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The Morning Risk Report: Europe Has a New Cop on the White-Collar Crime Beat
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Laura Codruta Kövesi will lead the European Public Prosecutor’s Office.
PHOTO: KENZO TRIBOUILLARD/AGENCE FRANCE-PRESSE/GETTY IMAGES
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The European Union’s newest law-enforcement agency is facing a number of challenges out of the gate, including watching how billions in Covid-19 relief funds are spent and dealing with resistance to expanded EU powers from some member states.
The European Public Prosecutor’s Office, launched last week, will investigate and prosecute crimes involving EU funds and taxes. Even in normal times, that would prove a daunting task. But today, the agency’s antifraud mandate also includes the 750 billion euros, equivalent to $913 billion, that the EU has earmarked to help member countries recover from the pandemic.
[Continued below...]
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It won’t just be corrupt politicians or organized criminal enterprises that will need to watch out for the EPPO. Companies that receive EU stipends or pay taxes in the region also could find themselves in the EPPO’s crosshairs, defense lawyers say.
EU financing and subsidies for businesses typically come laden with requirements. For example, 30% of the EU’s Covid-19 recovery fund must be spent on climate-change-related projects. It isn’t uncommon for businesses to run afoul of the rules, said Daniel Travers, a counsel at law firm Freshfields Bruckhaus Deringer LLP.
“We do see a lot of cases like that,” Mr. Travers said. “These are national cases at the moment, but in the future, if they involve EU funds, that would be a crime that would fall under the EPPO’s jurisdiction.”
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From Risk & Compliance Journal
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Skycity’s Adelaide Casino Faces Money-Laundering Investigation
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Casino operator Skycity Entertainment Ltd. said an Australian regulator is investigating potential serious breaches of anti-money-laundering and terrorism-financing laws at its Adelaide casino.
A review by the Australian Transaction Reports and Analysis Centre, which began in September 2019, found potential breaches related to customer due diligence and adoption and maintenance of an anti-money-laundering program, the New Zealand company said Tuesday.
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The ProPublica article highlighted years in which Amazon.com founder Jeff Bezos and others paid little or no income tax.
PHOTO: SAUL LOEB/AGENCE FRANCE-PRESSE/GETTY IMAGES
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Federal authorities are investigating the release of wealthy Americans’ tax information, Internal Revenue Service Commissioner Charles Rettig said Tuesday.
ProPublica, a nonprofit news organization, published details about the reported income and tax payments of some of the richest Americans, including Amazon.com Inc. Chief Executive Officer Jeff Bezos and Berkshire Hathaway Inc. CEO Warren Buffett.
The ProPublica article said the news organization didn’t know the identity of its source and described the information it received as IRS data on thousands of people covering more than 15 years. It isn’t certain that the information—a highly unusual airing of private tax data—came directly from within the IRS or whether the agency was hacked in some way. The article highlighted years in which Mr. Bezos and others paid little or no federal income tax.
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French prosecutors on Tuesday brought preliminary charges against Renault SA on suspicion of emissions fraud, adding to the fallout for auto makers following Volkswagen AG’s emission scandal. The French auto maker said Tuesday it would need to pay a bail of €20 million, equivalent to $24.4 million, and provide bank guarantees of €60 million to compensate potential damages as part of the probe related to older diesel vehicles.
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Google’s critics have said for years that it should be treated like a public utility. On Tuesday, Ohio’s attorney general filed a lawsuit asking a judge to rule that the search company is one. The case adds to the legal woes confronting the Alphabet Inc. subsidiary, which also faces antitrust lawsuits from the Justice Department and a separate consortium of states led by Colorado and Texas.
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ILLUSTRATION: JON KRAUSE
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For many bosses and employees, there is a measure of relief in returning to the office—especially for those who have the flexibility of continuing to work from home part of the time. But for those teams working to protect their offices from hackers, the new hybrid workplaces aren’t nearly as welcome.
In a typical hybrid workplace, some employees will be in the office, some will be working from home—or spaces like coffee shops and client headquarters—and some will be cycling back and forth. Devices, too, are moving in and out of the company network, with employees bringing their laptops onto company networks and then taking them back home—where they’re much more exposed to hackers and can easily get infected with malware.
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The pipeline company hit by a multimillion-dollar ransomware attack last month is still working to fully restore some of its computer systems, its chief executive told lawmakers Tuesday, as he defended his decision to pay hackers a ransom.
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Covid-19 vaccines have transformed the global economy. The companies that produce them, meanwhile, already a big target for hackers, have to be more on their toes than ever. A Q&A with Marene Allison, chief information security officer at Johnson & Johnson, who oversees the company’s efforts to protect its operations from cybercrime.
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Hundreds of suspected members of criminal networks have been arrested by authorities around the world after being duped into using an encrypted communications platform secretly run by the FBI to hatch their plans for alleged crimes including drug smuggling and money laundering.
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On Christmas Eve 2020, the Scottish Environment Protection Agency received a most unwelcome visitor: Hackers took control of its computer systems, seized data and demanded a ransom. The agency elected not to pay—and hackers published the data they had stolen.
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Storm Christoph caused widespread flooding in the U.K. in January. The Bank of England’s most extreme climate-change forecast sees increasingly frequent extreme weather.
PHOTO: PAUL ELLIS/AGENCE FRANCE-PRESSE/GETTY IMAGES
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The Bank of England launched a program to assess the ability of lenders and insurers to withstand risks such as rising sea levels, flooding, cyclones and wildfires, in the latest step by a central bank to scrutinize the impact of climate change.
The U.K.’s biggest banks, including HSBC Holdings PLC and Barclays PLC, and insurers such as the U.K. units of American International Group Inc. and parts of Lloyd’s of London, will estimate how their businesses will perform in the next 30 years based on three different scenarios in which governments and companies either take early, late or no action to mitigate climate change.
The tests represent the latest step by central banks and financial regulators to look at climate change when assessing the health of financial institutions. Regulators have traditionally used similar “stress tests” to measure the resilience of lenders to adverse economic scenarios such as deep recessions, rises in interest rates or trade wars.
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Dozens of websites in the U.S. and Europe briefly went dark Tuesday, victims of an internal glitch at a major cloud-service provider and the latest example of how a problem at a single player in the internet’s piping can have outsize repercussions.
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Ryan Cohen is expected to be elected chairman at GameStop’s annual shareholder meeting on Wednesday. PHOTO: DANIA MAXWELL/LOS ANGELES TIMES/GETTY IMAGES
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E-commerce entrepreneur Ryan Cohen spent seven months pushing to overhaul GameStop Corp. as an activist investor and later a board member.
Mr. Cohen is slated to become the videogame retailer’s chairman on Wednesday, cementing his oversight of a company that is searching for a chief executive and seeking to manage expectations of shareholders bullish on its turnaround potential.
At GameStop’s annual shareholder meeting, the 35-year-old Chewy Inc. co-founder is expected to be elected to a smaller, reshaped board of directors as a majority of incumbent members resign from the panel. The company nominated five others for election, including departing CEO George Sherman. Three nominees have ties to Mr. Cohen from the online pet-supplies retailer he sold to PetSmart in 2017 for $3.35 billion.
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President Biden in February ordered a 100-day review of the breakdown of supply chains during the Covid-19 pandemic.
PHOTO: JONATHAN ERNST/REUTERS
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The Biden administration outlined new measures Tuesday to address widespread supply-chain issues, with a goal of bringing manufacturing back to the U.S. and diversifying access to foreign-made materials such as rare-earth minerals used for batteries.
The steps, which include the creation of a new government supply-chain task force, are the result of a 100-day review that President Biden ordered in February, as the pandemic exposed problems that continue to affect key industries, including auto making.
The review covers four areas: semiconductors, used in products from cars to phones; large-capacity batteries used in electric vehicles; pharmaceuticals; and rare-earth elements that are key to technology and defense.
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