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The Morning Risk Report: SEC Is Investigating Activision Blizzard Over Workplace Practices, Disclosures
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Activision Blizzard’s offices in Irvine, Calif. The company is known for its Call of Duty, World of Warcraft and Candy Crush franchises.
PHOTO: BING GUAN/BLOOMBERG NEWS
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Good morning. Federal securities regulators have launched a wide-ranging investigation into Activision Blizzard Inc., including how the videogame-publishing giant handled employees’ allegations of sexual misconduct and workplace discrimination, according to people familiar with the investigation and documents viewed by The Wall Street Journal.
The Securities and Exchange Commission has subpoenaed Activision, known for its Call of Duty, World of Warcraft and Candy Crush franchises, and several of its senior executives, including longtime Chief Executive Bobby Kotick, according to the people and documents.
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The agency is asking for documents including minutes from Activision board meetings since 2019, personnel files of six former employees, and separation agreements the company has reached this year with staffers, records show. The SEC is asking for Mr. Kotick’s communications with other senior executives regarding complaints of sexual harassment or discrimination by Activision employees or contractors, the documents show.
An Activision spokeswoman, Helaine Klasky, on Monday confirmed that the SEC’s investigation concerns “the company’s disclosures regarding employment matters and related issues,” adding that the agency has subpoenaed several current and former employees. “The company is cooperating with the SEC,” the spokeswoman said.
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WSJ Risk & Compliance Forum
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Join us on Oct. 12 for the WSJ Risk & Compliance Forum. The virtual program includes sessions on anti-money laundering laws, emerging risks, compliance and cryptocurrencies, lessons from Wirecard and workshops on ESG reporting and responding to ransomware. You can register here.
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Coinbase Global went public on the Nasdaq earlier this year.
PHOTO: MICHAEL NAGLE/BLOOMBERG NEWS
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Coinbase Global Inc. won’t offer a lending program that drew the threat of enforcement action from U.S. regulators.
The product would have allowed customers holding a digital token called USD Coin to earn interest by lending it to other cryptocurrency traders. But the Securities and Exchange Commission told the company it couldn’t do so without registering the activity under investor-protection laws, Coinbase disclosed earlier this month.
Coinbase Chief Executive Brian Armstrong wrote in social-media messages at the time that the SEC threatened to sue over the product launch. He called the SEC’s position and tactics “sketchy” and wrote that litigation with the agency might yield “the regulatory clarity the SEC refuses to provide.” The SEC didn’t adequately explain why the product would qualify as an asset overseen by securities regulators, he said.
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George Economou, a Greek shipping tycoon who was the controlling shareholder in DryShips.
PHOTO: BENJAMIN LOZOVSKY/BFA
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Before meme stocks, there was DryShips Inc. Shares of the Greek shipping company on the edge of bankruptcy rose 1,500% in four days in November 2016. The stock’s rise lit up message boards and drew in small investors, making it one of the most traded on the Nasdaq stock exchange.
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But, unlike GameStop, the frenzy of orders that followed over the next several months was almost entirely in new shares created and sold to the unsophisticated investors. The shares fell more than 99% in subsequent months.
Behind it all was a Canadian hedge fund and the company’s controlling shareholder, a Greek shipping tycoon named George Economou. Now the hedge fund and its chief investment officer, Marc Bistricer, have agreed to pay a combined $8.15 million to the Securities and Exchange Commission for allegedly violating trading rules. Mr. Bistricer and his fund, Murchinson Ltd., didn’t admit to or deny the SEC claims.
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When Archegos Capital Management blew up, it saddled Credit Suisse Group AG with $5.5 billion in losses. One reason investors and regulators were blindsided: a gap in the regulatory oversight of big international banks.
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Lawyers for the Trump Organization’s finance chief asked a judge for more time to prepare their defense, saying that they were reviewing millions of pages of documents and that prosecutors may file charges against other people. “We have strong reasons to believe there could be other indictments coming,” said Bryan Skarlatos, a lawyer for Chief Financial Officer Allen Weisselberg.
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An electronic display at a booth for e-commerce giant Alibaba at a Beijing trade fair on Sept. 3.
PHOTO: MARK SCHIEFELBEIN/ASSOCIATED PRESS
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Xi Jinping’s campaign against private enterprise, it is increasingly clear, is far more ambitious than meets the eye.
The Chinese President is not just trying to rein in a few big tech and other companies and show who is boss in China. He is trying to roll back China’s decadeslong evolution toward Western-style capitalism and put the country on a different path entirely, a close examination of Mr. Xi’s writings and his discussions with party officials, and interviews with people involved in policy making, show.
Mr. Xi’s overhaul has generated more than 100 regulatory actions, government directives and policy changes since late last year, according to a Journal tally, including steps aimed at breaking the market dominance of companies such as e-commerce behemoth Alibaba Group Holding Ltd., conglomerate Tencent Holdings Ltd. and ride-sharing leader Didi Global Inc.
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U.N. Secretary-General António Guterres speaks after a meeting with British Prime Minister Boris Johnson about climate change on Monday in New York.
PHOTO: JOHN MINCHILLO/PRESS POOL
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The coming climate summit in Glasgow, Scotland, runs a “high risk of failure” unless world leaders take stronger measures to stem greenhouse gas emissions, United Nations Secretary-General António Guterres said Monday. Some big oil companies say they want to play a key role, but they are set to be sidelined at the coming event.
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Retailers, tech companies and consumer products makers have all been named as “principal partners” for COP26 in Glasgow—allowing them greater involvement with the event—but major oil companies like BP PLC and Royal Dutch Shell PLC will have a lower profile. That is because the oil industry has yet to agree on science-based plans for how it will reduce carbon emissions, a hurdle U.K. organizers set as a prerequisite for involvement in the event.
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Twitter Inc. said it agreed to pay more than $800 million to settle a consolidated class-action securities lawsuit alleging the social-media company deliberately misled investors about user engagement in 2015.
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General Motors Co. said it would start next month to fix Chevrolet Bolt electric cars that were recalled for fire risk, although many owners likely will have to wait months to receive the remedy.
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Assisted picking bots at a DHL Supply Chain facility. The unit of Deutsche Post increased its focus on automating operations to meet surging demand and keep workers safe.
PHOTO: DEUTSCHE POST DHL GROUP
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The Covid-19 pandemic has supercharged the role of chief information officers, accelerating a shift from backroom technicians to front-office decisionmakers, as companies’ operations are increasingly shaped by technology.
CIOs and other corporate technology leaders over the past year found themselves in greater positions of leadership, taking a critical role in facilitating the shift to remote work, reconfiguring supply chains, speeding up the automation of factories, and moving stores and restaurants online, executives and industry analysts say. CIOs also had a hand in strengthening the security and resilience of their companies which was tested this year as never before as the shift to remote work and collaboration tools opened new vulnerabilities for hackers.
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A cornfield in Greene County, Iowa.
PHOTO: GETTY IMAGES/ISTOCKPHOTO
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An Iowa grain co-op said it was hit with a cyberattack that security researchers are linking to newly launched ransomware group BlackMatter, which the researchers said demanded $5.9 million to unlock the organization’s data.
Fort Dodge, Iowa-based New Cooperative Inc. said Monday that it took its computer networks down after some of its devices and systems recently were hacked. The organization notified law enforcement and is working with data-security experts to investigate what happened, it said.
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FedEx said its shipping rates next year would go up an average of 5.9% next on most of its services.
PHOTO: DAVID PAUL MORRIS/BLOOMBERG NEWS
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Shipping rates are going up faster than they have in nearly a decade, increasing pressure on merchants to raise prices or find other ways to offset higher costs.
FedEx Corp. on Monday said shipping rates would go up an average of 5.9% next year across most of its services, the first time in eight years that it or rival United Parcel Service Inc. UPS has strayed above annual increases of 4.9%.
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