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The Morning Risk Report: Target’s Chief Legal and Risk Officer Helps Retailer Manage Bumpy Supply Chains
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Don Liu is executive vice president and chief legal and risk officer for Target Corp. PHOTO: TARGET CORP.
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Good morning. Target Corp. started to prepare for possible supply-chain challenges this year right after the 2020 holiday season concluded, with the help of technology tools to predict consumer purchasing patterns and mapping out potential bumps along the way that could hamper deliveries from manufacturers to its shelves.
With the start of the holiday shopping season, the retailer reported it had 17.6% more in inventory in its fiscal third quarter ended Oct. 30 compared with a year earlier, well exceeding a 13.2% growth in sales.
Target is also facing complications seen by many companies this year, including manufacturing disruptions and travel restrictions wrought by the coronavirus pandemic as well as a tight labor market.
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Preparing to ensure that holiday shelves are full and the season goes smoothly is a result of risk predictions, updates with board members and coordination across teams, said Don H. Liu, who has served as Target’s chief legal and risk officer for the last five years.
The Wall Street Journal spoke with him about how the company has managed calls for responsible sourcing and supply-chain transparency, how it ensures ethical conduct among its employees, and his perspective on the risks Target faces in the coming year.
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Note: Risk & Compliance Journal will take a break on Thursday and Friday for Thanksgiving, and will be back in inboxes on Monday.
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With about $2.5 trillion of cryptocurrencies like bitcoin in circulation, they are attracting institutions and investors from traditional financial markets. PHOTO: MARIO TAMA/GETTY IMAGES
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A group of U.S. federal agencies on Tuesday said they plan next year to begin delineating how banks can legally get involved in the growing field of cryptocurrencies.
The agencies will focus on what activities banks can legally participate in, and outline rules to ensure safety, consumer protection and compliance with existing laws, said the joint statement from the Federal Reserve, Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency.
“The emerging crypto-asset sector presents potential opportunities and risks to banking organizations, their customers, and the overall financial system,” the group said.
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PHOTO: ANDREW KELLY/REUTERS
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A federal jury in Cleveland found that the companies that own CVS, Walgreens and Walmart pharmacies were liable for contributing to the opioid epidemic in two Ohio counties, a potentially influential verdict among the many cases filed against pharmacy chains.
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The counties argued that by enabling the opioid crisis, the pharmacy companies created a public nuisance. Each county said the crisis cost them about $1 billion related to law enforcement, social services and courts. The verdict in the bellwether case is being closely watched by attorneys elsewhere as similar cases play out against pharmaceutical manufacturers and distributors.
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President Biden’s decision to reappoint Jerome Powell as Federal Reserve chairman and elevate governor Lael Brainard signals continuity on monetary policy but leaves open questions on the direction the central bank will take in regulating Wall Street.
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The Justice Department filed an antitrust lawsuit challenging U.S. Sugar’s proposed purchase of rival Imperial Sugar, arguing the tie-up would lead to higher prices for refined sugar and food-and-beverage staples for consumers.
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Global financial regulators boosted capital requirements for JPMorgan Chase & Co., Goldman Sachs Group Inc. and BNP Paribas SA under rules intended to help avoid a repeat of the 2008 global financial crisis, in which the largest lenders were deemed too big to fail.
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The U.S. and other countries will tap their national strategic petroleum reserves in an attempt to bring down gasoline prices that have become a sore spot with motorists and a big contributor to inflation, President Biden said.
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Interpol’s governing body gathers this week to choose a new president, one that Western governments hope will block authoritarian states from using the global law enforcement agency to pursue political dissidents across borders.
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The National Rifle Association said it had found additional examples of excessive benefits paid by the nonprofit gun rights organization in recent years to CEO Wayne LaPierre, including $44,000 in private jet flights, according to a new tax filing.
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For the first time in her criminal-fraud trial, Elizabeth Holmes took aim at the most serious allegations made against her by prosecutors, offering a narrative of herself as a well-intentioned if inexperienced entrepreneur who had some success in her effort to transform healthcare.
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MetLife’s private-equity investments returned $1.5 billion, or 12.6%, in the third quarter. PHOTO: KENA BETANCUR/AGENCE FRANCE-PRESSE/GETTY IMAGES
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U.S. life insurers are backing Americans’ policies with bigger slugs of riskier, higher-yielding investments.
Holdings of real estate, below-investment-grade bonds, mortgage loans, private equity, hedge funds, limited partnerships and privately placed debt increased 39% from 2015 to 2020, outpacing the 26% increase in total cash and invested assets, according to a new report by Moody’s Investors Service.
As a result, these so-called illiquid assets represented about 35% of insurers’ $4.04 trillion in investments as of Dec. 31, 2020, up from 32% out of $3.2 trillion in 2015.
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Firms on both sides of the Atlantic reported robust demand in November that, combined with persistent shortages of parts and labor, has led to record price increases.
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U.N. Nuclear Chief Leaves Iran Without a Deal on Factory Inspection
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The head of the United Nations atomic watchdog agency left Iran late Tuesday after failing to reach a deal to allow inspectors access to a factory making equipment for Tehran’s nuclear program, diplomats said.
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Apple’s lawsuit alleges malware targeted some users’ iPhones. PHOTO: KIRSTY O'CONNOR/ZUMA PRESS
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Apple Inc. has sued NSO Group, an Israeli maker of surveillance software, alleging the company misused its products and services, escalating a battle over surveillance and user privacy.
The lawsuit alleges that NSO Group engaged in “concerted efforts in 2021 to target and attack Apple customers, Apple products and servers and Apple through dangerous malware and spyware,” and seeks to bar NSO Group from using Apple’s products.
Apple’s lawsuit, filed Tuesday in the U.S. District Court for the Northern District of California, is another salvo in an emerging strategy against the surveillance techniques.
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Gap says supply-chain disruptions in the quarter added $100 million in airfreight costs. PHOTO: DAVID PAUL MORRIS/BLOOMBERG NEWS
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Gap Inc. joined a growing list of apparel chains still struggling to keep their shelves stocked even as large retailers such as Walmart Inc. say they have been able to snag enough inventory for the holidays.
Gap reported net sales of $3.9 billion for the quarter ended Oct. 30, flat from 2020 and 1% lower than 2019. The company said its brands were unable to meet strong demand from shoppers as continued fallout from Covid-19 outbreaks led to factory closures and clogged ports.
Gap said supply-chain disruptions in the quarter shaved an estimated $300 million in lost sales and added $100 million in airfreight costs.
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Samsung Electronics Co. said it plans to invest roughly $17 billion into a semiconductor-making facility in Taylor, Texas, the latest mega chip-plant commitment this year amid a global processor shortage.
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Consumers are spending freely on sporting goods and kitchen appliances, but they are doing more of their shopping in stores than they did last year when Covid-19 restrictions upended the holiday shopping season.
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HP Inc. reported strong earnings and gave an upbeat outlook, aided by office reopenings and an expectation for healthy consumer demand through the holiday shopping season despite supply shortages.
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GPB Capital Holdings LLC has closed its sale of auto dealerships after settling a yearslong legal dispute tied to its acquisition of many of the same assets, paying a self-proclaimed whistleblower $30 million.
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Large private employers must ensure that their workers are vaccinated or tested weekly for Covid-19, according to a Biden administration mandate set to take effect Jan. 4. PHOTO: SUSAN WALSH/ASSOCIATED PRESS
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The Biden administration on Tuesday filed an emergency court motion that seeks the immediate reinstatement of its rules requiring many employers to ensure their workers are vaccinated or tested weekly for Covid-19.
The Justice Department filed the request with the Sixth U.S. Circuit Court of Appeals in Cincinnati, which last week was designated as the court that would decide legal challenges filed around the country to the vaccine-or-testing rules.
The Occupational Safety and Health Administration earlier this month formally issued the requirements, which apply to businesses with 100 or more employees. The rules cover roughly 84 million workers and are scheduled to take effect Jan. 4.
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