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The Morning Risk Report: Microsoft Gambles on Troubled Activision, but Risks Are Likely Manageable
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Microsoft Corp. in its planned purchase of Activision Blizzard Inc. will take on a company with a troubled reputation surrounding its workplace culture, but the risks stemming from those problems are far from insurmountable, deals experts told Risk & Compliance Journal's Richard Vanderford.
Microsoft’s announcement this week that it intends to purchase the videogame company in a $75 billion all-cash deal came after Activision experienced a spate of bad news over the past six months, including allegations of sexual misconduct and subsequent regulatory actions.
But the bet Microsoft has made, though large, isn’t reckless, despite the workplace issues, according to people who specialize in topics related to mergers and acquisitions.
[Continued below...]
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U.S. corporate culture on the whole has become more attuned to the corrosive effects of sexual misconduct and gender discrimination, a focus that has led to deeper due-diligence reviews ahead of transactions.
“There’s definitely more diligence being done, particularly diligence being done around ‘bad behavior,’” said Sabina Menschel, president of the global investigative firm Nardello & Co. “Not only sexual harassment or misconduct, but bullying or other types of behavior—companies have a lot less tolerance for that.” Read more.
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Most Banking Compliance Employees Feel Burned Out, Survey Finds
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A majority of banking compliance officers surveyed by Kyckr Ltd. said they feel somewhat or very burned out at work, and about half said they want to change jobs in the next year.
The results of the poll of 244 full-time compliance professionals, released Wednesday, come as many workers across sectors say workplace stress and burnout, exacerbated by the pandemic, are big challenges to their well-being at work, The Wall Street Journal previously reported. In the first 10 months of 2021, America’s workers handed in nearly 39 million resignations, according to the Labor Department, the highest number since tracking began in 2000.
The survey by Kyckr, a corporate registry data provider, was conducted online in October and included responses from compliance professionals with job titles such as money-laundering reporting officer, head of compliance, know-your-customer specialist, onboarding specialist and compliance analyst. More than three-quarters of respondents were in the U.S., with the rest located in the U.K., Canada and Australia.
Thirty-seven percent of the respondents said their job got more difficult in the past year because of pandemic-related stressors such as remote work and increased cyber threats, while 34% attributed the additional burden to new regulations. About half of them said they don’t have the tools needed to do their job effectively, and 43% said they lack the training needed to do their job effectively.
Burnout and a dearth of resources and training can carry risks for companies. Forty-four percent of the respondents said they wouldn’t be surprised to see their bank receive an anti-money-laundering-related fine, the survey showed.
—Mengqi Sun
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Sen. Chuck Grassley, the top Republican on the judiciary panel, said the antitrust bill aims to prevent conduct that stifles tech-industry competition. PHOTO: MICHAEL BROCHSTEIN/ZUMA PRESS
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A Senate panel approved antitrust legislation forbidding the largest tech platforms from favoring their own products and services over competitors’, scoring a win for backers of stricter Big Tech regulation against fierce industry opposition.
The American Innovation and Choice Online Act moves next to the Senate floor, where several senators said they wanted to see additional changes before backing the measure. Thursday’s 16-6 vote in the Senate Judiciary Committee showed the bill had bipartisan support but also raised bipartisan concerns.
The legislation “is specifically designed to target a small number of specific companies, most of which are headquartered in my home state,” said Sen. Dianne Feinstein, who criticized elements of the bill along with fellow California Democratic Sen. Alex Padilla. “It’s difficult to see the justification for a bill that regulates the behavior of only a handful of companies while allowing everyone else to continue engaging in that exact same behavior.”
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The Federal Reserve on Thursday launched a review of the potential benefits and risks of issuing a U.S. digital currency, as central banks around the world experiment with the new form of money to keep pace with private-sector payments innovations.
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The central bank described the long-awaited discussion paper as the first step in a debate on whether and how a U.S. digital dollar could improve the safe and effective domestic payments system. The paper doesn’t favor any policy outcome, and the Fed said the release of the report isn’t meant to signal any imminent decision.
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When a lawsuit alleged human-resources software company Automatic Data Processing Inc. had failed to make its products accessible for people who are blind or have low vision, the case joined a growing body of litigation over accessibility in the digital world. But its recent settlement, and the path that the opposing parties took to get there, could do more for digital accessibility than many of the cases that came before it, some advocates say.
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The Consumer Financial Protection Bureau said it would scrutinize the practices of for-profit colleges that lend to their own students as part of a crackdown on aggressive debt-collection practices in the private student-loan industry.
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The U.S. Justice Department charged four Belarusian government officials with aircraft piracy, alleging they conspired to fabricate a bomb threat to divert a Ryanair passenger jet last year to arrest a dissident journalist.
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Federal prosecutors dropped criminal charges against a Massachusetts Institute of Technology mechanical engineering professor accused of hiding his China ties, saying in a Thursday filing that the government no longer believed it could prove its case at trial.
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Lawyers for Ghislaine Maxwell asked a federal judge to grant her a new trial after raising concerns about statements a juror made following the disgraced socialite’s conviction last month on sex-trafficking charges.
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The House select committee investigating the Jan. 6 attack on the U.S. Capitol has asked former President Donald Trump’s daughter Ivanka Trump to cooperate with the panel voluntarily.
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Ukraine is unnerved by the presence of almost 100,000 Russian troops near its borders. Ukrainian soldiers in Chasiv Yar, Ukraine. PHOTO: BRENDAN HOFFMAN/GETTY IMAGES
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President Biden said on Thursday any Russian troop movement into Ukraine would be considered an invasion, clarifying his stance on a potential incursion as the administration gave approval for U.S.-made weapons to be transferred to Kyiv.
“I’ve been absolutely clear with [Russian] President Putin. He has no misunderstanding,” Mr. Biden said at a White House event. “If any—any—assembled Russian units move across the Ukrainian border, that is an invasion.”
Mr. Biden’s comments came one day after he sparked criticism, both domestically and in Europe, when he suggested a “minor incursion” by Russia would be met with less than the punishing economic measures his administration has promised for weeks.
Ukraine, already unnerved by the presence of almost 100,000 Russian troops near its borders, was shaken by the comments, and several officials spoke out, saying that any suggestion of a weaker response would only encourage Mr. Putin.
Related: Putin Loves to Roll the Dice. Ukraine Is His Biggest Gamble Yet.
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North Korea suggested it might consider restarting long-range and nuclear-weapons tests, promising to take “practical action” as it says the U.S. threat to the country can no longer be ignored.
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France’s TotalEnergies SE said it is withdrawing from Myanmar over shareholder pressure and a deteriorating human-rights situation since the country’s military seized power in a coup last year.
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Initial claims for unemployment benefits, a proxy for layoffs, rose by 55,000 to 286,000 during the week that ended Jan. 15, following an increase in the week ended Jan. 8.
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Bees and butterflies play a vital role in agriculture. But new research from the U.K. shows that common air pollutants can interfere with pollination and thus the cultivation of crops by making it hard for some insects to sniff out the aromatic flowers where they sip nectar and nosh on pollen.
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Last week, hackers defaced the websites of more than 70 Ukrainian government agencies. A warning message appeared in Ukrainian, Russian and Polish. PHOTO: PAVLO GONCHAR/ZUMA PRESS
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A recent cyberattack in Ukraine has heightened concerns in Kyiv that Moscow is plotting to support a land invasion with destructive hacks, although some experts remain puzzled about the Kremlin’s intentions.
Last week, hackers defaced the websites of more than 70 government agencies, according to Viktor Zhora, deputy chief of Ukraine’s State Service of Special Communication and Information Protection. More worryingly, the hackers also installed destructive “wiper” software designed to render computer systems inoperable in at least two government agencies, he said.
Russia has denied any involvement in the cyberattacks.
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Bob Chapek took the helm of the entertainment giant just as the pandemic was taking hold. PHOTO: KATHERINE TAYLOR/REUTERS
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Walt Disney Co. paid company chief Bob Chapek $32.5 million in total compensation for 2021, his first full calendar year at the helm of the entertainment and media conglomerate.
Nearly half of Mr. Chapek’s pay came in the form of a $14.3 million cash bonus, according to a company filing Wednesday. The award shows Disney has revived giving out non-equity bonuses after suspending them in 2020 as the coronavirus pandemic ravaged the company’s revenue.
Mr. Chapek’s total compensation last year more than doubled the $14.2 million he earned in 2020.
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JPMorgan Chase Co. is paying Chief Executive Jamie Dimon $34.5 million for a record-breaking 2021, $3 million more than he made in the previous two years.
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Nordea Bank Abp said on Thursday that it has appointed Mark Kandborg as chief risk officer and a member of the group leadership team as of April 1, according to MarketWatch.
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Walmart Inc.’s top U.S. e-commerce executive Casey Carl is leaving the retailer, according to an internal memo, adding to a string of recent executive shifts at the company.
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Peloton bikes and other equipment aren’t in as high demand as they were early in the pandemic. PHOTO: ADAM GLANZMAN/BLOOMBERG NEWS
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Shares of Peloton Interactive Inc. sank 24% Thursday following a report that said the company plans to temporarily halt production on its connected-fitness products.
CNBC reported that the company would pause Bike production in February and March, and pause production of its Bike+ until June, citing internal documents. Peloton won’t manufacture its Tread treadmill machine for six weeks, beginning next month, CNBC reported.
The company didn’t respond to a request for comment.
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Airlines had hoped to put the global coronavirus pandemic behind them, but the emergence of the Omicron variant and a surge of cases dealt them yet another setback after two of their most difficult years.
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Union Pacific Corp. said it was caught off guard by the amount of workers absent because of quarantines and getting their vaccines, which led to fewer on-time trips and other deteriorating operating performance in the fourth quarter.
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A group of China Evergrande Group’s international bondholders threatened to move forward with a legal enforcement plan that could potentially include liquidation of the company’s assets, after being unable to engage substantively with the troubled property developer for months.
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Schott AG’s finance chief plans to increase spending this year as the specialty glass and materials manufacturer sees growing demand for its products, including syringes and vials for Covid-19 vaccines.
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A look at where Microsoft Corp. made its money in 2001, 2011 and 2021 reveals the rise of the importance of gaming for the company, even as it recorded strong growth from enterprise and cloud software.
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TikTok, the buzzy video-sharing app, said it is testing a paid subscription model, a concept that could allow creators to charge people to view their content.
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Twitter Inc. will start allowing some users to use nonfungible tokens as their profile pictures, jumping into a digital-goods business that has exploded over the past year.
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Intel Corp. plans to invest at least $20 billion in new chip-making capacity in Ohio, according to a person familiar with the matte.
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