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The Morning Risk Report: IRS Investigating American Express Sales Pitches
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Good morning. The Internal Revenue Service is investigating American Express Co. over a questionable tax break that it pitched to clients, according to people familiar with the matter.
The civil investigation has been under way for a few months, these people said. The Wall Street Journal reported in November that AmEx salespeople touted a tax break based on a shaky interpretation of tax law. The pitch was part of a strategy to persuade business owners to sign up for costly payment services.
[Continued below...]
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Content from our Sponsor: DELOITTE
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Atlantic Union Bank’s Asbury Embraces Change to Thrive
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By combining high-tech and high-touch strategies, Atlantic Union Bank’s CEO John Asbury aims to close the digital gap, deliver tools to meet customer needs, and remain competitive in a crowded market. Read More ›
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AmEx previously acknowledged, in response to the November story, that some members of its U.S. sales organization “failed to uphold our values and had positioned certain products inappropriately, specifically with respect to tax benefits.”
An AmEx spokesman said this week that “we have already taken a number of actions to change products, policies and personnel and are continuing to cooperate with our regulators and government agencies.”
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WSJ Risk & Compliance Forum
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Brian Nelson, undersecretary for terrorism and financial intelligence and the senior U.S. Treasury official for sanctions, will be speaking at the Risk & Compliance Forum on May 10. We’ve also added a breakout session to discuss navigating sanctions imposed on Russia due to the Ukraine war. You can register for a complimentary ticket here.
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From Risk & Compliance Journal
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Ex-BofA Treasury Note Trader Admits to Spoofing
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A former Bank of America Corp. trader has pleaded guilty to spoofing, admitting to entering phony orders to try to influence the market for U.S. Treasurys, reports Risk & Compliance Journal's Richard Vanderford.
Tyler Forbes, 27, on Thursday entered a plea to a single count of manipulating securities prices at a hearing in Brooklyn federal court, according to prosecutors.
Mr. Forbes, who traded in the secondary market for U.S. Treasury notes, entered large so-called spoof orders to move the market ahead of genuine orders he intended to fulfill, prosecutors said.
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A worker soldered solar cell modules at a factory in Phnom Penh, Cambodia. TAYLOR WEIDMAN/BLOOMBERG NEWS
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For the past five years, Southeast Asia has ranked as America’s top source of solar panels from abroad, driven in large part by Chinese manufacturers who expanded into the region after the U.S. in 2012 imposed duties on exports from China. A new U.S. probe has cast a shadow over that growth run.
Washington wants to know how much China-made material is used in solar panels shipped from Malaysia, Vietnam, Thailand and Cambodia—countries that accounted for 85% of American imports last year. It is investigating whether producers do small-time processing in these countries to skirt tariffs while reaching back into China-based supply chains for critical components.
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Juries in Texas and Colorado this week turned back the Justice Department’s efforts to prosecute corporate defendants accused of colluding to restrict workers pay and mobility, dealing a blow to efforts to punish practices that it says harm workers.
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Ferrero, the maker of Nutella, said it is going to stop sourcing palm oil—a key ingredient in the sweet spread—from Sime Darby Plantation Bhd in Malaysia after the U.S. government found the company used forced labor.
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The southern Ukrainian port city of Mariupol has seen some of the war’s most intense shelling. PHOTO: ALEXANDER ERMOCHENKO/REUTERS
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The last Ukrainian troops holding out in besieged Mariupol rejected Moscow’s ultimatum on Sunday that they surrender or face destruction by Russian forces, as Ukrainian President Volodymyr Zelensky warned an all-out Russian assault on the troops would endanger further peace negotiations.
Russia had given the troops until noon local time to lay down arms and observe a seven-hour cease-fire that it said would allow them to leave the battlefield unscathed. Russian forces are close to capturing the strategic port after weeks of heavy bombardment that has reduced much of the city to rubble and left most of the remaining residents without access to food, water and power.
Control of Mariupol would give Russia a land corridor to the Crimean Peninsula ahead of what is expected to be an intense wave of fighting in the eastern Donbas area. A Russian victory in the city would also free up its troops to focus on fighting Ukrainian forces in the east.
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The war in Ukraine is making it tougher for many emerging-market governments to make debt payments to foreign creditors, fueling concerns of potential crises that could shake markets and weaken the global economic recovery.
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Several million workers who dropped out of the U.S. workforce during the Covid-19 pandemic plan to stay out indefinitely because of persistent illness fears or physical impairments, potentially exacerbating the labor shortage for years, new research shows.
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A proposal in the California State Legislature would define the workweek in the state as 32 hours, not 40, for larger companies. While the proposal is still many steps away from becoming law, if passed, the bill could affect more than 2,000 businesses.
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North Korean leader Kim Jong Un oversaw the test-firing of what the country’s state media said was a new type of tactical guided weapon aimed at boosting its nuclear capabilities, following a series of provocative missile launches that allow Pyongyang to diversify its arsenal.
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Israeli police clashed with Palestinians in and around Jerusalem’s most sensitive holy site on Sunday, as tensions in the city continued amid a rare overlapping of religious holidays.
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Mobile phones are seen during the 2019 Locked Shields exercise. PHOTO: INTS KALNINS/REUTERS
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NATO’s large, multiday cyber defense exercise is set to bring together technical experts from alliance countries and Ukraine nearly two months after Russia’s invasion.
The annual cyber wargames, known as the Locked Shields exercise, will start Tuesday in Tallinn, Estonia. The North Atlantic Treaty Organization’s Cooperative Cyber Defense Centre of Excellence organizes the event, which includes fictional cyberattack exercises that test teams have to fend off under time pressure.
This year’s competition is significant for the countries participating because their cyber defense units have been on high alert since the outbreak of the war in Ukraine, said Anett Numa, an international policy adviser in the cyber policy unit of Estonia’s ministry of defense.
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A so-called poison pill makes it difficult for Elon Musk to increase his stake beyond 15%. He already owns a more than 9% stake. PHOTO: RYAN LASH/AGENCE FRANCE-PRESSE/GETTY IMAGES
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Twitter Inc. moved to prevent Elon Musk from significantly increasing his stake, after he unveiled a $43 billion unsolicited takeover bid for the social-media company.
The company on Friday adopted a so-called poison pill that makes it difficult for Mr. Musk to increase his stake beyond 15%. The billionaire founder of Tesla Inc. already owns a more-than 9% stake that he revealed earlier this month.
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Sen. Dick Durbin and other lawmakers are urging Visa Inc. and Mastercard Inc. to scrap their planned card fee increases.
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Didi Global Inc. said Saturday its fourth-quarter revenue fell 12.7% from the same period a year earlier as the ride-hailing firm, under a cybersecurity investigation by Chinese regulators, prepares to delist from the New York Stock Exchange.
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China Eastern Airlines said it has resumed passenger flights of its Boeing 737-800 model aircraft after grounding the planes for nearly a month, following a crash that killed all 132 people.
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Food and Drug Administration officials said they are examining reports from more than 100 consumers who told the agency that they got sick after eating Lucky Charms cereal recently. General Mills Inc., which makes the cereal, said it is working with the FDA on the matter.
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Rivian Automotive Inc. Chief Executive RJ Scaringe is warning that the auto industry could soon face a looming shortage of battery supplies for electric vehicles—a challenge that he says could surpass the current computer-chip shortage.
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Florida Gov. Ron DeSantis has clashed repeatedly with Disney in recent weeks. PHOTO: JOE BURBANK/ORLANDO SENTINEL/GETTY IMAGES
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When Walt Disney Co. Chief Executive Bob Chapek explained his decision to stay silent on Florida’s Parental Rights in Education bill, known by its opponents as the “Don’t Say Gay” legislation, he told employees in a March letter that he didn’t want Disney to become a “political football.”
More than a month later, that’s exactly what Disney has become, nowhere more than in the Sunshine State.
Some Republican lawmakers in Florida are threatening to end a special tax district that has allowed the company to effectively govern the land on which Walt Disney World sits for decades. Members of Congress have called for Disney to be stripped of its original Mickey Mouse copyright.
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In the latest phase of the Covid-19 pandemic, federal and local officials are telling people to decide for themselves how best to protect against the virus.
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Two years of dealing with Covid-19 have made people tired of taking precautions, getting tested and asking about other people’s status, say physicians, psychologists and behavioral scientists. BA.2 proves the pandemic isn’t over, but people are over it.
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Small-business owners are bristling over a congressional proposal that would redirect unspent money from Covid-19 programs to provide $10 billion for the federal government’s pandemic health response, including vaccines and therapeutics.
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Shanghai’s health authorities said three Covid-19 patients have died, the first Covid-related deaths to be reported in the Chinese financial capital since a widespread outbreak last month prompted a citywide lockdown.
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