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The Morning Risk Report: McDonald’s Directors Beat Sexual Misconduct Oversight Lawsuit
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Here's what you need to know:
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The decision throws out shareholders’ claims against nine individuals who sat on McDonald’s board during a period in which sexual misconduct claims at the company drew widespread public scrutiny.
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The suit was brought under a Delaware law that allows shareholders to sue directors over alleged oversight failures, including the failure to ensure there were compliance processes in place to address mission-critical risks.
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The lawsuit against the board members was closely watched, not only because it offers a window into an alleged party culture at the headquarters of one of the world’s leading restaurant brands. The court’s rulings could clarify expectations for how company leadership is expected to respond to failures of corporate compliance.
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Content from our Sponsor: DELOITTE
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2023 Global Technology, Media, and Telecommunications Predictions
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Would you like ads with your streaming video? Will AI design better chips? Can 5G phones cost less than $100? Deloitte Global’s TMT Predictions 2023 report highlights what’s in store. Read More ›
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WSJ Risk & Compliance Forum
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Join us on May 9 for the WSJ Risk & Compliance Forum, where we will be discussing export controls, sanctions, sustainability, privacy laws, workplace compliance, managing in a downturn and addressing risks at the board level. Sign up here.
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Terren Peizer is the CEO of telehealth provider Ontrak. PHOTO: RINGO CHIU/ZUMA PRESS
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Healthcare chief executive faces charges of making illicit stock sales in prearranged trades.
The founder of telehealth provider Ontrak Inc. was charged in a first-of-its-kind criminal insider-trading case, with prosecutors alleging he sold millions of dollars worth of stock while misusing a trading plan that executives normally deploy to shield themselves from such suspicions.
What's a 10b5-1? The case is novel because it focuses on Mr. Peizer’s use of a so-called 10b5-1 trading plan. Executives and corporate directors have used the prearranged trading plans to sell while immunizing themselves against claims of insider trading. Regulators recently revised the rule governing 10b5-1 plans to address concerns that some executives abused them.
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Indian tobacco company settle with Treasury over North Korea sanctions violation.
Godfrey Phillips India Ltd., a Mumbai-registered tobacco company, will pay $332,500 to settle a U.S. action for allegedly violating sanctions on North Korea, the Treasury Department said Wednesday. GPI through a Thai intermediary sold about 87 tons of tobacco that was allegedly shipped to North Korea.
Though the transaction didn't directly involve U.S. entities, GPI was paid in U.S. dollars and also used an India-based branch of a U.S. bank, triggering U.S. sanctions, Treasury said.
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Chinese financier Fan Bao, who went missing last month, has been detained by authorities in mainland China in connection with a corruption investigation targeting a former senior executive at the investment bank he founded, people familiar with the matter said.
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Two Democratic lawmakers called on the executive branch to root out financial conflicts-of-interest among top government officials.
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A group of large European Union countries is threatening to block a plan by Brussels to effectively ban the internal combustion engine, endangering the bloc’s ambitious agenda to combat climate change.
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The Biden administration said it would pursue laws to establish liability for software companies that sell technology that lacks cybersecurity protections, concluding that market forces alone aren’t sufficient to guard consumers and the nation.
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45%
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The percentage of respondents to a American Chamber of Commerce in China survey that said China was either the priority or a top-three priority in their near-term global investment plans, down from 59% in 2019.
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Nearly half of the respondents in a U.S.-company survey say China’s investment environment is deteriorating. A port in Jiangsu province. PHOTO: CFOTO/ZUMA PRESS
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Fewer American companies see China as an investment priority.
Fewer U.S. companies consider China a top investment destination following disruptions caused by Beijing’s harsh anti-Covid measures and rising geopolitical tensions, according to an annual survey by a major American business group.
Souring on China. U.S. companies are also more pessimistic about their financial outlook there, with more than half saying they didn’t turn a profit last year and more than a third saying their China revenue fell from a year earlier, according to the survey conducted by the American Chamber of Commerce in China.
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Rep-and-warranties insurance rates drop.
Rates for representations and warranties insurance dropped steadily in 2022 after a price surge in 2021, according to a new report from insurance brokerage Marsh. Companies use such policies to cover merger risks. "The insured-friendly rate environment is expected to continue in the short-to-medium term," Marsh said.
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Military supplies from China would provide Russia with a lifeline in its Ukraine war effort, thanks to the compatibility of Chinese and Russian weapon systems and Beijing’s large military manufacturing base.
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India is close to approving a deal to buy high-altitude armed drones from the U.S. as it seeks to counter a more-assertive Chinese stance on the countries’ contested Himalayan border, people with knowledge of the matter said.
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Ohio senators are leading a bipartisan effort to respond to last month’s train derailment in their state, proposing legislation that would subject railroads to a series of new federal safety regulations and increase fines for wrongdoing.
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Eli Lilly & Co. will cut the list prices for its most commonly prescribed insulin products by 70% and take other steps to make it easier for patients to afford the drugs.
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Elon Musk is trying to run Twitter Inc. with an ever-shrinking fraction of the staff the company had when he took over. Silicon Valley is watching to see if he will succeed.
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The illness known as Havana Syndrome reported by hundreds of U.S. intelligence and other officials overseas was unlikely to have been the work of a foreign adversary targeting American personnel, according to a new U.S. intelligence report.
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Nishad Singh followed Sam Bankman-Fried into the high-stakes world of cryptocurrency trading. Now he could help put the former FTX chief executive in prison.
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TikTok is adding a new 60-minute screen-time limit for users under the age of 18 in an effort to get young people to become more aware of how much time they spend on the app.
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The Senate voted Wednesday to overturn a new Biden administration regulation that would allow retirement-plan managers to consider climate change and other factors when they make investment decisions.
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