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The Morning Risk Report: Vaccine Ruling Settles Divisive Issue for U.S. Companies
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Good morning. Several corporate leaders said they would scrap plans to impose vaccine requirements for their workers after the Supreme Court blocked the Biden administration’s mandate for large private employers. Others said they would move ahead with their plans to require shots.
“We were ready, but we’re glad we didn’t have to implement it,” said Guy T. Williams, chief executive of Gulf Coast Bank & Trust Co., a Louisiana-based bank that employs 750 people.
Mr. Williams said he worried his organization could lose some employees if they didn’t want to comply. He also said he didn’t understand why the mandate applied only to companies with more than 100 employees. “We’re still going to say get it,” he said of the vaccine, “but it’s not going to be mandatory.”
[Continued below...]
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Many prominent U.S. companies have some sort of vaccine requirements but have stopped short of mandating them for all staff. U.S. airlines and a few high-profile companies, including Walt Disney Co. and Tyson Foods Inc., have adopted vaccine mandates for their workers. Others such as Facebook owner Meta Platforms Inc. and JPMorgan Chase & Co. required them for employees returning to their offices.
But many other corporate leaders held off in implementing vaccine or testing policies, waiting to see if the Biden administration’s rules would withstand legal challenges.
Related: Supreme Court Blocks Biden Vaccine Rules for Large Employers
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Please note that Risk & Compliance Journal will not publish on Monday, Jan. 17, in observance of Martin Luther King Jr. Day.
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From Risk & Compliance Journal
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Innovation, Communication Needed to Address Emerging Illicit Finance Threats, Say Regulators
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Himamauli Das, acting director of FinCEN. PHOTO: FINCEN
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Top financial regulators are encouraging bankers to work closely with their agencies on ongoing efforts to modernize the nation’s financial crime safeguards, including by helping to implement a landmark anti-money-laundering reform bill, reports Risk & Compliance Journal's Dylan Tokar.
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Himamauli “Him” Das, acting director of the U.S. Treasury Department’s anti-money-laundering bureau, said on Thursday that the agency was exploring the idea of creating a series of regulatory “sandboxes,” within which financial institutions can experiment with new technologies without the risk of a regulatory violation.
“FinCEN’s view is that our regulatory framework needs to approach these innovations in a way that recognizes not only the risks that they pose, but the opportunities that they present,” Mr. Das said at a virtual conference on financial crime enforcement hosted by the American Bankers Association and the American Bar Association.
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Crypto Platform BitMEX Taps New Risk Boss
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BitMEX, which last year agreed to a $100 million settlement with U.S. enforcers over compliance issues, has hired Marcus Hughes, a former managing director at Coinbase Global Inc., to serve as the cryptocurrency platform’s new chief risk officer, Richard Vanderford reports for Risk & Compliance Journal.
Mr. Hughes, who will work between offices in Europe, Asia and North America, will guide the company’s legal strategy, build out its risk and compliance program and engage with regulators and policy makers, BitMEX said in a blog post Thursday. Mr. Hughes will report directly to BitMEX Chief Executive Alexander Höptner.
The platform in August agreed to a $100 million settlement with the Financial Crimes Enforcement Network, a bureau of the U.S. Treasury Department, and with the Commodity Futures Trading Commission.
BitMEX’s efforts to put a more sure-footed compliance program in place come as it embarks on plans to scale up its business and expand globally.
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Microsoft said it would compare itself against the best practices of other companies on matters of sexual harassment and gender discrimination. PHOTO: DAVID PAUL MORRIS/BLOOMBERG NEWS
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Microsoft Corp.’s board of directors on Thursday said it would review the company’s sexual harassment and gender discrimination policies and unveil a summary of the results of past investigations into how the company handled allegations against company executives, including co-founder Bill Gates.
The software company’s board is taking this action, Microsoft said, in response to an unexpected win by activist shareholders at the company’s annual investor meeting in November with a proposal demanding greater disclosure around sexual harassment issues.
“Our culture remains our number one priority and the entire Board appreciates the critical importance of a safe and inclusive environment for all Microsoft employees,” said Microsoft Chief Executive Satya Nadella in a statement announcing the board’s plans. “We’re committed not just to reviewing the report but learning from the assessment so we can continue to improve the experiences of our employees. I embrace this comprehensive review as an opportunity to continue to get better.”
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The Senate voted Thursday to defeat a bill sponsored by Sen. Ted Cruz (R., Texas) that would have imposed sanctions on Nord Stream 2 AG, the company behind a pipeline built to deliver Russian natural gas to Germany.
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The Biden administration opposed the bill and lobbied Democratic senators against it, arguing that it would remove U.S. leverage to deter Russia and damage ties with Germany and other European allies.
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The House select committee investigating the Jan. 6, 2021 attack on the U.S. Capitol issued subpoenas to four social media companies as part of its investigation into the riot and its causes.
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A senior Syrian officer was convicted of crimes against humanity by a German court, the highest-ranking official to be found guilty for the government’s actions during the country’s civil war in a decision that could pave the way for similar prosecutions.
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Members of the Organization for Security and Cooperation in Europe met in Vienna on Thursday to discuss the Russian military buildup near Ukraine. PHOTO: MICHAEL GRUBER/GETTY IMAGES
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Russia’s deputy foreign minister said talks with the U.S. over the security situation in Ukraine had stalled and suggested that Moscow could dispatch a military deployment to Venezuela and Cuba, as the Kremlin seeks to pressure Washington to respond to its demands to halt Western military activity that it says threatens Russia.
Deputy Foreign Minister Sergei Ryabkov said on Thursday that Moscow couldn’t exclude dispatching “military infrastructure” to Venezuela or Cuba if tensions with Washington—which have soared in recent weeks over a huge buildup of Russian troops on Ukraine’s border—continue to rise.
“I don’t want to confirm anything, I will not rule out anything…. Depends on the actions of our American colleagues,” Mr. Ryabkov told privately owned Russian-language television network RTVi in an interview Thursday in Moscow. Mr. Ryabkov said he saw no immediate grounds for fresh talks with the U.S., after several rounds of negotiations this week yielded little progress in defusing the crisis in Ukraine.
Related: Russia Says It Is Preparing to Withdraw Troops From Kazakhstan
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Europe’s growing dependence on Russian gas and oil is limiting the continent’s room to maneuver in the mounting U.S.-Russia crisis over security in the region and making it highly vulnerable in the event of an escalation.
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Beijing is trying to fortify the Chinese economy against a prolonged period of tension with the U.S. and other countries, stockpiling some essentials and planning on more domestic production as it accelerates efforts to make China less dependent on the world.
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For workers, it is great news: The U.S. labor market is nearing, or may already be at, its ideal state of “full employment.” But for the economy as a whole, it risks introducing a new source of upward pressure on inflation.
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In the hierarchy of business threats confronting corporate leaders in 2022, Covid-19 still rules. But inflation has quickly closed the gap.
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Federal Reserve governor Lael Brainard, the White House nominee to serve as the central bank’s No. 2 official, told Congress that efforts to reduce inflation are the central bank’s “most important task.”
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Prices that suppliers are charging businesses and other customers closed out 2021 near the highest level in over a decade, though December showed a slight cooling of producer inflation.
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Major oil companies, under pressure from investors and environmentalists, are fleeing Canada’s oil sands, the fourth-largest oil reserve in the world and by some measures one of the most environmentally unfriendly. Nevertheless, oil production there is expected to continue for at least two more decades. And last year, the oil sands were on track to deliver more oil than ever.
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Philip Rosedale is returning to the company he left in 2010. PHOTO: LIZ HAFALIA/THE SAN FRANCISCO CHRONICLE/GETTY IMAGES
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The founder of Second Life, one of the earliest digital-reality worlds, is returning for a second stint to take on big tech.
Philip Rosedale in 2003 launched the online game where players using avatars can hang out, socialize with other players and make purchases. Second Life is a forerunner of the virtual worlds that big tech companies are now trying to create and are often referred to as the metaverse. Mr. Rosedale is returning to the company he left in 2010 to serve as a strategic adviser and shepherd its expansion as the metaverse gains wider traction, he said in an interview.
The metaverse, though still largely more aspirational than real, has become a hot new battlefield for tech companies looking for a major new source of revenue. Facebook Inc. last year rebranded as Meta Platforms Inc. to reflect its focus on the digital realm and vowed to spend billions of dollars to realize its metaverse over the coming years that would involve virtual- and augmented-reality headsets, software and more.
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Goldman Sachs said it would require eligible employees and visitors to receive a booster shot starting in February. PHOTO: GABBY JONES FOR THE WALL STREET JOURNAL
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Goldman Sachs Group Inc. again delayed its plans to bring employees back to the office in response to the spread of the Omicron Covid-19 variant.
The bank told employees in an email that they could work from home until Feb. 1, a company spokeswoman said on Thursday. Goldman had instructed its workers earlier this month to return on Jan. 18.
Goldman had been among the more aggressive banks about returning to in-person work and had largely full offices as recently as last month, but Omicron forced a temporary rethink of those plans. The delay was earlier reported by Bloomberg News.
The bank has required Covid-19 vaccines for workers and visitors to its offices since last summer, and it is doubling down on those efforts. Goldman said last month it will require eligible employees and visitors to receive a booster shot starting in February. Employees who do work from the office are also required to test for the virus twice a week.
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Retail-trading platform Robinhood Markets Inc. doesn’t plan on spending significant amounts of corporate cash on crypto assets anytime soon, Chief Financial Officer Jason Warnick said.
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Delta Air Lines Inc. said on Thursday it expects to shake off the impact of Omicron, the fast-spreading Covid-19 variant that knocked the airline’s operation off course and damped revenue at the end of the year.
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Taiwan Semiconductor Manufacturing Co., the world’s largest contract chip maker, said it would increase its investment to boost production capacity by up to 47% this year from a year earlier as demand continues to surge amid a global chip crunch.
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Google plans to spend $1 billion buying office space it already uses in central London, saying it believes office work will remain vital for the tech giant.
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A flood of private lending has reached some unexpected places, from Rugby Australia to celebrity Khloé Kardashian to Delta Air Lines. PHOTO: DAVE HUNT/EPA/SHUTTERSTOCK, TERENCE PATRICK/CBS/GETTY IMAGES, CURTIS COMPTON/ATLANTA JOURNAL-CONSTITUTION/AP
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One of Brigade Capital Management’s best trades of 2021 was making about one million loans to U.S. shoppers.
The investment firm made double-digit returns funding more than $500 million of “buy now, pay later” and other consumer loans used for purchases on digital marketplaces like Amazon.com Inc., people familiar with the trade said.
Brigade’s foray into consumer finance is part of a boom in private credit—lending by money managers rather than banks—spreading across the globe. Funds that make such loans now control about $1.2 trillion, nearly twice the capital they had five years ago, according to analytics company Preqin.
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CES attendees stood in line for Covid-19 PCR tests last week in Las Vegas. PHOTO: PATRICK T. FALLON/AGENCE FRANCE-PRESSE/GETTY IMAGES
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The Omicron variant has highlighted a testing divide in American business, where some big companies have secured ample Covid-19 tests and kept workers coming in, while others have struck out and let workers stay home.
At Alphabet Inc.’s Google, many full-time employees can regularly test themselves or their dependents at home on machines that give results within minutes. Salesforce.com Inc. plans to soon roll out an at-home device for employees to test themselves before coming into an office or attending a company gathering. Meanwhile, industrial giant Honeywell International Inc., has supplied employees who are using its offices with at-home rapid tests that they can take daily, part of what Chief Executive Darius Adamczyk calls a “belt and suspenders” approach to safety.
“Testing is the key,” Salesforce Co-CEO Marc Benioff said. “The reality is, it’s not risky to come together in the office if everyone is tested [that day]. And it’s not risky to come together in a meeting or an off-site or a company event or a customer event if everyone is tested.”
The high cost and lack of availability of tests have left many companies searching for alternatives, executives and corporate health advisers say.
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President Biden said he is directing his administration to procure 500 million additional at-home rapid Covid-19 tests, doubling the number the U.S. plans to send to Americans free of charge, following calls from public health officials to expand testing amid a surge in cases.
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The U.K. appears to have passed the peak of the latest wave of Covid-19 caused by Omicron, a promising sign that the highly transmissible variant’s impact may be brief, if intense, and fueling optimism that the pandemic may be waning.
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