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The Morning Risk Report: Elon Musk’s Belated Disclosure of Twitter Stake Triggers Regulators’ Probes
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Good morning. Federal regulators are investigating Elon Musk’s late disclosure last month of his sizable stake in Twitter Inc., according to people familiar with the matter, a lag that allowed him to buy more stock without alerting other shareholders to his ownership.
The Securities and Exchange Commission is probing Mr. Musk’s tardy submission of a public form that investors must file when they buy more than 5% of a company’s shares, the people said. The disclosure functions as an early sign to shareholders and companies that a significant investor could seek to control or influence a company.
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Content from our Sponsor: DELOITTE
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DARPA: Safeguarding Data for Stronger Democracy
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The Defense Advanced Research Projects Agency is pioneering new methods for sharing data while lowering security and privacy risks. Read More ›
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The Tesla Inc. chief executive made his filing on April 4, at least 10 days after his stake surpassed the trigger point for disclosure. Mr. Musk hasn’t publicly explained why he didn’t file in a timely manner.
Mr. Musk likely saved more than $143 million by not reporting that his trades had crossed the 5% threshold, said Daniel Taylor, a University of Pennsylvania accounting professor, since the share price could have been higher had the market known of the billionaire’s growing stake.
More: Social-Media Regulations Expand Globally as Elon Musk Plans Twitter Takeover
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From Risk & Compliance Journal
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Citigroup Names New Compliance Chief
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Citigroup Inc. has named Tom Anderson as its new chief compliance officer.
Mr. Anderson, who currently serves as compliance chief of Citi’s personal banking and wealth management business, will begin his new role on June 1, according to an internal memo from Citigroup General Counsel Brent McIntosh seen by The Wall Street Journal.
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Payment Companies Propose Best Practices to Avoid Bank Shutouts
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A set of compliance best practices standardizing how money-services businesses can protect themselves against financial crimes could have an additional knock-on effect: preventing banks from dropping them as customers.
The primary goal of the new document from a group of industry associations, including the Electronic Transactions Association and the Money Services Business Association, is to help payment companies fight illicit activity such as money laundering and terrorism financing. But its authors also hope the standards will help protect against so-called de-risking by banking partners leery of the legal danger such business partners can pose, a problem that has long plagued the industry.
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The trading platform Coinbase Global held $256 billion in cash and cryptocurrencies for its customers at the end of the first quarter. PHOTO: SHANNON STAPLETON/REUTERS
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Cryptocurrency trading platforms might look and feel like regular brokerage apps to everyday users, but regulators have long warned they lack the oversight and investor protections that are built into traditional financial services.
Coinbase Global Inc. acknowledged that reality this week. In its quarterly filings, the crypto trading firm suggested that the digital tokens it holds for its users might not really belong to them if push comes to shove.
“Because custodially held crypto assets may be considered to be the property of a bankruptcy estate, in the event of a bankruptcy, the crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings, and such customers could be treated as our general unsecured creditors,” the company said.
Also: Bitcoin Falls Below $26,000, Tether Edges Down From $1 Peg
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Allianz SE has set aside an additional $2 billion for legal expenses related to ongoing settlements with investors in funds that sustained losses during the March 2020 market mayhem.
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The Senate confirmed law professor Alvaro Bedoya to the Federal Trade Commission on Wednesday, giving Democrats a 3-2 majority and potentially energizing the agency’s scrutiny of large technology companies.
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A New York judge on Wednesday said he was lifting an order finding Donald Trump in contempt of court, so long as the former president meets certain conditions and pays $110,000 in fines by next week.
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Relatives of victims of the 2021 condo tower collapse in Surfside, Fla., have reached a proposed $997 million settlement to resolve wrongful death claims against defendants sued over the building’s failure.
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A bitcoin-themed art installation at a conference last month in Miami. At present, there are no specific accounting or disclosure rules on companies’ crypto holdings. PHOTO: CHANDAN KHANNA/AGENCE FRANCE-PRESSE/GETTY IMAGES
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The Financial Accounting Standards Board voted to consider setting clear rules on the accounting and disclosure of certain digital assets such as bitcoin and ethereum, a move that could fill a gap for companies that hold these assets and provide more information to investors.
The U.S. accounting standard-setter said on Wednesday it would add the new project to the technical agenda that determines its rule-making priorities, paving the way for a potential new rule.
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April marked the fourth straight month grocery prices increased by at least 1%. PHOTO: DAVID PAUL MORRIS/BLOOMBERG NEWS
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Americans paid less for gasoline but more for groceries and air travel last month as the broader pace of inflation eased slightly but remained historically high.
A fall in energy costs led the way toward the smaller overall gain, with gasoline prices dropping a seasonally-adjusted 6.1% in April, following a steep advance in crude-oil prices in March after Russia’s invasion of Ukraine. Grocery prices rose by 1% over March and were up 10.8% over the past 12 months, the largest 12-month increase since November 1980, the Labor Department said.
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Ukrainian investigators have raced to collect evidence of purported atrocities committed by Russian troops against civilians during the nearly 11-week war and have said they would pursue war-crimes cases in domestic courts.
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Ukraine reduced flows of Russian natural gas through its territory to Europe, sending prices higher amid the continent’s still-precarious reliance on Russian fossil fuels.
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Finland’s president and prime minister said they supported the country applying for NATO membership, making it all but certain that the Nordic nation will join the alliance in response to Russia’s invasion.
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Moderna has emerged as a major Covid-19 vaccine maker. PHOTO: BRIAN SNYDER/REUTERS
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Moderna Inc.,, maker of a leading Covid-19 vaccine, said Wednesday its newly hired chief financial officer left the company on Tuesday, citing a newly revealed internal investigation by Dentsply Sirona Inc. into matters that include financial reporting.
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The current head of Johnson & Johnson’s consumer-health division will helm the business after J&J turns it into a stand-alone company. J&J said Wednesday it has named Thibaut Mongon as chief executive officer designate of the future consumer-health products company, which J&J plans to split off sometime in 2023.
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Japanese technology investor SoftBank Group Corp. reported the biggest annual loss in its four-decade history because of the global selloff in technology shares.
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Chris Smalls, a leader of the effort to organize at one of Amazon’s Staten Island distribution centers, after the votes were tallied in New York City on Friday. PHOTO: JASON SZENES/EPA/SHUTTERSTOCK
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Unionization efforts in two large American employers demonstrate some of the broader trends playing out in the U.S. labor movement. There are two key differences between unionization campaigns at Amazon.com Inc. and Starbucks: Starbucks petitions have been more frequent and much smaller in bargaining size compared with Amazon.
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