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The Morning Risk Report: U.S. Blacklists Five Chinese Firms for Allegedly Helping Russia’s Military
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Good morning. The U.S. Commerce Department added five Chinese companies to an export blacklist for allegedly helping Russia’s military despite U.S. and allied efforts to cut off Russia’s access to technology following its invasion of Ukraine.
Commerce officials said the companies had supplied items to Russian entities of concern before Russia’s Feb. 24 invasion and “continue to contract to supply” sanctioned Russian entities. They didn’t provide details on the technology involved.
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The move, effective Tuesday, marks the first time U.S. officials have taken action against Chinese companies for allegedly supporting Russia in the war. It also comes as U.S. officials and others have continued to say that China has generally not sought to help Russia militarily.
National security adviser Jake Sullivan told reporters Tuesday that the U.S.’s number-one priority with respect to China when it comes to the war in Ukraine is that China not become militarily supportive of Russia through the provision of equipment. “Number two is that they not engage in wholesale or systematic undermining or evasion of U.S. sanctions,” he said while traveling to the North Atlantic Treaty Organization summit in Madrid. [Read more]
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From Risk & Compliance Journal
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New York regulator bullish on crypto despite market’s decline. Adrienne Harris, head of the New York State Department of Financial Services, said she wants the regulator to continue to be a leader in cryptocurrencies, remaining upbeat on virtual assets despite the industry’s turmoil. [Read more]
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The U.K.’s sanctions regulator fined a United Arab Emirates-based subsidiary of a U.K. company for violating sanctions on Syria. The Office of Financial Sanctions Implementation said Wednesday that it imposed a penalty of £15,000, equivalent to about $18,200, against Tracerco Ltd., a provider of oil-and-gas measuring products and services that is a subsidiary of London-based specialty chemicals company Johnson Matthey PLC. [Read more]
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The British government said Vladimir Potanin’s wealth is estimated at $16 billion.
PHOTO: MAXIM SHEMETOV/REUTERS
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U.K. sanctions Russian billionaire Vladimir Potanin. The U.K. sanctioned Russian metals billionaire Vladimir Potanin, the latest broadside by the British government aimed at Russia’s oligarch class. Mr. Potanin controls the Interros conglomerate and has a minority stake in MMC Norilsk Nickel PJSC, one of the world’s largest nickel makers. [Read more]
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Special Feature: CEO stock sales raise questions about insider trading. As Plug Power Inc. shares soared to a 15-year high in January 2021, longtime Chief Executive Andrew Marsh unloaded some of his stock in a well-timed sale.
In his biggest-ever payday from selling the company’s shares, Mr. Marsh netted $36 million by selling about 40% of his holdings under an automatic trading plan.
Prearranged trading plans, created by a regulation put in place two decades ago, have become a popular way for top executives and other company insiders to sell shares.
A WSJ analysis of such plans shows that executives benefit when sales happen quickly after the plans’ adoption. Academics and the Securities and Exchange Commission say some corporate insiders might be using nonpublic information to game the system.
The company and Mr. Marsh said the chief executive’s 2021 trades were routine and not timed before the earnings restatement. [Read more]
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China eases restraints on two tech platforms. Two Chinese technology companies said they have resumed registering new users, the latest sign Beijing is dialing back a regulatory campaign that had hurt economic activities in the country’s tech sector.
Logistics platform Full Truck Alliance Co. and online recruitment firm Kanzhun Ltd. said on Wednesday that Chinese authorities lifted a ban preventing the companies from registering new users, signaling the end of a year-long cybersecurity probe.
The two companies had come under scrutiny shortly after listing in the U.S., as part of regulatory moves that also had enveloped ride-hailing giant Didi Global Inc. just two days after its U.S. listing last year. The moves led some Chinese companies to hold off on plans to go public in the U.S. [Read more]
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A federal appeals court ordered a new trial for imprisoned insurance executive Greg Lindberg, who was convicted of attempting to bribe a state insurance commissioner with campaign contributions to secure more favorable regulatory treatment for his insurers.
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President Biden said at a NATO summit in Madrid that the U.S. will position more military personnel and equipment in NATO countries including Poland, Spain and the U.K., stepping up its security support across Europe. PHOTO: SUSAN WALSH/ASSOCIATED PRESS
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U.S. to ramp up military presence in Europe to counter Russia. The U.S. will carry out its biggest military expansion in Europe since the Cold War, including its first permanent troop presence in Poland, as NATO prepares for two more members to join the alliance in response to Russia’s invasion of Ukraine.
The announcement, which follows a NATO pledge this week to increase its high-readiness forces sevenfold, comes despite Washington’s efforts to shift U.S. attention toward China and offers fresh evidence of how Russia’s war is upending international security. [Read more]
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Under CEO Alex Mashinsky, Celsius surged amid the crypto boom to have more than $12 billion in deposits.
PHOTO: BLOOMBERG
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Behind the Celsius sales pitch was a crypto firm built on risk. Celsius Network LLC became a cryptocurrency lending giant on a pitch that it was less risky than a bank with better returns for customers. But investor documents show the lender carried far more risk than a traditional bank.
The lender issued numerous large loans backed by little collateral, according to Celsius investor documents from 2021 reviewed by The Wall Street Journal. The documents show that Celsius had little cushion in the event of a downturn, and made investments that would be difficult to quickly unwind if customers raced to withdraw their money. Celsius didn’t respond to requests for comment from the Journal. [Read more]
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FCC Commissioner Brendan Carr’s request adds to political pressure over TikTok, which has tens of millions of U.S. users.
PHOTO: TOM WILLIAMS/ZUMA PRESS
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FCC member calls on Apple, Google to banish TikTok. A federal communications regulator has asked Apple Inc. and Google to remove Chinese-owned TikTok from their app stores, citing the security risks posed by the data collected by the short-form video site on American users.
“It is clear that TikTok poses an unacceptable national security risk due to its extensive data-harvesting being combined with Beijing’s apparently unchecked access to that sensitive data,” Federal Communications Commission member Brendan Carr wrote in a letter to Apple and Google, a unit of Alphabet Inc. [Read more]
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The Transportation Security Administration is loosening pipeline cybersecurity rules imposed after the hack of Colonial Pipeline Co. last year, giving companies a longer window to report cyberattacks and more leeway to design their defenses.
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Consumer groups from several European countries on Thursday plan to file formal complaints to regulators alleging that Google violates privacy rules and doesn’t inform users of how their data from across the company’s services is used to target advertisements.
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Margaret Mitchell was fired as co-leader of Google’s ethical AI team after she wrote a critical paper; Google said it was for sharing internal documents with outsiders.
PHOTO: CHONA KASINGER/BLOOMBERG NEWS
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Tech giants pour billions into AI, but hype doesn’t always match reality. After years of companies emphasizing the potential of artificial intelligence, researchers say it is now time to reset expectations.
With recent leaps in the technology, companies have developed more systems that can produce seemingly humanlike conversation, poetry and images. Yet AI ethicists and researchers warn that some businesses are exaggerating the capabilities—hype that they say is brewing widespread misunderstanding and distorting policy makers’ views of the power and fallibility of such technology.
“We’re out of balance,” says Oren Etzioni, chief executive of the Allen Institute for Artificial Intelligence, a Seattle-based research nonprofit. [Read more]
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