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North American Edition
5th August 2022
The era of the kinder CEO is fading
Chief executive officers are ditching a softer approach as the economy shows signs of difficulty, reports the Wall Street Journal. As the economic outlook worsens, corporate bosses are bringing back blunt demands, performance reviews and telling employees to reconsider spending on trips. The CEO of Alphabet, Google’s parent company, told staff last month to work with “greater urgency, sharper focus, and more hunger than we’ve shown on sunnier days.” Meanwhile, Meta CEO Mark Zuckerberg said in late July that the Facebook owner needs to operate with greater intensity “and I expect us to get more done with fewer resources.” Ellen Kullman, chairwoman of 3-D printing company Carbon Inc. and former CEO of DuPont, observes: “In the good times, we want to focus people on the growth aspects . . . But when the economy appears to have the potential for that downturn, it’s fundamentals 101. It’s: How do I conserve cash? How do I focus the team to emerge from whatever this is stronger?” Now, “I hear from different CEOs that it is a little bit of a tougher talk,” Ms. Kullman said.
Tennessee sues Walgreens over opioid distribution
The state of Tennessee has filed a lawsuit against Walgreens, accusing the retail pharmacy of nourishing the state's opioid epidemic by willfully flooding the market with an oversupply of prescription narcotics in violation of consumer protection and public nuisance laws. According to the lawsuit, Walgreens used its position as one of the state's largest pharmacy chains to dispense over 1.1bn oxycodone and hydrocodone pills within Tennessee from 2006 to 2020, roughly equivalent to 175 tablets for every resident of the state. According to the lawsuit, Walgreens effectively became part of an "unlawful controlled substance selling scheme" by ignoring numerous signs of suspicious opioid prescription practices. A similar lawsuit brought against Walgreens and two pharmaceutical companies by the city of San Francisco is now under consideration by a federal judge following an 11-week trial during which the two other firms reached a $58m settlement with the city last month. 
Visa and Mastercard cut ties with ad arm of Pornhub owner MindGeek
Visa and Mastercard have suspended card payments for advertising on Pornhub and its parent company MindGeek after a federal judge in California denied Visa’s motion to dismiss a lawsuit by a woman who accuses the payment processor of knowingly facilitating the distribution of child pornography on Pornhub and other sites operated by parent company MindGeek. Visa CEO and Chairman Al Kelly said he strongly disagrees with the court’s decision and is confident in his position.  However, Kelly said the court decision created uncertainty about the role of TrafficJunky, MindGeek’s advertising arm, so the company will suspend its Visa acceptance privileges until further notice. Mastercard cited new revelations from the case for its decision to suspend card payments.
Mine workers ordered to pay Alabama coal company over $13m
The National Labor Relations Board (NLRB) has ordered the United Mine Workers of America to pay more than $13m in compensation to Warrior Met Coal Mining, an Alabama coal company, where members have been on strike for more than a year. The federal oversight board said the company was due the money for costs including increased security, damage repair and lost revenues from unmined coal, and individuals were due almost $30,000, mostly for damage to vehicles. “Is it now the policy of the federal government that unions be required to pay a company’s losses as a consequence of their members exercising their rights as working people? This is outrageous and effectively negates workers’ right to strike. It cannot stand,” international union president Cecil E. Roberts said.
Appeals court nips $200m IRS penalty against ExxonMobil
A federal appeals court has nipped a $200m penalty that the IRS imposed on ExxonMobil for wrongly seeking a $1bn tax refund, with the panel likening the underlying and convoluted area of law to “occult mysteries.” The government imposed the $200m penalty because it said Exxon’s billion-dollar refund request was excessive and unreasonable, but Judges Gregg Costa, Edith Brown Clement and James Graves of the U.S. Court of Appeals for the Fifth Circuit said the oil company reasonably construed a complicated tax issue over whether its income from certain transactions came from a lease or sale of minerals. It was a dispute that had to go to a bench trial, the panel noted. However, the panel sided with the government in the bulk of the case, rejecting a more than a billion-dollar refund Exxon sought. At issue were agreements Exxon entered into with Qatar and Malaysia, and whether those agreements were leases or sales. Exxon initially treated its mineral transactions with the countries as leases in 2006 and 2009, but in a refund request it filed a few years later, treated them as sales instead. Because the countries have an “economic interest” in the deposits that Exxon extracts, the judges said the agreements should be described as leases.
Bain & Co mulls legal action against U.K. over state contract ban
Bain & Co is considering legal action against the U.K. government after a three-year ban on bidding for state contracts was imposed on the firm for its “misconduct” in a corruption scandal in South Africa.
Goldman credit card business probed
The Consumer Financial Protection Bureau is investigating how Goldman Sachs manages accounts at its credit card business, the bank admitted in a regulatory filing on Thursday. Goldman’s consumer finance arm launched six years ago and credit card lending is a key factor in expanding the division. The business, which also includes Marcus-branded savings accounts and lending, generated $1.5bn in revenues last year. The bank is aiming to push revenues above $4bn by 2024.
Americans set to overtake Chinese for Portugal’s golden visas
According to one investment migration consultancy, 10,000 high-net-worth residents are seeking to pull $48bn from China this year. In the past, some have used Portugal’s so-called golden visa program as an escape route. But various impediments, including the EU making increasingly clear its disdain for residence and citizenship-by-investment programs, currently offered in some form by 10 member states, and an application process that requires an in-person interview — almost impossible amid China’s Covid travel restrictions – mean China’s ultra-rich are losing a favorite escape route to Europe. For the first time ever, more Americans are tapping Portugal’s golden visa program than their Chinese counterparts. Investment migration consultants also say government authorities in China have introduced subtle impediments as well, such as delaying passport renewals and questioning why certain documents need notarizing.
U.S. trade deficit narrows as energy exports rise
The U.S. trade deficit narrowed in June, as a rise in shipments of energy products pushed up exports, while cooling consumer appetite weighed on imports. The Commerce Department said the trade gap in goods and services closed 6.2% to $79.6bn after seasonal adjustment, down from May's revised deficit of $84.9bn. Economists surveyed by the Wall Street Journal had forecast a trade deficit of $80bn for June. Exports grew 1.7% to $261bn, helped largely by higher shipments of energy and food products. Imports fell 0.3% to $340bn, reflecting sizable declines in American purchases of autos and food items. “Faltering global growth and the stronger dollar are set to hit export demand over the coming months,” said Andrew Hunter, senior U.S. economist at Capital Economics.
CVS to enter primary-care sector by end of year
CVS said Wednesday that it plans to acquire or take a stake in a primary-care company by the end of the year. Speaking on the company's second-quarter earnings call, chief executive Karen Lynch said she wants to team up with a provider that has a strong management team and tech background and the ability to grow quickly. Other retailers, including Walgreens Boots Alliance, Walmart and Amazon have already made moves in the sector. In the three months to June 30th, CVS' net income rose to $3bn, or $2.23 per share, from $2.8bn a year earlier. Stripping out one-time costs, per-share earnings were $2.40. Analysts polled by FactSet were expecting adjusted per-share earnings of $2.18. Revenue came in at $80.6bn, ahead of analyst expectations for $76.4bn, according to FactSet.
Meta bosses switch to London
Former U.K. deputy prime minister Sir Nick Clegg is partly relocating to London, becoming the latest Meta executive to split their schedule between Silicon Valley and the U.K. as the company seeks to prevent an exodus of users to TikTok. Clegg, who is president of global affairs at Meta, will divide his time between homes in London and California, according to the Financial Times. The news of Clegg’s relocation came a day after it emerged that Adam Mosseri, the head of Meta’s Instagram service, is also planning to relocate to London. Alex Schultz, Meta’s chief marketing officer, also moved to the U.K. this year. Meta has 4,000 employees in London, making the U.K. capital its biggest engineering hub outside the U.S. Meta said in a statement: “The past few years have brought new possibilities around the ways we connect and work. We believe that how people work is far more important than where they work from.”
Coinbase forges deal to give BlackRock clients access to crypto
Coinbase has struck a deal with BlackRock to give the asset manager’s clients more seamless access to digital asset markets. BlackRock clients will be able to use its Aladdin investment-management system to oversee their exposure to Bitcoin along with other portfolio assets such as stocks and bonds, and to facilitate financing and trading on Coinbase’s exchange.
Exelon boss says climate bill would increase taxes on big utilities
Exelon CEO Chris Crane says the comprehensive climate and tax legislation package being weighed by Washington would raise taxes on big utilities and potentially stymie efforts to fight climate change. The Inflation Reduction Act includes a corporate minimum tax that would impact Exelon’s cash tax by about $300m annually, starting in 2023, Crane said. Tax incentives included in the bill are intended to boost the use of clean energy; however, efforts to transform America’s power grid will have a significant impact on utilities.  Crane’s comments signal the package may not provide enough aid for companies like Exelon that deliver electricity to homes and businesses, notes Bloomberg. “The higher tax would ultimately limit our ability to invest in infrastructure needed to accommodate the clean energy our customers want,” Crane said.
Indian agency accuses Vivo of $280m tax evasion
An Indian government agency has accused Chinese-owned Vivo Mobile of evading taxes worth 22.1 billion Indian rupees ($280m). India's Directorate of Revenue Intelligence (DRI) detected customs duty evasion, following which it has issued a show cause notice - a formal demand for an accused party to justify themselves - to Vivo India, the agency said in a statement. The DRI's investigation led to the finding of "incriminating evidence indicating wilful mis-declaration in the description of certain items imported," the statement said. The DRI has also issued a show cause notice to Oppo, another Chinese phone-maker, demanding duty of 44 billion Indian rupees ($556.5m).
Spanish research agency targeted by cyberattack linked to Russia
Spain’s leading scientific research agency has been hit by a cyberattack that authorities suspect is linked to Russia, according to the country's science ministry. The Spanish National Research Council was targeted by the ransomware attack on July 16th-17th, Spain’s science ministry said. A preliminary analysis by Spain’s cybersecurity authorities indicated that no sensitive or confidential information was extracted. The science ministry said the cyberattack was similar to others carried out against NASA in the United States and the Max Planck Institute in Germany.
North Korean fraudsters target LinkedIn listings
North Korean fraudsters are plagiarizing job listings on LinkedIn and Indeed and pretending to be from other countries as part of an attempt to raise money for the government in Pyongyang, according to cybersecurity experts and data provided to Bloomberg News. The fraudsters incorporate details they find on legitimate profiles into their own resumes in order to try getting hired at U.S. cryptocurrency firms, according to security researchers at Mandiant.
Returning office workers rediscover pet annoyances
Employees who are returning to their offices are rediscovering the pet peeves that come with working alongside colleagues, reports the Wall Street Journal. Coming back to the workplace after so much time away can be a bit of a culture shock for many professionals, observes Katie Burke, chief people officer at Cambridge, Mass.-based software firm HubSpot. “There was this romanticizing of the office experience,” she said. “Now we’re seeing a return to normalcy.” Workers may need a little time to readjust to a challenging commute or a new one for those who changed jobs, added Ms. Burke. “Everyone can benefit from taking a deep breath before going in and approaching things with a little bit of kindness,” she said. “When in transition everyone tends to forget what the expected rules of the road are.”

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