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North American Edition
26th May 2023
U.S. government alerts companies to impending ransomware attacks
A new initiative from the U.S. government's Cybersecurity and Infrastructure Security Agency (CISA) has issued around 225 notifications about planned ransomware attacks since the beginning of the year. The Pre-Ransomware Notification Initiative alerts organizations about a viable, imminent plot to lock up their systems and hold customer data hostage. Many of those alerted so far have been schools and hospitals. Through a related CISA program, the Ransomware Vulnerability Warning Pilot, the agency also identifies risks in organizations' systems and notifies them about those vulnerabilities. CISA's warnings go beyond the U.S., with the agency alerting organizations in 18 countries to 52 planned ransomware attacks. It has also received 33 notifications from 10 partner countries of impending attacks on U.S. organizations, and CISA wants to scale up the initiative, reports Bloomberg.
Three of Europe’s biggest insurers quit industry net zero initiative
French insurers Axa and Scor, and Allianz of Germany, have become the latest members of the Net Zero Insurance Alliance (NZIA) to quit. There have now been seven high-profile defections from the alliance in less than two months. Bloomberg says Axa’s departure is particularly noteworthy, as the firm had chaired the alliance, and since Munich Re quit the NZIA in late March, citing “material” legal risks, the alliance has struggled to keep other members from walking out. An emergency meeting of the alliance was held on Thursday, according to people familiar with the process. Bloomberg notes a growing anti-ESG campaign in the U.S. led by attorneys general from 23 states. The explicit targeting of NZIA led several members to conclude they were safer outside the alliance, people familiar with the deliberations said. Patrick McCully, a senior analyst at nonprofit Reclaim Finance, said that “as NZIA disintegrates before our eyes, we must ask why these huge companies with their hordes of lawyers didn’t see antitrust issues as a major obstacle when they founded the alliance.”
Tesla faces possible data protection violations in Germany
German authorities are investigating possible data protection violations by Tesla, according to Handelsblatt newspaper. The carmaker has allegedly failed to protect data from customers, employees, and business partners. One hundred gigabytes of confidential data was leaked to the newspaper by a whistleblower. The breach would violate the European Union's General Data Protection Regulation (GDPR). A lawyer for Tesla claims that a disgruntled former employee abused his access as a service technician to obtain information, and the company plans to take legal action against the suspected ex-employee. The whistleblower notified German authorities about the data protection breach in April. The Brandenburg data protection office has stated that the matter would become serious if the evidence becomes substantial. Tesla and the data protection office were not immediately available for comment.
SEC's largest-ever award related to Ericsson's bribery case
The record $279m whistleblower award issued by the Securities and Exchange Commission (SEC) earlier this month stemmed from a bribery case against telecommunications company Ericsson. The award was related to the $1.1bn settlement Ericsson reached with U.S. authorities in 2019 over allegations it made illegal payments to win business in five countries. The SEC's cash-for-tips program allows whistleblowers to receive between 10% and 30% of fines collected in SEC civil-enforcement actions and related actions from other enforcement agencies. Ericsson's wrongdoing occurred in Djibouti, China, Vietnam, Kuwait and Indonesia from 2000 to 2016. The deferred prosecution agreement in 2019 included a $520m criminal penalty and $540m disgorgement of illicit profits and required Ericsson to retain a compliance monitor for three years and to cooperate in related probes.
EU celebrates GDPR's fifth anniversary with record-breaking fine
The European Union's General Data Protection Regulation (GDPR) celebrated its fifth anniversary on Thursday. The EU marked the occasion by issuing a record-breaking fine of €1.2bn ($1.3bn) to Meta Platforms for violating the data protection rules. GDPR was hailed as a gold standard for regulating how companies use people's data, and its principles were later copied by other countries. However, Bloomberg notes the implementation of GDPR was slow, and regulators were held back by a lack of resources and procedural rules. The EU is currently negotiating new controls for AI, but it will likely take a while before the laws go into effect.
EU, Google to develop voluntary AI pact
Google's parent company, Alphabet, and the European Commission aim to develop an artificial intelligence (AI) pact involving European and non-European companies before rules are established to govern the technology, EU industry chief Thierry Breton said on Wednesday. He also urged EU countries and EU lawmakers to finalise details of the Commission's proposed AI rules before the end of the year. Both groups have yet to start negotiations to iron out their differences. EU Commissioner for Competition Margrethe Vestager underlined the need to act together. "We need the AI Act as soon as possible. But AI technology evolves at extreme speed. So we need voluntary agreement on universal rules for AI now," she said in a tweet.
Bank of America to cut jobs in Asia amid slowing Chinese dealmaking
Bank of America has asked around 40 bankers in Asia to look for new roles within the company as the lender seeks to cut costs globally and reduce its presence in the Chinese dealmaking market. The affected bankers work in junior roles and in Chinese equities, while a few are employees in banking and markets divisions. Those who cannot find another role internally within a few months would face redundancy. Bank of America expects its global headcount to shrink to 213,000 by the end of June. The move follows a similar one that is seeing fewer than 200 wealth management and lending employees moved to product specialist positions within the company's global operations organization.
Companies seek internal auditors when they get in trouble
Internal auditors are in especially high demand by businesses that have faced recent public failures, according to a new study.  The study, co-authored by Young Hoon Kim, an assistant professor of accounting at George Mason University's School of Business in Fairfax, Virginia, analyzed 49,000 corporate online job postings for internal auditors for the years 2010 through 2019 and found that when companies experienced a public failure the previous year, they were nearly 10% more likely to seek an internal auditor. Hiring internal auditors reduced the probability of the firm experiencing another failure by more than 17%, compared to failed companies that didn't hire an auditor. Not every company saw that much success, however, as those that hired internal auditors without providing appropriate governance structures were just as likely to fail again. 
PwC Australia leak staff told to step aside
PwC has agreed to remove staff with links to the leak and use of confidential Australian tax plans from government work until a review is completed. The Australian Treasury referred the matter to police for a criminal investigation on Wednesday. The scandal originated with PwC's former head of international tax, Peter Collins, who shared confidential information about Australia’s tax plans with other staff at the firm. Other PwC staff then used the leaked intelligence to advise 14 clients on how to sidestep new multinational tax avoidance laws in 2016. The scandal has elicited anger within the professional services community in Australia, with KPMG expressing concern about the reputational damage inflicted on the industry. KPMG CEO Andrew Yates and chair Alison Kitchen have urged their firm's workforce to act ethically and in the public interest, admitting the company had not always met expectations in the past.
CEO of biggest carbon credit certifier resigns
David Antonioli, the head of Verra, the world’s leading carbon credit certifier, is to step down next month. The move comes after an investigation found many of the Washington-based organisation’s carbon offsets, which are used by major companies for climate and biodiversity commitments, were worthless. Verra has certified more than 1bn credits through its verified carbon standard (VCS). The Guardian notes that companies such as Gucci are moving away from offsetting-based environmental claims while scientists are calling for urgent reform of the unregulated system.
U.S. unions call for equitable trade policy with China
U.S. trade policy with China and other nations must strike a more equitable balance between the needs of workers and corporate profits, according to leaders of two big U.S. unions. The impact of trade, especially with China, on U.S. workers is a sensitive issue for the Biden Administration, notes Reuters. U.S. President Joe Biden needs the support of unions and union workers in swing states such as Michigan or Wisconsin to win re-election in 2024. The leaders of the United Auto Workers and AFL-CIO unions expressed support for the Biden approach, but underscored the role open trade agreements have played in the decline of U.S. industrial unions. "We need trade agreements that have strong labor standards, strong environmental standards," said AFL-CIO Secretary-Treasurer Frederick Redmond. "We're not anti-trade," United Auto Workers union President Shawn Fain said during a panel discussion led by U.S. Trade Representative Katherine Tai. "We're anti-trade (when) it's a one-sided affair."
First-quarter GDP growth lifted to 1.3%
The U.S. economy grew at a 1.3% annual rate in the first quarter, as businesses wary of an economic slowdown trimmed their inventories, the government said Thursday in a slight upgrade from its initial estimate. The government had previously estimated that the economy grew at a 1.1% annual rate. Despite the first-quarter slowdown, consumer spending, which accounts for around 70% of America's economic output, rose at a 3.8% annual pace, the most in nearly two years and an encouraging sign of household confidence. Specifically, spending on physical goods, like appliances and cars, rose 6.3%, also the fastest growth rate since April-June of last year. A cutback in business inventories shaved 2.1 percentage points off January-March growth. “Consumers — the critical lynchpin to the U.S. economy — are still spending, tapping into savings and credit to be able to do so,″ said Jim Baird, chief investment officer for Plante Moran Financial Advisors. “That can’t persist indefinitely though, raising the risk of a more pronounced slowdown or recession the longer the Fed’s battle with inflation drags on.”

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