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Organized crime rings have expanded from Southeast Asia to form a global network, making up to $3 trillion a year, according to the head of Interpol. The pandemic has fuelled an "explosion" of human trafficking and cyber scam centers, and these crime groups are now operating at an unprecedented scale, Interpol secretary-general Jurgen Stock told a briefing at the global police coordination agency's Singapore office. The cyber-scam centers, often staffed by trafficked individuals, have helped criminal groups diversify their revenue from drug trafficking. Drug trafficking still contributes a significant portion of their income, but they are also involved in trafficking of human beings, arms, intellectual property, and stolen products. Interpol estimates that $2 trillion to $3 trillion in illicit proceeds flow through the global financial system annually. Last year, over 100,000 people were trafficked into online scam centers in Cambodia, and Myanmar handed over thousands of fugitive Chinese telecom fraud suspects to China. Singapore was praised for uncovering a money laundering case involving over S$3bn in seized assets.

 

Reuters

Treasury Secretary Janet Yellen has announced that a U.S. federal supply chain task force will meet to assess the Baltimore bridge collapse and port closure. The Francis Scott Key bridge in Baltimore collapsed after a freight ship crashed into it, leaving six construction workers presumed dead. Yellen stated that the Biden administration is committed to reopening the Port of Baltimore as quickly as possible. The supply chain task force, established to address COVID-19-era port blockages, will review the latest information on the situation. Yellen also mentioned that insurance payments may partially cover the cost of rebuilding the bridge, but emphasized that financing concerns should not delay reconstruction. The Port of Baltimore is considered one of the most important ports in the United States. The task force aims to prevent any disruptions to the supply chain caused by the bridge collapse and port closure.

 

MSN

The catastrophic bridge collapse at the Port of Baltimore is unlikely to cause a major supply chain crisis or spike in goods prices, according to economists and logistics experts. They say competing East Coast ports have ample spare capacity to absorb any surge in container traffic. While the closure of the Francis Scott Key Bridge may add time and cost for some companies, economists do not expect a significant macroeconomic impact. The impact on the Port of Baltimore's workers could be significant if the closure lasts more than a few days. Concerns do however arise regarding higher shipment costs for imported cars and trucks, as Baltimore is the largest U.S. port for "roll-on, roll-off" vehicle shipments.

 

Reuters

McKinsey & Co. has sent memos to some consultants, warning them of the limited time they have to win promotion. The memos were sent to engagement managers and associate partners in North America, reminding them that staff in these roles have an average of two and a half years to be promoted. McKinsey's recent actions suggest a possible rethinking of the firm's staffing strategy following years of aggressive hiring and low attrition rates. The firm maintains a high bar for performance and continues to recruit and hire robustly. McKinsey's warning comes at a time when the consulting industry is facing a slowdown in client activity and economic headwinds. The "up or out" policy, whereby employees are expected to be promoted within a specific time-frame or exit, is common in many global consulting firms. Other consulting firms, such as Accenture and Ernst & Young, have also trimmed headcount to control costs. Last year, McKinsey eliminated about 1,400 roles. The company has about 45,000 employees worldwide and has faced political backlash for its work in Saudi Arabia and China.

 

Bloomberg

Phoenix, Arizona has passed a landmark heat safety ordinance that will provide protections for outdoor workers in the hottest U.S. city. The rule, passed unanimously by the Phoenix city council, requires employers to provide access to rest, shade, water, and air conditioning for workers, as well as training on recognizing signs of heat stress. The ordinance will apply to city contractors and their subcontractors, including construction and airport workers. The rule also ensures access to air conditioning in vehicles by 2025. The new regulation aims to protect the most vulnerable workers and address the disproportionate impact of extreme heat on people of color. Last summer, Phoenix experienced record-breaking heat, with 31 consecutive days of temperatures over 110F. The ordinance comes as there are currently no federal standards protecting outdoor workers from extreme heat. The move has been praised by climate vulnerability researcher Juan Declet-Barreto, who said that Phoenix is recognizing the need to take action. Councilwoman Laura Pastor emphasized the importance of heat mitigation and respite for essential workers.

 

The Guardian

Artificial intelligence (AI) is posing increasing risks to financial firms, according to a report by the U.S. Treasury Department, with criminals able to mimic voice or video, impersonate customers, and carry out sophisticated email phishing attacks. The report highlights the need for improved coordination and regulation to address these risks, and also emphasises the challenges faced by smaller financial firms, which have fewer IT resources and less expertise in developing AI systems. To bridge this gap, the American Bankers Association is designing a pilot program for industry information-sharing on fraud. The U.S. government may also provide access to historical fraud reports to train AI models.

 

Cyberscoop

Bloomberg

The Securities and Exchange Commission (SEC) is investigating how tech and telecom companies handled the SolarWinds cyberattack. The SEC has refined its inquiries, seeking internal communications and probing for gaps in corporate security. The probe aims to determine what companies may have known but didn't disclose. The investigation follows a lawsuit filed by the SEC against SolarWinds, accusing the company of failing to maintain adequate controls and downplaying security risks. Bloomberg notes that the SEC's regulatory ambitions have faced criticism from trade and lobbying groups, including the U.S. Chamber of Commerce. The lawsuit is seen as a test of the SEC's power to penalize companies for alleged failures of controls. The SEC's enforcement director has highlighted a disconnect between what SolarWinds said publicly and what executives said internally.

 

Bloomberg

Extremists in the U.S. are increasingly engaging in doxxing, the practice of publishing personal information about someone online to spur harassment or violence, according to a report by cybersecurity firm Recorded Future. The trend has raised concerns in an election year, following an uptick in political violence. Doxxing victims have included federal law enforcement officers and public figures. While posting publicly available information is not illegal, many online service providers prohibit the practice. To combat potential doxxing, the report suggests that business and public leaders regularly review and update their online presence and remove personal information from people search websites.

 

Bloomberg

Recorded Future

A U.S. appeals court has upheld a jury's verdict in the trademark dispute between Constellation Brands and Anheuser Busch InBev. The court ruled that Constellation's hard seltzers, including Corona Hard Seltzer and Modelo Ranch Water, do not violate the trademark rights of AB-InBev-owned-Grupo Modelo, the maker of Corona and Modelo beers. The court stated that Constellation's contract to distribute Modelo beers in the U.S. also allowed it to sell hard seltzers using Modelo brand names. The case revolved around the definition of "beer" in the companies' agreement. Modelo alleged that Constellation breached the agreement and infringed its trademarks, while Constellation argued that the agreement's definition of "beer" covered its hard seltzers. A federal jury had previously sided with Constellation. The court's decision affirms the jury's verdict and rejects Modelo's challenge to the jury instructions. The case is Cerveceria Modelo de Mexico S de R.L. de C.V. v. CB Brand Strategies LLC, 2nd U.S. Circuit Court of Appeals.

 

Reuters

Nasdaq

A federal judge has ruled that Walmart is entitled to end its credit card partnership with Capital One early, due to the bank's repeated customer service failures. Walmart accused Capital One of being slow to post transactions and failing to replace lost cards promptly. The problems were discovered in late 2022 and early 2023. U.S. District Judge Katherine Polk Failla's decision favored Walmart's interpretation of the agreement, stating that Capital One's interpretation would leave Walmart powerless. Capital One disagreed with the decision and is considering an appeal. Both companies have been directed to resolve their remaining claims and counterclaims. 

 

US News and World Report

PYMNTS.com

SpaceX's lawsuit against the U.S. Department of Justice could have significant implications for discrimination laws. The lawsuit claims that administrative judges at the DOJ have been improperly appointed, which could curb enforcement of a federal law prohibiting discrimination based on citizenship. The DOJ argues that administrative judges do not need to be appointed by the president and confirmed by the Senate, as SpaceX claims, because their rulings can be reviewed by the attorney general. If SpaceX's legal theories are accepted, it could eliminate enforcement of an important civil rights statute. The case is ongoing, with SpaceX due to file its own motion for summary judgment. The lawsuit is also separate from SpaceX's lawsuit against the National Labor Relations Board, which alleges that the agency's structure is unconstitutional. SpaceX is facing multiple legal battles regarding discrimination and labor issues.

 

Reuters

The U.S. Consumer Financial Protection Bureau (CFPB) will be scrutinizing credit card reward programs following an increase in consumer complaints, according to Rohit Chopra, the director of the agency. Mr. Chopra stated that the investigation is a result of clashes with credit card issuers over regulations on late fees. "What the marketing gurus and consultants are telling credit card issuers is that they should focus consumers' attention on splashy rewards, but then withhold information from them when they're paying lots of interest and could switch to a lower-rate card, even within the same bank," he added. The CFPB aims to address the concerns raised by consumers and ensure transparency and fairness in the credit card rewards market. 

 

Reuters

Maryland could become the first state to adopt worldwide combined reporting for corporate taxes if a House Delegates proposal passes muster among the Senate's leadership ranks. The House spending package includes a provision mandating the reporting system for multinational companies, favoring a worldwide system to prevent profit shifting. However, Senate President Bill Ferguson has expressed skepticism about the bill.

 

Bloomberg Tax

A new Bloomberg News/Morning Consult poll reveals that 69% of registered voters in seven swing states support higher taxes on billionaires and higher income taxes on individuals earning over $400,000 a year. This widespread support for taxing the rich is seen across party lines, with 58% of Republicans, 83% of Democrats, and 66% of independents approving the idea. The preference for taxing billionaires has grown from a fringe idea to a centerpiece of President Joe Biden's economic policy, which also includes raising the current 21% corporate rate. However, despite this support, swing state voters trust former President Donald Trump more to handle tax policy. The poll also found that half of swing state voters like Mr. Trump's idea of imposing tariffs on imports. The support for populist-inspired tax policy could impact debates in Congress next year, particularly regarding the extension of Mr. Trump's tax cuts. Additionally, increasing the cap on state and local tax (SALT) deductions is likely to be a key tension point in Congress.

 

Accounting Today

CPA Practice Advisor