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U.S. companies will no longer be able to enforce noncompete agreements on employees, following a rule approved by the Federal Trade Commission (FTC). The ban aims to increase job mobility and prevent restrictions on workers' ability to switch jobs for higher pay. The FTC argues that noncompete agreements harm workers and the economy by reducing job churn and limiting the hiring ability of other businesses. The rule, which received support from the majority of the 26,000 comments received, will take effect in six months unless blocked by legal challenges. Business groups have criticized the measure, claiming it exceeds the FTC's authority. The U.S. Chamber of Commerce plans to sue to block the rule. Noncompete agreements are already banned in three states, including California.

 

The Baltimore Sun

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The Commodity Futures Trading Commission (CFTC) is investigating banks, including JPMorgan Chase, Bank of America, and Citigroup, to determine if they have been suppressing whistleblowers. The CFTC has requested non-disclosure agreements and employment and customer agreements from the banks' swaps and clearing businesses. The U.S. Securities and Exchange Commission has also increased oversight in this area and imposed fines on non-compliant companies. JPMorgan previously paid an $18m civil penalty for violating whistleblower protection rules. Damian Williams, a top enforcer of criminal malfeasance on Wall Street, has encouraged whistleblowers to come forward and report wrongdoing.

 

Firstpost

Reuters

Two crypto industry trade associations, the Blockchain Association and the Crypto Freedom Alliance of Texas, have filed a lawsuit against the Securities and Exchange Commission (SEC) to block a new rule that expands the regulator's interpretation of what constitutes a "dealer" of securities. The rule, adopted by the SEC in February, aims to enforce stricter oversight and risk management controls on proprietary traders and other firms in the U.S. Treasury market. However, the crypto groups argue that the rule threatens to hinder innovation and the digital assets industry. The associations are seeking a declaration that the rule is arbitrary and capricious and are asking for it to be vacated entirely.

 

CoinDesk

Some of the world's biggest tech and AI firms, including Amazon, Google, Meta, Microsoft, and OpenAI, have pledged to follow new online safety principles called Safety By Design. The principles, developed by child online safety group Thorn and non-profit All Tech is Human, aim to combat the creation and spread of AI-generated child sexual abuse material. The commitments include developing, deploying, and maintaining generative AI models with child safety at the center, proactively addressing child safety risks, and staying alert to emerging risks.

 

The Independent

The U.K. privacy regulator, the Information Commissioner's Office (ICO), has expressed concerns over Google's proposed cookie replacement technology, Privacy Sandbox. According to a draft report reviewed by the Wall Street Journal, the ICO stated that Privacy Sandbox has vulnerabilities that can compromise user privacy and anonymity. Google plans to phase out third-party cookies by the second half of 2024. The U.K.'s Competition and Markets Authority (CMA) is investigating Google's plan, fearing it may hinder competition in digital advertising. The ICO is urging Google to make changes and has shared its concerns with the CMA. The CMA has promised to consider the ICO's recommendations. Neither the ICO, CMA, nor Google have responded to requests for comment.

 

Reuters

The Supreme Court on Tuesday appeared willing to side with Starbucks in the company’s challenge to a federal judge’s order to reinstate seven workers who were attempting to unionize a store in Memphis. The justices heard arguments in the Seattle-based company's appeal of a lower court's approval of an injunction sought by the U.S. National Labor Relations Board (NLRB) ordering reinstatement of the workers. The case could make it harder to quickly halt labor practices challenged as unfair under federal law while the NLRB resolves complaints. A majority of the justices seemed sympathetic to Starbucks’ argument for a more rigorous test for allowing the labor board to reinstate workers. Through their questioning, the justices appeared to see the looser standard that the NLRB was given in this case as an outlier.

 

USA Today

New York Times

Washington Post

Kroger is set to pay $47.5m to the state of Washington for its role in the opioid epidemic. The state sued Kroger, along with Albertsons and Rite Aid, for failing to act against the over-prescription of opioids. The lawsuit is part of a larger effort by Washington and other states to hold companies accountable for their involvement in the opioid crisis. The settlement, which is not yet finalised, will be paid out over 11 years and will be used to combat the opioid epidemic. Half of the money will go to the state, while the other half will be allocated to local governments. Washington Attorney General Bob Ferguson said: "We've won more than $1.2bn that's going to every community in the state to combat the opioid and fentanyl epidemic by improving treatment options, educating youth, and supporting first responders".

 

The Columbian

The Securities and Exchange Commission (SEC) is being sued by the National Center for Public Policy Research, a conservative think-tank, which alleges the regulator's new market surveillance tool violates their constitutional privacy rights. The suit, which was brought along by a pair of individual investors, accuses the SEC of acting without authority to create the Consolidated Audit Trail, a database intended to collect virtually all U.S. trading data.  According to the suit, the CAT will "impose dystopian surveillance, suspicionless seizures, and real or potential searches on millions of American investors." First proposed in 2010 after that year's "flash crash" briefly wiped almost $1tn off U.S. stocks, the CAT is designed to give the SEC a live window across markets in near real-time, with an eye toward detecting unusual activity and misconduct. The case is Davidson v. Gensler, 24-cv-00197, U.S. District Court, Western District of Texas (Waco).

 

Accounting Today

A Citigroup managing director has filed additional details to a November lawsuit accusing the bank of failing to protect her from a supervisor's threats and abuse due to a "pervasive" culture of sexual harassment and gender discrimination. Ardith Lindsey detailed threats from Mani Singh, a former Citigroup executive, including violent phone calls and text messages. She also alleged years of abuse and misconduct, as well as the bank's failure to address the issue. Citigroup stated it would defend against Lindsey's claims and emphasized its commitment to preventing discrimination and harassment in the workplace. The lawsuit comes amid ongoing efforts by Wall Street banks to address diversity and gender equality issues.

 

U.S. News

European Union watchdogs have raided the premises of an unidentified security equipment firm in another test of a new law aimed at preventing foreign state-funded companies from abusing their financial muscle to fend off EU rivals. The move follows a flurry of probes under the Foreign Subsidies Regulation, targeting Chinese firms involved in clean energy and rail. The EU has powers to vet subsidies that can distort European markets and could issue fines, orders to suspend tenders, or outright blocks of state takeovers.

 

Bloomberg

Grain trader Archer-Daniels-Midland (ADM) has announced that its Chief Financial Officer, Vikram Luthar, will resign from his role effective September 30. Luthar is the highest-level executive to leave the firm since accounting issues were disclosed within its Nutrition division. ADM had put Luthar on administrative leave in January as it launched an internal investigation. Luthar will receive $743,419 in cash performance incentive award for 2023 and shares awarded in 2021. CEO Juan Luciano stated that the decision was made after careful consideration of the future of the company. Luthar joined ADM in 2004 and oversaw the company's transition to a diversified food ingredients and nutrition company. However, the new division faced growing pains, and ADM corrected six years of financial data in March. ADM shares closed down slightly on Monday. Government investigations are ongoing.

 

Reuters

U.S. steelmaker Cliffs is focusing on buying back shares instead of pursuing takeovers, according to CEO Lourenco Goncalves. The company plans to repurchase up to $1.5bn in stock, as Goncalves believes it is a better use of capital than any M&A opportunities at current valuations. This decision comes after Cliffs lost out in a bidding war for Nippon Steel Corp. Goncalves has been critical of the $14.1bn takeover of the American steelmaker by a Japanese company, calling it a severe miscalculation. Cliffs' first-quarter results missed analysts' estimates, causing shares to drop 2.5% in after-market trading. The Cleveland-based company is renewing its buyback program after ending its previous plan to repurchase up to $1bn in shares.

 

Bloomberg

As more companies invest in artificial intelligence (AI), Luminos.AI, a new software firm, has emerged to combat AI legal risks. Luminos.AI spun off from Luminos.Law, a law firm specializing in advising companies on AI and analytics risks. The firm's custom AI risk software is now available on an enterprise platform. The potential legal risks associated with AI have grown as companies invest billions of dollars in the technology. Luminos.AI offers a range of products, including a "bias calculator" and an automated reporting tool for compliance documentation. The company, co-founded by Andrew Burt and Mike Schiller, raised $1.7m last year and is currently in the process of a second capital-raising. Other law firms have also spun off technology ventures in recent years. Luminos.AI aims to address the legal challenges of AI and ensure fairness and compliance in AI systems.

 

Reuters

A pair of new surveys from S&P suggest that the U.S. economy lost momentum in April. The flash U.S. manufacturing purchasing managers index (PMI) slipped to a four-month low of 49.9 in April from 51.9 the previous month, while the flash services PMI fell 0.8 points to a five-month low of 50.9. Both readings were close to the 50-mark separating expansion from contraction. “The U.S. economic upturn lost momentum at the start of the second quarter,” said S&P chief business economist Chris Williamson. “The more challenging business environment prompted companies to cut payroll numbers at a rate not seen since the global financial crisis [in 2008-2009] if the early pandemic lockdown months are excluded.”

 

Bloomberg

Market Watch

Google has fired at least 20 more workers in the aftermath of protests over the company's supply of technology to the Israeli government. The total number of terminated staff now exceeds 50, according to the group representing the workers. The protests were centered on Project Nimbus, a $1.2bn contract signed in 2021 for Google and Amazon to provide cloud computing and AI services to the Israeli government. The contract has faced backlash from employees and activists since it was signed, but the objections have grown amid Israel’s ongoing military campaign in Gaza. Dozens of employees occupied company offices in New York City and Sunnyvale, California. The group organizing the protests, No Tech For Apartheid, accused Google of attempting to quash dissent and silence its workers. The company disputed the group's claims and stated that every terminated employee was personally involved in disruptive activity.

 

Arab News

The Times of Israel