Risk Channel delivers the latest, most relevant and useful business intelligence to key decision makers and influencers, each weekday morning.

Jen Easterly, director of the U.S. Cybersecurity and Infrastructure Security Agency, has said that the security of America's election systems is assured, observing that “Malicious actors, even if they tried, could not have an impact at scale such that there would be a material effect on the outcome of the election.” Despite warnings of foreign attempts to influence the upcoming presidential race, particularly from Russia and Iran, Easterly emphasized that no specific cyber activity targeting election infrastructure has been detected. The Biden administration has taken steps to counter these threats, including seizing fake Kremlin-run websites and charging individuals involved in disinformation campaigns.

 

Los Angeles Times

Mastering GRC with the power of workflow automation and orchestration

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According to a new study by the French nonprofit SaferAI, many leading AI labs, including Elon Musk's xAI, are lacking in key safety measures. Siméon Campos, founder of SaferAI, said: “AI is extremely fast-moving technology, but AI risk management isn't moving at the same pace.” The study's ratings, which assess risk management practices, show that xAI received a score of 0/5, the lowest amongthe six companies evaluated. Meta and Mistral AI were also rated as having “very weak” risk management, while OpenAI and Google Deepmind received “weak” ratings. Campos hopes that the ratings will encourage companies to enhance their internal processes to reduce bias and misinformation. The grading framework aligns with international AI standards, including the EU AI Act. Yoshua Bengio, a prominent AI figure, endorsed the ratings, emphasizing the need for accountability in AI development.

 

Time.com

A new PCAOB report, Observations From the Target Team's 2023 Inspections, emphasizes the importance of expert involvement in public company audits, particularly in emerging risk areas like cryptoassets and multi-location audits. Inspectors found that most deficiencies were linked to cryptoassets, highlighting issues such as the auditor's response to material misstatement risks and the integration of internal control audits with financial statement audits. The report recommends that audit firms engage specialists and subject matter experts to enhance their practices. As stated in the report, "good practices" involve seeking assistance from experienced team members to address these challenges effectively.

 

Journal of Accountancy

The International Longshoremen's Association, representing 45,000 U.S. dockworkers, has agreed to suspend a three-day strike until January 15th to allow for contract negotiations. The union will resume work immediately, and a tentative wage increase agreement has been reached, raising the offer from 50% to 62% over six years. However, details remain undisclosed, and any wage increase must be ratified by union members. The strike, which began after the expiration of the previous contract, was prompted by disputes over pay and automation at 36 ports from Maine to Texas. "With the grace of God, and the goodwill of neighbors, it's gonna hold," said President Joe Biden. Until January 15th, workers will operate under the old contract, which expired on September 30th.

 

New Jersey Herald

Missoulian

Los Angeles Times

Wall Street Journal

Amazon has been accused by the National Labor Relations Board (NLRB) of illegally refusing to negotiate with a union representing drivers employed by Battle Tested Strategies (BTS). The NLRB's complaint asserts that Amazon is a "joint employer" of these drivers and employed illegal tactics to suppress union activities at a facility in Palmdale, California. Following their unionization last year, BTS drivers became the first Amazon delivery contractors to join the International Brotherhood of Teamsters. Teamsters President Sean O'Brien said: “This decision brings us one step closer to getting Amazon workers the pay, working conditions, and contracts they deserve." The case will be heard by an administrative judge in Los Angeles.

 

The Hill

Bloomberg

Reuters

EssilorLuxottica has asked a U.S. judge to throw out what it called “misguided” consumer lawsuits accusing it of monopolizing markets for designer frames and prescription lenses, causing customers to pay higher prices. A number of consolidated lawsuits filed in Manhattan allege that the Ray-Ban maker used serial acquisitions of rivals and restrictive sales and distribution agreements to unlawfully dominate markets for eye products. In its bid to dismiss the lawsuit, EssilorLuxottica said it and its affiliated companies operated in a highly competitive industry, and that the plaintiffs’ “grab bag” of antitrust claims failed to allege that the company was excluding potential rivals.

 

Reuters

Starbucks is buying two new research farms that will test everything from drones to microbes as it seeks to make coffee more resilient to climate change. A farm in Costa Rica will look at solutions including how technology can help growers, while in Guatemala Starbucks will replicate the challenges facing the small farms that make up 97% of its supply chain. It said future farm investments are also planned for Africa and Asia, noting that the company will have a network that spans the three main growing regions of the "Coffee Belt" - Latin America, Africa and Asia Pacific. The company aims to study the different cultures, landscapes and growing methods that contribute to growing coffee.

 

Bloomberg

International Business Times

Levi Strauss is contemplating the offloading of its struggling Dockers brand, which has suffered a 15% decline in sales during the third quarter. Chief executive Michelle Gass said: “We are narrowing our focus to realise the full potential of the Levi's brand as well as accelerate Beyond Yoga”. The company aims to enhance growth through its core denim offerings and direct-to-consumer sales. Despite Dockers' challenges, Levi's has seen a 10% increase in direct-to-consumer sales, particularly in women's clothing. The company anticipates fourth-quarter revenue growth in the mid-single-digit percentage range, lower than previous estimates due to Dockers' performance and reduced consumer spending in China. Levi has engaged Bank of America as a financial adviser for the strategic review of Dockers, with no set deadline for completion.

 

CNBC

Market Watch

The Globe and Mail

Hundreds of U.S. Environmental Protection Agency (EPA) employees in Chicago are raising concerns about Legionella bacteria and heavy metals in their drinking water. The American Federation of Government Employees Local 704 has filed a complaint, highlighting that many water sources at the Ralph H. Metcalfe Federal Building remain untested. “Based on the sampling that has been done, it is reasonable to believe that a significant number of untested sources are contaminated,” the union said. Although no Legionnaires' disease cases have been reported among employees, Local 704 President Nicole Cantello emphasized the need for immediate action, including shutting down drinking water sources and allowing remote work. U.S. Rep. Danny Davis urged management to prioritize employee safety, while the EPA acknowledged the issue and is coordinating with the General Services Administration to address the contamination.

 

Chicago Sun Times

The number of Americans who applied for unemployment benefits last week rose by 6,000 in the seven days to September 28th, according to the Labor Department, confirming that layoffs remain surprisingly low even though many companies have pulled the plug on hiring. Economists polled by the Wall Street Journal had forecast new claims to total 220,000. The four-week moving average of new applications fell to 224,250, while continuing claims were essentially unchanged at 1.83m. New jobless claims fell in 28 of the 53 states and territories that report the figures to the federal government, while 25 showed relatively small increases. Hurricane Helene-afflicted Georgia and Florida saw the largest declines, and North Carolina, South Carolina and Tennessee had smaller decreases. “The hurricane effect will reverse going forward, as people thrown out of work by storm damage will likely push up the tally for a few weeks," said Stephen Stanley, chief economist at Santander U.S. Capital Markets. His sentiment was echoed by Thomas Simons, U.S. economist at Jefferies LLC, who said there is nothing "particularly worrisome" about the latest figures, which were released ahead later today of the September jobs report.

 

Bloomberg

Market Watch

The Commerce Department has reported a 0.2% drop in factory orders in August, missing the 0.2% rise expected by economists and down from the revised 4.9% rise seen in July. The modest decrease by factory orders came as orders for non-durable goods slid by 0.5%, offsetting a slight uptick in orders for durable goods. The report also said shipments of manufactured goods fell by 0.5% in August after climbing by 0.8% in July. Inventories of manufactured goods inched up by 0.1%. The inventories-to-shipments ratio crept up to 1.46 in August from 1.45 in July.  

 

Nasdaq

RTT News

A new survey commissioned by KPMG has found that almost 60% of Canada's chief executives see economic uncertainty as their biggest current challenge. The proportion of top executives who expressed confidence in the three-year growth outlook for Canada’s economy was 83%, a decline of six percentage points from last year. Executives of smaller businesses appear to be a little more optimistic than the heads of larger companies about growth for the economy and for their own firms, the survey said. 

 

Bloomberg

In response to Hurricane Helene, the IRS is deploying over 500 employees to assist the Federal Emergency Management Agency (FEMA) with disaster relief efforts. These employees will help manage FEMA's call lines, providing crucial support to victims seeking federal assistance. The IRS has a long history of aiding FEMA during emergencies, having answered over 1.6m calls from storm survivors in the past decade. Additionally, IRS Criminal Investigation agents are actively involved in search and rescue operations. The IRS has already announced disaster tax relief for individuals and businesses affected by the hurricane, extending filing deadlines until May 1st 2025, to areas designated by FEMA, including Alabama, Georgia, North Carolina, South Carolina, and parts of Florida, Tennessee, and Virginia.

 

Tax Notes