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North American Edition
20th November 2023
 
THE HOT STORY
Citigroup expected to announce layoffs and management changes
Citigroup is expected to announce layoffs and senior management changes as part of its biggest reorganization in decades. The job cuts could affect thousands of staff, and executives are likely to announce the changes by email. Some staff may have the opportunity to apply for other roles at the bank. Last month, Citigroup revealed plans to reduce management layers and functional roles. Compliance and risk management staff, as well as technology staff working on overlapping functions, are at risk of being laid off. Citigroup declined to comment on the matter.
DIVERSITY, EQUITY & INCLUSION
SCOTUS ruling spurs new wave of DEI offerings
The Supreme Court's ban on affirmative action in college admissions has led to the creation of diversity, equity, and inclusion (DEI) practices at law firms such as Simpson Thacher and Paul Weiss. These firms have established DEI practice areas in response to client queries about racial equity audits and the potential legal challenges following the Supreme Court decision. Former US Attorney General Loretta Lynch, who leads the new practice at Paul Weiss, stated that clients want to ensure the effectiveness of their DEI programs. This second wave of DEI practice area creations comes after the killing of George Floyd in 2020 prompted firms to assist with designing DEI programs. Corporations now seek to defend these programs against conservative attacks. The rise of DEI practices reflects the increasing need for legal advice on DEI issues. Law firms are responding to market demand by advertising these services. The lack of competition among firms in providing conflict-free counsel is also noted. Multiple avenues of counsel are seen as beneficial for clients in navigating the evolving legal landscape.
LEGAL
IRS whistleblower program 'needs reforms to thrive'
Legislation aimed at improving the IRS Whistleblower Program would reduce processing delays, end double taxation for attorney fees, and remove budget sequestration, argues Stephen Kohn, founding partner of law firm Kohn, Kohn & Colapinto. The program has recovered over $6.6bn from tax cheats and non-compliant corporations, paying $1.1bn to whistleblowers. However, collections have dropped, and delays for award claims have reached nearly 11 years. The IRS Whistleblower Program Improvement Act of 2023 proposes technical reforms, including imposing interest on delayed awards, ending budget sequestration, eliminating double taxation of attorney fees, and implementing de novo review in award case appeals. Mr. Kohn argues that these reforms are crucial to restore trust and incentivize whistleblowers, particularly as comparable programs, such as the SEC Whistleblower Program, have seen record years of late. He concludes that to effectively enforce tax laws and close the tax gap, Congress must pass the IRS Whistleblower Improvement Act.
STRATEGY
Eli Lilly to build €2bn production plant in Germany
Eli Lilly plans to build a €2bn production plant in western Germany, its first major production complex in the country. The move comes as drugmakers aim to manufacture critical healthcare products closer to the markets they serve. The new site is expected to create over 1,000 jobs, including sub-contractors and suppliers. The plant will produce diabetes drugs, including the off-label weight loss drug Mounjaro. The investment is fully-funded by Eli Lilly, which has seen surging demand for its diabetes drugs. The town of Alzey, where the plant will be built, is within an hour's drive of major pharmaceutical and chemical companies. The German government sees the investment as a positive for the country's manufacturing sector. Eli Lilly's market value has risen over 65% this year.
WORKFORCE
Walgreens will close nearly all its pharmacies on Thanksgiving
Walgreens Boots Alliance plans to shut nearly all of its stores and pharmacies on Thanksgiving Day - for the first time in the pharmacy chain's history - amid complaints from pharmacists and technicians about poor work conditions and under-staffing. The chain will close most of its over 8,700 stores on Thanksgiving to give staff "time with their loved ones," it said. "We have consistently heard from our team members — who are the face of Walgreens — that time off is a meaningful way for us to demonstrate we value them," said Tracey Brown, president of Walgreens Retail and chief customer officer. Sector peer CVS Health has also announced it is to close all of its non-24-hour pharmacy locations early next Thursday. Rite Aid said its pharmacies will be closed but retail stores will remain open, adding that all Rite Aid stores will be closed on Christmas. Reuters notes that some staff members at CVS and Walgreens' U.S. pharmacies had launched a three-day walkout at the end of October to push their employers to improve working conditions and add more staff to their stores.
WORKPLACE
Millennials are redefining workplace norms
Millennials have become the most influential generation in the workplace, redefining workplace norms and pushing for changes in work culture, writes Kirk Coleman for Reuters. They typically prioritize work-life balance, flexibility, wellness, and opportunities for advancement, and also advocate for action on social and political issues, such as climate change. Millennials expect their employers to prioritize mental health and provide family-friendly policies, and have pioneered discussions on diversity, equity, and inclusion (DEI) and are determined to increase DEI in the workplace. As millennials take on leadership positions, they will continue to shape the future of work and bridge the gap between generations. Understanding their values and preferences is crucial for current leaders and mentors. Millennials have the potential to make a significant impact on the legal profession and other industries.
CYBERSECURITY
Israeli detective sentenced to prison for global hacking campaigns
A U.S. court has sentenced Aviram Azari, an Israeli private detective, to six years and nine months in prison for organizing global hacking campaigns. Azari, a former policeman, pleaded guilty to wire fraud, conspiracy to commit hacking, and aggravated identity theft. Prosecutors stated that Azari's firm earned nearly $5m over five years for managing hacking campaigns that targeted thousands of victims, including climate change activists and critics of German company Wirecard. The US Attorney's office in Manhattan described Azari as having "exhibited zero regard for the harm inflicted on his victims." Azari was hired by Wirecard to target individuals and financial firms that had criticized the company. He also used hackers to steal emails from climate activists campaigning against Exxon Mobil Corp. Azari's defense lawyer requested a sentence of no more than five years, citing his client's acceptance of responsibility and a "debilitating medical condition" contracted while in jail. The sentencing follows an investigation by Reuters that exposed how Azari and other private investigators used hackers to assist wealthy clients in court battles.
SEC charges SolarWinds CISO with fraud
The Securities and Exchange Commission (SEC) has charged SolarWinds Corporation and its former Chief Information Security Officer (CISO), Timothy Brown, with fraud and internal control failures related to the company's cybersecurity practices leading up to a 2020 cyberattack. This is the first time the SEC has brought charges against a company's CISO in connection with a cybersecurity incident. The SEC alleges that SolarWinds and Brown misled investors about the company's cybersecurity practices and had inadequate internal controls to prevent and detect cyberattacks. The charges mark a significant shift in the way the SEC views cybersecurity, holding companies and their executives accountable for failing to protect their systems and data. 
LEADERSHIP
OpenAI co-founder Sam Altman joins Microsoft
Following his surprise ouster, OpenAI co-founder and former CEO Sam Altman has joined Microsoft as the head of artificial intelligence research. Altman's move comes less than a year after OpenAI launched the viral chatbot ChatGPT and secured Microsoft as an investor. The shakeup is not the first for OpenAI, which has seen previous departures and the founding of competitor Anthropic. Altman's firing was due to a breakdown in communication, according to an internal memo. Microsoft CEO Satya Nadella confirmed the hiring of Altman and colleagues to lead a new advanced AI research team. OpenAI has appointed former Twitch boss Emmett Shear as interim CEO.
General Motors' Cruise CEO resigns amid safety review
Kyle Vogt, the CEO of General Motors' robot-taxi unit Cruise, has resigned from the company a day after apologizing to staff as the company undergoes a safety review of its U.S. fleet. Vogt's decision follows weeks of turmoil at the unit, which had to pull all its vehicles from testing in the United States to conduct a safety review after an October 2 accident. Cruise's woes are also a setback for an industry dependent on public trust and the cooperation of regulators, Reuters observes. The Cruise board met on November 13 and the next day named GM general counsel Craig Glidden as Cruise's chief administrative officer. Former Tesla President Jon McNeill, a GM director since 2022, was named vice chairman of the Cruise board alongside Barra, who is the chair. Barra has told investors Cruise could generate $50bn in revenue by 2030.
INTERNATIONAL
Italy's parliament approves ban on lab-grown food
Italy's lower house of parliament has approved legislation banning the use of laboratory-produced food and animal feed.  The proposal, which had already been approved by the upper house Senate, passed by 159 votes in favour to 53 against. It prohibits the use, sale, import and export of food and feed "from cell cultures or tissue derived from vertebrate animals." Italy’s minister for food sovereignty and agriculture, Francesco Lollobrigida, said the measures were about “defending work, environment, culture and identity — which are rooted in food quality,” and that they were intended to “defend our civilization against a model driven by delocalisation and long supply chains.” Factories breaching the prohibition can be subject to fines of up to €150,000m ($162,700) and could be shut down, and owners could lose their right to obtain public funding for up to three years.
Beijing law firm to open office in sanctions-strapped North Korea
A Beijing-based law firm, Jingsh Law Firm, plans to become the first Chinese firm to open an office in North Korea. The firm aims to attract Chinese investors interested in the opening up of the reclusive country. Jingsh Law Firm will also expand into Japan and South Korea, with all three offices expected to be open by the first half of next year. The firm intends to provide legal advice to Chinese investors for foreign direct investment, greenfield investment, and mergers and acquisitions. It will collaborate with a local partner in Pyongyang and hopes to have 10 to 20 staff there. Jingsh Law Firm's expansion plans align with North Korea's desire to promote an opening up. China was one of the first countries to reopen transport links with North Korea after the pandemic. However, strict controls on private businesses and international sanctions limit investment and trade with North Korea.
Hilton encourages Gen Z jobseekers to submit TikTok resumes
The Hilton hotel chain in Australia is encouraging jobseekers, particularly Gen Z workers, to submit TikTok videos as job applications. The company posted a video on TikTok, urging potential employees to create a short video showcasing their skills and how they would make a day for Hilton guests. Traditional written CVs are also being accepted. Mary Hogg, regional human resources director for Hilton Australasia, stated that the TikTok pilot was aimed at attracting candidates with strong interpersonal skills. Legal experts have noted that employers can request TikToks as part of job applications, but they must ensure that the requirements do not discriminate or have unreasonable impacts. In 2021, TikTok launched a similar program called #TikTokResumes.
 


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