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

A federal judge has allowed parts of a lawsuit against UnitedHealthcare to proceed, in which plaintiffs claim the insurer used a faulty artificial intelligence program to deny necessary post-acute care for Medicare patients. Judge John Tunheim of the U.S. District Court of Minnesota ruled that while most arguments were preempted by federal law, two claims — breach of contract and breach of the implied covenant of good faith — can continue. The lawsuit, filed in November 2023, alleges that UnitedHealthcare's AI tool, naviHealth, led to wrongful coverage denials, forcing patients to incur significant out-of-pocket expenses. UnitedHealthcare says the lawsuit is based on “unfounded allegations” and insists medical directors make decisions, not artificial intelligence. “Our number one priority is to ensure patients are receiving the care they need,” UnitedHealthcare said in a statement.

 

The Columbian

Minnesota Star-Tribune

Just Released: The 2025 IT Risk and Compliance Benchmark Report

Each year, we ask over 1,000 risk and compliance professionals about their pain points, budgets, staffing, risk management best practices, and much more to provide an in-depth view of the market’s current state and what to expect for the coming year. Join us on-demand as we unveil the findings from Hyperproof’s sixth annual IT risk and compliance benchmark report.

Watch Now

 

The European Commission is set to introduce at least five legislative simplification packages this year aimed at reducing bureaucratic hurdles in digital regulation. "I personally think that we have too much of a heavy administrative burden and bureaucracy," Henna Virkkunen, the EU Commission's vice president for technological sovereignty, security and democracy, said.  "That is why the commission will this year present at least five legislative simplification packages, which will cut down on the extra bureaucracy, above all in order to promote investment and innovation in Europe." Virkkunen last month said the European Union continues to enforce laws regulating big tech despite some U.S. companies calling on President Donald Trump to stop the bloc from fining them.

 

U.S. News

The Consumer Financial Protection Bureau (CFPB) has seen its signage removed from its Washington, D.C. headquarters, marking a significant move by the Trump administration in its efforts to dismantle the agency. The CFPB, established after the 2008 financial crisis, has faced increasing scrutiny and opposition from conservatives. Mark Calabria, a former housing official and adviser, has been temporarily detailed to the agency, while President Donald Trump's executive order has led to the termination of two advisory councils. Under a recent court order, CFPB's leadership committed to halting mass layoffs and preserving its data collections.

 

Reuters

Washington Governor Bob Ferguson has suspended a controversial policy that allowed the automatic deletion of instant messages at state agencies, following a $225,000 settlement with the Department of Children, Youth and Families (DCYF) for destroying public records. The settlement is the first of its kind against a Washington state agency regarding such actions. Ferguson said: “I am directing [Washington Technology Solution] to suspend Teams' automatic deletion feature for the agencies it supports until my team has completed a thorough 6-month evaluation.” The policy, implemented in 2021, permitted Microsoft Teams messages to be deleted after seven days, raising concerns about compliance with the Public Records Act. The DCYF has acknowledged the need for improved retention practices, while the Washington State Patrol has disabled Teams chats altogether.

 

The Columbian

Brazil's Supreme Court has fined Elon Musk's X 8.1m reais ($1.4m) for noncompliance with orders to provide user data linked to misinformation, rejecting the platform's arguments against compliance. The firm was said to have refused to provide registration data for a user profile accused of spreading disinformation. The account was linked to Allan dos Santos, an ally of the country's former President Jair Bolsonaro.

 

The Globe and Mail

BMW's chief purchasing officer, Joachim Post, says the German automaker does not see the need to negotiate a special deal with the U.S. to avoid import tariffs, noting the company's considerable local presence and good relations with U.S. government officials. BMW's plant in South Carolina is a major exporter to markets including China, Germany, and Britain; as such, BMW can shift focus for the local market should Donald Trump impose tariffs of around 25% on vehicle imports. "By value, we are the biggest exporter of vehicles from the United States," Post observed.

 

U.S. News

Citigroup CEO Jane Fraser has said that the bank will no longer require a diverse pool of candidates for job interviews, and it will only maintain "aspirational representation goals" where mandated by local law. Meanwhile, Citigroup's Diversity, Equity and Inclusion and Talent Management team will be rebranded as Talent Management and Engagement. "It is important to note that we're living in an environment where things are changing quickly," Fraser wrote, adding that the bank will still encourage "the best practice of having a variety of perspectives included in hiring decisions."

 

Reuters

The emergence of generative artificial intelligence (AI) has sparked concerns about AI-guided cheating in educational settings, particularly among accounting educators. Sean Stein Smith, a professor at Lehman College, said: "Students still need to understand the implications of ASUs, disclosures, etc., and if they rely entirely on AI for assignment completion that knowledge will fade away." While some educators, such as Tracey Niemotko from Marist University, view AI as a helpful tool rather than a cheating mechanism, others worry about students' over-reliance on AI, which may hinder their critical thinking skills. Jack Castonguay from Hofstra University expressed concern that students struggle to apply core concepts during presentations and exams due to their dependence on AI. As discussions continue among faculty on how to address this issue, the challenge remains to ensure students develop the necessary skills for their future careers in accounting.

 

Accounting Today

Charlie Javice has pleaded not guilty to securities fraud, wire fraud, bank fraud and conspiracy over JPMorgan's $175m acquisition of her college financial aid start-up Frank. Prosecutor Rushmi Bhaskaran claimed that Javice and co-defendant Olivier Amar, the start-up's chief growth officer, bought fake student data to satisfy demands from JPMorgan. Jose Baez, a lawyer for Javice, said the bank simply had "buyer's remorse" over the transaction.

 

Reuters

Asset manager BlackRock has reportedly resumed meeting with executives from its portfolio companies in the wake of new guidance from the U.S. Securities and Exchange Commission. The firm issued a statement on resuming its stewardship engagements, saying that it "does not use engagement as a way to control publicly traded companies." It went on to confirm: "we are complying with the new requirements including by highlighting our role as a 'passive' investor at the start of each engagement."

 

Reuters

Tom Frieden, former Centers for Disease Control and Prevention (CDC) director and current president of Resolve to Save Lives, warns that recent layoffs of federal health workers could jeopardize public safety. He said: “Undermining the CDC workforce makes America less safe and less economically productive.” The Trump administration's decision to terminate hundreds of probationary employees from key health agencies, including the CDC, Food and Drug Administration, and National Institutes of Health, has raised alarm among experts. Frieden says that the cuts will weaken essential training programs and create operational gaps, and “are not the way to make America healthier.”

 

U.S. News

The Conference Board reported Thursday that its Leading Economic Index (LEI) slipped 0.3% in January to 101.5, erasing almost all the gains made in the last two months. The consensus among analysts was for the LEI to be unchanged last month. For the six months ended January 2025, the LEI fell 0.9%. The Coincident Economic Index rose 0.3% to 114.3 in January from 114.0 in December (revised from 114.1), while the Lagging Economic Index climbed to 119.3 from 118.7. "Consumers' assessments of future business conditions turned more pessimistic in January, which — alongside fewer weekly hours worked in manufacturing — drove the monthly decline," commented Justyna Zabinska-La Monica, senior manager of Business Cycle Indicators at The Conference Board. "However, manufacturing orders have almost stabilized after weighing heavily on the Index since 2022, and the yield spread contributed positively for the first time since November 2022."

 

MSN

RTT News

Reuters reports that recent layoffs at Southwest Airlines - the first in the carrier's 54-year history - risk undermining a company culture of putting employees first that differentiated it from rivals and ensured a loyal fan base. Conor Cunningham, a travel and transport analyst at Melius Research, said the layoffs go against the company's long-built culture, which he described as "the special sauce that makes everything possible." Doug Parker, the former CEO of rival American Airlines, last year said Southwest enjoyed a competitive advantage with airline customers because of its culture. 

 

Reuters

An Associated Press report takes a look at how spending all day standing can take a toll on a worker’s body, and considers whether spending all day on your feet at work could be an occupational hazard. A review by the National Institute for Occupational Safety and Health found that standing for long periods can precipitate lower back pain, fatigue, muscle pain and leg swelling, and it can also heighten the risk of cardiovascular problems and pregnancy complications. Unionized workers at the Barnes & Nobles store in Manhattan's Union Square have made access to chairs and the right to sit down under certain conditions a part of their negotiations for their first contract.

 

U.S. News