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

U.S. President Donald Trump has signed an executive order to “increase oversight” of proxy advisers that guide shareholder votes made by pension funds and some other money managers, saying top firms often "advance and prioritize radical politically-motivated agendas." Trump directed the Securities and Exchange Commission, the Federal Trade Commission and the Labor Department to review if Institutional Shareholder Services and Glass Lewis had violated rules or antitrust law related to their treatment of environmental and social issues. The executive order calls for a review of regulation relating to proxy advisers and to consider “revising or rescinding those rules, regulations, guidance, bulletins, and memoranda that are inconsistent with the purpose of this order, especially to the extent that they implicate ‘diversity, equity, and inclusion’ and ‘environmental, social, and governance’ policies.” The order also directs the agencies to consider steps such as new regulations.

 

Bloomberg

Financial Times

Reuters

A Guide to AI Risk Management Frameworks

Ready to unlock the power of AI while staying ahead of potential risks? This essential resource provides you with a clear overview of the latest frameworks, practical strategies for risk assessment, and expert insights to help you navigate the complexities of AI deployment. Equip yourself with the knowledge to manage AI risks effectively and drive your projects with confidence. Read our guide today and lead your organization towards secure, responsible AI innovation.

Read Now

 

The Office of the Comptroller of the Currency (OCC) has said the nine largest U.S. banks had in the past placed restrictions on providing financial services to some controversial industries in a practice known as "debanking." The regulator launched its review after President Donald Trump signed an executive order directing a regulatory review of all banks for such current or past practices. “It is unfortunate that the nation’s largest banks thought these harmful debanking policies were an appropriate use of their government-granted charter and market power," Comptroller of the Currency Jonathan Gould said. The OCC was unable to provide specific examples of wrongdoing at the banks. The firms examined were JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, U.S. Bank, Capital One, PNC, TD Bank and BMO Bank.

 

Reuters

U.S. Treasury Secretary Scott Bessent is to recommend changing the approach of the Financial Stability Oversight Council. The agency’s focus has been tightening regulations and oversight of the institutions it oversees, but the new plan will push for looser regulation. ″[T]he Council will work with and support member agencies in considering whether aspects of the U.S. financial regulatory framework impose undue burdens and negatively impact economic growth, thereby undermining financial stability,” a letter published Thursday states. Bessent further noted that the impact of additional regulations is assessed “in isolation,” not in how it impacts the economy broadly. “The cumulative burdens of regulatory and supervisor regimes, and the interactions among individual rules, are rarely considered,” he said.

 

CNBC

The U.S. Treasury is proposing to take a lead role in anti-money-laundering (AML) enforcement, aiming to curb what it sees as excessive and ineffective regulation of banks. Under the draft plan, regulators would need Treasury’s Financial Crimes Enforcement Network (FinCEN) approval before penalizing banks for Bank Secrecy Act breaches, especially in cases of technical violations. Treasury Secretary Scott Bessent argues current rules stifle economic growth and wants FinCEN to act as a "gatekeeper" for AML enforcement. The proposal would undergo public consultation before implementation.

 

Wall Street Journal

Amazon is to pay €510m ($582m) to settle a tax dispute in Italy, in one of a number of cases involving the company there. Reuters reports that Milan's prosecutors are however in disagreement with the settlement between the tax collection agency and the company, and plan to continue their criminal investigation, according to sources. Amazon criticized the Italian regulatory environment, saying: "We will forcefully defend our position on the potential ungrounded criminal case . . . Unpredictable regulatory environments, disproportionate penalties, and protracted legal proceedings are increasingly affecting Italy's attractiveness as an investment destination."

 

Reuters

The U.S. government's statistical system is facing severe challenges due to significant staff layoffs, funding cuts, and political interference, according to a report by the American Statistical Association. One agency reportedly lost 95% of its staff, while others experienced reductions of up to 40%. The report highlights that the cuts threaten the integrity of data essential for informed decision-making across various sectors, including the economy and education. “The statistical system is still functioning, but the threats are very serious,” said Beth Jarosz, vice president of the Association of Public Data Users, which was not involved in the report. “There are staffing reductions, contracted services that have been reduced. We're seeing that showing up in the cancellation of data products, the reduction in data collection on things like consumer prices.”

 

U.S. News

The U.S. trade deficit narrowed by nearly 11% to $52.8bn in September, the smallest gap since mid-2020 and well below economist expectations of $63.1bn, driven by a sharp rise in exports of non-monetary gold and pharmaceuticals. Exports rose 3% $289.3bn, while imports increased 0.6% to $342.1bn, according to Commerce Department data published on Thursday. The inflation-adjusted goods trade deficit fell to $79bn, the lowest in almost five years, with real exports of consumer goods hitting a record high. The U.S. posted its largest-ever trade surplus with Switzerland amid shifting gold flows influenced by tariff policy, while deficits with Mexico and Canada widened and the China gap narrowed to near its lowest since 2009.

 

Bloomberg

Nasdaq

Reuters

Wall Street Journal

Canada Pension Plan Investment Board chief executive John Graham has said private credit “is a buyer beware” market, as he cautioned institutional investors against rushing into deals.

 

Financial Times

Do Kwon, the South Korean cryptocurrency entrepreneur who was behind two digital currencies that lost an estimated $40bn in 2022, has been sentenced to 15 years in prison for what a New York judge called an "epic fraud." Mr. Kwon was the co-founder of Singapore-based Terraform Labs, which developed the TerraUSD and Luna digital coins. U.S. District Judge Paul A Engelmayer said the Stanford graduate had repeatedly lied to investors who trusted him with their money. "This was a fraud on an epic, generational scale," he said during Thursday's court hearing in Manhattan. "In the history of federal prosecutions, there are few frauds that have caused as much harm as you have."

 

CNN

New York Times

BBC News

The heirs of Suzanne Adams, an 83-year-old woman from Connecticut, are suing OpenAI and Microsoft for wrongful death, claiming that Open AI's ChatGPT bot  exacerbated her son Stein-Erik Soelberg's paranoid delusions, leading to her murder. The lawsuit alleges that the AI chatbot reinforced harmful beliefs, stating: “Throughout these conversations, ChatGPT reinforced a single, dangerous message: Stein-Erik could trust no one in his life - except ChatGPT itself.” Soelberg, who had a history of mental instability, fatally attacked his mother before taking his own life. The lawsuit, filed in California Superior Court, accuses OpenAI's close business partner Microsoft of approving the 2024 release of a more dangerous version of ChatGPT “despite knowing safety testing had been truncated.” The case is the first wrongful death suit linking an AI chatbot to homicide rather than suicide. OpenAI said it is reviewing the allegations and continues to improve its AI's responses to mental health issues.

 

U.S. News

More than 3,800 Starbucks baristas across 180 stores in 130 U.S. cities have joined a month-long strike, marking the longest work stoppage in the company’s history as Starbucks Workers United presses for a first labor agreement. The union is demanding better pay, staffing, and scheduling, while Starbucks says fewer than 1% of its 17,000 U.S. locations have been affected and is prepared to resume talks. The strike began during the company’s Red Cup Day on November 13th and follows stalled negotiations and the rejection of a previous pay proposal.

 

Reuters

Mexico’s Senate has approved sweeping legal reforms that impose prison terms of up to eight years and fines of up to 226,000 pesos ($12,500) for producing or selling vapes and electronic cigarettes, in a major escalation of anti-tobacco enforcement. The legislation, backed by President Claudia Sheinbaum, now awaits her formal enactment and aims to crack down on the growing market amid health concerns and fears of criminal involvement.

 

Reuters