Fitbit Employees Accused of Trade Secrets Crimes

Six people have been charged with being in possession of trade secrets of Jawbone after they left the now-defunct wearables maker to work for arch rival Fitbit.An indictment filed on Thursday accuses the six, who include one current Fitbit employee, of misconduct similar to allegations that Jawbo...

By Matthew Heller • June 15, 2018

U.S. Agrees to Lift American Parts Ban on ZTE

The Trump administration has announced it will lift a ban on American companies supplying ZTE with components as part of an agreement that requires the Chinese smartphone maker to pay a $1 billion penalty.The U.S. decision to end sanctions that had threatened to cripple ZTE’s operations follows t...

By Matthew Heller • June 7, 2018

House Sets Vote on Dodd-Frank Rollback Bill

Republican legislation to roll back the Dodd-Frank reform act is moving closer to clearing a final hurdle before being signed into law by President Donald Trump.CNBC reported that the House will vote on the legislation on Tuesday. It passed the Senate in March by a 67-31 vote with support from mo...

By Matthew Heller • May 16, 2018

Traditional Packaging Fails for E-Commerce

Using traditional product packaging in e-commerce can hurt the bottom line. For many companies, the practice triggers unnecessary, counterproductive costs several percent of their total cost of goods sold (COGS).Vijay Kasi This is a growing problem, with e-commerce rapidly becoming a much bigger ...

By Vijay Kasi and Tom Gildersleeve • May 15, 2018

McKinsey Accused of Running ‘Criminal Enterprise’

The founder of corporate restructuring firm AlixPartners has accused rival McKinsey & Co. of making at least $101 million in bankruptcy consulting fees by concealing potentially disqualifying conflicts of interest from the courts.In a complaint filed on Wednesday, Jay Alix said McKinsey had c...

By Matthew Heller • May 10, 2018

U.S. Parts Ban Forces Halt to ZTE Operations

Chinese smartphone maker ZTE said Wednesday it had ceased “major operating activities” as a result of a U.S. ban on American companies supplying it with parts.The announcement is the first major indication of the fallout from a “denial order” that the Department of Commerce issued on April 20, ci...

By Matthew Heller • May 9, 2018

Global CFOs Still Bullish on America — So Far

Two years ago, the makings of a new world order emerged. Brexit was followed by the 2016 U.S. presidential election and a foreign policy strategy that put “America First.” Since then, news headlines have prominently featured threats of import tariffs, renegotiated trade agreements, anti-immigrant...

By Dalynn Hoch • May 3, 2018

Panasonic Fined $280M Over Airline Scheme

Japan’s Panasonic Corp. has agreed to pay $280 million in criminal and regulatory penalties to settle charges that it engaged in a bribery scheme to secure business from a government-owned airline for in-flight entertainment systems.The U.S. Securities and Exchange Commission said the scheme invo...

By Matthew Heller • April 30, 2018

LendingClub Accused of Hiding Upfront Fees

LendingClub has been charged with deceiving consumers by advertising loans as having no hidden fees when it in fact collected “hundreds or even thousands of dollars” as an upfront fee.The U.S. Federal Trade Commission said Wednesday that the peer-to-peer lender effectively hid the upfront fee — a...

By Matthew Heller • April 25, 2018

Procurement Lacks Tech Prowess

Digital technologies may be taking over a broad swath of corporate processes, but the procurement function is lagging far behind in that respect, according to a new Deloitte report.A meager 3% of chief procurement officers (CPOs) said they believe their staffs possess all the skills required to m...

By David McCann • April 18, 2018

China’s ZTE Banned From Using U.S. Parts

The U.S. has sanctioned China’s second-largest maker of telecom equipment for breaching a settlement of allegations that it illegally shipped goods to Iran.Secretary of Commerce Wilbur L. Ross on Monday ordered American companies not to supply components to ZTE Corp. for seven years, saying it fa...

By Matthew Heller • April 17, 2018

Ex-Soupman CFO Gets Jail for $600K Tax Fraud

The former CFO of Soupman has been sentenced to nine months in prison for cheating the federal government out of nearly $600,000 taxes on compensation paid to employees of the gourmet soup company that licenses the recipes of the real-life “Soup Nazi.”Robert Bertrand, 63, admitted at his sentenci...

By Matthew Heller • April 13, 2018

Apple Hit With $502M Patent Infringement Award

A Texas jury has awarded $502.6 million in damages against Apple in a long-running legal battle between the tech giant and the holder of four patents for secure internet-based communication.The award came in the second of two lawsuits that Nevada-based patent holder VirnetX has filed against Appl...

By Matthew Heller • April 12, 2018

Blockchain Firm Accused of Illegal Stock Sales

The chief executive of Longfin and three of its stockholders have been charged with illegally selling shares in the cryptocurrency company after it went public through a Regulation A+ “mini-IPO.”The U.S. Securities and Exchange Commission said one of the shareholders — stock promoter Amro Izzelde...

By Matthew Heller • April 9, 2018

There’s No Legal Limit for AI Development

On Friday we published an article, based on an Allianz report, that explored the business risks emanating from the continued development of artificial intelligence tools. Here, attorney Coleman Watson shares his views on legal issues related to AI. Coleman Watson As noted in last week’s report fr...

By Coleman Watson • March 26, 2018

AI: Revolutionary Technology but a Big Business Risk

That machines are destined to become smarter and smarter as the years roll by, and that businesses will increasingly use them in attempts to differentiate products and boost profits, are not matters of debate.The real question is whether change wrought by artificial intelligence will, all things ...

By David McCann • March 23, 2018

Theranos Founder Accused of ‘Elaborate’ Fraud

Theranos founder and CEO Elizabeth Holmes has agreed to give up control of the diagnostics company to settle charges that her promise to revolutionize blood testing was an “elaborate, years-long fraud.”In what USA Today called a “downbeat coda to a once high-flying Silicon Valley startup,” the U....

By Matthew Heller • March 15, 2018

‘Impossible Position’ for Corporate Fraud Gatekeepers

[Editor’s note: This article, by a principal architect of the SEC’s whistleblower program, takes a much stronger stance against the Supreme Court’s recent whistleblower-case ruling than did an article we published in February.]Jordan A. Thomas Here’s the thing about corporate fraud: It’s kind of ...

By Jordan A. Thomas • March 15, 2018

Former Equifax Exec Accused of Insider Trading

A former Equifax executive was charged on Wednesday with selling his shares in the company based on insider knowledge that it had been exposed to a massive security breach.The U.S. Securities and Exchange Commission said Jun Ying, who was the chief information officer of Equifax’s United States I...

By Matthew Heller • March 14, 2018

How to Manage Cyber-Whistleblower Risk

Public companies increasingly are confronted with whistleblower complaints regarding data breaches, cybersecurity vulnerabilities, and related internal control deficiencies.William Barry If those complaints go unheeded — or, worse, prompt retaliation — companies could be exposed to civil liabilit...

By Brian Fleming and William Barry • March 8, 2018

Apple Finds 44 Core Violations at Suppliers

Overall compliance with Apple’s code of conduct for suppliers is improving but the number of serious violations of its policies doubled in 2017, the company reported.For its latest Supplier Responsibility Progress Report, Apple audited 756 suppliers spanning 30 different countries, 197 of them fo...

By Matthew Heller • March 8, 2018

What Risks Would a Trade War Bring?

President Trump’s announcement that his administration plans to impose tariffs on foreign-imported steel and aluminum threatens to send the United States and its trading partners into a global trade war.Steven Minsky Prices of U.S. domestic steel are up approximately 20% since the beginning of 20...

By Steven Minsky • March 6, 2018

Deloitte to Pay $149M Over TBW Loan Fraud

Deloitte & Touche has been fined $149.5 million to settle allegations that its auditors failed to detect a massive accounting fraud at Taylor, Bean & Whitaker that led to the collapse of the mortgage originator.In announcing the settlement on Wednesday, the U.S. Department of Justice said...

By Matthew Heller • March 1, 2018

Beijing Seizes Control of Anbang Insurance

China’s insurance regulator said Friday it will take control of troubled Anbang Insurance Group for a year in an unprecedented seizure by the Chinese government of a major non-state company.The dramatic move by the China Insurance Regulatory Commission (CIRC) came as the Shanghai prosecutors offi...

By Matthew Heller • Feb. 23, 2018

High Court Limits Scope of Whistleblower Law

The U.S. Supreme Court on Wednesday adopted a narrow reading of the Dodd-Frank financial reform law that may make it more difficult for whistleblowers to sue employers for retaliating against them.The law’s anti-retaliation provisions apply only if the whistleblower makes a complaint to the Secur...

By Matthew Heller • Feb. 21, 2018