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

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

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

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

Eyeing Cyber Risks, SEC Seeks 3.5% Budget Boost

After a two years of flat funding, the Securities and Exchange Commission is asking Congress to boost its 2019 budget by 3.5%. And perhaps the SEC’s main reason for the request is to help the commission tackle cyber risks and fortify its technological capabilities.In the budget request it release...

By David Katz • Feb. 13, 2018

CFPB Said to Be Icing Probe of Equifax Breach

The Consumer Financial Protection Bureau is reportedly backing off its investigation into last year’s massive security breach at Equifax, fueling Democratic lawmakers’ concerns that the Trump administration is seeking to gut the consumer watchdog.Citing people familiar with the matter, Reuters re...

By Matthew Heller • Feb. 5, 2018

Apple, Cisco Move Into Cyber-Insurance Market

Call it iCoverage. Apple announced Monday it is teaming up with Cisco Systems to help businesses that primarily use equipment from the technology companies to insure themselves against the risk of cyber-attacks.The joint venture, which also includes insurer Allianz SE and insurance broker Aon PLC...

By Matthew Heller • Feb. 5, 2018

How Fake News May Lead Us to a Cyberwar

Fake news — we’ve all heard the phrase over the past couple of years. However, we sometimes struggle to grasp the far-reaching extent of its impact.Joe Carson With the next generation moving to online and social media as their go-to news source, and a good chunk of what is put out on social media...

By Joe Carson • Feb. 5, 2018

U.S. Trade Panel Overturns Bombardier Tariffs

In an unexpected setback for the Trump administration’s “America First” trade policy, the U.S. International Trade Commission said Canadian aircraft manufacturer Bombardier could import its CSeries planes without huge tariffs.The Commerce Department had imposed a nearly 300% tariff after finding ...

By Matthew Heller • Jan. 26, 2018

Delaware Suit Targets Painkiller Supply Chain

Delaware has accused drug distributors and pharmacies of facilitating the abuse of prescription painkillers in a lawsuit that targets the entire opioid supply chain.U.S. states, counties and cities have repeatedly sued drugmakers for pushing addictive painkillers through deceptive marketing. In i...

By Matthew Heller • Jan. 22, 2018

Deregulation Push Targets Payday Loan Rules

The new leadership of the Consumer Financial Protection Bureau has begun the process of potentially unwinding one of the agency’s signature rules aimed at curbing payday lending.The CFPB is now under the control of White House budget director Mick Mulvaney, who once called the bureau a “sick joke...

By Matthew Heller • Jan. 18, 2018

Apple Reveals Widespread Hardware Bugs

“Meltdown” and “Spectre”: They sound like a doomsday scenario and a super villain from a James Bond movie, respectively. But according to an an announcement by Apple yesterday, they represent microchip flaws that “apply to all modern processors and affect nearly all computing devices and operatin...

By David Katz • Jan. 5, 2018

Petrobras Settles Investor Class Action for $2.9B

In one of the largest securities class action settlements in U.S. history, Petrobras said Wednesday it had agreed to pay $2.95 billion to investors who sued over losses resulting from the Brazilian state-owned oil company’s corruption scandal.The settlement, if approved by a federal judge in New ...

By Matthew Heller • Jan. 3, 2018

Report Faults FAA Oversight of Regional Airlines

The Federal Aviation Administration’s tools for detecting financial risk at regional air carriers are inadequate and inspectors do not use them effectively due to a lack of financial knowledge, an internal investigation has found.Congress had asked the the Transportation Department’s inspector ge...

By Matthew Heller • Jan. 2, 2018

Feds Propose Easing of Oil-Drilling Safety Rule

The Trump administration has extended its rollback of environmental regulations to offshore drilling, proposing revisions to safety standards adopted in the wake of the Deepwater Horizon rig disaster.The Interior Department’s Bureau of Safety and Environmental Enforcement said the changes to the ...

By Matthew Heller • Jan. 1, 2018

Mitsubishi Says Top Exec Knew of Data-Rigging

Mitsubishi Materials has reported that the former head of its cable-making subsidiary allowed possibly inferior products to be shipped to customers for about eight months.An interim investigative report released Thursday said former Mitsubishi Cable Industries President Hiroaki Murata, who resign...

By Matthew Heller • Dec. 28, 2017

Kmart Fined $32.3 Million Over Rx Drug Fraud

Kmart has agreed to pay $32.3 million to settle allegations that it overcharged federal health programs by failing to report the true prices of prescription drugs.The settlement arose from a 2008 whistleblower lawsuit brought by James Garbe, a pharmacist at a Kmart in Ohio who discovered that the...

By Matthew Heller • Dec. 28, 2017