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How a Proposal for German Corporate Criminal Reform Would Affect Privilege and Internal Investigations

If the Corporate Sanctions Act is adopted in current form, German in-house counsel may face challenges with investigations. Read

EU Regulators Finally Clarify Scope of GDPR

Answers to the pressing questions: "Does the GDPR apply to my organization, and if so, to what extent?" Read

Blockchain Basics: Global Regulations

Blockchain’s regulatory landscape is unsettled and constantly shifting. Here's what to watch on the horizon. Read

California AB 51 Bans Mandatory Employment Arbitration Agreements

Wide in scope but short on certainty, this law raises several questions and will likely face legal challenges. Read

Around the World: Disability Law Changes

Globally, more than 100 million people live with a major disability. Here's an overview of new disability laws. Read

In Brief

Today's Top Story

In Bid to Curb Virus, China Firms Tell Staff to Work From Home Even After Holidays End

Chinese corporate giants including Alibaba and Tencent said they have asked staff to work from home for one week after an extended Lunar New Year break ends, with the New York Times (27 January) reporting that the move is an effort to limit the spread of coronavirus. The government already lengthened the week-long Lunar New Year holiday by three days to 2 February. So far, the flu-like virus has infected more than 2,700 people, and has killed at least 81 people. But even though the official holiday ends on 2 February, some big businesses have instructed workers not to return to their offices until 10 February. Alibaba said the measure applied across all its divisions, including to workers in Hong Kong, Taiwan, and Macau, as well as in mainland China. Alibaba employs more than 100,000 people worldwide, most of whom are in China. Meanwhile, the cities of Shanghai and Suzhou said companies headquartered there could not get back to work in offices until 9 February. That decision will impact Tesla, General Motors, and Volkswagen, all of whom either own or operate factories in Shanghai. Tiktok owner Bytedance was among the most stringent, requiring employees who travelled during the holidays to quarantine themselves and work from home for 14 days. The origin of the outbreak, the city of Wuhan, is already under lockdown, and movement has been severely restricted in other places across China.

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Legal Actions

Lawsuit From Fan Alleges MLB Teams Engaged in Corruption in Sign-Stealing Scandal

A baseball fan has filed a lawsuit against Major League Baseball, the Houston Astros, and the Boston Red Sox in the wake of a sign-stealing scandal that has rocked the league, reports the New York Times (24 January, Singh). The fan, Kristopher Olson, filed suit in Manhattan federal court on behalf of all fans who participated in DraftKings' fantasy baseball contests. Olson claimed the outcomes of the fantasy baseball contests were tainted by the real-life cheating in games. The scandal erupted after reports emerged that the Astros used a sophisticated system to steal opposing pitchers' signs and relay them to batters, who would know what they were facing before the pitch was thrown. After the Astros won the 2017 World Series, their bench coach, Alex Cora, departed to manage the Red Sox, who then won the 2018 World Series. MLB Commissioner Rob Manfred published a detailed report on the Astros' sign-stealing operation, and an investigation into the Red Sox is currently underway. In his lawsuit, Olson alleged that the sign-stealing systems altered the outcome of games and consequently "tainted" and "compromised" the fantasy baseball competitions.

From "Lawsuit From Fan Alleges MLB Teams Engaged in Corruption in Sign-Stealing Scandal"
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Bayer Faces Fourth US Roundup Cancer Trial in Monsanto Home Court

Bayer AG is set to face a fourth US jury trial over allegations that its popular weed killer Roundup causes cancer, reports the New York Times (24 January, Bellon). Four cancer patients in St. Louis, the hometown of its agricultural subsidiary Monsanto, were set to kick off testimony on Friday. This is the first Roundup lawsuit to take place outside of California. The central question is whether glyphosate, Roundup's active ingredient, is carcinogenic. Roundup cancer lawsuits against Bayer in the United States have ballooned to more than 75,000 since the company was hit with multibillion-dollar verdicts, as three consecutive juries found the company liable for causing cancer. Bayer is appealing those verdicts. The company is also seeking to settle litigation across the board. While some lawyers have decided to hold off on legal proceedings while negotiations are ongoing, others have pressed ahead with their complaints. The case in Missouri's Circuit Court for the 22nd Judicial Circuit of the City of St. Louis is scheduled to last several weeks, with both sides presenting extensive scientific evidence through expert witnesses. Bayer has denied all allegations that Roundup contains carcinogenic materials, and has pointed to independent studies as proof.

From "Bayer Faces Fourth US Roundup Cancer Trial in Monsanto Home Court"
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Regulatory Developments

T-Mobile, Sprint Merger Could Be Derailed by California Regulators

T-Mobile US Inc. and Sprint Corp. are waiting for a federal judge to rule on whether they can merge, reports MarketWatch (26 January, Krouse), but the companies face another hurdle even if they overcome that legal challenge: the California Public Utilities Commission. The state utilities overseer is the only such body that has yet to give a green light to the US$26 billion deal. In fact, its ongoing review threatens to further delay and even possibly derail a merger that has dragged on for almost two years. It has until July to vote, but may extend that timeline further. "Disapproval by a state public-utility commission could be enough to stop a communications merger," consultants at NERA Economic Consulting wrote in a 2017 paper that analyzed state reviews of 40 such transactions.

From "T-Mobile, Sprint Merger Could Be Derailed by California Regulators"
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Swiss Regulator Fines Former Bank Boss Over 'Serious' Insider Trading

Finma, Switzerland's market watchdog, on Friday fined an anonymous former bank chief executive over "serious" insider trading offenses, reports the Financial Times (24 January, Jones). The individual in question was ordered to pay back US$752,000 in illegal profits. In a statement, the regulator revealed that he "executed transactions through deposit accounts held in his wife's name at other banks" in a clear violation of "the bank's internal directives." Finma said it had evidence the executive had "repeatedly and systemically" engaged in such behavior. The individual used his wife's account to trade on sensitive market information on client companies of the bank he gained access to in his position. Finma does not have the authority to bring criminal charges, but it also issued a four-year ban on the individual accepting any management role in finance as well as a six-year ban on his license as a securities dealer.

From "Swiss Regulator Fines Former Bank Boss Over 'Serious' Insider Trading"
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Italy Watchdog Threatens Facebook with Another Fine Over Improper Use of Data

Reuters (24 January) reports that Italy’s competition watchdog said on Friday it has launched proceedings against Facebook for noncompliance with a request to correct improper commercial practices in the group’s treatment of user data. The regulator in late 2018 ruled that Facebook had not informed users properly about the collection and use, for commercial reasons, of the data it collects. At that time, the watchdog fined Facebook US$5.5 million and asked it to publish an amending statement on the homepage of its website for Italy, on the Facebook app, and on the personal page of each registered Italian user. On Friday the regulator revealed that Facebook has not yet published the amending statement, and it could face another US$5.5 million fine over its noncompliance. A spokesperson for Facebook said the group was reviewing the decision.

From "Italy Watchdog Threatens Facebook with Another Fine Over Improper Use of Data"
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Labor and Employment

Amazon Employees Launch Mass Defiance of Company Communications Policy in Support of Colleagues

More than 350 Amazon employees violated the ecommerce giant’s communications policy Sunday, in an unprecedented public display of support for colleagues who were warned they could be fired for speaking out to criticize the company’s climate practices. The Washington Post (26 January, Greene) reports that the group Amazon Employees for Climate Justice published quotes from 357 workers identified by name in a post on Medium. Amazon rules dictate that company employees cannot publicly address the business without corporate justification and express approval from executives. The protest Sunday followed a threat to fire two workers who spoke out about the company’s environmental policies in October. Many of the comments said Amazon bears responsibility for the climate crisis and should be doing more to mitigate climate change. Other comments criticized the ecommerce behemoth for its communications policy. Amazon Employees for Climate Justice also plans to post a video of employees Monday speaking about the danger of climate change and saying they won’t be silenced. Amazon spokesman Drew Herdener said employees are encouraged to advocate for causes they believe in, but that any cause related to Amazon business should be pursued internally.

From "Amazon Employees Launch Mass Defiance of Company Communications Policy in Support of Colleagues"
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Walmart Boosts Starting Hourly Pay to US$12 for Some Staff in Test

Walmart spokeswoman Jami Lamontagne has confirmed that the retail giant is testing out a higher minimum starting wage for certain jobs in hundreds of stores, reports Bloomberg (24 January, Boyle). Walmart has introduced its "Great Workplace" operating model in roughly 500 stores nationwide. In those stores, some team associates working in the fresh, front-end, and replenishment areas will see their hourly pay rise from US$11 to US$12. Lamontagne said the wage increase is a test run and that Walmart does not currently have plans to raise the minimum starting wage across the entire company. The retail behemoth employs the biggest private workforce in the country. The redefined roles carry more responsibility, Walmart has said, which justifies the higher compensation. But this could be the first step to increasing wages across the board. Walmart has previously come under fire for its employee compensation, prompting it to raise pay three times between 2015 and 2018.

From "Walmart Boosts Starting Hourly Pay to US$12 for Some Staff in Test"
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New Huawei Restriction in Limbo After Pentagon Disagrees with Commerce Approach

Sources familiar with the situation have disclosed that the US Department of Commerce has put on hold a rule aimed at further reducing sales to China’s Huawei Technologies amid pushback from the Department of Defense. Reuters (24 January) reports that the pause has left the Huawei proposal in jeopardy, but President Donald Trump’s administration has reportedly planned a high-level meeting for next week to discuss the issue. The Pentagon was reportedly concerned about the impact of limiting sales to Huawei on US businesses. Commerce in May placed Huawei on a trade blacklist, citing national security concerns. Some US officials have pushed to expand regulations to further block sales to Huawei. According to two people familiar with the matter, Commerce has drafted a rule that would lower the threshold only on exports to Huawei to 10 percent and expand the purview to include non-technical goods like consumer electronics including non-sensitive chips.

From "New Huawei Restriction in Limbo After Pentagon Disagrees with Commerce Approach"
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Twitter Tells Facial Recognition Trailblazer to Stop Using Site's Photos

Twitter sent a letter to the small start-up company, Clearview AI, demanding that it stop taking photos and any other data from the social media website “for any reason” and delete any data that it previously collected, a Twitter spokeswoman said. The cease-and-desist letter accused Clearview of violating Twitter’s policies, according to the New York Times (23 January, Hill). Clearview has amassed a database of more than three billion photos from social media sites — including Facebook, YouTube, Twitter, and Venmo — and elsewhere on the internet. The vast database powers an app that can match people to their online photos and link back to the sites the images came from. The app is used by more than 600 law enforcement agencies, ranging from local police departments to the F.B.I. and the Department of Homeland Security. Tor Ekeland, a lawyer for Clearview, confirmed that it had received Twitter’s letter and said the company “will respond appropriately.”

From "Twitter Tells Facial Recognition Trailblazer to Stop Using Site’s Photos"
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Wells Fargo Ex-CEO Banned, to Pay US$17 Million in Fake-Account Scandal

The US Office of the Comptroller of the Currency has barred former Wells Fargo & Co. Chief Executive Officer John Stumpf from the banking industry for life and fined him US$17.5 million over the firm's fake-accounts scandal, reports the Wall Street Journal (24 January, Ensign, Eisen). The firm's former chief administrative officer and chief risk officer settled similar civil charges, and five other former executives, including the former consumer-bank chief, were also charged in the scandal. The sanctions against Stumpf, in particular, are notable because few top bank executives have faced penalties of this magnitude in recent years. Although banks paid tens of billions of dollars in fines for conduct that led to the economic meltdown, federal enforcement efforts were roundly criticized by market watchers and others because of a lack of charges against individuals. Since the scandal first came to light four years ago, Wells Fargo has paid US$185 million in fines for unethical sales practices. Additionally, it has settled a US$110 million class-action lawsuit and is presently facing a slew of lawsuits that could tally US$3 billion.

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Economic Outlook

Nigeria Tightens Screws on Banks with Higher Cash Requirements

Nigeria turned the screws even tighter on lenders by increasing the amount of money they need to park with the central bank for the first time in almost four years in an effort to tame inflation. Bloomberg (24 January, Olurounbi, Onu) reports that Nigeria increased the cash-reserve requirement for lenders from 22.5 percent to 27.5 percent of total deposits. The monetary policy committee decided to keep its key lending rate steady at 13.5 percent. While Nigeria's central bank is trying to encourage lenders to extend more credit in a bid to reignite economic growth, it is also wary of flooding the system with too much cash, which will stoke price increases. Inflation reached a 20-month high in December and has now been above the central bank's target band of 6 percent to 9 percent for more than four years.

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