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What US Employers Should Know About the Travel Ban

ACC Docket's HR Columnist discusses what parts of the ban are in effect and how they'll impact companies. Read

Matal v. Tam: What to Do When an Application for a Disparaging Mark Targets Your Business

Though the US Supreme Court’s decision might be a victory for freedom of speech, it may make your brand the target of disparagement. Read

Lexmark Wrecked Your Business Model — What Now?

Where does the US Supreme Court’s Impression Products v. Lexmark ruling leave businesses and legal teams? Read

Understanding the WannaCry Virus: One of the Largest Cyber Attacks in History

In an unprecedented event in cyber history, hackers utilizing software stolen from the US National Security Agency (NSA) unleashed a ransomware virus Friday that impacted nearly 200,000 computers in over 150 countries around the world. Read

The Road Ahead: How the French Election Might Impact In-house Counsel

With France inching towards isolationism and the European Union inching towards another Brexit, the scenario begs the question: Will this impact my in-house practice? Read

In Brief

Today's Top Story

U.K. Company Directors Unprepared for Cyberattacks

Britain's largest quoted companies are failing to provide enough information about cybersecurity risks to their boards of directors, according to a poll that reports more than two-thirds of boards have not been trained in how to respond to an attack. Just 31 percent of the 105 FTSE 350 boards that responded to a U.K. government survey said they received "comprehensive, generally informative" reports about cyber crime. Only 28 percent said they were trained to deal with an incident, reports the Financial Times (20 August, Ram). The results reveal poor boardroom oversight of cyberthreats in the U.K. despite a number of high-profile attacks in the past three years. The U.K. has a large number of finance, manufacturing, and technology companies and is on the frontline of attacks in Europe, according to Research by FireEye, a U.S. cybersecurity company. However, U.K. companies have been slow to update IT systems to deal with the threat and City of London bosses have even suggested businesses should hire younger directors to speed up the process.

From "U.K. Company Directors Unprepared for Cyberattacks"
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Legal Actions

Brazil Graft Probe Widens to Include U.S., Greek Firms

Brazilian authorities recently widened their Car Wash graft probe to include more international targets, ensnaring U.S. asphalt maker Sargeant Marine and six Greek shipping companies, and a former Brazilian congressman. Former lawmaker Candido Vaccarezza, who had been a Workers Party government leader in the lower house, was arrested over allegations he received bribes of nearly US$500,000 from Sargeant Marine in exchange for helping it win asphalt supply contracts from state-controlled oil company Petroleo Brasileiro SA, a statement said. From 2010 to 2013, Florida-based Sargeant Marine signed 12 contracts worth about US$180 million with Petrobras, as the oil company is known, because of Vaccarezza's influence, prosecutors said. Separately, Brazilian authorities said they were investigating allegations that Greek shipping companies paid bribes to obtain contracts from Petrobras, reports Reuters (18 August).

From "Brazil Graft Probe Widens to Include U.S., Greek Firms"
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Mergers and Acquisitions

China to Limit Overseas Investments in Certain Sectors

China's government is moving to curb domestic companies' investments abroad in property, sports, entertainment, and other sectors, reports the Guardian (19 August), following a series of high-profile, multibillion-dollar acquisitions by Chinese firms. A document released late last week by the State Council, China's Cabinet, marked the latest move by regulators to slow a string of foreign acquisitions due to lingering worries that the companies involved may be taking on too much debt. In addition to limiting overseas investments in areas such as the entertainment industry, real estate, and sports clubs, the Cabinet document encourages companies to invest in projects related to President Xi Jinping's signature foreign policy initiative that seeks to link China with other parts of Asia and eastern Europe via multi-billion-dollar investments in ports, highways, and other infrastructure.

From "China to Limit Overseas Investments in Certain Sectors"
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Hyundai Motor Faces Government Calls to Address Governance Risk

South Korea's new antitrust chief said he has been in talks with the autos-to-steel conglomerate Hyundai Motor Group about overhauling its complex ownership structure, which critics say gives too much power to its controlling family at the expense of shareholders. Kim Sang-jo, appointed to head the Korea Fair Trade Commission by President Moon Jae-in, said that Hyundai's web of cross shareholdings among its group affiliates has resulted in a "big governance risk" for South Korea's second-largest conglomerate, which is run by its 79-year-old chief Chung Mong-koo, reports Reuters (20 August, Kim, Jin). At the heart of the governance conundrum are the interlocking shareholdings among group companies held by their founding families, which mean that if one affiliate goes insolvent, another affiliate will often be forced to come to the rescue. In Hyundai's case, its chairman, Chung, controls the sprawling conglomerate with only small stakes in key affiliates including the automaker Hyundai Motor and parts supplier Hyundai Mobis. Kim said that Hyundai has stayed put even as many of South Korea's top conglomerates have moved to unwind cross shareholdings in recent years.

From "Hyundai Motor Faces Government Calls to Address Governance Risk"
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Hackers Target Jobseekers

Hackers attempt to hook tens of thousands of people through job scams each year, according to U.S. Federal Trade Commission data, aiming to trick them into handing over personal or sensitive information, or to gain access to their corporate networks. Employment fraud is nothing new, but as more companies shift to entirely-digital job application processes, Better Business Bureau director of communications Katherine Hutt said scams targeting job seekers pose a growing threat. Job candidates are now routinely invited to fill out applications, complete skill evaluations, and interview — all on their smartphones, as employers seek to cast a wider net for applicants and improve the matchmaking process for entry-level hires, reports the Wall Street Journal (15 August, Gee). Of the nearly 3,800 complaints the nonprofit has received from U.S. consumers on its scam report tracker in the past two years, people under 34-years old were the most susceptible to such scams, which frequently offer jobs requiring little to no prior experience.

From "Hackers Target Jobseekers"
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Ukraine Central Bank Warns of New Cyberattacks

The Ukrainian central bank recently said it had warned state-owned and private lenders of the appearance of new malware as security services said Ukraine faced cyberattacks like those that knocked out global systems in June. The 27 June attack, dubbed NotPetya, took down many Ukrainian government agencies and businesses, before spreading rapidly through corporate networks of multinationals with operations or suppliers in eastern Europe, reports Reuters (18 August, Zinets). On 11 August, the central bank "promptly informed banks about the appearance of new malicious code, its features, compromise indicators and the need to implement precautionary measures to prevent infection." The new malware is spread by opening email attachments of word documents.

From "Ukraine Central Bank Warns of New Cyberattacks"
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Food and Beverage

Nestle's Poland Spring is Common Groundwater, New Suit Alleges

Nestle's Poland Spring Water unit has duped U.S. consumers into paying premium prices for ordinary ground water that is pumped from some of Maine's most populated areas, rather than from natural springs as the company advertises, according to a lawsuit cited by the San Jose Mercury News (19 August, Hurtado) and filed last week in federal court in Connecticut. The complaint claims that Nestle Waters North America has bottled well water that does not meet the regulatory definition of spring water. The suit seeks unspecified damages for violations of state laws, including New York, New Jersey, and Massachusetts. Nestle Waters has vowed it will fight the suit. "The claims made in the lawsuit are without merit and an obvious attempt to manipulate the legal system for personal gain," according to a company statement issued over the weekend. "We remain highly confident in our legal position."

From "Nestle's Poland Spring is Common Groundwater, New Suit Alleges"
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U.K. to Water Down Plans to Crackdown on Excessive Executive Pay

The Telegraph (20 August, Williams, Armstrong) reports that the British government is preparing to water down plans to curb excessive executive compensation, amid concerns of gridlock in Parliament and claims that current legislation is "working well." Prime Minister Theresa May planned to give shareholders greater authority to challenge boards of directors as part of a larger attempt to restore trust in business. However, the most radical of these proposed reforms are likely to be abandoned in the coming weeks, including a proposal for more binding votes on remuneration. Under the existing system, listed companies have to subject their pay policy to a binding vote every three years and resolutions on pay are passed with a simple majority vote.

From "U.K. to Water Down Plans to Crackdown on Excessive Executive Pay"
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Hollywood Has a Hacking Problem

Piracy is a long-running and even routine issue for Hollywood, whether it is street vendors hawking bootleg DVDs on street corners or video uploaded to file-sharing sites like Pirate Bay. Now, cybercriminals are also putting embarrassing chatter and other company secrets at risk, reports the Associated Press (18 August, Arbel). According to Erik Rasmussen of Kroll Cyber Security, the reputational risk from leaked email is more difficult to calculate than any financial risk from piracy because "you have no way of knowing what's in those emails." Unreleased movies were leaked in the Sony hack in 2014, but what is remembered is the chaos unleashed amid a network shutdown and the disclosure of derisive comments about such well-known actors as Angelina Jolie and Leonardo DiCaprio and racially insensitive remarks about then-President Barack Obama. Although the recent HBO leaks so far have fallen well short of the damage inflicted on Sony, there were concerns early on that hackers were setting the stage for an embarrassing sequel for Hollywood.

From "Hollywood Has a Hacking Problem"
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Judge Dismisses Venezuelan Libel Suit Against Dow Jones

A federal judge in Manhattan dismissed a libel lawsuit filed by a top Venezuelan official against Dow Jones & Co., ruling the official failed to show that a 2015 article in The Wall Street Journal about a money-laundering and drug-trafficking investigation contained falsehoods about him. In a May 2015 article, the Journal reported that the official, Diosdado Cabello, was under investigation by U.S. prosecutors for his suspected role in trafficking cocaine and laundering money through Venezuela. Cabello has not been charged with a crime. On 16 August, U.S. District Judge Katherine Forrest rejected Cabello's allegations that the article contained "materially false" statements, reports the Wall Street Journal (18 August, Davis O'Brien). Judge Forrest wrote that Cabello had not adequately challenged the "gist or substance of those statements — that he is, in fact, under investigation for his potential involvement in drug trafficking and money laundering activities."

From "Judge Dismisses Venezuelan Libel Suit Against Dow Jones"
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Corporate Social Responsibility

MGM to Match Employee Donations to Civil Rights Groups

ABC News (19 August) reports that MGM Resorts International is launching a donation match program benefiting civil rights organizations. The largest casino operator on the Vegas Strip announced late last week that it would match employee donations made to the Southern Poverty Law Center, the NAACP, the Anti-Defamation League, the Human Rights Campaign, the Council on American Islamic Relations, OCA National-Asian Pacific American Advocates, and the League of United Latin American Citizens. MGM Resorts CEO Jim Murren wrote in a letter that he felt compelled to speak out against "the degradation of basic human dignity" following the deadly attacks in both Charlottesville, Va., and Barcelona in recent days, noting that his company champions diversity and inclusion.

From "MGM to Match Employee Donations to Civil Rights Groups"
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Tech Censorship Draws Criticism from Within Industry

The debate intensified over whether the growing number of tech companies that blocked white supremacists and a neo-Nazi website on the internet have gone too far, as a prominent privacy group questioned the power a few corporations have to censor. The CEO of Cloudflare, one of several internet companies this week to cut ties with Daily Stormer, effectively preventing the neo-Nazi website from appearing on the web, admitted he set a troubling precedent. On 17 August, the nonprofit privacy group Electronic Frontier Foundation said tech companies including Cloudflare, GoDaddy Inc., and Google, part of Alphabet Inc., threatened freedom of expression online by blocking Daily Stormer. The three tech companies pulled support for Daily Stormer after it published a story denigrating Heather Heyer, the 32 year-old woman killed in Charlottesville, Va., last weekend. The moves made Daily Stormer's website inaccessible. Over the past week, tech companies including Facebook Inc., Twitter Inc., and GoFundMe Inc. removed white supremacists from their platforms, overthrowing the image some of the companies convey of being neutral platforms with free-speech principles, reports the Wall Street Journal (19 August, Koh).

From "Tech Censorship Draws Criticism from Within Industry"
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