CLOs

Chile's environmental regulator accused a major hydroelectric power facility operated by US-based AES of violations, reports Reuters (26 January, Cambero). Environment regulator SMA outlined four charges covering AES' Alto Maipo project in a statement on Thursday, which accused it of engaging in work in a protected paleontological area plus unlawful moving of fauna. Alto Maipo, located southeast of the capital Santiago, features two power plants and an extensive network of tunnels that extend deep under the Andes Mountains. It has been mired in controversy dating back several years, including fierce opposition from local communities who complain the facilities harm their access to water. An audit showed that the company's local unit AES Andes failed to build a "complementary" water outlet for irrigation for a canal set out in previously agreed to deal with local communities, SMA Superintendent Marie Claude Plumer said. The violations could lead to a fine of around US$18.5 million, the closure of the plants, or the termination of AES' environmental permit.

From "Chilean Regulator Charges AES Power Plant with Environmental Violations"
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The Wall Street Journal (26 January, Landers) reports that Toyota Motor CEO and President Akio Toyoda on Thursday announced that he will step down from his current roles and become board chair in April. Chief Branding Officer Koji Sato, who has spearheaded Toyota’s luxury Lexus division since 2020, has agreed to become president and CEO at that time. Takeshi Uchiyamada, Toyota's current chair, will step down from that post. The management switch comes as Toyota navigates the transition in the auto industry toward electric vehicles (EVs). Toyoda has publicly questioned whether EVs should be pursued exclusively, a stark contrast to other automakers that have set dates by which their vehicle lineups will be entirely EV.

From "Toyota CEO Akio Toyoda to Step Down and Become Chair"
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Panama Deputy Environment Minister Diana Laguna said that Canada's First Quantum will not be allowed to expand the area of its existing copper mining operations, reports Reuters (26 January, Hilaire). The comment comes as both sides negotiate a new contract for the major copper mine amid a longstanding dispute, with taxes and other payments to the government at the forefront of discussions. "The company has asked for more surface to operate and we have said no," Laguna said. "They must work with what they have. It is more than enough." Laguna added that in negotiations over the new contract her ministry was pushing to install an office at the Cobre Panama mine to monitor its environmental footprint and assure tighter controls. This followed what she described as failed environmental commitments, including one that called for reforestation.

From "Panama Won't Allow Canada's First Quantum to Expand Its Copper Mine Operations"
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A new report by Canada's privacy watchdog stated that Home Depot failed to get customer consent before sharing personal data with Meta, reports CBC (26 January, Tunney). Privacy Commissioner Philippe Dufresne released the findings of his latest investigation Thursday. It found Home Depot began sharing details from electronic receipts with Meta, including encoded email addresses and in-store purchase information, without the knowledge or consent of customers. The company said it stopped sharing customer information with Meta in October 2022. According to the report, information sent to Meta was used to determine whether a customer had a Facebook account. If they did, Meta compared the person's in-store purchases to Home Depot's ads to gauge their effectiveness. The program's contract terms also allowed Meta to use the customer information for its own business purposes, including user profiling and targeted advertising unrelated to Home Depot. "While the details of a person's in-store purchases may not have been sensitive in the context of Home Depot, they could be highly sensitive in other retail contexts, where they reveal, for example, information about an individual's health or sexuality," said the commissioner's report. Home Depot told Dufresne's office that it relied on implied consent and that its privacy statement — accessible through its website and in print upon request at retail locations — explained that the company uses de-identified information for internal business purposes. "The explanations provided in its policies were ultimately insufficient to support meaningful consent," Dufresne said. Home Depot has agreed to implement the commissioner's recommendations, including the recommendation that it stop disclosing the personal information of customers who request electronic receipts to Meta until it is able to put better consent measures in place.

From "Home Depot Didn't Get Customer Consent Before Sharing Data with Facebook's Owner, Privacy Watchdog Finds"
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Morgan Stanley has hit bankers with financial penalties running up to more than US$1 million per employee for conducting official business on messaging platforms, reports the Financial Times (26 January, Massoudi, Morris, Franklin). The forfeitures come as the bank tries to punish employees for a scandal that tarnished the group’s reputation and resulted in it paying US$200 million of regulatory fines last year. The employee penalties are the latest fallout from a wide-ranging crackdown on Wall Street by US regulators over the use of personal phones and unapproved apps. The multiple investigations have resulted in more than US$1 billion in fines across the banking industry. US regulators have said bank failures to ensure that employees’ electronic communications were stored properly have impeded their investigations.

From "Morgan Stanley Hits Bankers with US$1 Million Penalties for Messaging Breaches"
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The Australian Competition and Consumer Commission (ACCC) has written to pet goods suppliers and other industry players, to investigate how Woolworths’ planned move in the sector could impact competition, reports the Australian Financial Review (26 January, Macdonald, Thompson, Sood). The ACCC sent letters to industry players this week, asking them about competition for pet products and services and how specialty pet chains may overlap with Woolworths’ supermarkets or Big W chain. The regulator had separate questions for pet product and services wholesale suppliers and retailers. The letters come one month after Woolworths signed a deal to buy a 55% stake in Petspiration Group, the second-biggest player in its sector behind TPG Capital’s Greencross.

From "ACCC Sinks Teeth into Woolworths Pets Play"
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The UK Competition and Markets Authority (CMA) is to examine potential greenwashing in the sale of food and other household essentials, reports the Financial Times (26 January, Evans). The CMA said on Thursday that it would examine food and drink, cleaning products, toiletries, and personal care items for issues including “vague and broad eco-statements” and “entire ranges being incorrectly branded as ‘sustainable’.” It may open an investigation into specific companies if evidence suggests green claims could be unfounded. The watchdog has already taken aim at the fashion industry, examining claims made by Asos, Boohoo, and Asda, while the advertising regulator has censured Tesco, Innocent Drinks, and Oatly for what it said were unsubstantiated or misleading claims. The clampdown echoes measures by the European Union to combat greenwashing, including draft legislation that would require green claims to be backed up with evidence. The European Commission has found that more than half of such claims are misleading.

From "UK Food and Toiletries Face Scrutiny over "Green" Claims"
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Wolverine World Wide Inc. has hired Reginald Rasch as general counsel while the footwear maker grapples with lawsuits tied to forever chemicals, reports Bloomberg Law (25 January, Baxter). Rasch until November was the top lawyer at Party City Holdco Inc., which filed for bankruptcy last week. He joined the party goods retailer in 2021 after serving as Americas head of legal at Japanese e-commerce company Rakuten Group Inc. Wolverine has been fighting litigation related to drinking water contamination stemming from fluorinated chemicals, better known as PFAS, which Wolverine used to weatherproof its shoes. Wolverine and 3M Co. agreed last year to pay US$54 million to settle a proposed PFAS class action. 3M had previously agreed to pay US$55 million to Wolverine to help clean up PFAS pollution in Michigan. Rasch succeeds former General Counsel Kyle Hanson, who left Wolverine last year to join over-the-counter pharmaceutical maker Perrigo Co. as its top lawyer.

From "Wolverine Hires Ex-Party City Legal Chief During PFAS Litigation"
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Mayville Engineering Company on Thursday announced the appointment of Sean Leuba as general counsel and senior vice president, according to a release published by Business Wire (26 January). For more than 23 years, Leuba served in a variety of roles with Caterpillar. Most recently, he served as the head of corporate development for Caterpillar.

From "Mayville Engineering Company Announces Appointment of Sean Leuba as General Counsel"
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A former Deutsche Bank AG trader whose conviction for rigging the London Inter-Bank Offered Rate (Libor) was overturned has begun a US$30 million legal action in New York accusing the German bank of malicious prosecution for making him a scapegoat, reports Reuters (26 January, Stempel). Gavin Black said Deutsche Bank and others conspired to commit "malicious prosecution and abuse of process," leading to his unjustified conviction. He wants at least US$30 million plus punitive damages from Deutsche Bank and other defendants, according to a summons filed on Wednesday in a New York state court in Manhattan. The legal action comes two months after Matthew Connolly, who led Deutsche Bank's pool trading desk in New York, filed a US$150 million lawsuit also accusing the bank of malicious prosecution. Black and Connolly were convicted in 2018 for rigging Libor, but the federal appeals court in Manhattan overturned both convictions last January, citing a lack of evidence of guilt.

From "Exonerated Deutsche Bank Trader Accuses Bank of "Malicious Prosecution""
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A federal lawsuit in Nevada is seeking class-action damages for hotel patrons who booked rooms in Las Vegas since 2019, reports the Associated Press (27 January, Ritter), alleging that most hotel-casinos on the Las Vegas Strip have used a third-party vendor to illegally fix prices. The complaint filed Wednesday in US District Court in Las Vegas alleges that MGM Resorts International and Caesars Entertainment, along with Treasure Island and Wynn Resorts, share information with a company that used pricing algorithms to “maximize market-wide prices.” It accuses the resorts and Rainmaker Group Unlimited, a revenue management company owned by Cendyn Group, of “algorithmic-driven price-fixing … at the expense of consumers and in violation of antitrust laws.” The lawsuit was filed on behalf of plaintiffs Richard Gibson and Heriberto Valiente by attorneys from the law firm of Hagens Berman Sobol Shapiro in Seattle and Berkeley, California. It seeks class status and unspecified monetary damages for “tens of thousands if not hundreds of thousands” of people based on alleged antitrust violations of the federal Sherman Act.

From "Vegas Strip Resorts Used Vendor to Fix Hotel Rates: Lawsuit"
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India’s Adani Group launched a share offering for retail investors Friday as it mulled taking legal action against US-based short-selling firm Hindenburg Research over a report that led investors to dump its shares, reports the Associated Press (27 January), with some stocks in the group falling up to 20 percent on Friday. The market value of Adani’s companies has soared in recent years, one of the reasons Hindenburg said it judged the seven key Adani listed companies to have an “85% downside, purely on a fundamental basis owing to sky-high valuations.” Its report, “Adani Group: How the World’s 3rd Richest Man is Pulling the Largest Con in Corporate History,” said Hindenburg was betting against shares in companies within the Adani empire, founded by Asia’s richest man, Gautam Adani. Hindenburg’s report prompted selloffs on Wednesday and Friday that have wiped out tens of billions of dollars’ worth of market value. Markets in India were closed on Thursday for a holiday. Jatin Jalundhwala, head of Adani Group’s legal department, said Thursday that the group “was evaluating the relevant provisions under US and Indian laws for remedial action against Hindenburg Research. Clearly, the report and its unsubstantiated contents were designed to have a deleterious effect on the share values of Adani Group companies as Hindenburg Research by their own admission, is positioned to benefit from a slide in Adani shares."

From "Adani Mulls Suing US Short-seller as Shares Sink up to 20 Percent"
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New York state Attorney General Letitia James is seeking information from Madison Square Garden (MSG) Entertainment Corporation about the company’s reported use of facial recognition technology at its venues, reports CNBC (25 January, Sheidlower). MSG Entertainment has reportedly used the technology to identify and deny entry to multiple lawyers affiliated with law firms involved in ongoing litigation relating to the company. According to a letter James sent the company Tuesday, approximately 90 law firms were impacted by this policy. The prevention of lawyers from accessing MSG Entertainment’s venues due to ongoing litigation could violate local, state, and federal human rights laws, she wrote.

From "NY AG Letitia James Presses MSG over Use of Facial Recognition Technology"
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The US Department of Justice (DOJ) is investigating Goodyear Tire & Rubber Co. for its handling of a recalled tire that has been linked to eight deaths and dozens of injuries, reports the Wall Street Journal (25 January, Felton). As part of the probe, federal prosecutors have sought company records and depositions from an Arizona plaintiffs’ attorney produced as part of civil litigation filed against Goodyear years ago, according to a copy of a grand jury subpoena. An attached letter states that the subpoena is being issued as part of a criminal investigation and involves prosecutors from the US attorney’s office of the Central District in California and the DOJ’s consumer-protection branch. The investigation adds to the government’s scrutiny of a Goodyear tire that was made between 1996 and 2003 and sold under the G159 model name for use on motor homes. Goodyear has received more than 600 claims for personal injury and property damage related to the tires failing, according to statements the company has previously made in court filings.

From "Justice Department Probes Goodyear’s Handling of Recalled Tire"
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A California law creating a council with broad authority to set wages and improve the working conditions of fast-food employees has been halted, reports the New York Times (25 January, Lee). Officials from the California Secretary of State’s office announced Tuesday that Save Local Restaurants, a coalition of small-business owners, large corporations, restaurateurs, and franchisees, had turned in enough valid signatures to stop the law from taking effect. The group, which has raised millions of dollars to oppose the law, had to submit roughly 623,000 valid voter signatures by an early December deadline to place a question on the 2024 ballot asking California voters if the law should take effect. Legislation signed in September by Governor Gavin Newsom would set up a council of union representatives, employers, and workers to oversee the fast-food industry’s labor practices in the state. The panel would have the authority to raise the minimum wage of fast-food workers to as much as US$22 an hour and would oversee health, safety, and anti-discrimination regulations for nearly fast-food workers statewide.

From "California Voters to Decide on Regulating Fast-food Industry"
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BNP Paribas SA’s Frankfurt offices were raided by German prosecutors as part of their investigation into the Cum-Ex scandal that has swept up Wall Street’s biggest banks, reports Bloomberg (25 January, Rajbhandari, Matussek, Arons). Cum-Ex was a trading strategy across Europe that siphoned off billions of euros in government revenue, by taking advantage of tax laws that seemed to allow multiple investors to claim refunds of a tax on dividends that was paid only once. Germany moved to abolish the practice in 2012. While dating back more than a decade, the Cum-Ex scandal continues to roil the financial industry. Prosecutors in Cologne are investigating more than 1,500 people and are ramping up the pressure on international banks. Most recently international law firm Norton Rose Fulbright was raided in connection to the scandal. Bank of America Corp.'s Merrill Lynch premises were targeted in recent months, along with Morgan Stanley, and JPMorgan Chase & Co. Barclays Plc's Frankfurt office was also raided.

From "BNP Frankfurt Office Raided by Prosecutors in Cum-Ex Probe"
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Brazil’s Supreme Court Justice Alexandre de Moraes fined the messaging app Telegram on Wednesday for not suspending the account of a far-right elected official, reports CNN (25 January, Akbarzai, Jones). Earlier in January, the court ordered Telegram to suspend Nikolas Ferreira’s accounts and others “to stop the spread of criminal manifestations,” stated the court. Failure to suspend Ferreira’s account “is considered indirect collaboration to the continuing of criminal activities,” it added. Ferreira, a federal representative from the state of Minas Gerais, has more than 300,000 subscribers on Telegram, 3.6 million followers on Tik Tok, and over 6 million followers on Instagram. He tends to post evangelical and far-right content, and support for former Brazilian President Jair Bolsonaro.

From "Brazil Fines Telegram for Not Suspending Far-right Congressman’s Account"
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The UK Competition and Markets Authority (CMA) plans to relax antitrust regulations for climate change initiatives, reports the Financial Times (25 January, Beioley, Hodgson). The move is intended to address concerns raised by businesses that partnerships on climate change could lead to claims of collusion. Many of those businesses that raised concerns over the rules are in the financial sector. Sarah Cardell, CEO of the CMA, says the regulator will meet in February to discuss proposed changes that will "provide more clarity on what businesses can do." The changes being considered would designate climate change mitigation a benefit to society that would fit within a "fair share" exemption. The CMA also would not punish companies that cooperate on policies that would have an impact on climate change.

From "UK Competition Watchdog to Ease Rules on Climate Change Action"
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Nokia Corp. said Wednesday that it has appointed Esa Niinimaki as chief legal officer (CLO), reports MarketWatch (25 January, Chopping). Niinimaki has worked at Nokia for more than 15 years, holding multiple positions. He took the interim CLO role in October, after Nassib Abou-Khalil stepped down as CLO and left the company.

From "Nokia Appoints Esa Niinimaki as Chief Legal Officer"
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Italy's high court upheld a ruling which had annulled a market regulator's resolution indicating French media group Vivendi was exercising 'de facto control' of Telecom Italia (TIM), reports Reuters (25 January, Pollina). Italian market watchdog Consob ruled that Vivendi, TIM's top shareholder, took control of two-thirds of the Italian phone company's board in 2017. In 2020, Italy's top administrative court annulled the resolution of Consob, which subsequently appealed that decision. The Supreme Court's ruling came as Vivendi is calling for governance changes in TIM. It could give the French group the option to present its own list of board candidates to win TIM's board control without being compelled to consolidate the former phone monopoly's financial accounts. At present, no Vivendi's representative sits on TIAOF's board of directors, after the French group's CEO left his seat earlier this month.

From "Italy Supreme Court Upholds Nullity of Ruling Over Vivendi's Control of Telecom Italia"
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