CLOs

The Mexican government plans to bring another lawsuit against US companies it claims are responsible for the flow of illegal weapons into Mexico, reports the Associated Press (5 October). Foreign Affairs Secretary Marcelo Ebrard said Wednesday that the new lawsuit could target gun shops or dealers in US border states like Arizona who sell guns to “straw” purchasers who pass them on to smugglers, who then take the weapons into Mexico. A recently enacted US law defines straw purchasing as a crime and sets out sentences of as much as 15 to 25 years if the offense is related to drug trafficking. The announcement comes just days after a US federal judge dismissed Mexico’s first lawsuit against US gun manufacturers. Ebrard said Mexico would appeal that decision. The judge ruled Mexico’s claims did not overcome the broad protection provided to gun manufacturers by the Protection of Lawful Commerce in Arms Act passed in 2005, which shields gun manufacturers from damages “resulting from the criminal or unlawful misuse” of a firearm. Mexico was seeking at least US$10 billion in compensation.

From "Mexico Pledges to Bring 2nd Lawsuit Against Gun Dealers"
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A new survey from the Canadian Federation of Independent Business shows that an estimated one in five small businesses is planning to pass on credit-card transaction fees to their customers after new surcharge rules come into effect this week, reports the Toronto Globe and Mail (5 October, Hannay). Starting Thursday, businesses will be allowed by credit-card companies to add surcharges to their bills for customers who are paying by credit card. The fees are not set but would be around 1.4 percent or more of the bill. Financial institutions use the money in large part to fund loyalty programs. The new rules are the result of a settlement in a long-running class-action legal battle between small merchants, Visa, MasterCard, and financial institutions. Credit-card companies had long resisted allowing businesses to pass on these costs as it could lead consumers to switch payment methods to avoid paying the fees. Instead the cost is borne by merchants, many of whom feel they have to pay the fees to accommodate the many customers who want to pay by credit card.

From "Paying with a Credit Card Will Soon Cost You More"
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The World Trade Organization (WTO) forecast on Wednesday that global economic growth in 2023 will be 2.3 percent, reports the Wall Street Journal (5 October, Hannon), down from the earlier estimate of 3.3 percent. The WTO warned of a sharper slowdown if central banks across the globe raise their key interest rates too sharply. The trade of goods is likely to slow more than expected over the next year, which could ease inflationary pressures but raise the risk of a global recession, according to the WTO's latest forecast. With the surge in energy costs and rising interest rates weakening household demand, exports and imports should increase by just one percent in 2023, down from a previous forecast of 3.4 percent.

From "WTO Sees Sharp Slowdown in Global Trade, Pointing to Possible Recession, Lower Inflation"
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Reclaim Finance and other environmental groups have sent letters to global insurance companies asking them to stop providing coverage for the expansion of the Ichthys liquid natural gas (LNG) project in Australia, reports Bloomberg (5 October, Rajbhandari, Marsh). The groups say the project would produce 590 million tons of carbon dioxide emissions, which would be close to Australia's annual carbon dioxide output. None of the companies that received a letter are involved in the first phase of the project, but they also don't have policies excluding LNG projects. Experts say insurance and reinsurance companies could face major losses due to climate change.

From "Climate Activists Call on Insurers to Ditch Australia LNG Boost"
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Food manufacturers have used the labels for decades to estimate peak freshness, reports the Associated Press (5 October, Durbin). Unlike “use by” labels, which are found on perishable foods like meat and dairy, “best before” labels have nothing to do with safety and may encourage consumers to throw away food that’s perfectly fine to eat. To tackle the problem, major UK chains like Waitrose, Sainsbury’s, and Marks & Spencer recently removed “best before” labels from prepackaged fruit and vegetables. The European Union is expected to announce a revamp to its labeling laws by the end of this year; it’s considering abolishing “best before” labels altogether. In the United States, however, there is no similar push to scrap “best before” labels. But there is growing momentum to standardize the language on date labels to help educate buyers about food waste, including a push from big grocers and food companies and bipartisan legislation in Congress. In the absence of federal policy, states have stepped in with their own laws, frustrating food companies and grocers.

From "Keep It or Toss It? "Best Before" Labels Cause Confusion"
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France will seize the windfall profits of electricity producers next year to bolster aid to companies and local governments struggling to pay rising energy bills, reports Bloomberg (5 October, De Beaupuy, Horobin). The government will take any surplus made by power generators when they sell above €180 per megawatt-hour, as recently agreed at an EU level, Finance Minister Bruno Le Maire said. The mechanism will be introduced in the 2023 budget bill. “What we have put in place is fair and balanced,” Le Maire told a news conference in Paris. “We’re not taxing everyone, as some people propose. We’re just saying that energy companies can’t benefit unduly from unearned income linked to crazy prices.”

From "France to Tap Power Company Windfalls to Help Ailing Firms"
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South Korea’s largest private gas supplier, SK E&S, removed claims it would produce carbon-free liquefied natural gas (LNG) from its marketing materials, reports Bloomberg (5 October, Lee), after the government expanded a crackdown on misleading labels of fossil fuel projects. SK E&S edited previous press releases and promotional videos in late September to remove its assertion that LNG from its planned Barossa project off the northern coast of Australia would be “CO2-free,” toning down its claim to “low-carbon” gas, a company representative said Tuesday. That came after South Korea's environment ministry urged the company to accurately advertise its product in March. Seoul is getting tougher on green marketing. The ministry’s guidance came after a climate group in December alleged that SK E&S falsely advertised the green credentials of the Barossa project.

From "Korea Gas Giant Removes LNG Claim in Greenwashing Crackdown"
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In the United Kingdom, according to the Solicitors Regulation Authority, only 35 percent of law firm partners are female, and the proportion drops to 31 percent in the largest and best-known firms, reports the Financial Times (5 October, Clegg). Lawyers from Black, Asian, and minority ethnic backgrounds account for 16 percent of all law firm partners but only eight percent in large firms. Some 68 percent of lawyers at the biggest firms had professional parents. Only five percent of all lawyers declare a disability compared with 14 percent of the overall working population. However, chief legal officers are now increasingly paying attention to, and sometimes leading, initiatives to help businesses and the law become more inclusive.

From "In-house Lawyers Use Position to Speak Up on Diversity"
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Amazon has suspended at least 50 warehouse employees who refused to work their shifts following a trash compactor fire at one of its New York facilities, reports the Associated Press (5 October, Hadero). The company suspended the workers, with pay, on Tuesday, a day after the fire disrupted operations at the Staten Island warehouse that voted to unionize earlier this year. Derrick Palmer, the vice president of the Amazon Labor Union, said day-shift workers were sent home with pay due to the fire, which began late afternoon Monday. But night-shift employees, who were just coming in for their shift were told to remain in a break area until management figured out the situation. Dozens of workers began to raise concerns about safety. Eventually, roughly 100 workers held a sit-down protest at the facility’s main office, demanding to be sent home with pay.

From "Amazon Suspends at Least 50 Workers After Fire Protest"
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New York Life announced the appointment of Michael McDonnell as the company’s general counsel, effective immediately, according to a release published by Business Wire (4 October). Since 2021, he has held the position of deputy general counsel at the insurance company. Previously, McDonnell was an associate with Debevoise & Plimpton LLP, where he worked for 10 years.

From "New York Life Names Michael McDonnell General Counsel"
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A US bankruptcy judge has blocked New Mexico and Mississippi from pursuing lawsuits accusing Johnson & Johnson (J&J) of misleading consumers about the safety of its talc products, reports Reuters (5 October, Knauth, Pierson). US Bankruptcy Judge Michael Kaplan in Trenton, New Jersey, on Tuesday said the litigation must be paused while an appellate court reviews whether J&J can use the bankruptcy of subsidiary LTL Management to resolve claims it is facing that its talc products caused cancer. He said he would revisit allowing the states' lawsuits to proceed at a hearing in December. J&J, which maintains its talc products are safe, created and spun off LTL in October, assigned its talc liabilities to the unit and placed it in bankruptcy a few days later. The restructuring paused about 38,000 individual lawsuits J&J was facing alleging that its baby powder and other talc-based products contain trace amounts of asbestos and caused mesothelioma and ovarian cancer.

From "US Judge Temporarily Blocks Two State Lawsuits over J&J Talc Marketing"
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A US jury has found former Uber Technologies Chief Security Officer Joe Sullivan guilty of criminal obstruction charges for failing to report a 2016 cyber intrusion to federal authorities, reports the New York Times (6 October, Metz). The case was closely watched as a rare instance of a senior cybersecurity executive facing criminal consequences for a decision not to disclose a hacking incident. Under the verdict, delivered Wednesday in a San Francisco federal court, Sullivan faces a five-year prison sentence on the obstruction charge and as many as three years in prison on a second charge of failing to report a felony. Sullivan’s lawyers had argued that their client had ultimately protected about 57 million Uber customer records in 2016, when they were accessed by an anonymous hacker who demanded a US$100,000 payment. The money was eventually paid as a “bug bounty” by Sullivan’s team. Prosecutors claimed that the payment was an attempt by Sullivan to cover up the incident and that he took steps to prevent it from being reported to the US Federal Trade Commission, which was investigating Uber’s cybersecurity practices over an earlier breach at the time. The case could change how security professionals handle data breaches. “The way responsibilities are divided up is going to be impacted by this," said Chinmayi Sharma, a lecturer at the University of Texas at Austin School of Law. "What’s documented is going to be impacted by this. The way bug bounty programs are designed is going to be impacted by this.”

From "Former Uber Security Chief Found Guilty of Hiding Hack from Authorities"
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Tsuguhiko Kadokawa, a major figure in Japan’s movie and entertainment industry, was charged Tuesday with bribing a former Tokyo Olympics organizing committee member, reports the Associated Press (4 October, Kageyama). The charges are the latest in the unfolding corruption scandal related to last year’s Tokyo Summer Games. Kadokawa was arrested in September on suspicion of bribing Haruyuki Takahashi, a former executive at advertising company Dentsu who joined the Tokyo Olympic organizing committee in 2014 and who had great influence in arranging sponsorships for the games. He has been arrested and re-arrested three times since August. All the while, he has remained in custody and is also facing bribery allegations involving two other companies: Aoki Holdings, a clothing company that dressed Japan’s Olympic team, and Daiko Advertising Inc. Analysts say the arrests and charges may continue for months in the Olympics scandal, as more than 50 companies were sponsors. Kadokawa, son of the founder of Tokyo-based publisher Kadokawa Group, said in a statement carried on Japanese media that he would quit as chair. Several other officials at the companies accused of bribery have been arrested, including two other Kadokawa employees.

From "Publishing Executive Charged in Tokyo Olympic Bribes Scandal"
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The UK Financial Conduct Authority (FCA) said on Tuesday that some insurers have “fallen short” of meeting regulatory requirements when handling COVID-related business interruption claims, while others have not met them consistently, reports the Financial Times (4 October, Wright). The regulator said it would use “all regulatory tools” to rectify the “significant issues” it had encountered when analyzing companies’ handling of such claims. Business interruption claims have proved an area of significant controversy for insurers since the start of lockdowns in March 2020. Many insurers have challenged the extent of the losses that businesses claimed, leading to court cases aimed at resolving the extent of obligations. The FCA brought a test case to seek clarity on the meaning of certain insurance wordings, which resulted in a Supreme Court judgment in January last year intended to speed up decisions on thousands of claims by small and medium-sized businesses. More cases remain to be handled.

From "UK Regulator Criticizes Insurers on Handling of COVID-related Claims"
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McDonald's has temporarily won a lawsuit by 52 Black former franchise owners who claim the fast-food giant set them up for failure by steering them towards crime-ridden, low-income neighborhoods, reports Reuters (4 October, Wiessner). A federal judge in Chicago dismissed the 2020 lawsuit in a written order but gave the plaintiffs until 21 October to file an amended complaint. The plaintiffs claim McDonald's has not offered profitable restaurant locations and growth opportunities to Black franchisees that were on the same terms as White franchisees, despite its public commitment to diversity and Black entrepreneurship. They are seeking up to US$1 billion in damages.

From "McDonald's Defeats Black Franchisees' US$1 Billion Bias Lawsuit, for Now"
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Organized crime prosecutors in Romania have opened an investigation against four employees of the local branch of neighboring Serbia’s NIS Petrol, which is majority-owned by Russia’s Gazprom Neft, over suspected data leaks, reports the Associated Press (4 October). Authorities said on Monday that police raided the company's offices in the capital, Bucharest, and the western city of Timisoara, along with the employees' homes, as part of the probe. Serbia sold the majority stake in its state oil monopoly NIS to Russia's Gazprom Neft in 2008. NIS Petrol in Romania runs Gazprom gas stations in the West of the country and has carried out exploration for new sources of oil. The Romanian prosecutors said information about geological data had been sent to Belgrade and to Russia before Romanian authorities were informed.

From "Probe Opens in Romania over Data Leaks from Russian-owned Company"
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Arizona Attorney General Mark Brnovich announced that his office "had reached an US$85 million settlement with Google over the state’s lawsuit targeting company’s efforts to track user's locations," reports Fox Business (4 October, Shaw). The settlement marks the end of one of the largest consumer fraud lawsuits in Arizona's history. Brnovich's office sued Google in the spring of 2020, charging the tech giant with using deceptive and unfair practices to track users' location even if they had opted out. The company allegedly used that data to target users with ads that generated over US$130 billion in revenue in 2019.

From "Arizona AG Announces US$85 Million Google Settlement over Location Privacy Lawsuit"
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HSBC has launched a strategic review of its Canadian business that could lead to its sale for up to US$9 billion, reports the Financial Times (4 October, Dunkley), as the bank resists pressure from shareholder Ping An to split its Asian and western operations. HSBC said on Tuesday that it was in the early stages of the review, as it looked to reshape its global network to focus on Asia and other growth regions. The development comes as HSBC’s largest shareholder, Chinese insurer Ping An, pushes the bank to hive off its Asian business to unlock growth potential, reduce the need to navigate geopolitical tensions between Washington and Beijing, and boost return on equity. Ping An claims that spinning off its Asian business would create up to US$35 billion of additional market value and release HSBC from an additional US$8 billion of capital requirements because of its status as a global systemically important bank. The review of the Canadian business comes as HSBC seeks to cut costs and retrench from overseas operations that are less profitable, largely to focus on Asia and Europe. The bank, which operates in more than 60 countries, is also looking to simplify its global network.

From "HSBC Explores US$9 Billion Sale of Canadian Business"
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Australian telecommunications company Telstra and National Australia Bank (NAB) have been hit by a data breach of a rewards platform, with names and email addresses of their current and former staff posted online, reports the Sydney Morning Herald (4 October, Samios, Koob, Biggs). The companies said on Tuesday their internal systems had not been hacked, instead the information of their employees had been stolen from a platform called Pegasus, which provides rewards programs for businesses. The Telstra data, covering 30,000 employees, was from 2017 and published on the same forum that published the Optus customer data last week. Meanwhile, NAB said the names and email addresses of a number of employees had been exposed but stressed it was not due to a breach of any internal systems. Sources familiar with the breach said the names and email addresses of up to 72,000 current and former employees across 15 companies that used the platform were taken by an unauthorized person in 2017. The release of information comes two weeks after Australian telecommunications company Optus notified nearly 10 million customers that their data had been stolen.

From "Telstra, NAB Staff Info Stolen in Third-party Data Breach"
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Members of the European Parliament voted to force companies such as Apple to adapt products that do not already feature a standard USB-C charger to use one, reports Bloomberg (4 October, Deutsch). The deal, provisionally agreed in June between the European Commission and the European Union’s 27 countries, still needs to get the final sign-off from the EU member states. The rules are likely to be written into law at the beginning of 2023. Under the proposed rules, all phones and tablets sold in Europe will have to comply by the fall of 2024. Laptops will have longer to make the switch. The commission will also be able to set standards for wireless charging in the future. The proposal is meant to cut down on environmental waste and save consumers an estimated €250 million a year, as they will no longer need to buy a different charger for each device, Commission Executive Vice President Margrethe Vestager told the parliament on Tuesday.

From "Apple Will Be Forced to Use New Charger After EU Votes for USB-C"
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