– CNBC reported that Elliott Investment Management asked for a special meeting on December 10 at Southwest Airlines as it seeks control of the company’s board. Elliott has also trimmed the size of its board slate from 10 director candidates to eight after Southwest cut its board size from 15 to 12. Southwest’s campaign will be Elliott’s first US proxy fight since it took on Arconic in 2017.
Elliott has never previously called for a special meeting, which at Southwest carries a higher threshold of approval compared with voting at a regularly scheduled shareholder meeting. Elliott will have a little under two months to solicit votes from shareholders large and small.
Southwest described the move as ‘unnecessary and inappropriate considering the extreme nature of Elliott’s demands.’
– Reuters (paywall) reported that video gamers who sued over Microsoft’s $69 bn acquisition of Call of Duty maker Activision Blizzard have settled their lawsuit, which claimed the deal would harm industry competition and lead to increased prices. The gamers said in a joint filing with Microsoft in San Francisco federal court that they were dismissing their lawsuit with prejudice, meaning they cannot refile it.
The court filing did not explain how the lawsuit was resolved and the plaintiffs’ attorneys did not immediately respond to a Reuters request for comment. In a statement, Microsoft said the two sides settled the case but declined to provide more details.
The lawsuit had alleged that Microsoft’s deal to buy Activision violated US antitrust law and should be barred. The private civil case was lodged in late 2022 before the Federal Trade Commission sued unsuccessfully to stop the deal. Microsoft has denied any wrongdoing and defended the acquisition as beneficial to gamers.
– The Wall Street Journal (paywall) reported that according to people familiar with the matter, activist investor Palliser Capital has built a stake in the holding company of AI chip maker SK hynix and is pressing for changes to increase its share value. SK Square – SK hynix’s largest shareholder – is an arm of the SK Group conglomerate. Palliser has pushed to add board members with more asset-management experience and to tie executive pay to company performance. It also wants SK Square to lower its capital costs by using more debt. The discussions between SK Square and Palliser have so far been amicable.
‘SK Square has been exchanging views with Palliser regarding long-term strategic direction and shareholder return policies,’ a spokesperson for SK Square said.
– Pfizer appointed a former CEO of Vanguard, the drug company’s biggest investor, to its board on Tuesday as it faces pressure from activist hedge fund firm Starboard Value, Reuters reported. Mortimer Buckley was Vanguard’s chair and CEO until this year when he announced his retirement. Buckley’s appointment was announced a day before Pfizer and Starboard Value were scheduled to meet. A spokesperson for the investor had no comment on the board news.
– The New York State Department of Financial Services issued new guidance advising the entities it regulates to monitor and assess risks from AI-enabled tools as part of the agency’s existing cyber-security regulation, the WSJ reported. The department said financial services firms need to better understand AI-related risks such as social engineering, cyber-attacks and the theft of non-public information. It added that it had issued the guidance in response to inquiries about how AI is changing cyber-risk and how it can be mitigated. Superintendent Adrienne Harris said the guidance reinforces the need for firms to factor AI into their risk frameworks and the requirements under amended cyber-security regulations.
‘I think it’s really about making sure there’s expertise in the institution, making sure they’re engaging with lots of stakeholders, so they understand the development of the technology,’ Harris said, adding that firms need to be engaged in conversations around the use of AI even if they don’t have a large team of experts in the technology.
– CNN said machine learning AI helped the US Department of the Treasury to sort through massive amounts of data and recover $1 bn worth of check fraud in fiscal 2024 alone, almost triple what the Treasury recovered in the previous fiscal year. ‘It’s really been transformative,’ said Renata Miskell, a top Treasury official. ‘Leveraging data has upped our game in fraud detection and prevention.’
The Treasury Department credited AI with helping officials prevent and recover more than $4 bn worth of fraud overall in fiscal 2024, a six-fold increase from the year before. US officials started using AI to detect financial crime in late 2022. A Treasury spokesperson told CNN that the department is speeding up its work to improve the fraud-detection tools available to federal and state-administered programs.
Ben Maiden
Ben Maiden is the editor-at-large of Governance Intelligence, an IR Media publication, having joined the company in December 2016. He is based in New York. Ben was previously managing editor of Compliance Reporter, covering regulatory and compliance...
