– Reuters (paywall) reported that the Federal Deposit Insurance Corp (FDIC) proposed that banks enhance recordkeeping requirements for accounts held by fintech companies on behalf of their customers. The move follows the collapse of bank-fintech middleman Synapse Financial Technologies earlier this year, which led to the freezing of thousands of accounts.
The new requirements would ensure consumers have timely access to their funds, even in the absence of a bank’s failure, the FDIC said. Under the proposal, banks that work with fintech companies would need to identify the beneficial owners of each account and its balance. Third parties – such as Synapse – would be allowed to maintain those records as long as certain requirements are met, such as a bank retaining unrestricted access to that data even in the event of a middleman’s bankruptcy or insolvency.
The FDIC also finalized a policy that would bring heightened scrutiny to bank mergers that would result in a combined bank with more than $100 bn in assets. The new rule would update the agency’s merger guidance for the first time in 16 years and would put special emphasis on maintaining the stability of the banking sector, agency officials said when proposing the rule in March.
– CNN reported that according to a report from advocacy group LeanIn.org and McKinsey & Company, there have been gains made since 2015 in terms of women’s advancement in corporate America. But the report also notes that women continue to face plenty of headwinds in getting ahead. As a result, the authors estimate that achieving true parity with men at work is many years in the future. They define parity as women holding leadership roles (from SVP level to the C-suite) in numbers that better approximate their share of the US population.
The report found that women now hold 29 percent of C-suite positions, up from 17 percent in 2015, although the increases were primarily in ‘staff’ roles that support the non-revenue-generating sides of the organization, such as chief HR officer, rather than ‘line’ roles directly tied to profit and loss and core business operations. More companies have also improved their hiring practices and performance reviews to make them fairer, according to the researchers. For example, 69 percent now offer bias training for evaluators, up from 53 percent in 2015.
– The Wall Street Journal (paywall) reported that all seven independent directors of DNA-testing company 23andMe resigned following negotiations with founder and CEO Anne Wojcicki over her plan to take the company private. In a letter to Wojcicki, the directors wrote that ‘after months of work, we have yet to receive from you a fully financed, fully diligenced, actionable proposal that is in the best interests of the non-affiliated shareholders.’ The board members wrote that they differ with Wojcicki on the ‘strategic direction for the company’ and because of her voting power it was best that they resign. Wojcicki controls 49 percent of 23andMe votes, giving her a level of control that blocks board members from shopping the company to other potential bidders.
‘I am surprised and disappointed by the decision of the directors to resign,’ Wojcicki wrote in a memo to her employees. She added that taking 23andMe private, ‘outside of the short-term pressures of the public markets’, is the best plan for the company, and said she would find new independent directors.
– According to Reuters, GameStop CEO Ryan Cohen agreed to pay a nearly $1 mn penalty to settle the US Federal Trade Commission’s (FTC) claim he failed to report the acquisition of more than $100 mn worth of Wells Fargo & Co voting shares. Cohen failed to notify the agency as required when he amassed shares above the $100 mn threshold in 2018, the agency said. He had not bought the shares solely as an investor but had given the bank’s management input into how to run its business and sought a board seat, according to the FTC. He reported the transactions to the FTC in 2021.
An attorney for Cohen did not immediately respond to a Reuters request for comment.
– The WSJ reported that Tyson Foods was sued for greenwashing. The company has since 2021 claimed it will reach net-zero emissions by 2050 and about two years ago it began promoting plans for its ‘climate-smart’ beef. The lawsuit, brought by the advocacy organization Environmental Working Group, alleges that these statements are misleading because Tyson Foods has no real plans to achieve the goals. ‘Greenwashing claims are really targeting well-meaning consumers who want to do good with their money, who want to try to take some individual responsibility and purchase foods that are more climate-friendly,’ said Carrie Apfel, an attorney for Earthjustice, an environmental law firm representing the plaintiff.
A Tyson Foods representative said the company would not comment on the litigation but added that it ‘has a long history of sustainable practices that embrace good stewardship of our environmental resources.’
‘We’re seeing quite a growth in greenwashing lawsuits around the world,’ said Michael Gerrard, founder of the Sabin Center for Climate Change Law at Columbia Law School. ‘Europe and Australia have been the leaders in these suits, and their advertising integrity boards have been issuing a large number of violations. We also see them in the US, although at a lower volume.’
– According to CNBC, 20 civil rights organizations sent a letter to Fortune 1000 companies urging them to recommit to diversity, equity and inclusion (DE&I) after several major companies scaled back their efforts. ‘Abandoning DE&I will have long-term consequences [for] business success,’ the authors of the letter wrote. ‘Ultimately shirking fiduciary responsibility to employees, consumers and shareholders… These shortsighted decisions make our workplaces less safe and less inclusive for hard-working Americans.’
A range of companies have curbed their DE&I efforts, which picked up in 2020 after a national reckoning over racial injustice sparked by the police killing of George Floyd. Legal experts saw the US Supreme Court’s ruling on affirmative action last year as laying the basis for targeting companies prioritizing employee, supplier and consumer diversity.
– The US Department of Justice (DoJ) has begun building out its new pilot whistleblower program and has received reports from more than 100 tipsters since it was launched last month, the WSJ reported. The program was officially launched on August 1. The DoJ has named Patrick Gushue, a trial attorney in the money-laundering and asset-recovery section, as the program’s first acting director and has assembled a team of prosecutors from three divisions to staff it, according to Brent Wible, chief counselor in the department’s criminal division.
In anticipation of the types of tips it would receive under the pilot program, the DoJ has brought on board prosecutors from the criminal division’s public integrity and fraud sections as well as its money-laundering and asset-recovery unit. The team assesses tips then identifies an appropriate venue for the information, such as a specific US attorney’s office to help work on the case, Wible said.
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...
