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December 17, 2018Today's Top Risk News + Analysis From the Editors at RANE
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01
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GEOPOLITICAL
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Saudi Arabia Pumps Up Stock Market After Bad News, Including Khashoggi Murder

Saudi Arabia’s government has been spending billions of dollars to quietly prop up its stock market and counter selloffs that have followed repeated political crises in recent months, the Wall Street Journal reports. According to an analysis of trading data and interviews with multiple people with direct knowledge of government intervention efforts, the Saudi government has placed huge buy orders, often in the closing minutes of negative trading days, to boost the market. The Saudi stock market is a pillar of Crown Prince Mohammed bin Salman’s plan to revamp his country’s economy. Since he ascended to a top leadership position three years ago, the de facto Saudi ruler and his deputies have faced a series of foreign-relations predicaments — most recently the October murder of columnist Jamal Khashoggi — that prompted investors to dump Saudi stocks. Normally, the Saudi stock exchange discloses how much stock the government buys, but the recent purchases after political crises have been concealed from public view. Meanwhile, the U.S. Senate voted 56-41 on Thursday to end American military assistance for Saudi Arabia’s war in Yemen in the strongest show of bipartisan defiance against President Trump’s defense of the kingdom over Khashoggi’s killing, the New York Times reports.

READThe Wall Street Journal  , The New York Times 
02
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GEOPOLITICAL
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ECB to Formally End Bond-Buying Program, Marks Retreat from QE

The European Central Bank (ECB) is set to formally end its multi-trillion bond-buying program at the end of December, CNBC reports. But, it still intends to reinvest cash from maturing bonds for an extended period to go past its next interest rate increase. With this move, the ECB reaffirms what policymakers had been expecting since the summer, that it will no longer expand quantitative easing (QE) when this month ends, which is when bond purchases will drop to zero from €15 billion a month. This is seen as a turning point for the ECB as it ends one of President Mario Draghi’s most controversial policies. Going forward, the ECB plans to spend cash from maturing bonds to buy more debt. The purchases are meant to keep borrowing costs low until sometime in 2021. Although the ECB is now stepping away from QE, Financial Times reports that the initial view is that QE worked in helping the global economy by either encouraging investors to hold more risky assets, easing borrowing constraints, offering finance so governments could have larger budget deficits or proving that central banks have the ability to respond to weak demand and low inflation.

READCNBC , Financial Times 
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03
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GEOPOLITICAL
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Mueller Shifts Investigation’s Focus to Middle Eastern Connections

Special counsel Robert Mueller’s office is set to present a different side of his investigation away from his recent Russian focus. In court filings set for early next year, prosecutors will start to reveal Middle Eastern countries’ attempts to influence U.S. politics, reports the Daily Beast, citing sources familiar with the probe. Some of Mueller’s staff has been focusing on how Middle Eastern countries offered funds to Washington politicians to try to influence policy under President Trump’s administration. Different witnesses involved in Trump’s campaign have been questioned on their talks with deeply-connected individuals from the United Arab Emirates, Saudi Arabia and Israel, according to people familiar with the investigation. Discussions in those meetings were about various topics that included using social media manipulation to help Trump become U.S. President and overthrowing the Iranian regime. Sources said that the Special Counsel’s Office can now outline what cooperating witnesses have told them regarding these foreigners’ plans to help Trump win the U.S. presidency. Two sources stated that Mueller’s team has been discussing whether to issue new charges on this Middle Eastern part of the investigation.

READThe Daily Beast 
04
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SAFETY + SECURITY
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Bomb Threats Targeting Locations Across U.S., Canada Appear to Be Hoaxes

Dozens of bomb threats were reported Thursday against businesses, schools, hospitals and other places across the country — causing panic and evacuations, although all appeared to be hoaxes, NBC News reports. Police in San Francisco, New York, Chicago, Seattle, Miami, Washington, D.C., and other locations reported threats, some emailed, some phoned in. In Canada, threats were also received in Vancouver, Ottawa and Toronto. Authorities in New York City were monitoring “multiple bomb threats that have been sent electronically to various locations throughout the city,” the New York Police Department’s counterterrorism bureau said on Twitter. An email demanding $20,000 via bitcoin was forwarded to CNN affiliate KOCO-TV in Oklahoma City by a viewer who received it at her business. The message was identical to an email warning posted on social media by the Cedar Rapids, Iowa Police Department and similar to descriptions of other threats posted on social media nationwide. Earlier this week, a threat forced the evacuation of Facebook’s Menlo Park, California, headquarters. It’s not known whether any of the threats are connected, Reuters reports.

READNBC News , CNN , Reuters 
05
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CYBER + INFORMATION
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Iran Hackers Hunt Nuke Workers, US Officials; 2FA Bypassed, Researchers Say

Cyber hackers have been attempting to break into the personal emails of the U.S. officials enforcing the Iran sanctions re-imposed by the Trump administration last month, the Associated Press reports. Through data from the cybersecurity group Certfa, the news agency wanted to find out how a hacking group known as Charming Kitten has been trying to break into the private emails of their targets. Charming Kitten’s target hit list comprises more than a dozen government officials from the U.S. Treasury as well high-profile persons connected with the nuclear deal agreed on by the U.S and Iranian governments. The list, which went public after Charming Kitten accidentally left one of its servers open to the internet last month, also features Arabian atomic scientists, Iranian civil society figures and D.C. think tank workers. Certfa researchers were able to get a list of 77 Gmail and Yahoo addresses targeted by the hackers, although it is hard to figure out how many of these accounts were successfully compromised. Meanwhile, Ars Technica reports that Certfa researchers found that the Iranian hackers successfully breached accounts protected by SMS-based 2fa. But, they were not able to confirm that the technique succeeded against accounts protected by 2fa that transmitted one-time passwords in apps like Google Authenticator.

READThe Associated Press , Ars Technica 
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06
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GEOPOLITICAL
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DRC Fire Destroys Voting Machines Days Before Historic Presidential Elections

A fire has wrecked most of an election commission warehouse located in Kinshasa, the capital of the Democratic Republic of Congo (DRC), just 10 days before its historic presidential elections, the Guardian reports. The fire did damage to thousands of controversial new voting machines, worsening concerns that the elections — that can result in DRC’s first democratic transition of power — will be undermined by both logistic difficulties and fraud. Presidential adviser Barnabé Kikaya bin Karubi attributed the fire to unidentified “criminals.” The fire destroyed roughly 7,000 of the 10,000 voting machines scheduled to be used in Kinshasa. Kikaya said preparations for the December 23 poll are still pushing through, adding that police guarding the warehouse had been arrested. He did not say anything else about what or who might have caused the fire. Opposition supporters blamed the blaze on arson and accused Joseph Kabila, who has been in power since 2001, of searching for excuses to delay the poll. Meanwhile, other problems plague DRC as the Ebola outbreak in the country is fast becoming an international concern with 280 deaths and 489 people diagnosed with the disease, according to the Conversation.

READThe Guardian , The Conversation 
07
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CYBER + INFORMATION
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Cyberattack Costs to Hit $6 Trillion Annually by 2021, Study Says

Cyberattacks are now the fastest-growing crime in the world, and are expected to cost the global economy $6 trillion a year by 2021, according to a report by Cybersecurity Ventures, Verdict reports. The amount is equivalent to the annual GDP of both India and the UK in 2019 combined, making it a serious concern for businesses and governments alike. It also represents a doubling of the costs associated with cyberattacks within just a short space of time — in 2015, cyberattack costs were just $3 trillion. Detailed in the Official 2019 Annual Cybercrime Report by Cybersecurity Ventures, it indicates that cybercrime will within a few years be more profitable that the entire global drugs trade. Meanwhile, the already severe cybersecurity skills shortage is set to rise further. While in 2014 there were 1 million open positions in the cybersecurity industry, by 2021 this will surge to 3.5 million, with the cybersecurity unemployment rate remaining at 0 percent.

READVerdict , Cybersecurity Ventures 
08
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LEGAL, REGULATORY + COMPLIANCE
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FCPA Accusations Leave Lasting Scars, Even for Those Who Are Cleared

A South African company that had been been the subject of Foreign Corrupt Practices Act investigations — before being cleared nearly five years later — provides insight into the ongoing costs of such scrutiny, the FCPA Blog reports. In December 2012, Johannesburg-based payment-processing company Net 1 UEPS Technologies, Inc., announced the launch of a FCPA investigation by the Securities and Exchange Commission (SEC) and the Justice Department. By early 2013, Net1’s legal costs for the FCPA investigations had swelled to more than $1.25 million a month. In May 2013, the company announced a quarterly loss of $4.7 million. The SEC investigation lasted more than 2½ years, while the DOJ’s took nearly five years, and both agencies closed their investigations without bringing any charges. Yet in a 10-K filed with the SEC this month, Net1 hinted at its FCPA ordeal: Management has to spend “a disproportionate amount of time explaining the circumstances surrounding, and the result of the investigations, when engaging new business partners, shareholders or regulators,” Net1 reported, adding a final warning: It could all happen again.

READThe FCPA Blog  
09
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CYBER + INFORMATION
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Shipping Industry Releases Cybersecurity Guidelines Revealing Same IT Problems

Like other IT systems, ships go through the same kinds of cybersecurity problems as shown by a recent document from the international shipping industry, ZDNet reports. The document is the third edition of the “Guidelines on Cyber Security Onboard Ships,” which serves as an industry-approved guide that was put together by a group comprising 21 international shipping associations and industry groups. The document presents incidents when IT problems occurred after the proper cybersecurity procedure was not followed. It is the first time that actual examples of previous cybersecurity events that occurred on ships and ports have been made public. The shipping industry underwent a cybersecurity wakeup call in 2017 after Maersk, the biggest cargo shipping firm worldwide, was infected with the NotPetya ransomware. The incident incurred costs of more than $300 million. The firm’s IT staff also had to reinstall more than 4,000 servers and 45,000 PCs to safely resume operations. The updated guidelines are the shipping industry’s direct reaction to witnessing how NotPetya can derail an organization’s operations.

READZDNet 
10
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DILIGENCE
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Robinhood Launches No-Fee Banking Services; Temporary Trading Outage Sparks Ire

Robinhood is undercutting the big banks by forgoing brick-and-mortar branches with its new zero-fee checking and savings account features, TechCrunch reports. With no overdraft or monthly fees, a 3 percent interest rate and a claim of more U.S. ATMs than the five biggest banks combined, Robinhood is using the scalability of software to pass impressive perks on to customers. The free stock trading app already used that approach to attack brokers like E*Trade and Charles Schwab that charge a per-trade fee. Now it’s breaking into the larger financial services market with a model that could put the squeeze on Wells Fargo, Chase and Bank of America. Yet the startup’s rising popularity and expanding footprint hasn’t been all smooth sailing: Some customers attempting to access options trading on Wednesday morning received a message saying their account was deactivated and directing them to the company’s support email address without a more detailed explanation, prompting complaints on social media, Business Insider reports.

READTechCrunch , Business Insider 
11
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LEGAL, REGULATORY + COMPLIANCE
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Twitter Told to Reveal Identity of Person Behind JD Wetherspoon Parody Account

The identity of the person responsible for the fake JD Wetherspoon Twitter accounts — @Wetherspoon__UK and @SpoonsTom — will be revealed to the pub chain after a judge’s ruling, the Telegraph reports. During the hearing for the case, it was indicated that while garnering thousands of followers, these impostor accounts sent “abusive” replies to customers and since 2014, had posted incorrect updates under the name “Tom.” The pub chain’s barrister David Hirst recounted that a tweet saying that a staff would not be wearing poppies during Remembrance Day prompted a man who was attending the firm’s yearly general meeting to ask the board “very heated questions.” The fake accounts, thought to be operated by an ex-employee, had between 10,000 and 45,000 followers on each one. Hirst said that the significant number of followers proves that the fake accounts interfered with the running of the business. During a hearing held in London, the judge set a mid-January deadline for Twitter to disclose information regarding the identity of the person behind the fake account. The social media site did not oppose JD Wetherspoon’s application.

READThe Telegraph 
12
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SAFETY + SECURITY
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Western States Face Dire Water Shortages From Dwindling Colorado River

Prompted by years of drought and mismanagement, a series of urgent multi-state meetings are currently underway in Las Vegas to renegotiate the use of the Colorado RiverGrist reports. Decades of warming temperatures have finally forced a confrontation with an inescapable truth: There’s no longer enough water to go around. Lake Powell, on the Arizona-Utah border, is on pace to lose 15 percent of its volume within the next 12 months. Lake Mead, which feeds hydroelectricity turbines at the Hoover Dam and is the region’s most important reservoir, will fare even worse — falling 22 percent in the next two years. Under the current rules, federal water managers project a 52 percent chance that an official water shortage will be declared in fall of 2019, with mandatory cutbacks beginning in 2020. A shortage is more than 99 percent certain the following year, leading to water rationing, power shortages, abandonment of irrigated cropland and lawsuits.

READGrist  
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