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October 22, 2019Today's Top Risk News + Analysis From the Editors at RANE
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01
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LEGAL, REGULATORY + COMPLIANCE
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Ohio Counties Reach $260 Million Deal With Four Drug Companies, Averting Trial

Two Ohio counties have reached a $260 million settlement with four drug companies over their role in the opioid epidemic, averting a trial hours before it started, the Washington Post reports. The deal covers two of the 2,400 cities, counties and Native American tribes that sued the drug companies and only four of the companies facing lawsuits — the “Big Three” distributors McKesson Corp., AmerisourceBergen and Cardinal Health and the Israeli generics drugmaker Teva Pharmaceuticals — but it suggests a larger settlement might be possible. Going to trial could have cost the companies more than $8 billion. Cuyahoga and Summit counties will receive $215 million in cash immediately and another $20 million over two years from Teva. Some of the families who lost loved ones said they were not satisfied, partly because they wanted an apology. The case involving Walgreens, the retail drugstore chain sued over its distribution operation, was postponed, and a sixth defendant reached a deal worth $1.25 million with one of the counties on Monday.

READThe Washington Post 
02
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GEOPOLITICAL
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Russia Hosts First Africa Summit as Putin Seeks Friends and Allies

Russia will host its first Africa summit this week as President Vladimir Putin goes in search of new allies on the continent, the Financial Times reports. Leaders from more than 40 countries, including Kenya, Nigeria, Ghana and South Africa will attend the two-day summit in the resort of Sochi, where Putin will present Russia as more dependable than the U.S. and the former colonial European powers. One observer said he would push the idea of “a shared, common attitude to the west, which is that the global structure … needs to be changed.” It may not spend as much as some foreign powers in Africa, but “smaller sums with fewer conditions are welcomed.” Russian exports to African countries hit $20 billion last year, roughly double the level of 2015, but far less than China’s $205 billion. Arms and grain sales to northern states dominate, with Egypt and Algeria alone accounting for two-thirds, and Russia will seek trade agreements and partners for its energy, mining and defense companies at the summit.

READFinancial Times 
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03
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CYBER + INFORMATION
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Two Bills Can Change Cybersecurity Landscape by Pushing CISO, Privacy

Two bills currently in the Senate have the potential to change the cybersecurity landscape by promoting the role of a chief information security officer (CISO) and creating a new privacy law, SecurityWeek reports. The 'Cybersecurity Disclosure Act of 2019' makes three minor changes that may have far-reaching consequences, by increasing pressure on organizations to have a named CISO with a voice on the board. The Mind Your Own Business Act (MYOB) focuses on protecting user privacy: if passed, it will effectively become a federal privacy law, superseding existing state laws covering the same areas, and will turn the Federal Trade Commission (FTC) into a European-style data protection regulator with “the authority to be an effective cop on the beat,” in the words of its sponsor. It even proposes prison time for executives that misuse Americans' data and lie about those practices to the government, though some experts doubt it will pass in its current form.

READSecurityWeek 
04
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GEOPOLITICAL
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Narrow Trudeau Victory Reveals Canada’s Social Divides

The Canadian election revealed significant social divides, with a narrow Liberal victory for PM Justin Trudeau setting big cities against rural regions, north against south and the old against the young, the Globe and Mail reports. Younger urban and northern votes stuck with the center-left parties, while the older rural areas voted Conservative and for Bloc Quebecois, the Quebec separatist party. Alberta and Saskatchewan stayed Conservative, with two isolated NDP and Liberal islands among the 48 seats, while northern regions of Ontario, Manitoba, the territories with large Indigenous populations and downtown Montreal, Toronto and Vancouver voted Liberal. Yet, observers said that the rise of Quebec nationalism and Prairie grievances do not pose existential threats to national unity, for they have always been part of Canadian identity. The Liberals are projected to win 157 seats, 13 short of a majority, which means Trudeau will be prime minister of a minority government, and will find it harder to pass legislation in his second term. Vox reports that this campaign was especially bitter. Two serious scandals had troubled Trudeau’s government — one involving photos of Trudeau in blackface and brownface and the other had to do with political interference with a federal prosecution.

READThe Globe and Mail  , Vox 
05
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GEOPOLITICAL
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Israeli PM Netanyahu Can’t Form Government, Leaving Future Unclear

The Israeli Prime Minister Benjamin Netanyahu has said he can’t form a government, leaving his political future — and the future of the country — unclear, NBC News reports. Netanyahu’s rival Benny Gantz, who leads the opposition Blue and White party, will have 28 days to try and form a government, after President Reuven Rivlin said he would "transfer the mandate" to him. Netanyahu needed the support of a 61-seat majority in Parliament, but his right-wing block had only 54 and he couldn’t persuade any left-wing party members to join. Netanyahu blamed his failure to form a government on Gantz, saying his rival refused “time after time” to return to negotiations. Gantz — a former army chief of staff — resisted the idea of allying with Netanyahu, who is facing corruption charges. Blue and White said it was “determined to form the liberal unity government, led by Benny Gantz, that the people of Israel voted for a month ago." If it fails, Israel will face its third national election of 2019. In a video, Netanyahu warned that Gantz could assume power with Israeli Arab lawmakers' support, whose party came out as the third-largest in the Knesset, and that those parliamentarians “encourage terror and oppose Israel’s existence,” the Washington Post reports.

READNBC News , The Washington Post 
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06
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CYBER + INFORMATION
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Islamic State Militants Post Propaganda Videos on TikTok

Islamic State (IS) militants have been posting propaganda videos on TikTok, the social media site popular with teenagers, in a development that will pose a challenge for the app’s Beijing-based owner, Bytedance, the Wall Street Journal reports. The videos, which have been removed, showed corpses paraded through streets, Islamic State fighters with guns and women who call themselves “jihadist and proud.” Many were set to Islamic State songs, and some had TikTok filters, or images of stars and hearts streaming across the screen in an attempt to appeal to young people. IS seems to be trying to attract new recruits, or to regenerate enthusiasm for its cause, as U.S. troops withdraw from northern Syria. TikTok was the third-most installed app worldwide in the first quarter, behind WhatsApp and Messenger, and about 30 percent of users are under the age of 18. Its rules prohibit terrorist and criminal organizations from using the app, and it has hired thousands of moderators to maintain its light-hearted culture. In the U.S., TikTok is enjoying a surge in popularity among teenagers around the world and has been downloaded 1.4 billion times, despite concerns that it could become "a Chinese vacuum for coveted American data."

READThe Wall Street Journal , The New York Times , Axios 
07
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GOVERNANCE
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EY Training Seminar Lectures Women on How to Dress and Behave Around Men

Accounting giant Ernst & Young (EY) ran a seminar at the height of the #MeToo movement that gave women outdated and patronizing instructions about how they should behave around men, the HuffPost reports. The 55-page presentation at the June 2018 seminar in Hoboken, New Jersey was leaked by an attendee appalled by its prescriptions, such as clothing should flatter, and women should look healthy and fit, with a “good haircut” and “manicured nails,” but shouldn’t “flaunt [their] body,” for “sexuality scrambles the mind.” The Power-Presence-Purpose or PPP presentation came shortly after an EY partner filed a complaint, saying she was sexually harassed by a male partner. Yet the seminar — which the accounting firm says is “is no longer offered in its current form” — seemed to be founded on the idea that it was women’s behavior that needed to be fixed, not men’s. EY said it was “deeply committed to creating and fostering an environment of inclusivity and belonging.”

READHuffPost 
08
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LEGAL, REGULATORY + COMPLIANCE
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China Exports Internet Censorship Across Belt and Road Countries

China is exporting its model of a censored internet to some of the countries in the Belt and Road scheme, its modern version of the old Silk Road trading route, Asia Nikkei Review reports. China control online freedoms through measures such as a comprehensive cybersecurity law and heightened scrutiny for internet access, and by shutting out foreign players such as Google and Facebook. It also polices social media content tightly. It now wants to export the same controls across its trading network, building a digital Silk Road on top of the physical one, according to plans unveiled at the sixth annual World Internet Conference. The BeiDou Navigation Satellite System — China's answer to GPS — is operating in Belt and Road countries, Huawei Technologies is helping Cambodia and the Philippines with 5G mobile networks, and China Telecom has installed a fiber-optic connection between China and Pakistan. Beijing sees the moves as a way of extending its influence — and many countries see advantages in working with its companies.

READNikkei Asian Review 
09
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CYBER + INFORMATION
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Facebook Announces Changes in Security Features for Presidential Election in 2020

Facebook has launched new security features designed to make posts more transparent during the 2020 Presidential election and removed four networks of “coordinated inauthentic behavior” tied to Russia and Iran, CNBC reports. Facebook removed 50 Instagram accounts and one Facebook account with links to Russia’s Internet Research Agency, which was accused of using social media to interfere with the 2016 U.S. presidential election, and three networks that were tied to Iran. Those networks targeted users in the U.S., North Africa and Latin America with content on a variety of topics, including tensions between Israel and Palestine, U.S. race relations and Black Lives Matter. Facebook also said China has interfered in elections. It will label posts that include false information, sometimes with a blurred screen that will hide false photos and videos. It will also introduce a U.S. presidential candidate spend tracker that will show how much each candidate has spent on Facebook ads, ban any ads that suggest voting is useless and label state-controlled media. Separately, state attorneys general and federal investigators gathered Monday with public policy and antitrust experts to explore the legal grounds on which they could build an antitrust case against social media giant Facebook, the Wall Street Journal reports.

READCNBC , The Wall Street Journal 
10
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LEGAL, REGULATORY + COMPLIANCE
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Apple’s Hold on App Store Questioned While EU Criticizes Microsoft Data Practice

Apple’s decision to give in to pressure from Beijing and pull a map from the App Store that Hong Kong protestors were using to locate police forces is evidence that its habit of controlling its software from approval to distribution is unsustainable, TechCrunch reports. Before Apple introduced the App Store in 2008, companies could distribute third-party apps and web services without oversight, and consumers could download software from the internet or connect to any website. Apple’s attempt to control the user experience from approval to distribution through the App Store was a huge success. Yet, it has become so big that it is hard to manage effectively — it doesn’t enforce its own rules properly, and some developers find ways to abuse them, suggesting that regulation may be on the way. Meanwhile, Microsoft’s contracts with European Union institutions such as the European Commission do not fully accord with EU data law, the European Data Protection Supervisor (EDPS) has said, Reuters reports. The preliminary findings of an investigation that began in April found “serious concerns over compliance of the relevant contractual terms with data protection rules and the role of Microsoft as a processor for EU institutions using its products and services,” the EDPS said. Microsoft said it was “committed to helping our customers comply” with the General Data Protection Regulation, and said it would “soon announce contractual changes that will address concerns such as those raised by the EDPS.”

READTechCrunch , Reuters 
11
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LEGAL, REGULATORY + COMPLIANCE
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Index Provider MSCI Replies to Rubio Criticism Over Chinese Stocks

Global index provider MSCI Inc. has replied to criticism by U.S. Senator Marco Rubio (R-Fla) that it is funneling Americans’ investment dollars into Chinese companies linked to human rights abuses and national security threats, Bloomberg reports. Rubio had written to MSCI asking why it added hundreds of Chinese stocks to its benchmark emerging markets index since last year and then increased their weighting, directing billions of dollars more in investments and retirement-savings to Chinese companies. MSCI’s Chief Executive Officer Henry Fernandez replied there was no rule stopping an index company “from creating an index containing China A securities or U.S. investors from trading in the China A market.” He said inclusion in the index isn’t based on “subjective judgment” but on standardized attributes such as size and liquidity. Some stocks have recently been placed on a U.S. blacklist preventing business with American companies. Rubio is leading a group of bipartisan lawmakers advocating for more restraints on investment and greater scrutiny of Chinese companies in stock indexes and U.S. pension funds.

READBloomberg 
12
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SAFETY + SECURITY
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Study Marks Places Most Likely to Suffer From Climate Change

A new study identifies the spots where climate change will hit hardest by correlating the places where projected environmental losses overlap with human populations who depend on those resources, Mother Jones reports. In the study published last week in Science, the Stanford University-based research group Natural Capital Project looks at three natural systems that humans benefit from — pollination, freshwater systems and coastal ecosystems, which provide a buffer against storm surges and prevent erosion — and then plots predicted losses onto human population maps. Until now, few studies have considered how humans benefit from natural processes. However, it is not only the “total amount of nature” that matters, but where it is and whether “it delivers the most benefits to people,” said Rebecca Chaplin-Kramer, the lead scientist at the Natural Capital Project. The study suggests that up to five billion people will face hunger and a lack of clean water by 2050, with parts of Asia and South America hit hard. The scientists are working with the World Bank to develop a “Natural Capital” index to allow countries to track their natural resources.

READMother Jones , Science 
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