– CNBC reported that, according to an SEC filing, McDonald’s is attempting to recoup millions of dollars in compensation it paid former CEO Steve Easterbrook by suing him for allegedly lying during the company’s internal probe into his behavior. The company’s board announced in November that it had terminated Easterbrook for having a consensual relationship with an employee and picked Chris Kempczinski as his successor.
McDonald’s now alleges that new information about Easterbrook’s actions came to light in July, prompting further investigation from the company that allegedly found Easterbrook lied to the company and destroyed information regarding his inappropriate behavior, including three alleged additional sexual relationships with employees. The board said it would not have signed a separation agreement with Easterbrook had it known about this alleged conduct.
CNBC reached out to Easterbrook for comment.
– The Wall Street Journal reported that Interactive Brokers agreed to pay a total of $38 million to settle allegations by US regulators that it failed for more than five years to maintain an adequate anti-money laundering program. The broker-dealer hadn’t monitored hundreds of millions of dollars of customers’ wire transfers for money laundering concerns and did not report potential manipulation of micro cap securities in customer accounts, regulators said. The firm reached coordinated settlements with the SEC, Commodity Futures Trading Commission and Financial Industry Regulatory Authority.
Interactive Brokers consented to the settlements without admitting to or denying the regulators’ findings. A spokesperson for the broker-dealer said it had co-operated fully with the regulators and that actions it had taken to enhance its anti-money laundering safeguards were taken into account in those settlements.
– The Guardian said that, according to research from Oxford University, Facebook and other large tech companies are ‘too big to fail’ and there is a need for new regulations to protect users and society in the event of a collapse. In their paper, published in the Internet Policy Review journal, Carl Öhman and Nikita Aggarwal argue that the world’s biggest technology companies are unlikely to suddenly go out of business – but that the world is unprepared for what would happen if they did.
‘The demise of a global online communication platform such as Facebook could have catastrophic social and economic consequences for innumerable communities that rely on the platform on a daily basis,’ Öhman and Aggarwal write, ‘as well as the users whose personal data Facebook collects and stores.’
– According to CNN there are signs that boards may start prioritizing efforts to go beyond their usual networks to fill more open seats with people of color as the US faces a reckoning with systemic racism. For example, theBoardlist, a search platform of highly recommended executive women seeking to join corporate boards, has seen both an increase in requests for minority women candidates and in the number of minority women executives added to the platform by current and former board directors.
‘Ninety percent of the conversations we've had with boards in the past three months has been about looking for women of color and ideally, black women candidates,’ theBoardlist CEO Shannon Gordon said. The company has also announced it would include men of color among the board-ready executives on its platform.
As more investors, customers and employees assess businesses partly on how diverse they are, it's an issue companies can no longer ignore. ISS recently asked public companies to disclose the ‘self-identified’ race or ethnicity of the company's directors and named executive officers.
– Reuters reported that the US Department of Justice (DoJ) urged Congress to revise a 74-year-law that is central to how the government sets regulatory policy. Deputy attorney general Jeff Rosen said the DoJ wanted to work with Congress to modernize the 1946 Administrative Procedure Act (APA), adding the law ‘no longer reflects how the regulatory process actually works.’
Rosen wants Congress to enshrine some existing practices into law, adopt new transparency measures and take steps to improve the economic efficiency of regulations. In a new report, the DoJ argued the need for reform was urgent ‘as the regulatory state has grown ever larger.’ In some cases, courts have halted actions by the Trump administration for not following APA requirements.
– The SEC said Marc Panucci, deputy chief accountant, plans to leave the agency later this month. Since taking on the role in 2016, Panucci has managed and led the activities of the office of the chief accountant’s professional practice group. In this position, he has played a key role in the commission’s work related to overseeing the activities of the PCAOB, managing rulemaking and the resolution of auditor independence matters, as well as monitoring and addressing matters related to the requirements for internal control over financial reporting.
– According to the WSJ, the PCAOB is extending its window for inspections to assess the impact of the Covid-19 pandemic on audit quality. It intends to review a sample of US audits of public companies whose fiscal year ended on June 30, in addition to some with March 31 year-ends, PCAOB board member Duane DesParte said.
This year’s inspection window will cover five quarters instead of four, the PCAOB said. In addition to the year-end audits, inspectors will review some audits of quarterly financial statements. The reviews are expected to continue into the fall and a report on the findings is expected in the first half of 2021, according to a spokesperson.
– Reuters reported that former Hertz Global Holdings CEO Mark Frissora will pay $2.18 million to settle SEC allegations that he failed to reimburse incentive-based pay to the company following a financial restatement. Without admitting or denying wrongdoing, Frissora agreed to pay $1.98 million to Hertz and a $200,000 civil fine to the SEC, according to papers filed with the federal court in Newark, New Jersey. Frissora was Hertz’s CEO from July 2006 to September 2014.
The settlement requires a judge’s approval. A lawyer for Frissora declined to comment.