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Inside Compliance

Inside Compliance (Jul 29th, 2019)

1. Companies that add Facebook's "like" button to their websites can be held accountable for collecting user data, the European Union's Court of Justice ruled Monday. In the case that prompted the decision, a German consumer advocacy group sued a German online fashion store that employed Facebook's like button to collect user data and give the retailer more prominence on Facebook. "We are carefully reviewing the court's decision and will work closely with our partners to ensure they can continue to benefit from our social plugins and other business tools in full compliance with the law," said Jack Gilbert, Facebook's associate general counsel. - REUTERS

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2. New documents involving Audi reveal that Volkswagen's luxury unit was deeply involved with the emissions scandal that Volkswagen admitted to four years ago. The documents, obtained by the New York Times, reveal that Audi subverted emissions testing in the United States by programming its vehicles to depress pollutant emissions during testing but otherwise release emissions exceeding regulatory standards during everyday driving. And even after the emissions scandal was exposed, Volkswagen continued to sell noncompliant vehicles. - NEW YORK TIMES

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4. Federal agencies are hiring risk officers to avoid reputational hits, following in the footsteps of private companies that have been hiring risk and compliance officers for the past several decades. Financial scandals and subsequent huge losses are what prompted the private sector to beef up compliance departments. But public agencies face many non-financial risks. “It’s just the nature of government; we are subject to more scrutiny,” said Tom Brandt, the Internal Revenue Service's chief risk officer. “When something goes off track in the government, it is more likely to end up on the front page of a newspaper.” In the past three years, 58 percent of federal agencies have begun risk management programs. - WALL STREET JOURNAL

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5. The Trump administration said that Chevron could continue to operate in Venezuela until October 25 despite U.S. sanctions against the Latin American nation. Chevron has been involved in Venezuela for nearly a century, but it is facing increased pressure with the Trump administration's economic moves to oust Venezuelan President Nicolás Maduro. It's unlikely Chevron will receive another extension to remain in Venezuela, some experts believe. "The Trump administration seems to view the Venezuela issue as a proxy for Cuba, which resonates with Latino voters," said energy analyst Kevin Book. "It will get harder for the White House to give extensions to US companies when they are fighting to win votes in Florida." - ASSOCIATED PRESS

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6. A military contractor charges $1,443 for a part that cost $32 to produce. Is that company compliant? Is it ethical? That's the subject of a new National Defense ethics column which uses an investigation into TransDigm as a case study. The Defense Department's office of the inspector general found that of the 47 parts it looked at, TransDigm had realized excessive profits (defined as more than 15 percent) on 16 of them. And in some cases, the profit was exorbitant. National Defense ethics columnist Anne Harris asks if TransDigm's behavior, while compliant with federal acquisitions law, was ethical. - NATIONAL DEFENSE

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7. CannTrust Holdings has fired its CEO and forced the resignation of its president following reports that they knew about illegal cannabis growing at a company facility. "Our first priority is to complete the remaining items of our investigation and bring the company's operations into full regulatory compliance," said the new interim CEO, Robert Marcovitch, of the Canadian company. "Implementing the necessary changes is essential to the interests of our medical patients, customers, shareholders and employees." - THE STREET

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8. 3M is conducting an internal investigation after finding questionable records related to its Chinese marketing efforts. The company, based in Minnesota, has retained outside counsel and has disclosed the anti-corruption investigation to U.S. authorities. 3M's stock tumbled 4 percent on Friday, following the announcement. (It is up 2.5 percent so far Monday.) "3M has a culture of doing business the right way," said a company statement. "We have high expectations of all our employees and business partners, and expect that our business dealings are done in compliance with the law." STAR TRIBUNE

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9. Unum, a Fortune 500 company that includes Colonial Life Insurance, seeks a risk and compliance manager in Columbia, South Carolina.

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10. Citi seeks a compliance risk management director in New York.

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Paul Wachter is a California-based journalist who has written for The New York Times Magazine, Harper's, ESPN, and other publications. 

Editor: Kim Lyons (Pittsburgh-based journalist and managing editor at Inside).

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