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Inside Compliance (Aug 5th, 2019)

1. The Justice Department is investigating Charlotte-based Sealed Air Corp, maker of bubble wrap and other packaging products, over financial disclosures and its selection process for auditors. The company revealed Friday that it had received a subpoena from the department. Last year, the Securities and Exchange Commission also issued subpoenas, prompting Sealed Air to fire its CFO. The investigations are focused on the period beginning in 2015, when Sealed Air switched auditors to Ernst & Young, which issued a statement that said, "We stand by the quality of our work." - WALL STREET JOURNAL

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2. Compliance officers are at increasing risk for roles they may have played in the opioid epidemic. In 2018, then-Attorney General Jeff Sessions announced a task force to prosecute opioid manufacturers deemed responsible for the opioid crisis. And last month, in the most recent case, the Justice Department charged executives, including the compliance officer, at drug distributor Miami-Luken with "conspiring to distribute controlled substances.” In April, similar charges were filed against a compliance officer at another drug company. The most worrying tendency in such cases is when compliance officers have "actual knowledge of potential issues or suspicious behavior, coupled with a failure to act," said Callan Stein, a partner in the Health Sciences department at Pepper Hamilton. - COMPLIANCE WEEK

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3. Federal Reserve examiners inspected an Amazon.com cloud data facility, the first such visit and a preview of greater federal scrutiny of the tech giants that store most of the country's banking information. "The examiners were greeted warily at the Amazon offices," reported the Wall Street Journal of the April visit this weekend. "Chaperoned by an Amazon employee, they were allowed to review certain documents on Amazon laptops, but not allowed to take anything with them." Though companies like Amazon, Microsoft and Google store sensitive banking data, they have escaped the regulatory scrutiny applied to the country's banking industry. And Big Tech has fought Washington's attempts to increase oversight. - WALL STREET JOURNAL

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4. The U.S. Department of Agriculture wants American farmers to export more genetically engineered (GE) food. To further that goal, the department is looking to reduce its own oversight role and task GE producers themselves with self-compliance responsibility. The public comment period for the proposed rule ends today. The proposed rule has been criticized by environmental and trade groups. "USDA, in its desire to maximize trade in GE crops as soon as possible and everywhere, has proposed a rule that would make it exceedingly difficult to assess a GE plant’s risks," said the Institute for Agriculture and Trade Policy. - REGULATIONS.GOV

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5. California, New York and 10 other states have challenged the Trump administration's move to end Obama-era penalties for automakers that miss fuel efficiency benchmarks. The states, joined by Washington D.C., filed suit Friday in the U.S. Court of Appeals to reverse Trump's roll back. The Obama administration had doubled penalties for non-compliant auto manufacturers, a raise that automakers said cost them $1 billion annually in compliance costs. Meanwhile, the Obama administration had set a 46.7 miles per gallon fleet-wide fuel efficiency average goal by 2026, while the Trump administration has set a target of 37 miles per gallon. - REUTERS

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6. State investigators have found that the North Carolina Children's Hospital's pediatric heart surgery unit is in compliance with Medicare and Medicaid requirements. The statement, issued last week, follows a New York Times investigation that revealed higher than average death rates at the facility. The Times revealed that hospital physicians were wary of sending their own children to the heart surgery unit for care. Following the report, the hospital had suspended complicated heart surgeries and will continue to do so even with the findings by state investigators. - NORTH CAROLINA HEALTH NEWS

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7. San Francisco International Airport is banning the sale of single-use plastic bottles effective Aug. 20, the first airport in the world to implement the environmentally-concerned step. Airport vendors previously sold about 4 million bottles a year at the airport, according to an airport spokesman. It's uncertain what the penalties for non-compliance will be. The airport is "hopeful that won't be necessary," the spokesman said. - THE HILL

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8. India's top court ordered the country's central bank to determine whether WhatsApp is compliant with data localization rules as it rolls out peer-to-peer payments later this year. Last year, the Reserve Bank of India declared that while foreign payment companies could process Indian transactions outside of the country, they would have to ensure the data detailing payments was preserved in India. The court has given the bank six weeks to determine if WhatsApp, which is owned by Facebook and boasts 400 million users in India, is compliant and whether the company should maintain an executive compliance officer in India. - REUTERS

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9. Bank of America seeks a compliance manager for its Wealth Management's Alternative Investments Group. The manager is tasked with identifying and reporting compliance risks and monitoring regulatory changes. The position is based in New York.

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10. Lockheed Martin seeks a manager of supply chain regulatory compliance to work out of its Littleton, Colorado, office. The role is part of the company's space effort and will work on governmental and non-governmental programs, ensuring compliance with federal regulations.

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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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