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The United Kingdom introduced new fraud rules which took effect on October 7^th that aim to expedite reimbursements for scam victims. These rules ensure that funds are returned within five working days and will hold banks more accountable. Just last year nearly 3 million Britons lost over £1.1 billion to scams through authorized push payment fraud (APP) fraud. The new rules also require that both the sending and receiving banks share liability for losses, which encourage all banks to boost fraud protection. The automatic reimbursement cap was also reduced from £415,000 to £85,000. However, there are still concerns about customer complacency and the role of social media platforms in preventing fraud. The Payment Systems Regulator will monitor these new rules and the industry as a whole over the next year to assess their effectiveness. https://www.ft.com/content/cc1bf03a-7a7b-4977-b74a-c97f54ee8601

After Hurricane Helene devastated six states, homeowners are filing insurance claims, although many people find themselves without coverage due to tightened policy terms and increased deductibles. Property damage estimates range from $15 billion to $26 billion, though insured losses might be lower since most homeowners do not have flood insurance. In addition, deductibles have reached 5% for certain insurers, so many will face significant out of pocket expenses for repairs. Fewer than 1% of households in the hardest hit areas carry flood insurance which makes recovery complicated. Insurers could say the damage was in fact caused by flooding and it isn’t covered at all. According to Josh Darr, a managing director at reinsurance brokerage Guy Carpenter states, “There’s a lot of potential for litigation on claims, if the insurer takes a hard line and says it was 100% flood damage, even though the wind was blowing up to 140 miles per hour.” https://www.wsj.com/finance/homeowners-hit-by-helene-are-in-for-an-insurance-claim-shock-60ae5519?mod=hp_listb_pos3

The Spanish stock market regulator, also known as the National Securities Market Commission (CNMV), investigated drug maker Grifols and short seller Gotham City Research over alleged financial misstatements. Grifols’ shares collapsed in January after Gotham City Research accused the blood-plasma specialist of artificially manipulating its debt and earnings through related-party transactions. The CNMV claims Grifols provided misleading financial data and disclosure information. The CNMV also accused Gotham of deceptive practices to influence Grifols’ stock prices, while their January report was misleading. The case was referred to Spain’s public prosecutor, and by criminal code it could lead to a two-year prison sentence. https://www.ft.com/content/bb117c27-2db8-4b44-bc2d-bb2ac52d42c1

The Securities and Exchange Commission (SEC) plans to seek sanctions against Elon Musk for not attending a court testimony related to his $44 billion acquisition of Twitter. Musk informed the SEC just hours before the scheduled court date that he would not attend due to a SpaceX launch, although the SEC argued he knew about it in advance. The SEC is investigating Musk for potential securities law violations related to his Twitter stock purchases. Musk’s lawyer claimed the absence was necessary for safety and rescheduled the testimony for October 3^rd. https://www.reuters.com/technology/us-sec-intends-seek-sanctions-against-elon-musk-twitter-probe-2024-09-20/

Prager Metis, an accounting firm near the top 50 U.S. firms by revenue, was charged with misconduct over its audits of the cryptocurrency exchange, FTX. Prager Metis failed to properly understand the crypto market and inadequately audited FTX’s finances, which led to an $8 billion shortfall when FTX collapsed in November 2022. Although Prager Metis claims they were a victim of FTX’s fraudulent management, the firm will pay a $745,000 civil penalty to settle charges and $1.2 million for violations related to separate SEC charges. https://www.ft.com/content/ad04330b-4252-45d3-a7f9-b60a9d930081

The future of Rupert Murdoch’s media empire which includes Fox News and The Wall Street Journal, among others, is at stake in a Reno, Nevada probate court. Rupert Murdoch, who is 92 years old, wants to change a 1999 trust that gave his four older children, James, Elisabeth, Prudence, and Lachlan, equal voting power over the family’s businesses. Murdoch now wants to transfer full control of his empire to his son Lachlan who shares his political views. His other children, James, Elisabeth, and Prudence, unified in anger and surprise over his decision. On Monday, September 16, court hearings began to determine whether Murdoch’s changes to his irrevocable trust are valid. The dispute will have a major effect on the Murdoch family fortune and the future direction of its media outlets which have been a major influence on politics in the US, UK, and Australia for the past forty years.  https://www.ft.com/content/c6adaaa1-2ccb-4051-9637-a468522ba8ab

The Ministry of Finance and the China Securities Regulatory Commission suspended for six months and fined $62 million global auditing firm and dominant player in China, PricewaterhouseCoopers (PwC).  Chinese authorities asserted that PwC played a role in enabling financial misdeeds committed by China’s leading real estate developer, China Evergrande Group. According to the Ministry of Finance, PwC “knew that Evergrande made material misstatements in its financial statements for the years from 2018 to 2020” and “failed to point them out, issuing an inappropriate audit opinion and a falsified audit report.” PwC acknowledged their misconduct, fired involved staff members and promised to comply with penalties. This incident highlights China’s increased focus on financial misconduct and the $62 million is largest fine against auditors to date. https://www.nytimes.com/2024/09/13/business/pwc-china-evergrande.html?searchResultPosition=1

Former Volkswagen CEO Martin Winterkorn is on trial in Germany almost nine years after Volkswagen’s emissions cheating scandal.  From 2007 to 2015 Winterkorn led Volkswagen and was once one of Germany’s highest paid executives. Winterkorn is on trial for charges of fraud, market manipulation, and making false statements. This case shows the difficulty and time it takes for prosecutors to hold high-ranking executives accountable for illegal actions. The trial is expected to last until September 2025, with Winterkorn facing up to ten years in prison if convicted. https://www.nytimes.com/2024/09/03/business/volkswagen-trial-emissions-ceo-winterkorn.html

Tether, a stablecoin backed mostly by U.S. Treasurys, is one of the first effective products to emerge from the cryptocurrency uprising. While Tether has become a success, it has also created numerous obstacles for the U.S. in combating illegal financial activities. Although Tether can track the identities of its direct customers, its secondary market goes undocumented and unnoticed. Tether also has the ability to freeze wallets – between 2018 and this June, Tether blacklisted 2,713 wallets on its most popular blockchains that had received a total of about $153 billion. But Tether could only freeze $1.4 billion of these funds because the rest had already been sent on. Tether provides crucial support to people living in unstable economies that are isolated by sanctions, and runaway inflation, such as Venezuela and Argentina. On the other hand, Tether is considered the preferred choice for some money launderers and helps facilitate illicit transactions for countries under U.S. sanctions such as Russia and Iran. While Tether continues to expand into other emerging markets, regulators lack the tools to interdict in terrorist financing and sanctions evasion. https://www.wsj.com/finance/currencies/tether-crypto-us-dollar-sanctions-52f85459?mod=Searchresults_pos2&page=1

A series of lawsuits across the U.S. allege that RealPage, a Texas-based software company, enabled landlords to use data to get rental price suggestions which has increased rents everywhere. The software allows landlords to share rental data and use algorithms to set higher rents, which violate the federal antitrust law. Plaintiffs argue that this led to inflated rents worldwide. According to Zillow, annual rent growth peaked at nearly 16 percent in 2022. RealPage denied these allegations, stating that their software helps manage rents and that housing shortages are the reason for increased prices. The Justice Department’s antitrust division filed a brief in November in support of the renters’ case. Some state attorneys launched investigations and lawsuits. Brian Schwalb, Attorney General of the District of Columbia says, “It’s a housing cartel, and that housing cartel is resulting in already high market rents in our city being even higher.”  https://www.nytimes.com/2024/07/19/business/economy/rent-prices-realpage-lawsuit.html