Trust Digest 18 (September 6, 2013)

Manning Sentenced to 35 Years for a Pivotal Leak of U.S. Files

A military judge sentenced Pfc. Bradley Manning on Wednesday to 35 years in prison for providing more than 700,000 government files to WikiLeaks, a gigantic leak that lifted the veil on American military and diplomatic activities around the world. The sentence is the longest ever handed down in a case involving a leak of United States government information for the purpose of having the information reported to the public.

Key Words: WikiLeaks

Trust Issues: Transparency, Regulation


Cultural Traditions Do Not Excuse Banks’ Rule-breaking

What is corruption? What is operating pragmatically within the parameters of a foreign country’s cultural norms? The distinction has been an issue for as long as international trade has existed, but all the more so since the US Foreign Corrupt Practices Act was passed in 1977. For banks – scrutinised more closely than any other sector following the financial crisis – the focus is particularly sharp these days.

Key Words: Nepotism, Corruption

Trust Issues: Ethics


Lawmakers, privacy groups rattled by latest NSA reveal

Congressional critics of government surveillance blasted the NSA and promised additional hearings after the Obama administration on Wednesday declassified documents that show thousands of Americans’ emails had been scooped up. The unlawful collection, which the documents reflect ended in 2011, confirmed the worst fears of some lawmakers and civil liberties advocates undefined that the NSA’s ability to monitor foreigners’ Internet conversations had collided with the Constitution, threatened U.S. citizens and will require significant reforms.

Key Words: NSA

Trust Issues: Transparency, Regulation


SEC Is Set to Propose New Rule on CEO Pay

The Securities and Exchange Commission will soon thrust CEO compensation back into the spotlight when it proposes a long-delayed rule requiring companies to disclose the pay gap between chief executives and rank-and-file employees. The requirement, a mandate of the 2010 Dodd-Frank financial law, could put added pressure on corporate boards to slow pay increases for chief executives at companies with significant or growing gaps, proponents say.

Key Words: Dodd-Frank, CEO pay

Trust Issues: Ethics, Motives, Regulation

U.S. Retailers to Implement Bangladesh Factory Plan

Wal-Mart Stores Inc., and other major U.S. retailers plan to meet Tuesday in Chicago to start implementing a Bangladesh factory-safety plan announced last month amid criticism it lacks teeth to enforce company promises. The group, made up of 20 companies known as the Alliance for Bangladesh Worker Safety, will also announce its board of directors, reveal new signatories like Costco Wholesale Corp. and finalize common fire- and building-safety standards it pledged to put in place by Sept. 10

Key Words: Factory-safety, Retail

Trust Issues: Responsibility, Accountability, Benevolent Concern


Ryan Smith: Minimize the Distractions

Guest mentor Ryan Smith, CEO of Qualtrics:  Two words: radical transparency. This, I believe, is the key to building strong teams and collaborative work environments. Radical transparency is the idea that everyone in an organization knows everything.

Key Words: Radical Transparency

Trust Issues: Transparency


Money or Honesty? Which Do Investors Want Most From Managers?

People invest to make money, and always will. But getting the biggest returns is not the top concern for investors in choosing whom they want to handle their money, says a new survey from the CFA Institute. The new bottom line? Trust.

Key Words: Honesty, Trust

Trust Issues: Ethics, Motives, Honesty

Will Dodd-Frank Ever Be Finished?

President Obama rounded up a bevy of financial regulators yesterday and pushed them to get busy finishing the rules laid out in the 2010 Dodd-Frank financial reform law. Many of the law’s details still haven’t been spelled out, years after its passage. Dodd-Frank was epically complex, and in honor of the law’s third anniversary in mid-July, the law firm Davis Polk issued a report (PDF) summarizing its status. The firm found that regulators missed about 60 percent of the law’s 279 deadlines; more than two-thirds of past-due rules are in progress but not final.

Key Words: Regulation, Dodd-Frank

Trust Issues: Regulation


Gusher: A scandal at the regulator does a crucial sector no favours

Rudi Rubiandini, chairman until last week of the country’s [Indonesia] oil-and-gas regulator, must be hoping for some seasonal clemency. On August 13th the anti-corruption commission, the KPK, arrested Mr Rubiandini after catching him pocketing $400,000 from a Singaporean energy firm, Kernel Oil. The money is allegedly the second installment of a bribe worth $700,000. Mr Rubiandini has admitted accepting gifts but denies corruption, as does Kernel Oil.

Key Words: Corruption, Oil-and-gas

Trust Issues: Ethics, Dishonesty


Eli Lilly 'Deeply Concerned' by China Bribery Claims

US drugmaker Eli Lilly has said it is "deeply concerned" by claims that it bribed doctors to prescribe its drugs. Chinese paper 21st Century Business Herald cited a former staff, identified by a pseudonym, as saying the firm paid out 30m yuan ($4.9m; £3.1m).

The claims come at a time when China is investigating some drugs firms over similar bribery allegations.

Key Words: Corruption, Pharmaceuticals

Trust Issues: Ethics, Regulation, Dishonesty


The Poisonous Employee-Ranking System That Helps Explain Microsoft’s Decline

There were many reasons for the decline of Microsoft under Steve Ballmer, including, as I wrote this morning, its lack of focus and its habit of chasing trends rather than creating them. But one that’s not obvious to outsiders was the company’s employee evaluation system, known as “stack ranking.”

Key Words: Microsoft, Employee Ranking

Trust Issues: Communication

When Corporations Fail At Doing Good 
It’s fashionable, these days, for companies to tout their commitment to bettering society without any need for government involvement. They argue that the market will reward good deeds, so the public sector need not issue mandates. This rhetoric is appealing, but it doesn’t always line up with the facts. Key Words: CSR, Measuring social impact
Trust Issues: Responsibility, Benevolent Concern, Reputation, Motives, Stakeholders

Theft and Disruptions Knock Nigeria Oil Output to Four-year Low
Nigeria drastically reduced the number of oil worker kidnappings and pipeline bomb attacks in 2009 by persuading more than 26,000 militants to disarm in exchange for monthly cash payments, which are ongoing. While the violence has not returned, the theft of oil has grown into a vast and lucrative enterprise involving well-connected officials and security personnel…More than 150,000 barrels of oil are reportedly stolen every day, with some feeding illegal refineries in the Niger delta and the bulk shipped to destinations as far away as Asia.
Key Words: Corruption, Oil
Trust Issue: Corruption

JPMorgan Woes Deepen as US Demands $6bn Penalty
US authorities are demanding JPMorgan Chase pay more than $6bn to settle allegations it mis-sold securities to government-backed mortgage companies in the run-up to the financial crisis, according to people familiar with the discussions.
Key Words: Penalty, JP Morgan
Trust Issues: Accountability, Reputation

British Fraud Investigator in China TV Confession
Chinese state television on Tuesday aired a highly unusual public confession from a British fraud investigator detained for several weeks in the midst of a corruption probe into the activities of multinational pharmaceutical companies in China.
Key Words: Corruption, Pharmaceuticals
Trust Issue: Corruption

Newark's Merit-Pay Plan Begins
Newark, in a first for a large New Jersey public-school system, has given out bonuses of up to $12,500 to its highest-rated teachers, inaugurating a controversial merit-pay program being watched across the nation.
Key Word: Merit-pay
Trust Issues: Communication, Competence, Integrity, Motives

Advisers Tune Out High-Frequency Traders
As regulators move to set new guidelines for high-speed computer traders, investment advisers who trade securities in large blocks are stressing a need to find some sort of common ground.
Key Words: High-frequency trades, Volatility, Short-term
Trust Issues: Responsibility, Transparency, Motives

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