Trust Digest 27 (November 5, 2013)

Survey Roundup: Reputation Trumps Cost, AML ‘Drift’
When it comes to picking suppliers and partners, a study of senior executives by Baker & McKenzie found reputational risk is a more important factor than cost. The executives identified corruption, product quality and general compliance among the top issues with regard to managing their company’s supply chains.
Key Words: Reputation
Trust Issues: Reputation, Motives

Bourses Urged to Boost Sustainability Reporting
Stock exchange operators are being urged to force companies into publishing “sustainability” performance measures of their business before granting those companies a listing.
Key Words: Sustainability, Stock Exchanges
Trust Issues: Accountability, Communication, Transparency, Sustainability


Johnson & Johnson Fined $2.2bn to Settle Drug Cases
Drugs giant Johnson & Johnson has agreed to pay more than $2.2bn (£1.4bn) to settle allegations over its marketing techniques, the Justice Department has said.
Key Words: J&J, Marketing, Corruption
Trust Issues: Responsibility, Ethics, Corruption


CBI President Says Business Not 'The Enemy'
Business is suffering a crisis in public confidence, the president of the CBI [Confederation of British Industry] employers' group has said. Sir Mike Rake told the organisation's annual conference in London that business was seen by some people as the "enemy".
Key Words: Business, Reputation, UK
Trust Issues: Communication, Competence, Reputation

HSBC Profit Rises; Bank Is Cooperating With Foreign Exchange Inquiry
HSBC, Britain’s biggest bank, said on Monday that third-quarter earnings rose 10 percent from the period a year earlier, helped by its cost-reduction program. The bank also was the latest to admit that it was the subject of an investigation by several authorities into its conduct in the foreign exchange market.
Key Words: HSBC, Foreign Exchange, Reputation
Trust Issues: Accountability, Transparency, Regulation, Reputation

Silicon Valley Has an Arrogance Problem
At a startup conference in the San Francisco Bay area last month, a brash and brilliant young entrepreneur named Balaji Srinivasan took the stage to lay out a case for Silicon Valley's independence.
According to Mr. Srinivasan, who co-founded a successful genetics startup and is now a popular lecturer at Stanford University, the tech industry is under siege from Wall Street, Washington and Hollywood, which he says he believes are harboring resentment toward Silicon Valley's efforts to usurp their cultural and economic power.
Key Words: Silicon Valley, Arrogance, Trust
Trust Issues: Integrity, Transparency, Reputation, Regulation, Motives, Stakeholders


ANC Bemoans ‘Trust Deficit’ in Mining Industry

There is a trust deficit between the government and the mining industry which is making it difficult to finalise a strategy for the industry, said Enoch Godongwana, chairman of the African National Congress’s (ANC’s) economic transformation committee, on Tuesday.

Key Words: Mining, Trust, Africa

Trust Issues: Communication, Motives, Reputation


KPMG Auditor Deserves 3 Years for Insider Trading, Probation Office Says

Former KPMG partner Scott London should be sentenced to three years in prison for selling secret information about the accounting firm’s clients to a stock-trading friend, who used the tips to make more than $1.2 million in profitable trades, the federal probation office has recommended.

Key Words: KPMG, Insider Trading

Trust Issues: Responsibility, Accountability, Ethics


Omnicare Inc. Settles Whistleblower Case for $120M

Omnicare Inc. has agreed to pay $120 million to settle a federal whistleblower lawsuit that alleged the company paid kickbacks to nursing homes in the form of deeply discounted drug fees that violate Medicare rules.

Key Words: Medicare, Whistleblower, Regulation

Trust Issues: Accountability, Ethics, Integrity


The Impact of the Settlement on SAC Capital and Cohen

The plea agreement between the Justice Department and SAC Capital Advisors that calls for the firm to pay almost $1.2 billion to resolve insider trading charges is carefully drafted to permit the government to continue its pursuit of Steven A. Cohen, the hedge fund firm’s founder and owner. SAC has finally put the government’s criminal case behind it, but Mr. Cohen remains the focus of a continuing criminal investigation and an administrative complaint filed by the Securities and Exchange Commission.

Key Words: SAC Capital, Insider Trading

Trust Issues: Responsibility, Accountability, Ethics, Regulation

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