Trust Digest 62 (September 5, 2014)

New Leader Steers Ford Foundation Back Toward Familiar Ground
Pointing the way forward for a sprawling, venerable philanthropic institution like the Ford Foundation is a dizzying experience, says Darren Walker, the man who is setting its course. There is no clear, simple formula to determine how a philanthropy giant with billions in assets and offices across the globe should make its bets, says Mr. Walker. "The world is topsy-turvy, and you really can’t tell if you’re standing on quicksand or on concrete" he says.
Key Words: Ford Foundation, Philanthropy, Culture
Trust Issues: Alignment of Interests, Capability, Benevolence

Nearly Half of EY Inspected Audits Found Wanting
The Public Company Accounting Oversight Board inspectors looked at parts of 56 audits performed by the firm and one piece of work it did on another issuer audit engagement and found that in 28 cases, there were significant deficiencies. According to their report, the deficiencies were so significant that the inspectors were forced to conclude that EY, “at the time it issued its audit report, had not obtained sufficient appropriate audit evidence to support its opinion that the financial statements were presented fairly, in all material respects, in accordance with applicable financial reporting framework and/or its opinion about whether the issuer had maintained, in all material respects, effective internal control over financial reporting (ICFR)”.
Key Words: EY, Audit, PCAOB
Trust Issues: Capability, Regulation

Halliburton Agrees $1.1bn Gulf of Mexico Spill Deal
Halliburton, the US oil services group, has agreed a $1.1bn settlement to resolve damages claims from individuals, businesses and local governments over its role in the 2010 Deepwater Horizon disaster. The company said the deal would bring to an end “the substantial majority” of the legal action against it from the private sector and local government resulting from the blowout at BP’s Macondo well in the Gulf of Mexico.
Key Words: Deepwater Horizon, Halliburton
Trust Issues: Accountability

Germany's Flagship Green Energy Policy 'In Tatters'
Germany's flagship green energy policy is in tatters, according to a new report by the consultancy firm McKinsey which says many of its goals are "no longer realistic". Angela Merkel was hailed as the 'Klimakanzlerin', or 'Climate Chancellor' in 2010 when her government placed Germany at the forefront of the battle against climate change and announced ambitious plans to move to renewable energy sources. But the McKinsey report says Germany is so far behind its key commitment to cut CO2 emissions that it is no longer realistically achievable.
Key Words: Germany, Climate Change
Trust Issues: Sustainability, Capability

New York Accuses Evans Bank of Redlining
Drawn in thick marker along the map of upstate New York, the line snaked down the Niagara River and zigzagged east to outline a swath of Buffalo and its surrounding neighborhoods. But one area of the city — neighborhoods in east Buffalo, where more than 75 percent of the city’s African-American population lives — was explicitly excluded, cut off from access to mortgage credit. That map, ringed by a line, is at the center of a sweeping investigation by the New York attorney general, Eric T. Schneiderman, into whether banks are “redlining” — deliberately choking off mortgage lending to predominantly minority communities.
Key Words: Evans Bank, Redlining, Fair Housing Act
Trust Issues: Integrity, Regulation

Who Does the CEO Trust Most for Business Advice?
Most business leaders and CEO turn to their husbands and wives for advice – not just support – when running a company. According to a study from Adecco, 40% of CEOs and business owners said they look to and trust the opinions of their spouse when making big business decisions.
Key Words: Leadership, Customer Service
Trust Issues: Communication, Capability

SEC Announces $300,000 Whistleblower Award to Audit and Compliance Professional Who Reported Company’s Wrongdoing
Washington D.C., Aug. 29, 2014 — The Securities and Exchange Commission today announced a whistleblower award of more than $300,000 to a company employee who performed audit and compliance functions and reported wrongdoing to the SEC after the company failed to take action when the employee reported it internally. It’s the first award for a whistleblower with an audit or compliance function at a company.
Key Words: SEC, Whistleblowers, Internal Audit
Trust Issues: Accountability, Responsibility, Regulation

NSA Data-Sweep Lawfulness Challenged in NY Appeal Hearing
The National Security Agency’s program of collecting phone records, deemed lawful by a Manhattan federal judge, was challenged by the American Civil Liberties Union as the most sweeping surveillance operation ever directed against the American public by the government.
Key Words: NSA, Data Privacy
Trust Issues: Transparency, Communication, Benevolence

Insider Traders in U.S. Face Longer Prison Terms, Reuters Analysis Shows
U.S. judges are imposing increasingly long prison terms for insider trading, a Reuters analysis shows. The rise is at least partly driven by the bigger profits being earned through the illegal schemes, defense lawyers said. The trend is likely to continue on Monday when former SAC Capital Advisors manager Mathew Martoma is sentenced for what prosecutors have called the most lucrative insider trading case ever brought.
Key Words: Insider Trading, SAC
Trust Issues: Accountability, Regulation

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