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FirstFT: DoJ threatens to crack down on corporate misbehaviour

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The US Department of Justice is preparing to launch a crackdown on corporate wrongdoing, a senior official working on the plans told the Financial Times, with the first cases expected within weeks.

“You’ll see cases in the weeks to come” involving “some of the largest corporations” operating in the US, said John Carlin, a senior official at the DoJ.

The warning comes as the Biden administration prepares to follow through on its pledge to usher in a tougher approach to corporate malfeasance than during Donald Trump’s presidency, when the government was accused by critics of adopting a more laissez-faire stance.

One potential target for the DoJ, according to Carlin, was companies that had violated the terms of deferred prosecution agreements. These postpone criminal charges for a set period of time to allow a business to prove that it could remedy the wrongdoing — often in exchange for a financial penalty.

Another area where the department would take “significant” action was against companies that were failing to invest in compliance systems.

“There are going to be serious consequences,” said Carlin, who is the principal associate deputy attorney-general. “You should expect in the days, months, years to come an unprecedented focus by this attorney-general on corporate accountability,” he said referring to Merrick Garland, the US government’s top lawyer.

The number of corporate crime prosecutions brought by the justice department against individuals and business dropped to its lowest level in 25 years in 2020, according to research from Syracuse University.

Thanks for reading FirstFT Americas. Here’s the rest of today’s news — Gordon

1. GE to split into healthcare, energy and aviation companies General Electric yesterday revealed plans to break into three separate companies, marking the final step in the undoing of the sprawling group created by Jack Welch at the end of the last century.

  • Go deeper: The decision by GE to break itself up closes a defining chapter in US corporate history. Our reporters investigate why the conglomerate business model fell out of favour with investors and business executives.

2. Google loses appeal against €2.4bn shopping fine The General Court of Luxembourg earlier today dismissed Google’s legal challenge against the EU’s 2017 decision, marking the first time a European court has ruled on an antitrust case against Google.

3. Treasury market liquidity drought Liquidity in the $22tn US government bond market has deteriorated in recent weeks, data show, adding to pressure on regulators to address failings in a market that acts as a foundation of the global financial system. The deterioration in conditions comes as the Federal Reserve prepares to slow down its pandemic-era purchases of Treasuries.

4. China’s factory gate inflation soars to 26-year high Factory gate prices in China rose at their fastest pace in 26 years in October, as crippling power shortages and record commodity prices hit the world’s second-biggest economy. China’s official producer price index increased 13.5 per cent compared with October 2020, its biggest monthly jump since 1995.

5. Trump loses bid to deny White House records to January 6 panel A federal judge has denied Donald Trump’s bid to stop a congressional committee investigating the January 6 attack on the US Capitol from accessing White House records related to the former president’s role in the deadly riot.

COP26 digest

  • As negotiations enter their final days, significant rifts are emerging between countries over how to approach the goal of limiting global warming to 1.5C, set down as ideal in the Paris accord. The first version of the COP26 conclusions were published this morning. Here are five things to watch for as the summit enters its final days.

  • The UN found that 2030 climate targets are still far off track from Paris agreement goals and would increase temperatures up to 2.7C by 2100, according to a new report published yesterday.

  • US Democrats attending COP26 attempted to inject a positive tone into talks that remain stymied by a lack of political capital in Washington.

Protestors carry a sign reading, ‘We are watching you! COP26’

The day ahead

Inflation data US consumer prices rose at their fastest pace in three decades last month, new data are expected to show today, as bottlenecks and other supply-chain disruptions intensify and inflationary pressures broaden.

Rivian begins trading The Amazon-backed electric vehicle maker is set to list in New York in the biggest initial public offering for a US company since Facebook’s debut in May 2012.

Earnings Walt Disney is expected to show in its annual results today that the relaxation of lockdown restrictions helped its theme parks. Beyond Meat, which warned in October that third-quarter revenues would decline compared with last year, also reports results today.

What else we’re reading

The battle for the minds of American children Bill Clinton’s 1992 campaign watch phrase was “it’s the economy, stupid.” Today it would be “it’s the culture, idiot,” writes Edward Luce. He argues that once again the suburbs are where America’s highest-stakes political contests are occurring and one of the most contentious is the fight for control of suburban school districts.

Looming clash over Argentina’s $57bn bailout As Argentina faces down a deadline to repay billions of dollars from a record-breaking $57bn IMF bailout, the leftwing government in Buenos Aires needs a fresh deal to unlock more cash to relieve an economic crisis. But President Alberto Fernández is hardening his line ahead of Sunday’s midterm elections.

Bill Ackman tries to win neighbours’ support The veteran of corporate raids and rancorous short selling campaigns is trying to persuade residents of Manhattan’s Upper West Side of the benefits of a Norman Foster-designed renovation of his penthouse on West 77th street. The dispute is now entering a critical phase.

‘Britain’s game of Brexit chicken will end badly’ In threatening to repudiate its deal with the EU, the UK is undermining its credibility as a reliable partner. This is dangerous not just for the UK, writes Martin Wolf, but also for the EU and wider west.

Asia opens its post-Covid economies China may have among the most severe restrictions on the continent, but critics argue that curbs are still too strict in countries such as Japan, South Korea and Singapore as they begin to open up. “Politically and for businesses this [route] has been contentious,” said one executive.

Do you think Covid restrictions are still too stringent where you live? Tell us what you think in our latest poll.

The WFH revolution has not benefited everyone Older people were staying in work for longer — until the pandemic hit. Now an army of “Covid retirees” is heading for the labour market exit, writes Sarah O’Connor.

Technology

Thinking about the best technology gifts for Christmas? How To Spend It has just published its 2021 gadget guide, including a Sonos lamp speaker and an LED mask.

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