The week in GRC: Meta fined for data-scraping breach, Engine Capital pushes for Univar sale and Salesforce co-CEO to depart

Dec 02, 2022
This week’s governance, compliance and risk-management stories from around the web

The Wall Street Journal (paywall) reported that Ireland’s Data Protection Commission fined Facebook owner Meta Platforms €265 mn ($276 mn) for allegedly not better safeguarding more than half a billion users’ phone numbers and other information from data scrapers. The fine is the latest sign of how authorities in the EU are becoming more aggressive in applying the region’s privacy law to large technology companies. A Meta spokesperson said the company will review the decision and hasn’t yet decided whether it intends to appeal. ‘Unauthorized data scraping is unacceptable and against our rules,’ the spokesperson said.

The fine arose from disclosures in 2021 that a hacker had published personal phone numbers and other profile information of more than 530 mn Facebook users. In response, Meta said the information stemmed from mass ‘scraping’ of public profiles it said it had discovered and halted in 2019. The company said the data had been gathered by what it said were malicious actors who misused a Facebook tool to upload a large volume of phone numbers to see which matched the service’s users. On Monday, the company reiterated that it had removed the ability to use phone numbers to scrape its services in this way in 2019. Meta said it has made multiple changes to better safeguard users’ data.

CNN reported that Christina Spade stepped down as AMC Networks’ CEO after less than three months in the role. AMC said its board is ‘currently finalizing who it will name as a replacement, with an announcement to follow.’ James Dolan, AMC Networks chair, said in a statement: ‘We thank Christina for her contributions to the company in her CEO role and her earlier CFO role, and we wish her well in her future endeavors.’ AMC did not give a reason for Spade’s departure.

– According to Reuters (paywall), most of the groups that filed amicus briefs in a US Supreme Court case about the scope of attorney-client privilege argued for one limiting principle: that lawyers’ communications with their clients should be protected as long as a significant purpose of the interaction was to provide legal advice. But the American Bar Association (ABA) views that limit on the scope of privilege as too restrictive. The ABA’s amicus brief urged the court not to adopt any new test that would narrow privilege beyond a few long-established exceptions.

‘There is no reason to carve out a new exception for communications that involve a genuine yet somehow ‘insignificant’ legal purpose,’ wrote ABA counsel Deborah Enix-Ross. ‘Attorneys and clients should be able to have certainty that their communications are privileged [as] long as any purpose of those communications is to obtain or provide legal advice and no other well-established exception applies.’

– The SEC announced an award of $20 mn to a whistleblower who provided ‘new and critical information’ that led to the success of an enforcement action. In determining the size of the award, the SEC considered that the whistleblower provided ‘significant information and continuing assistance that helped enforcement division staff more quickly and efficiently investigate complex issues,’ it said in a statement.

– According to Reuters, US hedge fund firm Engine Capital urged Univar Solutions to consider a sale or other strategic options, days after Germany’s Brenntag said it was in preliminary talks to buy the chemicals distributor. Engine Capital said in an open letter that the bid by Brenntag confirms the hedge fund’s view that the company is ‘undervalued’ and a ‘highly attractive acquisition target’.

‘While we acknowledge the industrial logic of a combination between Univar and Brenntag and believe the synergies would be material, we also note that private equity has been actively involved in the space,’ Engine Capital wrote in the letter.

A Univar spokesperson said: ‘We value the view of our shareholders and we will continue to make decisions and take actions that we believe are in the best interests of the company and our shareholders.’

Brenntag declined to comment.

– Senate banking committee chair Sherrod Brown, D-Ohio, urged Treasury Secretary Janet Yellen to work with lawmakers and regulators to help write legislation governing the cryptocurrency market in the wake of the collapse of crypto exchange FTX, CNBC reported. Brown told Yellen to incorporate recommendations from the Financial Stability Oversight Committee, including legislation that would ‘create authorities for regulators to have visibility into, and otherwise supervise, the activities of the affiliates and subsidiaries of crypto asset entities’ with financial regulators such as the SEC and the Federal Reserve Board.

The US Department of the Treasury did not immediately respond to a request for comment.

– Salesforce said Bret Taylor will step down as co-CEO on January 31, leaving Marc Benioff alone again leading the cloud software company he co-founded in 1999, CNBC reported. Taylor played a key role in Salesforce’s $27.1 bn acquisition of Slack. Salesforce promoted Taylor a year ago from the position of president and COO. Benioff said Taylor is leaving the company to found a new company.

‘We have to let him be free, let him go and I understand, but I don’t like it,’ Benioff said. ‘And Bret, you know you’re always going to be our brother. We love you deeply, you have a home here, we’re gonna try to get you back somehow. Don’t think you’re gonna somehow get out of this alive because you’re not.’

– According to Reuters, Credit Suisse said it plans to halve the emissions-intensity of investments across its investment funds by the end of the decade, and will increase its focus on high-emitting companies. The firm said its 2030 target translated into an annual reduction in emissions-intensity of 6 percent a year, compared with a 2019 baseline, without using carbon credits to offset emissions. Emissions-intensity, for an asset manager, refers to emissions per dollar of assets held. Use of such a metric has been criticized by some campaigners for being less rigorous than a target focused on ‘absolute’ emissions reductions.

– Johnson & Johnson said its board elected CEO Joaquin Duato to take on the additional role of chair, effective in January, CNBC reported. Duato will succeed Alex Gorsky, who will step down from his role as executive chair following a brief transitional period. Duato replaced Gorsky as CEO earlier this year after holding a variety of roles during his more than 30 years at the company. He also took a leading role in Johnson & Johnson’s Covid-19 response and helped shape its pharmaceutical business strategy.

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