In case you missed it this week, e-commerce company Stitch Fix filed for an IPO, the Czech candidate for PM is slated to win despite fraud charges, and Japan's corporate compliance takes another hit.
Crime shouldn't pay | Czech citizens are voting for a new PM, and their leading man looks strikingly familiar. Andrej Babis, a media-savvy billionaire promising to run the country like a business, is the populist candidate slated to sweep the election on Monday—despite charges of subsidy fraud. Babis allegedly transferred ownership of some property to a buddy to make sure it was eligible for subsidies that garnered about €2m ($2.29m). After the money came in, he took back ownership and pocketed the cash. Babis said, “Not true,” and that he wasn’t scared of the parliament's’ attempt to take sully his name. Neither are the citizens of the Czech Republic, apparently.
10 demerits for corruption | Verizon is handing over $17.7m to settle allegations of overcharging New York schools. Between 2002-2008, a contractor hired by the NYC Dept. of Education funneled millions of taxpayer money through his company. He’d charge Verizon whatever he wanted, took a chunk of money as kickbacks, and then offset the bill to Verizon by overcharging the schools. Let that be a lesson to other telecom giants—you can ignore third-party risk management laws and swindle educators out of millions, but give it a decade or so and you’ll have to pay.
Meddle, mettle, metal | Corporate Japan has taken a few hard hits lately, but this week was particularly rough. Kobe Steel, a major Japanese steel manufacturer, admitted that it maybe definitely lied about the tensile strength (stiffness) of its aluminum, copper, and steel products. Companies like Ford, Nissan, and Toyota use Kobe products during manufacturing, and to offset the damage some of them have halted production to re-inspect their supply. Nissan wasn’t having a great month to begin with—in early October it announced a recall of more than one million vehicles due to faulty inspections. Unsurprisingly, its stocks aren’t faring so well.
No do-overs, Bob | Democratic Sen. Bob Menendez has been the center of many (crooked) politicians’ attention. He’s on trial for corruption charges—he allegedly gave political favors to a friend in return for lavish gifts that would make the late Hugh Hefner raise an eyebrow. His defense team gunned to get the charges thrown out on the basis that there were new, narrower definitions of bribery following a Supreme ruling this year. But the presiding judge refused to throw out his case, saying it would leave the door open to throw out future cases.
Sparks fly between SEC and Axon | The SEC has begun a financial review of Axon, the manufacturer of Taser stun guns. It has requested details on the company's returns, which is not unusual. But the fact that Axon apparently hasn't answered any of these letters, is. The SEC has told Axon it is running out of patience and will take action accordingly, while Axon's top leadership claims it only just became aware of the SEC's requests. Seems like a communications breakdown between Axon and the SEC, whatever the cause, is going to leave Axon feeling like being on the receiving end of one of its signature products.
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