Risk Channel delivers the latest, most relevant and useful business intelligence to key decision makers and influencers, each weekday morning.

Apple has suspended a new artificial intelligence (AI) feature that drew criticism and complaints for making repeated mistakes in its summaries of news headlines. The tech giant had been facing mounting pressure to withdraw the service, which sent notifications that appeared to come from within news organizations' apps. "We are working on improvements and will make them available in a future software update," an Apple spokesperson said. The feature had inaccurately summarized headlines from the BBC, the New York Times and the Washington Post, according to reports from journalists and others on social media. The BBC had complained to Apple about the technology after it created false headlines stating that Luigi Mangione, who is charged with the murder of the CEO of UnitedHealthcare, had shot himself. CNN notes that this week, the Apple feature incorrectly summarized a Washington Post notification, stating falsely: “Pete Hegseth fired; Trump tariffs impact inflation; Pam Bondi and Marco Rubio confirmed.” None of these statements are true.

 

BBC News

CNN

Reuters reports that advertisers who depend on TikTok as a key digital marketing tool are preparing contingency plans amid a dawning realization that the popular Chinese-owned social media platform may not be saved before a U.S. ban takes effect on Sunday. "It seemed unbelievable even as of just a few weeks ago to imagine that there would be no TikTok," said Kerry Perse, the former head of social media at Omnicom Group's media agency OMD. "We all thought that any access issues to the TikTok app would be slow and drawn-out," she said. The ByteDance-owned app plans to shut U.S. operations on Sunday unless it gets a last-minute reprieve, Reuters reported on Wednesday.

 

Reuters

Baker Tilly US LLP has been fined $500,000 by the PCAOB for failing to meet quality control standards during audits in 2018 and 2019. The PCAOB's inspections revealed significant deficiencies in the firm's testing of internal controls and accounting estimates. Despite being informed of these issues, Baker Tilly did not implement effective changes to its engagement performance. PCAOB chair Erica Williams stated "Deficient quality control systems put investors at risk," emphasizing the board's commitment to holding firms accountable. Baker Tilly has agreed to a disciplinary order, which includes hiring an independent consultant to review its quality control policies and providing training for its audit staff.

 

Accounting Today

American Express has agreed to pay about $230m to settle criminal and civil probes into alleged deceptive practices in selling credit card and wire transfer products to small business customers. Harry Chavis, a special agent in charge at the Internal Revenue Service's office in New York, said Amex “misled their customers by touting tax breaks that simply didn't exist." Authorities said an internal probe precipitated the termination of approximately 200 employees in 2021, and the products were discontinued later that year. “Financial institutions like American Express have no business pitching inaccurate tax avoidance schemes to sell products and turn a quick profit,” Judy Philips, acting U.S. Attorney for the Eastern District of New York, said. “This resolution ensures that American Express will be held financially accountable for the unacceptable conduct of its sales employees in misrepresenting the tax benefits of these products. ”

 

Financial Times

OregonLive.com

Reuters

U.S. News

A billion-dollar patent dispute between Gilead and the U.S. government relating to the firm's HIV prevention drugs Truvada and Descovy has been settled. The company's General Counsel Deborah Telman said that the agreement "allows Gilead to continue to focus its resources on its mission to discover, develop, and deliver innovative therapeutics to people with life-threatening diseases." The firm had been accused of ignoring contributions from the Centers for Disease Control and Prevention and exaggerating its own role in developing a HIV-prevention regimen.

 

Reuters

Fintech firm Block has been found to have had inadequate policies in place for preventing money laundering through its mobile payment service, Cash App, by a group of 48 state financial regulators. The company will now pay a fine of $80m, as well as having its Bank Secrecy Act and anti-money laundering program reviewed by an independent consultant. A spokesperson for the firm commented: "We share our regulators’ commitment to addressing industry challenges and will continue to invest across our operations to help promote a safe and healthy fintech ecosystem."

 

Reuters

The cost of imported goods rose 0.1% in December, and by 2.2% on an annual basis, according to the Labor Department, in line with expectations. Imported fuel prices jumped 1.4% in December, the most since last April, after rising 0.9% in November. Higher costs for natural gas and petroleum accounted for the increase in fuel prices. Food prices shot up 2.8% after advancing 1.4% in November. Excluding fuels and food, import prices fell 0.2%. Relatedly, U.S. business inventories grew 0.1% in November, according to the Commerce Department, and were up 2.6% on an annual basis. Retail inventories excluding autos, which go into the calculation of GDP, increased 0.5%. Business sales rose 0.5% in November after being unchanged in October. At November's sales pace, it would take 1.37 months for businesses to clear shelves.

 

Market Watch

Reuters

Reuters

In his farewell address, outgoing U.S. Attorney General Merrick Garland has urged Justice Department employees to remain steadfast in their duties despite facing "unfounded attacks." He emphasized the importance of maintaining the department's independence, saying: "It is the obligation of each of us to follow our norms not only when it is easy, but also when it is hard." He went on to say: "I know that you have faced unfounded attacks simply for doing your jobs, at the very same time you have risked your lives to protect our country from a range of foreign and domestic threats. And I know that a lot is being asked of you right now . . . But before I leave, I have one more thing I want to ask of you. That is to remember who you are, and why you came to work here in the first place." As Garland prepares to step down, concerns loom over the incoming administration's potential impact on judicial independence. President-elect Donald Trump's nominee for attorney general, Pam Bondi, has pledged to uphold the department's integrity. "There will never be an enemies list within the Department of Justice," Bondi told the Senate Judiciary Committee. "I will not politicize that office. I will not target people simply because of their political affiliation."

 

U.S. News

A U.S. Treasury Department study released this week has found that homeowners in areas most at risk from natural disasters pay much more for insurance than those in less dangerous regions. Such homeowners paid an average premium 82% higher than those in less exposed areas each year, at $2,321.

 

Reuters

Gartner's Consumer Community has carried out a survey which found that some 68% of consumers feel that the use of dynamic pricing models by brands leaves them feeling as though they are being taken advantage of. Kate Muhl, VP Analyst in the Gartner Marketing practice, said: "While inflation may have eased, suspicion and frustration have not - and these negative sentiments are fueling distrust and price paranoia. As a result, consumer loyalty is diminished and the brand relationship hardens into something more adversarial." She advises marketing leaders to use price-stabilizing tools and loyalty perks to prioritize price stability and boost customer retention.

 

CFO Tech

Boeing's 777X model has resumed flight testing after the firm grounded the test fleet in August following an incident involving  an engine mounting structure. The manufacturer issued a statement saying "We continue to execute a rigorous test program to demonstrate the safety, performance and reliability of the [777X variant] 777-9," after a test flight landed.

 

Reuters

Greenland’s mining minister Naaja Nathanielsen warns that Donald Trump’s proposal to buy the Arctic territory risks damaging the island's image as a stable democracy rich in rare earths and minerals.

 

Financial Times

China is implementing significant pay cuts for staff at its top three financial regulators, including the People's Bank of China (PBOC), National Financial Regulatory Administration (NFRA), and China Securities Regulatory Commission (CSRC), reducing their total income by approximately 50%. The move aligns their salaries with those of other civil servants, as part of a broader regulatory overhaul initiated in 2023. According to sources, department heads will see a 50% reduction, while officials below that rank will face a 40% cut, and some senior officials may experience a 60% decrease. The decision comes amid China's efforts to boost consumption and maintain economic stability, and contrast with recent wage increases for millions of civil servants. One source observed: “the hefty pay cuts at the regulatory bodies... comes at a particularly tricky time for China.”

 

Business Times SG

Straits Times

France's central bank governor Francois Villeroy de Galhau has cautioned that any moves to pursue financial deregulation by Donald Trump's U.S. administration would raise the chances of a financial crisis occurring. He said that "Financial deregulation as some people are calling for in the United States would be dangerous, including for the financial system itself." Villeroy also noted that light-touch regulation for non-bank financial actors including funds, venture capital, private equity as well as cryptoassets would also jeopardise financial stability.

 

Reuters

The Food and Drug Administration has proposed a new rule under which food manufacturers would be required to identify key nutrition information on salt, added sugar and saturated fat in products. A new label described as a “nutrition info box” would be attached to packages, breaking down information about sodium, added sugar and saturated fat content by saying whether the food contains “Low,” “Med” or “High” levels of the nutrients. A few different design options were tested in a representative sample of U.S. adults to see which type of packaging allowed consumers to make “quicker and more accurate assessments” of products. “Participants provided more correct answers regarding the helpfulness of the product than the other schemes tested and also spent significantly less time evaluating the nutrient profile of the product,” said Dr. Robin McKinnon, acting director for the FDA’s Nutrition Center of Excellence. If the proposal is approved, food manufacturers who make $10m or more in annual food sales will have three years to add the labels to their packaging, while businesses with less than $10m in annual food sales will have four years to comply.

 

CNN

USA Today

New York Times

Wall Street Journal