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The Ontario Securities Commission investigation determined Gerald Cotten, who ran what was Canada’s largest exchange for trading digital currencies like Bitcoin, created puppet accounts and credited them with cash he hadn’t deposited, then used $115 million in client funds to cover his losses. He also lost $28 million trading on rival platforms, and spent more customer cash on his lifestyle. (The Globe & Mail, Financial Post)

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Talking point: The regulator isn’t bringing an enforcement action, citing Cotten’s December 2018 death and Quadriga’s bankruptcy. But its work tracking down the missing funds—trustee EY has found only $46 million of the $215 million in client funds owed—suggests users won’t be getting their money back.

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The U.S. Trade Representative (USTR) investigation will include measures in the U.K. and EU as well as Brazil, India and Indonesia. USTR Robert Lighthizer said President Donald Trump was concerned the taxes “unfairly target our companies.” Meanwhile, the European Commission is seeking new antitrust powers to order companies deemed to be abusing their dominance to change their practices, even if they have followed competition law. (Reuters)

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Talking point: The White House capped a similar Section 301 investigation into France’s digital-services tax with tariff threats, winning a delay in its implementation. But that truce did not survive COVID-19—in May, France announced it would move forward with the measure this year. The U.S. is already engaged in commercial disputes with other governments targeted by the probe, for example by removing longstanding trade preferences for India and Turkey. Most countries—including Canada, where the Liberals promised a three-per cent value added tax during the 2019 federal election—have said their digital-services levies are stopgaps until an OECD global tax reform proposal is implemented, but a key approval meeting has been postponed from July to October because of the pandemic.

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The antitrust agency alleges tobacco giant Altria exited the e-cigarette market and agreed “not to compete in return for a substantial ownership interest in Juul”—35 per cent of the company, for which Altria paid US$12.8 billion in December 2018. The administrative trial is scheduled to begin on Jan. 5, 2021. Juul declined to comment to The Wall Street Journal. Altria general counsel said its investment “does not harm competition.” (The Logic, The Wall Street Journal)

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Talking point: The FTC hasn’t said if it wants to unwind the deal, but Altria’s stake in Juul is worth much less now than when it was acquired. In January, Altria wrote down its investment for a second time, cutting US$8.6 billion in total. Both sides have faced challenges. In November 2019, Juul announced it would lay off 650 staff and reduce expenses by US$1 billion. The two firms are also linked through their executive ranks: K.C. Crosthwaite, who became Juul’s CEO in September 2019, is Altria’s former chief growth officer, while the startup’s regulatory head, Joe Murillo, joined from the tobacco firm the following month.

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The Organization of the Petroleum Exporting Countries, the world’s largest oil-producing nations, reached a preliminary agreement to cut output by 1.5 million barrels a day, pending support from Russia. It’s the largest output cut since 2008–2009, as the spread of COVID-19 hits demand globally. (Financial Times)

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Talking point: The virus continues to impact industries, financial and otherwise. The U.S. stock market plunged over 1,000 points at its lowest on Thursday. Bank of Canada governor Stephen Poloz warned that the national economy’s “resilience could be seriously tested by COVID-19,” a day after it cut its overnight rate target by half a percentage point. Some 115 conferences (and counting) have been cancelled, delayed or moved online, including Shopify’s annual conference planned for May; OpenText’s flagship European event, Enterprise World Europe; and TED 2020, which was to be held in Vancouver. The Canadian cricket team’s chance at international success has been disrupted by the virus, too, as a tournament set to take place in Malaysia later this month has been postponed.

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The streaming giant responded to a US$25-million lawsuit brought forward by Chooseco, the publisher of the children’s interactive books, arguing that the phrase, like aspirin, has become “generic” enough to no longer be a protectable trademark. (The Hollywood Reporter)

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Talking point: Chooseco filed its complaint in January 2019 over Netflix’s Black Mirror: Bandersnatch, in which a game developer adapts one of the multiple-choice books while losing his grip on reality. Netflix negotiated with Chooseco over licensing the brand, but never received a licence, and is now denying Bandersnatch needs one. “In contemporary parlance, any situation that requires making a series of unguided choices, or that provides an opportunity to go back and re-make a series of choices that turned out badly, is referred to as a ‘Choose Your Own Adventure,’” Netflix’s response reads. Chooseco has signed a deal with Amazon to develop Choose Your Own Adventure stories for Amazon’s Alexa; Netflix, meanwhile, has many more interactive shows coming, including one based on Carmen Sandiego on March 10.

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A report released Thursday makes the case for Canada’s largest city to turn the 407 Express Toll Route into the “AV Highway of the Americas,” part of a plan to speed the transition to autonomous-vehicle technology. (The Logic)

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Talking point: Although the region stands to benefit from this cleaner, greener mode of transportation—the TRBoT argues it will reduce collisions, congestion, insurance costs, parking fines and even help the growing senior population—regulatory changes are not keeping up, the report says. Toronto’s political framework remains ill-suited to a comprehensive solution for autonomous vehicles, the report found, noting that the greater Toronto region’s 34 independently governed municipalities can be debilitated by political “fragmentation [that will increase] the risk that there might be divergent aims and strategies when it comes to AVs.” The industry, however, has demonstrated its commitment to the region: both Ford and General Motors have made investments in research centres dedicated to developing automated-vehicle technologies, promising to employ thousands engineers collectively for the task.

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The all-stock takeover, at US$58.74 per share, is expected to close in the fourth quarter and will see E*Trade CEO Mike Pizzi join Morgan Stanley. (The Logic)

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Talking point: This is the largest deal by a major Wall Street firm since the 2008 financial crisis, and it gives Morgan Stanley a major foothold in money management for the masses. The bank currently has three million clients with US$2.7 trillion in assets. E*Trade has more customers, at over 5.2 million, but significantly less in assets, at US$360 billion. In November 2019, E*Trade’s two main competitors, Charles Schwab and TD Ameritrade, announced a merger. The previous month, Fidelity cut its trading commission fee. Morgan Stanley CEO James Gorman had a message for the rivals of his newly acquired firm: “We’ll take on Schwab. We’ll take on Fidelity.”

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The EU’s latest draft text of the agreement includes a provision for signatories to “address issues relating to the return or restitution of unlawfully removed cultural objects to their country of origin.” The British Museum holds the sculptures, dating back to 500 B.C.E., which Lord Elgin removed from the temple in Athens starting in 1801. Westminster said the artifacts’ return was “not up for discussion.” (The Times, The Independent)

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Talking point: This battle isn’t just about the sculptures. The British Museum is among the U.K.’s most-visited cultural institutions, bringing through 5.8 million people in 2018. But large parts of its collection—and those of galleries in France, Belgium and other former rulers of empires—were “acquired” from their countries of origin during periods of colonial occupation. Present-day governments, notably many in Africa, are increasingly asking for the objects to be returned, but opponents argue the precedent could lead to the emptying-out of viewing halls. The British Museum claims Elgin didn’t steal the Parthenon Marbles because a British parliamentary committee’s 1816 investigation said so.

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“When companies launder advertising by paying an influential person to pretend that their support or review is untainted by a financial relationship, this is illegal payola,” wrote FTC commissioner Rohit Chopra in a statement released today. The FTC voted unanimously to issue a public consultation request on updated requirements for social media advertising, including a discussion over civil penalties. (The Logic)

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Talking point: The commission is taking a sweeping look at influencer marketing campaigns, including the use of false reviews. The consultation is seeking comments on what kinds of disclosures and warnings should be mandated around influencer reviews. Chopra also called for, among other measures, new requirements to be placed on platforms like TikTok and Instagram that facilitate and profit, even indirectly, from influencer marketing. The FTC’s review comes two months after Canada’s Competition Bureau also asked nearly a hundred companies to review their marketing to ensure it complies with the law on disclosing paid promotions, or risk penalties.

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The FTC claims Harry’s broke up a duopoly in the shaving market enjoyed by Edgewell and Gillette owner Procter & Gamble, and that the acquisition would increase prices for customers. (The Logic)

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Talking point: This lawsuit, which all five FTC commissioners voted to pursue, could establish precedent for much larger enforcement actions the agency is considering against tech firms like Amazon. The FTC argued that Target and Walmart selling Harry’s razors prompted Edgewell to cut its prices. As of 2018, Harry’s had just 2.6 per cent of the U.S. men’s razor market in 2018, compared with Edgewell’s 13.6 per cent and Gillette’s 47 per cent. If the FTC successfully argues this is a duopoly, it could cause problems for Amazon, which has a roughly 40 per cent share of the online shopping market, or Facebook and Google’s combined nearly 60 per cent share of the U.S. internet advertising market. The FTC has become increasingly assertive, though not always successfully. Last month, a judge overturned the agency’s attempt to block a US$625-million merger of two hydrogen peroxide makers, the first such loss for the FTC in over a decade.