The Wall Street Journal - USA (2020-12-01)

B2| Tuesday, December 1, 2020 **** THE WALL STREET JOURNAL.

INDEX TO BUSINESSES

These indexes cite notable references to most parent companies and businesspeople
in today’s edition. Articles on regional page inserts aren’t cited in these indexes.

A
Aaron Allen &
Associates..............A12
Airbnb........................B11
Amazon.com...............B4
Apple....................B4,B10
B
Bloomberg...................B2
BNP Paribas Asset
Management.............B1
Booking Holdings......B11
C

Chesapeake Energy....B3
Chevron.......................B1
Choice Hotels....A12,B11
Collectors Universe....B4
Cosco Shipping...........A3
Credit Suisse...............B1
Cyware Labs................B4
D
Diamondback EnergyB10
Dine Brands Global...A12
Driven Brands...........A12
Dunkin' Brands.........A12
E

Econo Lodge................A1
Edible Arrangements
...................................A12
Ennis-Flint...................B4
Expedia Group...........B11

Extended Stay America ...................................B11 Exxon Mobil...........A1,B3 F Facebook......................B3 G General Motors ........................A1,B5,B11 Goldman Sachs.........B10 H-I Homburger..................B1 IHS Markit...........B2,B10 Intel.............................B4 International Exchange .....................................B2 ISC2.............................B4 J Jacobs Engineering.....B4 Japan Exchange Group .....................................B2 JetBlue Airways.........B4 JPMorgan Chase.........B3 K Kustomer.....................B3 M Marriott.....................B11 Massage Envy...........A12 McDonald's...............A12 Microsoft...................B10

Moderna.........A1,A8,B10 N NIO..............................B5 Novavax.......................A8 P PA Consulting.............B4 PPG Industries............B4 R Restaurant Brands International...........A12 Root...........................B11 S Semiconductor Manufacturing International...........B10 SNL Financial..............B2 S&P Global...........B2,B10 Standard Chartered....B9 Subway........................A1 T-U Tesla............................B1 Tim Hortons..............A12 Treasury Wine Estates ...................................B11 UBS Group...................B2 W-Z Wendy's....................A12 Wyndham Hotels & Resorts....................B11 Zoom...........................B1

INDEX TO PEOPLE

BUSINESS & FINANCE

York misused confidential in-
formation and had the em-
ployee followed outside work.
The bank was concerned the
information may have been
used in a hedge fund’s pro-
posal to Credit Suisse to break
up its operations, and that the
New York employee was con-
nected to a backer of that pro-
posal, a former high-ranking
Credit Suisse executive, Gaël
de Boissard. Mr. de Boissard,
who Homburger found wasn’t
followed in the operation, de-
clined to comment. The name
of the New York employee
couldn’t be established by The
Wall Street Journal.
The second incident was in
March 2018, when an invest-
ment bank employee in Asia
was put under observation af-
ter being dismissed, the people
familiar with the Homburger
report said. While still at the
bank, the employee had threat-
ened colleagues, who feared he
might turn violent. The em-
ployee’s name couldn’t be es-
tablished by The Journal.
A Credit Suisse spokesper-
son said that the bank “does
not condone the physical ob-
servation of its people and it is
not part of Credit Suisse’s cul-
ture.” The bank said it was co-
operating with the Swiss regu-
latory proceedings and
couldn’t comment further
while those are ongoing.
Physical surveillance of em-
ployees is typically legal. How-
ever, the potential reputational
risk means it is usually seen as
a last resort if a company sus-
pects an employee of serious
ethical or legal breaches such
as fraud, bribery or other be-
havior that violates company
rules. Executives and lawyers
at other banks, and security
and employment consultants,
said it was rare.
Finma has said use of out-
side security firms isn’t itself
an area of supervisory con-
cern. But it found in an initial
probe that supervisory law
may have been violated in the
documentation and control of
the bank’s observation and se-
curity activities. Finma can’t
fine or criminally prosecute

Continued from page B1

B
Bahnsen, David.........B10
Birnbaum, Brad...........B3
Brown, David..............B4
C-D
Cunningham, Chase....B4
de Boissard, Gaël........B2
Dennis, Neal................B4
E
Erck, Stanley...............A8
F
Forester, Matt.............B1
G
Goerke, Peter..............B2
Gottstein, Thomas......B2
Greetham, Trevor......B10

J Juckes, Kit................B10 K Khan, Iqbal..................B2 Kiyota, Akira...............B2 L Lau, Owen...................B2 Leung, Steven...........B10 Li, William...................B5 M-P McGarry, Michael........B4 Miyahara, Koichiro......B2 Montagne, Mariann..B10 Morris, Daniel.............B1 Musk, Elon..................B5 Peterson, Douglas......B2

R Rohner, Urs.................B2 Rosso, Clar..................B4 S Sheldon, Michael......B10 Steckelberg, Kelly.......B1 Stefans, Joseph..........B9 Suriel, Jeremy.............B3 T Thiam, Tidjane............B1 W Woods, Darren............A1 Y-Z Yuan, Eric....................B1 Zuckerberg, Mark.......B3

banks, but can ban executives and order changes to firms’ governance or systems. A Finma spokesman declined to comment further. Credit Suisse has said that last year’s spying scandal tarnished its reputation and that it would work to restore trust with customers and employees. After a fight with some top shareholders who wanted Mr. Thiam to stay, the bank re- placed him with Thomas Gottstein, whose main focus has been navigating the coro- navirus pandemic. Mr. Thiam declined to comment. He has previously said he didn’t know about the surveillance of the two executives in 2019, and was cleared by Homburger. The spying scandal began in September 2019 when Credit Suisse’s international wealth- management head, Iqbal Khan, saw an investigator following him and his wife. Mr. Khan had resigned from Credit Suisse in July 2019 and was preparing to start a new job with rival UBS GroupAG. After Mr. Khan’s surveillance became public, Credit Suisse hired Homburger to review the incident. It found Credit Suisse’s chief operating officer, Pierre-Olivier Bouée, had been concerned Mr. Khan might try to take clients or staff to UBS and asked the bank’s security chief to have him followed. Chairman Urs Rohner told journalists at a news confer- ence on Homburger’s review that the two men may have been acting in the bank’s inter- ests, but that it was wrong and inappropriate. Mr. Bouée and the security chief resigned and declined to comment. A UBS spokesman said Mr. Khan declined to comment. Mr. Rohner said there was no sign other employees had been followed, and that physical observation “is not part of our toolbox, definitely not.” Two months after Mr. Roh- ner’s comments, in December 2019, Credit Suisse said that another executive, former hu- man resources head Peter Goerke, had been followed ear- lier that year. It again blamed Mr. Bouée and the bank’s security chief, and, based on the new information, terminated for cause Mr. Bouée’s employment agreement. The bank hasn’t said why Mr. Goerke was followed. He retired from Credit Suisse this year. He declined to comment.

Swiss Bank

Finds More

Spy Cases

long transformation. A decade ago, it was a conglomerate called McGraw-Hill Cos. It owned local television stations and published college text- books, as well as stock-market indexes like the S&P 500 and its well-known bond ratings. The ratings franchise took a hit after the 2008 financial crisis from controversy over

assigning top grades to com- plex securities backed by sub- prime mortgages that blew up when the U.S. housing bubble popped. S&P ultimately paid $1.5 billion, without admitting or denying wrongdoing, to re- solve litigation with the Jus- tice Department, states and others stemming from its ratings of mortgage bonds. Early in the 2010s, McGraw- Hill agreed to sell its TV stations and education division,

while bolstering its index unit through a tie-up with Dow Jones Indices. Under Mr. Pe- terson, who has held the CEO job since 2013, it acquired assets such as SNL Financial, a data provider focusing on banking and insurance, while shedding J.D Power, a more consumer-oriented brand known for its auto rankings. In 2016 the company re- named itself S&P Global, dis- carding a family name it had held for more than a century. The strategy of providing data, ratings and indexes to financial firms has fueled prof- itability. Last year, S&P Global had a 48% operating margin, the 14th-highest of all companies in the S&P 500, according to FactSet data. S&P Global still runs the largest U.S. credit-ratings business, issuing just under half of all ratings, giving it a market share greater than rivals Moody’sCorp. andFitch Rat- ingsInc. combined, the Securi- ties and Exchange Commission said in a January report. The ratings business has boomed in recent years as low global interest rates spurred record new bond issuance, lift-

ing S&P’s stock valuation and giving it more capital to pay for a major acquisition. Still, ratings revenues can be prone to fluctuations in corporate debt issuance. The IHS Markit deal would help reduce S&P’s dependence on that segment, diversifying its businesses to give it a more predictable stream of subscription-based revenue, analysts say. “Investors like recurring revenues,” said Oppenheimer analyst Owen Lau. S&P Global’s stock gained 3% on Monday after the deal was an- nounced, indicating that investors welcomed the transaction despite its hefty price tag, which includes $4.8 billion of net debt. Shares of IHS Markit were up 7.4%. The tie-up would also help S&P expand its footprint in the lucrative indexing business, which surged over the past decade as investors switched from actively man- aged funds to passive vehicles like exchange-traded funds that mimic indexes. About $1.7 trillion of ETF assets globally track S&P’s benchmarks, mak- ing it by far the world’s largest indexer.

S&P GlobalInc. spent most of the past decade expanding beyond its core business of rating bonds. Now, its pro- posed $44 billion acquisition ofIHS MarkitLtd. stands to solidify its position as one of the world’s largest financial- data companies. S&P’s push into data coin- cided with the rise of passive investing and quantitative trading, which have made its information even more essen- tial to bankers, traders and investors worldwide. The planned deal would ratchet up its competition with such companies asBloombergLP, Intercontinental Exchange Inc. andRefinitiv HoldingsLtd. “When you look at the breadth of who we are serv- ing, we have a ton of competi- tors,” S&P Chief Executive Of- ficer Douglas Peterson said in an interview. The deal is expected to close in the second half of 2021, subject to antitrust review and other conditions. The move marks the latest step in the company’s years-

BYALEXANDEROSIPOVICH ANDMATTWIRZ

S&P Beefs Up in Financial Data

With Mega Deal for IHS Markit

48% S&PGlobal’soperatingmargin lastyear.

TOKYO—A one-day shut- down was enough to end the 32-year career of the Tokyo Stock Exchange’s head. The exchange’s parent, Japan Exchange GroupInc., said Koichiro Miyahara resigned Monday, two months after computer problems caused one of the world’s largest markets to halt trading for a full day. The exchange’s regulator, the Financial Services Agency, criticized it for not having a good game plan in the event of technical glitches and ordered it to improve its operations. “We take the orders seri- ously and will do our best to prevent the same from hap- pening in the future,” said Akira Kiyota, chief executive of Japan Exchange Group. Mr. Kiyota said Mr. Miya- hara, the TSE’s chief executive, decided to step down volun- tarily although a board com- mittee felt the lapses weren’t serious enough to require his resignation. A spokesman said Mr. Miyahara, who joined the exchange in 1988, wasn’t avail- able for comment. Mr. Kiyota said he would cut his own pay for four months but stay on the job. The regulator said the exchange was too focused on preventing shutdowns and didn’t think enough about what to do in the event one happened, including how to deal with outstanding buy and sell orders. “The exchange did not make enough progress in im- proving its resilience because it focused too much on im- proving its reliability under the slogan, ‘Never stop,’” the regulator said. The problem emerged early on Oct. 1 after computers in- volved in transmitting price information broke down and the switch to backup hardware didn’t take place properly. Fearing that a midday restart could cause further problems, the exchange canceled the en- tire day’s trading for the first time since it moved to a fully computerized trading system in 1999. Mr. Kiyota said as a result of changes made when system supplier Fujitsu Ltd. installed the latest machines, the backup system didn’t start au- tomatically. He blamed Fujitsu for not alerting the exchange to the proper setup of the backup system, but said he wasn’t planning for now to seek compensation. Fujitsu, which acknowledged its manual gave misleading information about the backup, said it would make company- wide efforts to improve the quality of its products.

BYMEGUMIFUJIKAWA

Head of

To k y o

Exchange

Resigns

Credit Suisse has said the spying scandal tarnished its reputation.

SIMON DAWSON/BLOOMBERG NEWS

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