How does Adverse Media checks work for entities? What types of activities/crimes are monitored?
Adverse Media Entities (AME) focuses on companies with a corporate structure and commercial purpose that may have had adverse/negative media coverage on Regulatory, Competitive, Financial, Environmental, Production, Social and...
Dow Jones Risk & Compliance launched the Adverse Media Entities (AME) content set in August 2013.
The content set provides coverage of material from licensed sources on Factiva starting from January 2012 and covers companies from every country in the world. Research is carried out in all languages covered by Factiva where there is relevant content.
Profiles include information on the company, including secondary identifiers; information on the category or categories to which the company has been linked in the news; a Government Action identifier and links to the Factiva article or articles. For the purposes of the Adverse Media Entities content set, Government Action is defined as a reported action involving a public authority or public body. Examples of Government Action are official announcements, investigations, rulings or decisions, criminal or civil court filings and proceedings, complaints filed with law enforcement bodies and police actions.
An example of adverse media that does not fit the Government Action criteria is a report of alleged wrongdoing that does not involve a public authority or body. Profiles will be created for all companies involved in a lawsuit or dispute. For example, if one company is sued by another, both defendant and plaintiff will be profiled. The exception to this is copyright or patent disputes, where only the defendants are covered.
The Adverse Media Entity Categories:
Regulatory
● Corruption Issues
● Fraud Issues
● Regulatory Issues
● Sanctions Competitive/Financial
Anti-Competitive Issues
● Association Risk
● Information Rights/Copyright/Patent Issues
● Financial Difficulty
● Management Issues
● Ownership Issues
Environment/Production
● Environmental Issues
● Product/Service Issues
● Production/Supply Chain Issues
Social/Labour
● Discrimination/Workforce Rights Issues
● Human Rights Issues
● Workforce Disputes
● Workplace Health/Safety Issues
The category definitions:
Regulatory
Regulatory: Corruption Issues
Definition:
Covers reports or allegations that those in a public position have abused that position or that they are involved in corrupt activities. Such cases might involve bribery, kickbacks or breach of trust. It also includes reported - involvement in active bribery (which is the promising or giving of a financial or other advantage); - passive bribery (agreeing to receive or accepting a financial or other advantage); - bribery of public officials for the purpose of obtaining or keeping business; - failure of commercial organisations to prevent bribery by an associated person. All of these are offences under the UK Bribery Act and/or U.S. Foreign Corrupt Practices Act (FCPA). Also covers reported laundering of funds derived from corruption, fixing of bids for public contracts or public bid irregularities resulting in fraud and extortion. Note: Only reported government investigations or criminal proceedings will be covered in this category.
Regulatory: Fraud Issues
Definition:
Covers reports or allegations of fraud (internal or external), money laundering, market abuse such as insider dealing, manipulation of rates or indexes or prices, bid-rigging that doesn’t involve a government body or government official, tax crime, false claims submitted to government programs and kickbacks paid to other companies and procurement fraud.
Regulatory: Regulatory Issues
Definition:
Covers reported investigations and fines/penalties imposed on a company by a government, professional, industrial or other regulatory body in connection with possible or actual breaches or violations of regulations. It also includes articles about settlements by companies linked to these regulations.
Regulatory: Sanctions
Definition:
Covers reports of companies/entities that have breached sanctions or allegations suggesting they have breached sanctions/restrictions upon international trade or finance that a country or group of countries has imposed on another for political reasons. This includes those put in place against certain companies by the United Nations, European Union or Office of Foreign Asset Control.
Competitive/Financial
Competitive/Financial: Anti-Competitive Issues
Definition:
Covers reports of monopolies, antitrust, restrictive practices and other competition issues; reports on companies being involved in practices that lead them to have a dominant or abusive impact on markets. It also includes news of regulator/court decisions connected to antitrust issues. For example, if a company merger or acquisition is rejected by regulators on antitrust grounds, or if the company challenges that decision.
Competitive/Financial: Association Risk
Definition:
Covers reported or alleged association with an individual or entity with a negative reputation which is damaging the company.
Competitive/Financial: Information Rights/Copyright/Patent Issues
Definition:
Covers reported disagreement over patents, copyright, intellectual property. It also includes allegations of theft of trade secrets, abuses of privacy law, libel, defamation, illegal posting on electronic media sites and other information-rights issues. Only defendants in copyright or patent disputes will be covered. Profiles will not be created for plaintiffs.
Competitive/Financial: Financial Difficulty
Definition:
Covers reported declarations of bankruptcy, insolvency and other severe funding/cashflow problems. Issues such as stock-price fluctuations are excluded
Competitive/Financial: Management Issues
Definition:
Covers negative reports related to senior management changes or the failure of senior management to meet expectations. It includes negative news about management issues such as weak financial controls that have had an adverse impact on the company, lawsuits by senior management or former senior management against the company, or the dismissal or resignation of senior management in controversial circumstances.
Competitive/Financial: Ownership Issues
Definition:
Covers adverse media related to ownership changes, shareholder disputes, nationalisation/privatisation, initial public offerings.
Environment/Production
Environment/Production: Environmental Issues
Definition:
Covers reported pollution, damage to ecosystems, damage to wildlife, damage/overuse of natural resources and controversial actions affecting the environment. Alleged company actions can be either wilfully or accidentally damaging or overexploiting natural resources. It includes lawsuits linked to environmental issues and governmental decisions related to environmental concerns that are described as negative for a company.
Environment/Production: Product /Service Issues
Definition:
Covers reports of product recalls and bans; the failure of products or services; malpractice and professional negligence. It includes cybercrime issues such as data breaches, hacking, database break-ins, etc. that negatively affect a company's products/services. In general, issues related to the cancellation of products or services under development will be tagged Product/Service Issues. Issues related to production/supply of products/services are categorised Production/Supply Chain Issues.
Environment/Production: Production/Supply Chain Issues
Definition:
Covers reports of a sudden and severe threat to crucial functions that affects the short-term, and perhaps long-term, ability of the company to function. It includes news of potential, either temporary or lasting, disruption to the supply chain such as shortages of key components or materials for products or services, transport strikes affecting component/product deliveries, disruption of power supply, production issues such as factory shutdowns and issues around the failure of a company to provide products or services as required by agreements.
Social/Labour Issues
Social/Labour Issues: Discrimination/Workforce Rights Issues
Definition:
Covers reports of discrimination against workers, clients, prospects or other entities. It includes workforce rights issues, child labour, forced labour and discrimination. It also covers alleged discriminatory practices that represent a business/reputational risk.
Social/Labour Issues: Human Rights Issues
Definition:
Covers reports related to human rights issues such as genocide, rape, torture or war crimes. It also includes allegations of complicity in the commission of human rights abuse.
Social/Labour Issues: Workforce Disputes
Definition:
Covers reported strikes, stoppages, disputes over collective bargaining agreements or disputes over representation on supervisory boards.
Social/Labour Issues: Workplace Health/Safety Issues
Definition:
Covers reported issues, such as litigation, relating to death, injury, illness of employees (a single employee or more than one). It also includes reports of accidents that have just taken place, for example fires.