By this time, you’re probably aware of the debacle over Facebook’s initial public offering on the NASDAQ exchange last week. Let’s break it down.

The Good
There isn’t much that falls under this category, execpt for the fact that the NYSE is enjoying the controversy – it’s attempting to lure Facebook to the exchange.

The Bad
It was announced Tuesday that two U.S. financial regulators suggested reviews be launched into the social media site’s IPO, citing concerns over disclosure relating to underwriter Morgan Stanley. It was reported that Morgan Stanley analysts received information that caused them to cut revenue forecasts for Facebook. This information, however, was only shared with analysts from the 33 underwriting banks and was never made public. Simply put, “the disclosure of lower forecasts to certain big institutional investors left both Facebook and Morgan Stanley open to accusations of selective disclosure. Many smaller investors who bought Facebook shares in the IPO were left in the dark.”

This morning it was announced that Morgan Stanley and other underwriters associated with the IPO have profitted close to $100 million from stabilizing the share price, along with millions in profit more in IPO fees. Before the public offering, Morgan Stanley was given the opportunity to purchase a large chunk of shares at a discount in order to keep the share price stable through buying and selling once the shares were offered to the public. The bank not only sold every last one of the 421,233,615 shares it bought at discount, but it also shorted an additional 484,418,657, which only signals one thing — Morgan Stanley knew the share price would drop and it, in turn, would buy back the shorted shares at a profit.

The Ugly
Thus begins the wave of lawsuits. Tuesday, a Los Angeles-based law firm, Glancy Binkow & Goldberg LLP, filed a class action lawsuit on behalf of investors who suffered losses from Facebook’s IPO. And it was announced today that the law firm of Girard Gibbs LLP has filed a similar class action suit, stating that “the company, its officers and directors, and underwriters with violations of federal securities laws for false and misleading statements made in the Registration Statement and Prospectus issued in connection with the IPO.” In addition to these, several lawsuits have been brought against Mark Zuckerberg, Morgan Stanley and even Nasdaq.

In the end, the fact is that not all Facebook IPO investors received the same data. To most (i.e., small, individual investors), that’s unfair. But to many (institutional investors and underwriters), that’s just the name of the game. What’s your take?

The ongoing debt crisis in Greece continues to spur unrest, move markets and threaten the very fabric that connects the eurozone. Exactly how much effect a Greek default — and the domino effect in lending costs it would have throughout Europe — would have on the U.S. business world remains unclear.

But a good rundown from CNN Money offers a list of the three biggest risks Greek default presents for the United States: (1) U.S. bank exposure to sovereign debt, (2) a pullback in U.S. exports, and (3) U.S. business slow down.

To me, the last one seems the most threatening. Only now is the U.S. economy beginning to make any headway on replacing the jobs lost after the 2008 meltdown — and even this “recovery” remains mild, at best.

Here is how CNN breaks down that risk.

Many products sold by U.S. companies in Europe are made in Europe.

And losses there are already taking a bite out of U.S. multinational firms, from automakers General Motors and Ford Motor, to cereal maker Kellogg and smaller niche companies like watch and accessories maker Fossil, whose stock tumbled 40% in a single day after reporting weak European sales earlier this month.

If the value of the euro versus the dollar continues to drop, U.S. goods are going to become more expensive by comparison to those made by European rivals. And that could cut into U.S. business sales and exports around the globe if countries can get cheaper imports from Europe.

Furthermore, if export-driven economies like China see demand from Europe slow, it increases a risk of a so-called “hard landing” for the Chinese economy.

Given the importance of emerging market growth worldwide, a hard landing in China and other export markets poses a significant threat of creating a global recession, according to a report earlier this year from the World Bank.

And the with U.S. GDP of 2.2% in the most recent quarter, it is doubtful the United States can avoid a recession of its own if there is a true global slowdown.

There’s the “R” word resurfacing. For the United States—not just economies across the pond. In 2012, there is no greater risk facing American companies.

It was an interesting place to be while I, a white guy, was writing about what it is like for nonwhites to work in an industry that even today remains racially homogeneous to a staggering degree. Of the few hundred attendees there, I was one of about five white people. The awkwardness that I felt by this (at times … everyone was overwhelmingly welcoming), especially while walking around with a reporter hat on essentially asking everyone “So … what’s it like to be black?,”  provided an excellent means to frame my understanding of how black people working in insurance must feel all the time. It is just strange to be unlike virtually everyone else around you from such a fundamental, identity-establishing perspective.

It was somewhat ironic, then, that the most enduring memory I have from those few days was provided by another person just like me: a white dude who stood out like a tourist. Jay Fishman, CEO and chairman of Travelers, gave a speech to discuss what his company was doing to try to promote better diversity at his company.

Here is how I wrote about it at the time.

[The September 2008] NAAIA conference in Philadelphia was particularly memorable as it marked both the association’s tenth anniversary as well as the first time the CEO of a major insurer gave a keynote address. Travelers chairman and CEO Jay Fishman spoke to around 200 people over lunch and was visibly emotional as he articulated his feelings on the industry’s legacy of exclusion and his company’s struggles to overcome the past.

“I’m outside my zone of comfort and to not acknowledge that, I’d be lying,” said Fishman. “I’m in awe of this group. My awkwardness is born out of sensitivity — not out of an unwillingness to tackle the subject.”

While Fishman admitted that Travelers may not have been focused on diversity for as long as some of the other carriers and brokers in the industry, he also expressed a personal commitment and discussed his company’s recent diversity program advancements. “There has been an awakening to the inequities of the past,” said Fishman. “We’re not where we want to be, but at best, we’re headed in the right direction. At best.”

When I wrote that he was visibly emotional, I mean that he might have actually been crying on stage. He was clearly choked up throughout his presentation and really seemed to be going through something while addressing an audience of black people and telling them that, essentially, his industry was still failing to include them just as much as it had been doing for the past century.

I’m not sure exactly what all this has to do with the video below. But the clip was made by Travelers and it shows Fishman talking about how he has “been a remarkable beneficiary of the American opportunity” while discussing how his grandmother immigrated to the United States from Russia when she was 13 years old to work a sewing machine.

So that just struck a chord and reminded me of a time when he seemed to also realize how unique his American story was — and how genuinely I once saw him expressing how much he wishes that others could benefit from that same opportunity just as much as he has.

Those running shoes you bought from Amazon or that alarm clock you picked up from Target got from where they were made to your neighborhood stores by way of logistics, a trillion-dollar industry in the U.S. Big retailers are able to save money and keep merchandise prices down by, among other things, using cheap labor for logistical purposes. However, a recent study has found that abuse is rampant within the logistics industry.

Jason Rowe of the Kennedy School of Government at Harvard University, in partnership with New Labor, a workers rights group, surveyed 291 workers in New Jersey’s logistics industry and found serious problems in the way companies operate in towns off the heavily trafficked New Jersey turnpike. “New Jersey’s Supply Chain Pain: Warehouse & Logistics Work Under Walmart and Other Big Box Retailers” found the following:

• More than one in five logistics workers surveyed have incomes falling below the Federal Poverty Level.
• Less than 10% of those surveyed earn enough to meet the NJ Self- Sufficiency Standard, a measure of a living wage.
• Almost nine in ten logistics workers are uninsured.
• Agencies explicitly use gender as a hiring criterion for jobs in the logistics sector. They go so far as to advertise specific jobs for men and others for women.
• Women seem to have limited access to higher-paying jobs, like forklift operation. Less than 5% of forklift operators in the survey were women.

The study also found that workers employed through agencies make up a sizable share of the sector’s permanent workforce. But these agency workers are paid less than direct-hire workers doing similar tasks, and face other issues because of their dual-employer situation. In addition, more than 13% of the workers surveyed reported being injured while working in a distribution facility, of which only one-fifth received some form of compensation for medical costs and lost income. A staggering 42% reported not always receiving the personal protective equipment necessary to perform their job safely. Suggestions proposed towards state lawmakers to address these problems include:

• raise the minimum wage
• better combat wage theft
• force agencies to be more transparent with workers
• close any loopholes regarding the unlawful nature of transportation deductions

The state of working conditions for agency workers within the logistics industry nationwide, is dangerous not only to the workers, but also to the big box retailers who use them — potentially affecting their reputation and costing them more money than they have ever saved using low-paid workers.

Electric cars are great. They’re unbeatable with gas mileage, saving the owner time and money, and most people feel they’re better for the environment. But all the benefits pale in comparison to the one major drawback of electric cars — they can kill.

Battery-powered cars are quiet — too quiet some argue. Pedestrians cannot hear the cars approaching, something that the visually impaired rely on. The issue was serious enough for the National Highway Traffic Safety Administration (NHTSA) to issue a report on the matter, which found that hybrid electric vehicles “have a higher incidence rate of pedestrian and bicyclist crashes than do ICE [internal combustion engine] vehicles in certain vehicle maneuvers.” A recent New York Times review of the electric Ford Focus calls it “Deep-space silent, the quietest of the many electric cars I’ve driven.” That’s a problem.

A silent car puts pedestrians, cyclists and the National Federation of the Blind in an uproar, as it should. To help solve this issue, the Pedestrian Safety Act of 2010 was enacted, forcing the NHTSA to initiate a rule-making process for minimal vehicle noise. That’s fine going forward, but what about the fleet of quiet, electric cars already on the road? They could be considered to have a fatal flaw. And what if car companies are reluctant to manufacture cars with such a feature?

The response of the industry was clumsy. Many, including Honda and high-end manufacturer Tesla Motors, doggedly continued to manufacture hybrid and electric cars that ignored the issue. One motive for Tesla becomes apparent when you read their 2011 SEC filings: The safety feature “could negatively impact consumer interest in our vehicles.” Nissan Leafs made a half-hearted effort by installing a grating boop-beep sound—but featured a mute button, something the new law wouldn’t allow. Toyota and Hyundai have been more proactive: This 2010 Japanese video shows Toyota tinkering with the Jetsons-style sound that is now standard on 2012 Priuses.

Car manufactures have no other option than to see this as a critical issue. If they don’t, it represents a serious failure of risk management. And those are never cheap.

Reporting on food safety issues is not the most glamorous topic and, truthfully, it’s sometimes disgusting. But it’s also something that’s important and necessary. Investigative reporting, no matter what the field, requires persistence, fearlessness and a little bit of trickery. Here are a few examples of the best investigative reporting on food safety:

• “What the USDA Doesn’t Want You to Know About Antibiotics and Factory Farms” — This piece, published on MotherJones.com, explores the link between antibiotic-resistant infections and factory animal farms. It seems the USDA doesn’t want people to see this scathing report, which may explain why they’ve removed it from the website countless times. It is back up — for now.

• “America’s Dangerous Food-Safety System” — Author Eve Conant writes about how the lack of inspectors and budget cuts is constantly putting Americans at risk of illness and death. The article is shocking in itself, but also includes some hard-to-believe facts taken from a Newsweek investigation into the matter.

• “On the Menu, but Not On Your Plate” — Reporters with the Boston Globe found that certain fish being sold at area seafood restaurants were not the same variety as the menu claimed them to be. Many items on the menu were substituted with cheaper, less nutritional types of fish. Also known as “food fraud,” it has become somewhat of an epidemic and not only cheats consumers out of money, but exposes them to possible health risks. (We covered the topic in the April issue of Risk Management.)

• “How Washington Went Soft on Childhood Obesity” — As the article, published on Reuters.com, explains, “In the political arena, one side is winning the war on childhood obesity — the side with the fattest wallets.” Indeed, as more and more food and beverage companies engage in aggressive lobbying, plans to reduce sugar, salt and fat in food marketed to children have been cut, with little to no explanation. Oh, and did I mention that in April Congress declared pizza a vegetable? Money talks as generation after generation of Americans become heavier and less healthier.

The complete list of the best reporting on food safety is available on ProPublica’s website.

“From the time I took the Coca Cola driver’s testimony and obtained the company’s inadequate cell phone driving policy, I knew we had a corporate giant with a huge safety problem on our hands,” said Thomas J. Henry, one of the plaintiff’s attorneys.

Coca-Cola disagreed with the verdict and, in a statement, expressed its plans to appeal:

“This case was tried because the parties could not come to an agreement on damages. We have accepted responsibility for the accident. We understand that this verdict is a response to a plea from plaintiff’s counsel to the jury to ban all cell phone use while driving.

“Coca-Cola Refreshments’ cell phone policy, which requires the use of a hands-free device when operating a motor vehicle, is completely consistent with, and in fact, exceeds the requirements of Texas law. Coca-Cola Refreshments values the well-being of all citizens in the communities in which we operate. There is no discernible connection between the damages awarded in this case and the injuries sustained by the plaintiff. Although we respect the verdict of the jury, we plan to appeal.”

Nevertheless, the case does emphasize the need for all companies to have a clear cell phone use policy for their drivers. In a recent blog post, Matt Howard, CEO of ZoomSafer, a mobile phone safety software provider, outlined three important lessons the case can teach fleet managers. First, when accidents happen, plaintiffs will sue (and obviously judgments could get costly). In addition, policies cannot exist only on paper and they must be enforced. Hoffman concludes:

This case emphasizes just how serious the risk is – and that all employers can be vicariously implicated if they fail to manage and monitor how employees are using mobile devices while driving. Employers who want to minimize liability as much as possible must institute risk management programs to actively or passively enforce cell phone use policies.

The risks of distracted driving have been well documented and with more and more states enacting some sort of ban on cell phone use while driving, either for talking, texting or both, cell phone policies are quickly becoming a necessity. And as this case shows, it’s not just about legal compliance or driver safety–it can also have a substantial financial impact on your company.

There are no shortage of Wall Street firms that want to strip some teeth from the Dodd-Frank financial reform act. But energy companies also have some incentive to parse out at least one key provision.

The item at issue, Section 1504 of Dodd-Frank, centers on transparency. Specifically it would, according to Bloomberg Businessweek, use SEC rules to force publicly traded energy/mining companies “to make timely, detailed disclosures of the tax and royalty payments they make to governments worldwide.” What is the specific arrangement agreed upon by, say, ExxonMobil and the government of Chad for the energy giant to pump oil from the resource-rich nation?

Businessweek notes how Chad, specifically, had much of its wealth pilfered by corrupt leadership. Proponents of Section 1504 hope that mandating greater transparency of these deals will keep the blame-less citizens of poor, resource-rich countries from having their country’s resources sold away to the highest bidder for the personal gain of their crooked rulers.

Now, Exxon and most other big energy companies say they aren’t against this concept in principle. As much as history has certainly helped them benefit from he actions of corrupt governments in the developing world, they have realized that transparency and “information sharing can improve governance,” according to Businessweek.

Their main issue seems simple: they already do this.

Large oil and mining companies already participate in a voluntary regime, the Extractive Industries Transparency Initiative. Executives at ExxonMobil, the world’s biggest oil company, have sat on the Initiative’s board. Reformers have been frustrated by the slow and incomplete nature of the disclosures required by EITI; Dodd-Frank is a chance to push through tougher rules. Lobbyists are now urging the SEC to delay action or to narrow the kinds of disclosures that would be required. The American Petroleum Institute, the industry’s Washington arm, is leading the push, but all major oil and mining companies have joined in on their own. (Newmont Mining is the only major exception; it has expressed support for the 1504 rules.)

The question is whether or not this voluntary effort is enough.

Those in favor of Section 1504 say that the mandatory regulations go further and would better ensure that everything is reported and those living in poor, resource-rich nations are protected.

That is probably hard to argue with.

Big Oil, however, argues that the rules would be overly onerous.

The companies argue that the proposed rules would be “excessively burdensome,” in the words of Patrick Mulva, ExxonMobil’s vice president and controller. Big Oil’s “greater concern,” as Mulva wrote in a letter to the commission, is that 1504 would have a “detrimental effect” on the “global competitiveness of U.S. companies.” The fear is that Chinese, Russian, Brazilian, and Indian oil and mining companies, lacking qualms and unburdened by Dodd-Frank rules, would exploit the financial disclosures made by their Western competitors to outbid them—and potentially persuade leaders of resource-rich countries in the developing world to stay away from U.S. companies altogether.

Like all things with the rolling implementation of Dodd-Frank, I’m sure that there will be more to come on this … slowly.

Perhaps most interestingly to me, however, the article also compares this provision to the Foreign Corrupt Practices Act, which was passed by Congress in 1977 to stamp out the rampant bribery of foreign government office that goes on between U.S. companies operating abroad.

A generation ago, Congress insisted when it passed the Foreign Corrupt Practices Act that U.S.-headquartered multinationals would be held to a special standard, forgoing bribery even where it was commonplace abroad, and would have to learn how to compete with unscrupulous Russian, Chinese, or French companies. Not only did American business survive and thrive after the law was passed, but forward-thinking American executives learned to use the law to fob off outstretched hands and avoid unsavory rents they wouldn’t have wished to pay in the first place.

That may be true.

But companies are now facing an increased enforcement of the FCPA. We just finished edited a story for our June issue about how companies can insure themselves against Justice Department FCPA investigations. There are a lot of nuanced, policy-language questions that come into play if a claim is triggered. It is some very arcane stuff, frankly.

But what is notable is seeing how the enforcement has increased. Here are two charts that tell the story.

The 2012 “Report to the Nations on Occupational Fraud & Abuse” found the following:

• Fraud schemes are extremely costly. The median loss caused by the occupational fraud cases in the study was $140,000. More than one-fifth of these cases caused losses of at least $1 million.
• Schemes can continue for months or even years before they are detected. The frauds in the study lasted a median of 18 months before being caught.
• Tips are key in detecting fraud. Occupational fraud is more likely to be detected by a tip than by any other method. The majority of tips reporting fraud come from employees of the victim organization.
• Occupational fraud is a global problem. Though some findings differ slightly from region to region, most of the trends in fraud schemes, perpetrator characteristics and anti-fraud controls are similar regardless of where the fraud occurred.
• High-level perpetrators do the most damage. The median loss among frauds committed by owner/executives was $573,000, the median loss caused by managers was $180,000 and the median loss caused by employees was $60,000.
• Small businesses face increased risk. The smallest organizations in the study suffered the largest median losses. These organizations typically employ fewer anti-fraud controls than their larger counterparts, which increases their vulnerability to fraud.

The report goes on to break down occupational frauds by category, duration of fraud based on scheme type, size of victim organization and initial detection of occupational frauds. Here is the breakdown in graphical form:

The full report can be downloaded here.

There is no question that the computers controlling the nation’s critical infrastructure (the power grid, financial system, water treatment facilities, etc.) must be protected from potential cyber attacks launched by domestic or foreign enemies. But who’s responsibility is it to pay for this security, business leaders or national security organizations?

Some are backing stricter government regulation of cybersecurity, which has been proposed in the Lieberman-Collins legislation, while the majority of business leaders oppose this idea.

“The major concern is the vast regulatory structure that would be set up at the Department of Homeland Security,” says Larry Clinton, president of the Internet Security Alliance, an association of major U.S. companies with interests in the cybersecurity debate. It’s a concern not shared by Stewart Baker, a top cybersecurity official in the Bush administration who says he generally holds pro-business and anti-regulation views. “I see a big conflict between the desire to avoid regulation and the desire to protect national security,” Baker says. “I come down on the national security side of that debate.”

There is also disagreement as to whether private industry, which owns most of the U.S.’s infrastructure, is even capable of defending themselves against the increasing sophistication of external (or even internal) attacks. Many feel the government, with its cyber intelligence, could do a much better job. But again, that would require businesses to endure endless cyber regulations. As of now, many business leaders feel that is too much to handle (sounds similar to complaints about Dodd-Frank?). But when the electric grid is knocked offline in a cyber attack, they may feel differently. At that time, however, it could be too late.

As corporate boards and senior executives continue to deny the potential risks and consequences of cyber threats, we are indeed, as NPR put it best, fighting “a war without an army.”