January 30, 2023

Today's Topics

Hello! Adani Group has written a 413-page rebuttal to the allegations of fraud made against it. TLDR: it hasn't worked, with shares slipping again this morning. Today we're exploring:

  • Whistling: Crime doesn't pay... but whistleblowing seems to.
  • Burrito Season: Chipotle is looking for new recruits, to help wrap up its busy season.
  • TikTok: US lawmakers are probing the world's most addictive app, again.
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Last week, the SEC announced its biggest whistleblower reward so far this year, compensating four joint informants $28m after they “significantly contributed to the success of the action” against the wrongdoers.

Surprisingly, a multi-million dollar payout isn't uncommon in the world of financial whistleblowing. Just last month, one source was awarded $37m for their efforts in a healthcare bribery case, becoming one of the top ten highest-paid individual informants in the history of the SEC's whistleblowing scheme.

Snitches get riches

Compensating whistleblowers has cost the SEC over $1.3bn since it devised the program in 2010 to incentivize industry insiders to help catch financial criminals. And, while tips have risen almost every year since, the last couple have seen the whistleblowing volume taken to the next level. Whistleblowing tips grew 76% from 6,911 in 2020 to more than 12,000 in each of the last 2 years.

Along with increased awareness of the SEC program, it's hard to argue with the fact that — in the age of remote working — reporting the boss’s underhand dealings is much easier if you’re not making watercooler small talk with them every day.

One new fertile space for financial crime has been crypto. Last year more than 1,700 tips found their way to the SEC about crypto-related crimes, a category that has grown quickly alongside the sector, with Gemini & Genesis the latest crypto companies targeted by the SEC.

Seeking spicemakers

Last week Chipotle announced it was looking to hire 15,000 new employees in the next few months, as the fast-Mexican restaurant looks to beef up its workforce ahead of what it calls “burrito season” — its busiest period of the year, running from March to May.

Chipotle may struggle to fill its open positions, as hiring remains difficult across the industry. Taco Bell has more than 25,000 open roles advertised on its site, Starbucks has more than 10,000 and employment in the restaurant industry as a whole remains down nearly 4% on pre-pandemic levels. Indeed, a November survey of the National Restaurant Association found that 62% of restaurant operators said they didn't have enough employees to meet customer demand, as potential employees shirk the sector.

Although Chipotle’s hiring spree is likely only temporary, the company is still in growth mode. Company execs are planning to open another 285 new restaurants this year — nearly one-per-day — as they look to topple Taco Bell, the country’s largest Mexican-inspired food chain. But, apart from obviously different menus and focus, Taco Bell and Chipotle also have incredibly different business models.

Taco Bell is run like a traditional franchise. Owned by fast food giant Yum! Brands, which also owns KFC and Pizza Hut, just 7% of the Taco Bell locations in the US are run by the company itself, with the rest franchised out to independent operators. That’s a pretty standard model employed by many of the major chains, including McDonalds, Subway and Domino’s. Chipotle does things differently, owning and operating all of their stores — giving them closer control of each restaurant.

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In the dock

In devastating news for lip-syncers and procrastinators, TikTok looks to be edging closer to a potential ban in the US as a House panel gears up to vote on the motion next month. Shou Zi Chew, the CEO of the Chinese-owned video platform, will testify before Congress in March to defend the app’s alleged CCP affiliation, data security practices, and the impact it's having on American children.

Still on top

To say that TikTok, a shortform video app owned by the Beijing-based tech firm ByteDance, burst onto the social media scene is a serious understatement.

Its addictive algorithm, stylized as its For You page, saw TikTok become the quickest social platform to hit 1 billion active users in history, reaching the milestone in just over 5 years. That’s ~2.6 years quicker than Instagram and ~3.6 quicker than Facebook too.

Since then, it hasn't slowed down. The company has been breaking revenue records in remarkable time, has become teens' social media of choice and was (once again) the most downloaded app of last year according to data from Apptopia.

Despite its rapid rise, TikTok's ties to the CCP have long been touted as a security risk. Successive US governments have made various attempts to regulate the app, with president Trump going the furthest via an executive order in 2020 that sought to sell the US operations of TikTok to an American company. With US-China relations already strained, a ban of China's most famous tech company would be poorly received, although there's a strong precedent in the other direction, with American platforms like YouTube, Facebook, Twitter and others all banned in China.

More Data

• How Whatsapp became the new home for luxury London house-sellers.

• Everyone trusts nurses. That's the conclusion of the latest Gallup professional survey, which revealed that 79% of people had a high opinion of nurses — the highest of any profession.

• The Australian hunt for a 0.3-inch, radioactive “needle in a haystack” continues.

Toyota sold 10.5 million vehicles last year, defending its title as the world's top-selling automaker for the third third year in a row.


• A snapshot in time: can you tell what year it is based on a single photograph?

Off the charts: Which carmaker, that recalled 462k cars this week, is rolling out a free pickup and delivery service for repairs? Hint: they had more cars potentially affected by recalls than any other manufacturer in the US last year. Answer below.

Answer here.

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