Facebook Posts + Tweets = Possible Lawsuit

You may remember back in May when a Chicago resident tweeted about her property management company being OK with moldy apartments. That resident, Amanda Bonnen, was subsequently sued by Horizon Group Management for publishing a false and defamatory tweet on Twitter May 12.

The tweet read: “Who said sleeping in a moldy apartment was bad for you? Horizon realty think it’s okay.” Those two sentences sparked the suit in which Horizon sought $50,000 in damages, mostly reputation-related. The case was eventually dismissed this past January, with the judge claiming the tweet was “too vague to meet the legal standards of libel.”

Though it was dismissed, this one lawsuit opened the door to Twitter-related legal action. Soon to follow? Most likely lawsuits related to Facebook posts. Not only can tweeting or posting about another company get you in trouble, doing the same about the company for which you work can also pose a risk. As an article on MainJustice.com states:

“Our board members are talking about things like Facebook and Twitter, so we are definitely paying attention to social media,” said Haydee Olinger, the chief compliance officer for McDonald’s Corporation. Grace Renbarger, the chief ethics and compliance officer for Dell Computer, said she is constantly worried that something her employees say on Facebook or Twitter could hurt the company. “You don’t want people out there saying things that could be attributed to the company for liability purposes,” Renbarger said.

Because of the risk social media poses, the role of the chief compliance officer has grown to encompass the occasional or, in some cases, often, monitoring of employee’s Facebook and Twitter accounts. Tweeters and posters beware: big brother is watching!

wall of eyes

Safe Travels

The airline industry gets a lot of bad press, what with the occasional terrorist threat, security hassles and new fees for blankets and the like, but they deserve to get credit for when they’re doing things right. According to the International Air Transport Association (IATA), an airline industry trade group, 2009 was the second safest year for Western-built jets since the group started keeping records in 1964.

The IATA reported a rate of only one accident per 1.4 million flights, meaning that statistically you could take a flight every single day and not get into an accident for 3,859 years. Only 2006 saw a safer year and since 2000 the accident rate has dropped 36%.

“Safety is the industry’s number one priority. Even in a decade during which airlines lost an average of US$5 billion per year, we still managed to improve our safety record. Last year, 2.3 billion people flew safely. But every fatality is a human tragedy that reminds us of the ultimate goal of zero accidents and zero fatalities,” said Giovanni Bisignani, IATA’s Director General and CEO.

There is still room for improvement in certain key areas, however. Pilot handling was a contributing factor in 30% of all accidents, while runway incidents (called “excursions” by the industry) and ground damage accounted for 26% and 10% of all accidents respectively in 2009. The IATA has proposed a variety of safety programs to address these and other risk factors.

“Safety is a constant challenge. Having made aviation the safest way to travel, further improvements will come only with careful data analysis. We must understand the underlying safety risk trends, not just from the handful of accidents each year, but by bringing together and analyzing data from millions of safe flights. The IATA Global Safety Information Center was launched in December 2009 for just that purpose. Going forward our goal is to work with other organizations and governments involved in aviation safety to add to the database and drive even more improvements,” said Bisignani.

Now if they could just do something about flight delays.

TSA to Begin Swabbing Hands of Passengers

commercial airplane

U.S. airports will now be randomly swabbing the hands of passengers to check for traces of explosive materials. You may be familiar with this technique as it was previously used with carry-on baggage of some passengers.

Soon now, though, travelers can expect to see the increased random use of ETD [explosive trace detection] technology in different areas, including checkpoint lines and at boarding gates. Officers may swab a piece of luggage or passengers’ hands, then use ETD technology to test for explosives. The swab is placed inside the ETD unit which analyzes the content for the presence of potential explosive residue. To ensure the health of travelers, screening swabs are disposed of after each use. Since it will be used on a random basis, passengers should not expect to see the same thing at every airport or each time they travel.

This measure has been put into place in response to the attempted bombing of Northwest Flight 253 on Christmas day. Currently, the TSA has more than 7,000 ETD machines and has purchased 400 additional units with $16 million in federal stimulus money. The president’s fiscal 2011 budget calls for $60 million to purchase approximately 800 portable ETD machines.

But can’t terrorists wash off trace amounts of explosives with soap and water? Apparently not. The ETD can detect race elements “down to the nanogram — or billionth of a gram,” making it nearly impossible, no matter how many times hands are washed, to completely rid oneself of traces of explosives.

What exactly are the machines trying to detect? The official TSA list is classified. But it probably covers any commonplace explosive you can think of, including fertilizer, nitroglycerin (used in dynamite), C4, TNT, RDX, and PETN, the chemical used by Umar Farouk Abdulmutallab on Christmas Day.

Other security measurers are also being implemented in airports across the country. Backscatter x-ray and millimeter x-ray machines are currently being used in a handful of airports, while hundreds are in the process of being put into place by the TSA. Privacy groups, however, are up in arms about the technology, which is part of the reason they are not more commonplace in American airports. For more on this discussion, check out the March issue of Risk Management in which we feature an article titled “Airport Security: Privacy vs. Safety.”

Treasury Secretary May Gain More Power

capitol building

It looks as though the Treasury secretary may soon have a role overseeing individual financial companies. In a move to help monitor systemic risk throughout the financial arena, Senator Chris Dodd (D-Conn) is looking to release a bill next week that would overhaul financial regulation with sweeping reform.

Lawmakers and government officials have agreed that Washington should be working to identify risky activities that could threaten the entire system — a job no single regulator had during the lead-up to the financial crisis.

But because of the financial crisis, that job may now fall under the Treasury secretary’s duties, an idea both Dodd and Senator Richard Shelby (R-Ala), both of the Senate banking committee, favor since “the Treasury secretary has a higher international profile than most regulators” and because that position is more accountable to Congress.

Dodd’s new proposal represents a shift for the senator. Last fall, he introduced a bill that would have created a separate Agency for Financial Stability. Dodd envisioned an agency responsible for identifying, monitoring and addressing systemic risks and with the authority to break up large, complex companies if they posed a threat to financial stability. He called for it to be governed by an independent chairman, appointed by the president and confirmed by the Senate, as he said, “to provide insulation from political manipulation.”

Shelby and other conservatives did not completely support the idea of a new agency. Dodd then “embraced the idea of a council of regulators, with the Treasury secretary at the head.” But this bill will, and has, drawn criticism referring to the opportunity for political influence to play a part in the position.

If the bill should pass, it would mark significant milestone by granting a Cabinet member a measure of regulatory authority. For even more on this topic, don’t forget to check out the April issue of Risk Management, in which we will feature an in-depth piece on banking regulation and risk and what is being proposed by the Basel committee.