Microsoft systems crash worldwide due to Crowdstrike update | Armani, Dior faces labor exploitation probe | WazirX hit by security breach

In today’s Portfolio Intelligence Daily:?

• Microsoft systems crash worldwide due to Crowdstrike update in “Black Swan” event
• Armani and Dior faces supplier labor exploitation probe
• WazirX reports major security breach
• Digital World CEO sued for securities fraud

Our analyst team curates these summaries from Auquan’s Intelligence Engine, which uses generative AI and retrieval augmented generation (RAG) to uncover material non-financial insights at scale to support deal sourcing, due diligence, risk monitoring, and compliance.

Industry trends:

• Tackling Information Overload in the Age of AI [private credit] (TDWI Upside)
• How RAG completes the generative AI puzzle (InfoWorld) — Retrieval-augmented generation brings to generative AI the one big thing that was holding it back in the enterprise.
• Will AI be transformative for ESG data? (Environmental Finance)
• Why AI is finally catching up with financial services (Maddyness)

Microsoft + Windows systems crash globally due to Crowdstrike update in “Black Swan” event

Microsoft customers worldwide experienced significant outages that have taken down millions of machines running Windows and affecting multiple Microsoft 365 cloud-based services, including Outlook, Teams, and Azure cloud computing services.?

• The incident occurred due to an update issued by cybersecurity firm Crowdstrike, disrupting operations for businesses and individuals worldwide, leading to widespread frustration among users.

• Reports indicate that the outages began around 10:00 AM UTC. Many IT teams at companies using cloud-based Microsoft 365 systems were able to restore service after several hours of downtime, while many individual machines running Windows must be manually fixed and rebooted — a process that may take days or weeks.?
• The outage has affected thousands of working professionals worldwide along with airports, businesses and broadcasters. Planes have been grounded in the U.S., trains in the U.K. are impacted, and even media outlets are facing issues.
• An issue with CrowdStrike (a cybersecurity firm) is causing the widespread global issue of breaking computers running Windows, causing them to crash and display the “Blue Screen of Death”.
• As of the latest updates, Microsoft and Crowdstrike officials have confirmed that they had identified the root cause of the outage and were implementing and issuing fixes.

Select timeline

• July 19, 2024 | Microsoft says cause of outage at 365 apps and services fixed (Reuters)
• July 19, 2024 | Microsoft Outage: Airlines, banks, stock market, here's list of services affected due to CrowdStrike blue screen error (The Economic Times)
• July 19, 2024 |Microsoft says ‘resolution is coming’ amid outage (Hindustan Times)

Armani and Dior faces supplier labor exploitation probe

Italy's competition watchdog is investigating Armani and Dior over allegations of using suppliers that exploit workers with inadequate wages, excessive hours, and poor safety conditions.

• Allegations suggest that despite promoting craftsmanship and quality, Armani and Dior sourced goods from workshops employing laborers in exploitative conditions, contradicting ethical claims.
• Armani has pledged full cooperation, denying the allegations, while Dior has not commented amidst the ongoing investigation.
• Earlier this year, judicial administration was imposed on units of both Armani and Dior due to severe labor violations by subcontractors, exposing systemic issues in their supply chains.
• Legal actions reflect Italian authorities' stringent stance on labor law enforcement, underscoring the scrutiny faced by luxury brands over supply chain ethics.

Select timeline

• July 18, 2024 | Italian watchdog probes Armani, Dior over supplier labour issues (Apparel Resources)
• July 17, 2024 | Italy watchdog probes Armani, Dior over supplier labor issues (PhilSTAR Life)
• July 17, 2024 | Italy watchdog probes Armani, Dior over supplier labour issues (FashionUnited)

WazirX reports major security breach

WazirX, an Indian crypto exchange, suffered a security breach resulting in over $230 million worth of funds being compromised from a multisig wallet.

• The breach involved discrepancies in transaction data between WazirX and its custody provider Liminal, suggesting possible manipulation by attackers.
• Initial investigations point towards the Lazarus group, known for sophisticated cyberattacks on crypto exchanges worldwide.
• Withdrawals of rupees and cryptocurrencies on WazirX were temporarily halted to contain the fallout from the breach.
• The incident raises concerns about the security practices of centralized exchanges and could impact regulatory scrutiny and investor confidence in the Indian crypto market.

Select timeline

• July 18, 2024 | WazirX suffers security breach; $235 million worth of funds moved (Economic Times)
• July 18, 2024 | WazirX Hack: Indian Crypto Exchange Suffers $235M Exploit, Pauses Withdrawals (CoinGape)
• July 18, 2024 | WazirX Hacked, Over $230M Stolen in Major Crypto Exchange Breach (AlexaBlockchain)

Digital World CEO sued for securities fraud

U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Patrick Orlando, the former CEO of Digital World Acquisition Corp (DWAC).?

• In September 2021, DWAC raised $287.5 million in its IPO and announced a merger with Trump Media in October 2021.
• The SEC alleges Orlando made false statements in public filings, denying any merger plans with Trump Media & Technology Group while secretly discussing the merger.
• The SEC contends that Orlando knew his statements were false.
• The SEC seeks civil penalties, a permanent injunction, and the return of "ill-gotten gains."

Select timeline

• July 18, 2024 | US SEC sues Digital World's former CEO alleging securities fraud (Reuters)
• July 18, 2024 | US SEC Sues Digital World Ex-CEO Patrick Orlando For Alleged Securities Fraud (Markets Insider)
• March 22, 2024 | Digital World shares fall as traders resort to profit taking (Reuters)

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