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Rajat Gupta maintains his innocence
Rajat Gupta was once a member of the financial elite: the head of McKinsey, a board member of Goldman Sachs and an adviser to Bill Gates. Then he was convicted in 2012 of tipping an insider-trading ring. Now Mr. Gupta, who served two years in prison, has spoken to Andrew about his plight.
Mr. Gupta still says he’s innocent of securities fraud, despite having been convicted of illegally slipping the hedge fund manager Raj Rajaratnam confidential information about Goldman Sachs. His only regret? Being a little too loose-lipped about corporate secrets.
Mr. Gupta forgave Mr. Rajaratnam when the two shared prison time. “We played Scrabble in prison together. We played chess. We had breakfast together,” Mr. Gupta told Andrew.
But he definitely hasn’t forgiven Preet Bharara, the prosecutor who put him behind bars. “Go after the hedge funds and their circle, play up the story in the press, and maybe no one would notice that the big banking executives were continuing to walk free,” Mr. Gupta wrote in a new book, out next week.
Since being released three years ago, Mr. Gupta has done some consulting in India, but hasn’t reconnected with many business associates from his previous life. “I didn’t want to put them in a difficult position,” he said.
But he’s learning to move on. “Don’t get too attached to anything — your reputation, your accomplishments or any of it,” Mr. Gupta told Andrew. “This thing unjustly destroyed my reputation. That’s only troubling if I am so attached to my reputation.”
The E.U. gave Brexit an extension
European leaders have pushed back the deadline for Britain’s exit from the bloc, giving Prime Minister Theresa May and British lawmakers more time to avoid a no-deal Brexit, Stephen Castle and Steven Erlanger of the NYT write.
“Britain’s exit date will be pushed back to May 22 if next week Mrs. May can persuade lawmakers in Parliament to accept her plan for leaving the bloc, which they have already rejected overwhelmingly, not once but twice.”
“If she cannot persuade lawmakers to accept her plan, Mrs. May will get a shorter delay in exiting the European Union — until April 12. But Britain could stay in the bloc longer if it decides it needs more time for a more fundamental rethink of Brexit.”
The E.U. doesn’t want Britain to crash out. But officials “made it clear that it is for Britain to make serious choices, and soon, and that failure should not be laid at the door of Brussels,” Mr. Castle and Mr. Erlanger write.
More: Over two million people have signed a petition to cancel Brexit. And Britain’s Financial Conduct Authority warned that the finance industry still faces big risks in a no-deal scenario.
Boeing is upgrading the safety of its 737 Max jets
The embattled plane maker will install an extra safety alarm in its 737 Max jets after two fatal plane crashes. But it’s unclear whether that, together with a forthcoming software upgrade, will be enough to prevent future catastrophes.
The new feature warns pilots if a plane’s “angle of attack” sensors, which determine the pitch of the plane’s nose, disagree with each other. A faulty sensor is suspected of triggering anti-stall software that may have helped cause the Lion Air and Ethiopian Airlines crashes. Until now, this warning system was an optional extra on the Max jets.
But it’s only one of two features that experts say could help make the planes safer, according to the NYT. The other is an indicator that displays the sensors’ readings, which will remain an optional feature. Neither has been mandated by the F.A.A.
The move highlights Boeing’s practice of selling add-ons. The planemaker has made a lot of money by offering features as upgrades — some of which are important safety items, the NYT reports. (Among them: a backup fire extinguisher for the cargo hold and oxygen masks for the crew.)
But the damage continues to grow. Indonesia’s Garuda airline said today it was seeking to cancel a $4.9 billion order of Max 8 jets. “Our passengers, psychologically, they don’t trust flying with Max anymore,” a spokesman for the airline told the NYT.
Inside the lucrative world of mercenary hacking
Small countries, big companies and even just wealthy people can now turn to gun-for-hire hackers to settle their scores, according to an NYT investigation — turning the business into a multibillion-dollar industry.
Privatized cyberspying has taken off. Two companies — NSO, an Israeli company, and DarkMatter, based in the United Arab Emirates — have developed sophisticated espionage operations, helped by former government hackers on staff. They help governments perform legitimate law enforcement investigations.
But there’s a darker side. The Mexican government is suspected of using NSO tools to spy on its own citizens, including journalists and activists. Saudi Arabia has been accused of using NSO products to spy on associates of Jamal Khashoggi. And former DarkMatter employees told the NYT that the U.A.E. used the firm’s tools to spy on Ahmed Mansoor, a prominent human rights activist.
And it’s lucrative. “Francisco Partners, a private equity firm, purchased a 70 percent stake in NSO for $130 million in 2013. Last month, NSO’s co-founders raised enough money to buy back a majority stake in NSO at a valuation of just under $1 billion,” the NYT reports. Moody’s estimates that the so-called lawful intercept spyware market is worth $12 billion.
The latest Nafta hurdle: drugs
Intellectual property rules for new pharmaceutical products could derail President Trump’s push to get his revised North American Free Trade Agreement through Congress, Ana Swanson of the NYT reports.
• “While Mr. Trump secured Canada’s and Mexico’s signoff on the new agreement last year, the trade pact must be ratified by legislators in all three countries, including by Congress.”
• “Democrats, who now control the House, have already made it clear that they will not approve the new trade deal without significant changes to labor and environmental provisions.”
• “Now, they are also looking for revisions to the trade deal’s pharmaceutical provisions, in particular a measure providing an advanced class of drugs called biologics 10 years of protection from cheaper alternatives.”
• “A similar conflict over drug industry protections helped delay and ultimately sink the prospects for another trade deal, the Trans-Pacific Partnership.”
Jared Kushner went to Riyadh to talk policy; his brother, to talk business
Jared Kushner, President Trump’s son-in-law, went to Saudi Arabia in October 2017 in his role as a White House adviser. But his brother, Josh, was there the day before on behalf of his investment firm, David Kirkpatrick of the NYT reports — raising questions about whether Jared could be evenhanded in dealing with the kingdom.
• “Josh Kushner had spent the three days before his brother’s arrival at an investor conference, where Prince Mohammed had promised to spend billions of dollars on a high-tech future for Saudi Arabia.”
• Jared Kushner cut ties to Josh’s venture firm, Thrive Capital, including by selling his interest in its funds, after he joined the Trump administration. Previously, he had appeared to be closely involved in Thrive’s operations. Meanwhile, Josh Kushner has kept his distance from his brother.
• But, Mr. Kirkpatrick writes, Jared “was nonetheless discussing American policy with the rulers of the kingdom at virtually the same time that his brother was talking business with their top aides.”
• “It is reasonable to question Jared Kushner’s ability to be impartial,” Kathleen Clark, a law professor at Washington University in St. Louis, told the NYT.
More Kushner news: Charles Kushner, the father of Jared and Josh, has publicly defended both his real estate company and Jared. And the chairman of the House Oversight and Reform Committee claimed that Jared uses WhatsApp for official government business.
The central bank domino effect
Policy reversals at the Fed and the European Central Bank often catch economists off guard. But they can have a profound effect on nations that don’t use the dollar or the euro, the WSJ reports.
• “Switzerland and countries near the eurozone but not part of it — like Sweden and Denmark — rely on the bloc for much of their exports and imports.”
• “That makes growth and inflation highly dependent on the exchange rate.”
• “Central-bank stimulus tends to weaken a country’s exchange rate, so when the E.C.B. embraces easy-money policies, as it did two weeks ago, it tends to weaken the euro against other European currencies, such as the Swiss franc.”
• “Because the E.C.B. is so large, Switzerland and others can do little to offset it.”
As a result, small countries often adopt negative interest rates despite having otherwise healthy economies. That can be costly, particularly for commercial banks that have to pay the equivalent of billions of dollars to store funds.
James Comey says what he wants from the Mueller report
As speculation swirls about the exact timing of Robert Mueller’s imminent submission of his special counsel report on the Russia investigation, James Comey, the former F.B.I. director, writes in an NYT Op-Ed what he hopes to see:
• “I have no idea whether the special counsel will conclude that Mr. Trump knowingly conspired with the Russians in connection with the 2016 election or that he obstructed justice with the required corrupt intent. I also don’t care.”
• “I am rooting for a demonstration to the world — and maybe most of all to our president and his enablers — that the United States has a justice system that works because there are people who believe in it and rise above personal interest and tribalism.“
• What Mr. Comey personally doesn’t want to see: an impeachment of President Trump, because “a significant portion of this country would see this as a coup.”
Revolving door
Wells Fargo directors are reportedly in talks to hire Harvey Schwartz, the former president of Goldman Sachs, as their bank’s next C.E.O.
Ford Motor hired Tim Stone, who was most recently the chief financial officer of Snap, as its next C.F.O., replacing Bob Shanks.
Freddie Mac has named David Brickman, its president, as its next C.E.O., replacing Donald Layton.
President Trump plans to name Michael Kratsios as his administration’s first chief technology officer.
The speed read
Deals
• Shares in Levi Strauss jumped 31 percent in their first day of trading yesterday. The N.Y.S.E. relaxed its ban on jeans for the I.P.O. — but only for the day. (Reuters, WSJ)
• Pinterest reportedly plans to list on the N.Y.S.E. as soon as mid-April. (WSJ)
• Uber has reportedly picked the N.Y.S.E. for its I.P.O. (Bloomberg)
• Hyundai shareholders rejected Elliott Management’s campaign for board seats and a special dividend. (Reuters)
• Rent the Runway, the online clothing rental service, has raised $125 million at a $1 billion valuation. (NYT)
Politics and policy
• Americans are souring on the Trump tax cuts, in part because they’re receiving smaller refunds, new polling suggests. (NYT)
• Economic models, which often accurately predict presidential elections, suggest that President Trump would be re-elected if voting took place today. But economists predict a slowdown between now and 2020, which could change that. (Politico)
• Several big Democratic donors have reportedly told Joe Biden that they wouldn’t back him in the early stages of the party’s presidential primary, to see how the field shakes out. (CNBC)
• Margrethe Vestager, the E.U.’s antitrust chief, says she will run for president of the European Commission, hoping to succeed Jean-Claude Juncker. (FT)
Tech
• Facebook stored millions of user account passwords insecurely. Now might be a good time to read that deleting Facebook from your life isn’t as painful as you might expect. (NYT)
• The founder of 8chan, the website where the suspect in the Christchurch, N.Z., shooting posted a missive, thinks the site didn’t move fast enough to take down the message. And distributing the video of the shooting is a crime in the country. (WSJ, NYT)
• It looks like Tesla sales are falling. Also, the automaker has accused two groups of former employees of stealing trade secrets. (NYT, Verge)
• Walmart is building A.I. in a bid to compete with Amazon. (WSJ)
Best of the rest
• Michael Steinhardt, a former hedge fund mogul and leading donor to Jewish causes, has been accused of repeated sexual harassment. (NYT)
• Lawsuits against JetBlue claim that two of its pilots drugged and raped flight attendants. (NYT)
• Here’s everything you need to know about Modern Monetary Theory, but were too afraid to ask. (Bloomberg)
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