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Confidential documents shared with the NYT show how the German lender used gifts and political maneuvers over 15 years to become a major player in China.
More than 100 relatives of high-level Communist Party members were hired for jobs at the bank without meeting qualifications, and millions of dollars were paid to Chinese consultants with access to politicians.
And then there were the gifts, which included:
• A crystal tiger and a Bang & Olufsen sound system, worth $18,000 combined, given to a Chinese president;
• A $15,000 crystal horse for a premier, and $10,000 in golf outings and a trip to Las Vegas for his son;
• And a $4,254 bottle of French wine for a top state banking official.
It was part of Deutsche Bank’s effort to win favor in China, and it worked, Michael Forsythe, David Enrich and Alexandra Stevenson of the NYT report: “By 2011, the German company would be ranked by Bloomberg as the top bank for managing initial public offerings in China and elsewhere in Asia, outside Japan.”
The documents “show that the bank’s top leadership was warned about the activity but did not stop it,” the NYT reports. The bank paid $16 million in August to settle accusations by the S.E.C. of misconduct in China and Russia.
Josef Ackerman, who was the bank’s C.E.O. until 2012, denied having knowledge of many details in the documents, but defended the broader strategy. “This was part of doing business in this country,” he told the NYT.
Mr. James said that a tweet by Daryl Morey, the Houston Rockets’ general manager, in support of the Hong Kong protests was “misinformed,” Scott Cacciola of the NYT reports. It was a notable comment by an N.B.A. star that toed Beijing’s line.
Mr. James said he believed that Mr. Morey “wasn’t educated on the situation at hand,” and that “many people could have been harmed, not only financially, but physically, emotionally, spiritually.” His reaction came after the L.A. Lakers played a pair of preseason games in China.
His comments thrust the N.B.A.’s approach to the tweet back into the spotlight. Though the league’s commissioner, Adam Silver, has defended Mr. Morey’s right to express his views, several stars have tread carefully to avoid offending China, where they have big business interests through sponsors like Nike.
A backlash on social media soon followed. Among those weighing in was Senator Rick Scott, Republican of Florida, who wrote: “It’s sad to see him join the chorus kowtowing to Communist China & putting profits over human rights for #HongKong.”
More: China’s censorship has international consequences.
Wall Street is kicking off third-quarter earnings reports today with announcements from JPMorgan Chase, Goldman Sachs and Wells Fargo. And corporate America has given less guidance during the quarter than usual, meaning that investors don’t have many clues on what to expect.
S&P 500 companies have offered the fewest quarterly updates — positive or negative — since 2000, according to Bank of America. “Companies are starting to do what they do when there is rampant uncertainty, which is just stop issuing guidance,” Savita Subramanian, the head of U.S. equity strategy at the bank, told Matt Phillips of the NYT.
Companies may be feeling uncertain over a slowing economy, the trade war and presidential politics.
“The relative silence since their last reports means stock investors may be in for a lot of bad news all at once,” Mr. Phillips writes. (FactSet estimates that earnings for the S&P 500 are expected to decline 4.6 percent for the quarter.)
Executives of the co-working company reportedly favor a financial bailout plan led by JPMorgan Chase to a proposal that would hand control over to its biggest investor, SoftBank, Bloomberg reports, citing unnamed sources. They’ll have to make a decision this week on which proposal to take.
JPMorgan is said to be sounding out potential buyers for a debt-financing plan that could add billions of dollars to the company, Bloomberg reports. The structure of the offering could change based on investor feedback, though the news service adds that it may include some bonds whose interest would be paid out in additional bonds.
Any financing would probably carry high interest rates. Bloomberg reports that the pay-in-kind notes could feature a punitive 15 percent coupon.
Others think the SoftBank plan is a bad idea — for SoftBank and its founder, Masa Son. A takeover of WeWork “goes beyond doubling-down on a flailing investment in a single company and would saddle Son’s team with a task the fund wasn’t set up to tackle,” Tim Culpan of Bloomberg Opinion writes.
And WeWork has another problem: formaldehyde in its phone booths. The company told customers that it was removing about 1,600 booths in U.S. and Canadian locations that may have elevated levels of the chemical.
President Trump said yesterday that he would put sanctions on Turkish government agencies and officials after Turkey invaded northern Syria. The move came after condemnation over his decision to withdraw U.S. forces from the area, endangering America’s Kurdish allies.
The sanctions will effectively cut off their targets from the global financial system. Those affected include the Ministry of National Defense and the Ministry of Energy and Natural Resources, as well as the heads of both departments.
Mr. Trump added that he was halting negotiations over a $100 billion trade deal and would double tariffs on imports of Turkish steel.
“I am fully prepared to swiftly destroy Turkey’s economy if Turkish leaders continue down this dangerous and destructive path,” he said.
But it’s unclear that Ankara will acquiesce. Turkish-backed forces have streamed into the region, and President Recep Tayyip Erdogan appears determined to press on, saying yesterday: “We are determined to continue Operation Peace Spring to the end, regardless of threats and pressures.”
The Salesforce co-founder writes in an NYT Op-Ed that while capitalism has been good to him and other C.E.O.s, the business world needs to rethink the system and help improve society.
• “As a capitalist, I believe it’s time to say out loud what we all know to be true: Capitalism, as we know it, is dead.”
• “To my fellow business leaders and billionaires, I say that we can no longer wash our hands of our responsibility for what people do with our products. Yes, profits are important, but so is society.”
• Mr. Benioff says corporate leaders need to take on issues like equal pay for women and men, climate change, poverty and more.
The ride-hailing company continues to insist that drivers aren’t an essential part of its business. Documents reviewed by Greg Bensinger of the WaPo offer an inside look at the company’s legal strategy.
• “Uber raised eyebrows last month when its chief lawyer asserted that ‘drivers’ work is outside the usual course of Uber’s business’ in a call laying out the company’s resistance to a California bill that would alter the employment status of many ‘gig’ workers,” Mr. Bensinger writes.
• And in a 2017 deposition related to a lawsuit filed by Jessicka Harris, who sued the company after arguing that she had nearly lost her leg after being struck by a driver, “Uber executive Nicholas Valentino, then an operations manager for Atlanta, repeatedly corrected the plaintiff’s attorney when he referred to the contractors as ‘drivers.’”
• “‘They are not Uber drivers,’ Valentino said. ‘They’re independent, third-party transportation providers.’ He repeated the claim no fewer than 16 times, to the attorney’s apparent consternation.”
• “At stake for Uber in its many court battles is the potential for millions in new liabilities if its contract drivers are reclassified as employees, and the company is found to bear greater responsibility for their actions.”
More: The company laid off an additional 350 employees yesterday, taking its total layoffs since July to over 1,000.
Deals
• Authentic Brands, which owns Nine West, is reportedly preparing a $270 million takeover bid for Barneys that could be unveiled in bankruptcy court today. (WSJ)
• SmileDirectClub is the worst-performing I.P.O. by a unicorn this year, after California enacted a law protecting consumers of teledentistry products. (CNBC)
• Paytm, the biggest digital payments company in India, is reportedly close to raising about $2 billion from investors like Ant Financial and SoftBank. (Bloomberg)
• Thoma Bravo’s $3.9 billion takeover of the cybersecurity company Sophos is the latest sale of a British technology business by a foreign investor. (FT)
• Wedgewood Partners, a longtime investor in Berkshire Hathaway, has sold its stake in Warren Buffett’s company over frustration that he isn’t using his $120 billion cash hoard. (CNBC)
Trump impeachment inquiry
• John Bolton, the former national security adviser, was so alarmed by efforts to pressure Ukraine for political help that he directed an aide to tell White House lawyers, the aide told House investigators yesterday. (NYT)
• Federal prosecutors are reportedly examining Rudy Giuliani’s business in Ukraine, including his bank records and meetings with a mayor there. (WSJ)
Politics and policy
• The next Democratic presidential debate — the biggest in history — is tonight at 8 p.m. Eastern, and will be hosted by the NYT and CNN. Here’s what to expect. And you can watch it on nytimes.com.
• Mike Bloomberg has talked about running for president again, as Joe Biden slips in the Democratic primary polls. (CNBC)
• Executives at the National Enquirer reportedly shredded sensitive documents related to Donald Trump just before his election in 2016, according to a new book by Ronan Farrow. (Politico)
Brexit
• Efforts to agree on a Brexit deal this week appeared futile as a senior European official said the talks needed more time. (FT)
• European countries are cutting taxes and offering other incentives to persuade wealthy Britons to move after Britain’s departure. (WSJ)
• London remains the world’s biggest financial center by several measures, despite Brexit uncertainty. (Reuters)
Trade
• Treasury Secretary Steven Mnuchin expects the U.S. to impose a new round of tariffs on Chinese imports in December if Washington and Beijing don’t reach a trade deal by then. (CNBC)
• Oil prices fell yesterday amid investor concern about the trade war. (WSJ)
Tech
• Booking Holdings, the company behind Priceline, is the latest company to pull out of Facebook’s Libra. The social network now acknowledges that it faces uncertainty in getting the cryptocurrency project over regulatory hurdles. (FT)
• Harley-Davidson suspended production on its electric motorcycle after a problem arose with its charging equipment. (WSJ)
• Fortnite went dark on Sunday, leaving gamers to guess what comes next. (NYT)
• AMC Theaters is creating its own streaming service. (NYT)
• The Chinese government is reportedly using the most downloaded app in the country to spy on users. (WSJ)
Best of the rest
• Abhijit Banerjee and Esther Duflo of M.I.T. and Michael Kremer of Harvard won the Nobel in Economics for their research on ways to eliminate poverty. (NYT)
• How the case against Juul could play out in court. (White Collar Watch)
• Johnson & Johnson has been fighting lawsuits from more than 100,000 plaintiffs. It’s not going well. (WSJ)
• NBC hit back at allegations in Ronan Farrow’s new book that the network covered up complaints about Matt Lauer and tried to derail his reporting on Harvey Weinstein. (NYT)
Thanks for reading! We’ll see you tomorrow.
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