fortune--2020-09-30--As Palantir goes public, consider its troubling human rights record

Secretive software firm Palantir Technologies’ offering of a direct listing on Sept. 30 marks one of the most anticipated technology company debuts this year. However, behind the opening curtains lurk the shadows of Palantir’s human rights failings: a company whose technology has facilitated harmful U.S. government policies against migrants and asylum seekers.
Before potential investors consider this listing, they should consider the ramifications: There is a high risk that Palantir is contributing to human rights violations through the U.S. government’s use of its products and services. Furthermore, Palantir has failed to demonstrate it is taking meaningful action to address these risks through human rights due diligence.
Palantir has ongoing contracts with the Department of Homeland Security (DHS) to provide the company’s Integrated Case Management System (ICM) and FALCON analytical platforms for use by DHS’s Immigration and Customs Enforcement (ICE) agency. ICE used Palantir technology to arrest more than 400 people in an operation targeting parents and caregivers of unaccompanied migrant children in 2017, leading to detentions and harming children’s welfare. ICE utilized Palantir technology to plan mass arrests, including workplace raids in 2019 that led to the arrest of nearly 700 people and the separation of children from their parents, causing irreparable harm.
These raids alone also led to the detention of hundreds of people and as many deportations. Palantir’s ICM and FALCON technology facilitated these operations by enabling DHS and ICE to identify, share information on, investigate, and track migrants and asylum seekers to effect arrests and workplace raids.
None of this is news to Palantir.
The company itself has acknowledged this very cause for concern in its S-1 filing, stating that its services are “controversial because of their purported or real impact on human rights, privacy, employment, or other social issues” and that it may experience brand or reputational harm as a result. Palantir also makes note of its relationships with government customers “that are engaged in certain sensitive industries, including organizations whose products or activities are, or are perceived to be, harmful.”
Independent NGOs such as Mijente and coalitions such as the Investor Alliance for Human Rights, as well as media outlets, have consistently and widely reported on how ICE used Palantir technology in operations resulting in family separation and raids, in turn leading to detention in harmful conditions and oftentimes deportation. This happened so much that Palantir’s own employees have protested its activities.
Amnesty International’s own research has documented the human rights violations against migrants and asylum seekers under DHS and ICE through punitive restrictions on access to asylum; illegal family separations; mandatory and indefinite detention, including of children; the return of people to countries where they face serious human rights violations; and unlawful policies authorizing deportations.
The role of Palantir’s technology in ICE carrying out these abuses should give pause to any investor—as should the company’s efforts to obscure its role in family separations, raids, detentions, and deportations.
There is a well-documented discrepancy here: On the one hand is Palantir’s repeated assertion that its products and services are used only for “cross-border criminal investigation”; on the other are DHS documents and media and NGO reporting that demonstrate Palantir’s products and services have been used for civil immigration enforcement. (Palantir disputes the accuracy of some of the DHS documents and reporting.) In certain instances, ICE’s use of the company’s technology facilitated operations leading to human rights violations.
As a business enterprise, Palantir has a responsibility to respect human rights. Under the UN Guiding Principles on Business and Human Rights, companies have a responsibility to respect all internationally recognized human rights wherever in the world they operate. This entails undertaking due diligence to identify, prevent, mitigate, and account for human rights abuses with any associations to their business. Transparency is a key component of due diligence.
Yet when Amnesty International requested evidence of its due diligence measures, Palantir failed to provide details beyond a general commitment to “continually evaluate the use of its software…for potential violations of human rights.” And instead of substantively addressing the well-documented risks linked to its ICE contracts, Palantir sought to deflect and minimize its responsibility by asserting it has “purposefully declined to take on contracts with [Enforcement and Removal Operations (ERO)] and [Customs and Border Protection]” because of these concerns and “the risks of disproportionate immigration enforcement inside the U.S.” However, this ignores the very real risks related to its ongoing ICE contracts that facilitate ERO’s detentions and deportations.
Amnesty International is calling on Palantir to prevent its technology from being used to facilitate human rights violations, and so should potential investors. As a first step, Palantir must immediately carry out human rights due diligence and take effective steps to ensure that its technology is not contributing to abuses against migrants and asylum seekers by the U.S. government. As part of this due diligence, Palantir must publish details of the technology it has provided to ICE and of the human rights safeguards it has put in place.
These concerns about Palantir’s operations are growing in salience as the company becomes increasingly entrenched in U.S. government operations. For instance, earlier this year, the company was awarded a lucrative contract by the Department of Health and Human Services to collect and analyze millions of Americans’ health data on a new platform, which raises serious concerns about data privacy and mass surveillance.
Palantir’s direct listing is an opportunity for the company to live up to its ideals, and potential investors can play a critical part by demanding Palantir prevent its technology from being used to facilitate human rights violations. Failing that, investors should consider CEO Alex Karp’s own words, uttered during Palantir’s investment day presentation: “You should not invest in Palantir if…you think we are going to work with regimes that are not aligned with the U.S. and are abusing human rights.”
That’s quite ironic coming from the head of a company whose products are used in operations that contribute to serious human rights violations.
Denise Bell is a researcher for refugee and migrant rights at Amnesty International USA.
Michael Kleinman is director of the Silicon Valley Initiative at Amnesty International USA.


fortune--2020-09-30--Google’s new Chromecast tries to make TV viewing more intelligent. Here’s how

Meghan , The Duchess of Sussex : ‘ If you listen to what I actually say , it ’ s @ @ @

Google wants to play a bigger role in how you watch television.
The search giant on Wednesday debuted the newest version of its Chromecast video-streaming dongle that comes with software that recommends shows to users based on their preferences and viewing history. Someone who likes action films, for example, may see recommendations for the latest Bad Boys movie.
Users will only see recommendations for shows that are on video-streaming services like Netflix and Hulu that they subscribe to. The Apple TV+ subscription service is not included.
The new software, called Google TV, is intended to give users a more intuitive “home screen” to help them navigate their various video-streaming services and other information. It’s also an effort by Google to more closely entwine itself in the TV-viewing habits of its users.
“If they’re presented with a lot of content options, and it’s still hard to find the ones that matter to them, it’s not so useful,” said John Gildred, director of Google TV. “So the personalization needs to be very strong, and…we’re working very hard to make sure that comes through.”
The new Chromecast comes with a small remote control that features Google’s virtual assistant, called Google Assistant. People can now use their voices to change channels, in addition to do things like display weather reports on their TV screens.
The new software also turns TVs into a hub for using Google’s Internet-connected devices, like its Nest security cameras. “You say, ‘Who is at the front door?’ and it will show you on the big screen,” Gildred said.
The remote control comes with two buttons dedicated to YouTube and Netflix, so that users can quickly access them.
Next year, Google TV software will be integrated with televisions from third-party manufacturers, Gildred said. Although he declined to name those companies, he said their TVs would support 4K resolution and Dolby Atmos 5.1 surround sound.
Currently, manufacturers like Sony and Chinese tech company Hisense sell televisions that are embedded with Android TV, the underlying operating system that powers Google TV’s user interface. By 2022, he expects that “pretty much they will all move over to Google TV.”
Ten years ago, Google debuted an earlier version of Google TV that manufacturers like Sony and Logitech embedded in their televisions and set-top boxes. By 2014, however, after the service failed to catch on with consumers, Google killed Google TV, and instead started heavily marketing the company’s Android TV developer software.
In more recent years, Google has introduced several new Internet-connected products that are integrated with its voice assistant. The new Google TV service and upcoming line of televisions is the company’s attempt to retry an older idea under the assumption that Google’s improved machine learning and voice technology will make them more compelling to consumers.
Under the current strategy, Gildred said Google TV would be Google’s consumer-facing software that people can use to interact with their televisions while developers will use Android TV for building apps.
The new Chromecast, which costs $49.99—$20 more than the previous version—competes with devices from Roku, Amazon, and Apple. It’s available in white, pink, and blue.


fortune--2020-09-30--There is no such thing as ‘apolitical culture’

I am trying, mightily, to imagine the virtual water cooler-talk at Coinbase today.
Brian Armstrong, the cryptocurrency exchange’s chief executive, made a splash with a blog post on Sunday that declared Coinbase would not engage in social activism or advocate for political causes or candidates. Such issues present “a distraction from our mission,” which is to build financial infrastructure in support of digital money, he wrote.
Armstrong’s missive is, of course, a political statement all its own. The company is offering generous severance packages to anyone who doesn’t feel comfortable with its “stance-less” stance. While Armstrong is careful to note exceptions—welcoming debate over product direction and employment practices, for example—his message is clear: Leave personal moral beliefs at the door, or see yourself out.
It’s not hard to see from where the sentiment arises: Who isn’t sick of—and increasingly sickened by—politics? Last night’s “presidential debate”—less debate than headache, and far from presidential—set a high-water mark for the division that threatens to drown this pandemic-wracked republic. Anyone seeking mutual understanding—let alone dignity—left bereft.
What’s remarkable is that, until recently, the separation of social matters from business was, generally, the status quo. Sure, executives contributed to the political campaigns of their choice. But the purpose of enterprise, most people agreed, was profit—pure, plain and simple. No matter whether someone was a Democrat or a Republican, the creed was capitalism.
It’s only recently that chief executives have begun to champion social causes in earnest, a conversion Fortune has been keen on chronicling. The shift has happened so suddenly and seismically that, to many people, the alternative no longer even appears tenable.
Some people applauded Armstrong’s declaration. Paul Graham, founder of the startup accelerator YCombinator (of which Coinbase is an alumnus), said Armstrong “leads the way.” He added a prediction that “most successful companies will follow Coinbase’s lead. If only because those who don’t are less likely to succeed.”
Balaji Srinivasan, Coinbase’s former chief technology officer, agreed. “The alternative is that kind of debate every day in every Slack channel. Enough.”
Others took the opposing view. “This isn’t great leadership. It’s the abdication of leadership,” commented Dick Costolo, the former CEO of Twitter, on Twitter. “It’s the equivalent of telling your employees to ‘shut up and dribble.’“
“But … fintech is political,” commented Theodora Lau, founder of the VC firm Unconventional Ventures. “I am not quite sure how much you can actually separate the two.”
by all means let's keep politics and broader societal issues out of a mission to *squints* "bring economic freedom to people all over the world" — Nitasha Tiku (@nitashatiku) September 28, 2020
What is politics, after all, but the process of governance and vying for power? One can interpret Coinbase’s stance in light of recent controversies over free speech and content moderation at other tech giants, most notably Facebook. CEO Mark Zuckerberg recently referred to himself as a wartime CEO; willing to countenance dissent less, and be less liked.
Armstrong describes Coinbase as having an “apolitical culture”; the phrase is an oxymoron. All cultures, corporate or otherwise, are comprised of people. As long as there are people, there is politics.
But at the end of the day, Armstrong is the boss. The company’s “mission” is his prerogative, so long as he is in charge.
Anyone who disagrees can leave.
Robert Hackett
Twitter: @rhhackett
robert.hackett@fortune.com
THREATS
What a blur. Looking for a less vitriolic spectacle after last night's presidential belittle-and-bicker-fest? Google is hosting its first major product event of the year today. The company is expected to debut a new smartphone, the Pixel 5, rumored to cost $700, alongside a cheaper, $500 Pixel 4A 5G. Also on the menu: a new Google Nest-branded smart-speaker and a rebooted Chromecast video-streaming device that takes design cues from Roku and Amazon Fire TV. You can tune into the show, called Launch Night In, here at 2 PM ET / 11 AM PT.
Out of office message. A update to Microsoft cloud services caused hours-long outages late Monday, knocking out people's access to Teams, Office 365, and Outlook. A day later, a server issue disrupted Apple services, causing connection problems across iCloud, the App Store, Apple Music, and Apple TV+. The temporary outages follow similar lapses in service for Google's G Suite products last month.
Jailbirds. Yevgeniy Nikulin, a 33-year-old Russian national, has received a 7-year jail sentence for breaching tech companies like LinkedIn and Dropbox in 2012. The U.S. extradited him on hacking charges from the Czech Republic four years ago. Meanwhile, Twitter has hired a new chief information security officer, Rinki Sethi, following the company's epic hack this summer. Her resume includes stints at cloud data startup Rubrik, IBM, Palo Alto Networks, Intuit, eBay, Walmart, and PG&E.
The price is right. Apple CEO Tim Cook received his first major stock grant, nearly 337,000 shares of the company, since 2011. If he sticks around as CEO through 2025, Cook could receive more than 1 million shares, compensation equating to $114 million. In other share pricing news, the New York Stock Exchange said the reference points for Palantir and Asana shares are, respectively, $7.25 and $21 per share, ahead of the two companies' direct listings today. (The reference prices, based on private market trading, should be regarded as a guesstimate, not a traditional "opening price" as in an IPO.)
Sorry I'm late...it's this doggone virtual traffic.
ACCESS GRANTED
As the Department of Justice prepares to slap Alphabet's Google with an antitrust lawsuit as soon as next week, a techno-frenemy is seizing the moment. Cloudflare, an Internet infrastructure provider, has debuted a privacy-oriented rival to Google Analytics, the widespread behavior-tracking software that site administrators—and Google—use to understand digital visitors.
Fortune's own David Meyer interviewed Cloudflare CEO Matthew Prince about the impetus for releasing an alternative offering.
"You have companies like Google and Facebook which have made all their money off of having ad-supported business models. There are things that are good about ad-supported business models—it's a fair way to make content available to everyone—but there's also no doubt that there has been a level of abuse on the security front, on a performance-of-the-Internet front, but mostly on a creepy, 'I don’t want Google and Facebook to know everything there is about me' front. We thought, are there ways we can help in overcoming that challenge?"
FORTUNE RECON
Global investors dump stocks as presidential debate fireworks escalate election jitters by Bernhard Warner
Time-crunched doctors are relying on remote-working scribes to take notes via video call by Sarah Kwon
Two more Chinese tech companies are delisting from U.S. exchanges in on-going exodus by Naomi Xu Elegant
As seawater moves inland, ‘ghost forests’ are spreading. Why that’s so scary by Katherine Dunn
3 ways Walmart and Home Depot execs think retail will change for good by Anne Sraders
Palantir and Asana to test investor hunger for direct listings this week by Aaron Pressman
Joe Biden’s campaign attacks Facebook for failing to protect the 2020 election by Danielle Abril
Fewer waiters, no menus: Is Square’s new service the future of dining? By Jeff John Roberts
What you need to know about Nvidia and VMware’s big new A.I. deal by Jonathan Vanian
Pay with your palm: Amazon launches new tech for brick-and-mortar retailers by Phil Wahba
(Some of these stories require a subscription to access.Thank you for supporting our journalism.)
ONE MORE THING
Requiem for FTP... One of the Internet's earliest data transmission standards, File Transfer Protocol, is being put out to pasture. Google and Mozilla have both indicated that upcoming releases of their web browsers will no longer support the 49-year-old file-sharing code for security reasons.
Ernie Smith, editor of the Tedium newsletter, mourns the protocol's imminent passing; this may also be the first time anyone has compared a tech protocol to basketball sneakers. FTP "is the Converse All-Star of the internet," Smith writes. "It was file transfer before file transfer was cool, and it still carries some of that vibe."


fortune--2020-10-02--How A.I. is playing a bigger role in music streaming than you ever imagined

One major Asian economy besides China is set for growth this year—and its GDP just rose 2.6 %

Behind the scenes of some of the most popular music-streaming services, artificial intelligence is hard at work like an automated DJ, deciding which songs listeners will enjoy.
The technology’s ability to learn from the listening habits of millions of users across millions of songs has made the software key for nearly every music-streaming service today.
But its job doesn’t stop there. A.I. is playing an increasing role in some of the more subtle challenges inherent in music streaming, like adjusting sound volumes and eliminating dead air.
For example, Sonos, best known for its wireless audio speakers, in April debuted Sonos Radio, a streaming service that features third-party radio stations as well as the company’s first foray into original music programming. Machine-learning technology provided by a partner, Super Hi-Fi, helps with an important job: creating a smooth transition between songs.
Without it, listeners may end up being annoyed by huge differences in volume between one song and the next. For example, songs recorded in the 1970’s are often quieter than more modern songs, partly due to the recording techniques of that era and changing tastes in music.
Online radio giant iHeartMedia, which has its own streaming and playlist service, also puts Super Hi-Fi’s machine learning to work. The technology prevents brief silence between songs, which could frustrate listeners and cause them to switch to a rival.
“That’s the greatest sin on radio to have dead air,” said Chris Williams, chief product officer for iHeartMedia.
As Super Hi-Fi chief technology officer Brendon Cassidy explained, advances in neural networks, the complicated software that learns patterns from analyzing vast quantities of data, have made more sophisticated audio wizardry possible. The company trains the technology on sound data so that it can accurately adjust sound on the fly.
“We have tried it years ago before all this machine learning stuff was available and weren’t as successful,” Cassidy said.
In addition to using machine learning for the role of playlist DJ, Spotify’s machine learning head Tony Jebara said A.I. helps with some more nuanced tasks. That includes choosing to add surprises to personalized playlists.
Recommending the same song too often—even if a user has listened to it for weeks—could cause them to become bored, Jebara said.
“For music, it’s pretty easy to get someone to consume by giving them what they consumed yesterday—it’s kind of table stakes,” Jebara said. Using A.I. to occasionally “pepper in” surprises based on a person’s prior listening, helps spice up personalized playlists and help prevent them from leaving.
Still, music streaming services remain reliant on human curators and music editors. After all, music is complex—akin to human language—and is difficult for A.I. to completely understand.
Jebara said Spotify’s human music editors identify “things we don’t see in the data,” such as new musical genres and trends. Although great at recognizing patterns within millions of songs, the technology stumbles when trying to analyze songs from a genre it has never been trained to recognize.
Sonos Radio general manager Ryan Taylor said Sonos Radio uses humans rather than technology to curate its music playlists because they are better than today’s A.I. at determining a song is more similar to one by David Bowie than to Led Zeppelin. He refers to these nuances as “not quite tangible elements.”
“The truth is music is entirely subjective,” Taylor said.
“There’s a reason why you listen to Anderson .Paak instead of a song that sounds exactly like Anderson .Paak,” said Taylor, referring to a popular R&B singer.
People like a song because for many reasons, ranging from loving the stories behind their favorite artists to identifying with songs because of a cultural connection. It’s these intangibles that provide context to music, and these difficult-to-describe elements can’t be represented in data that software understands—at least for now.
“At some point in the future, A.I. might be able to pick up on that stuff,” Taylor said. “Ultimately neural networks can get there for sure, but they need more input than a catalog of 80 million tracks.”


fortune--2020-10-01--Sports league execs talk social justice, path forward to internal change

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Largely silent in the past on matters deemed political or related to social justice movements, American professional sports leagues and their players publicly advocated for social change and against racial injustice when returning to play this summer. Whether kneeling for the national anthem, postponing games as a result of player strikes, encouraging people to vote, or covering playing surfaces and jerseys with social justice messages, the actions taken collectively by these leagues were as demonstrative as they’ve ever been.
But while these efforts, for the most part, received praise from those who were critical of the leagues’ silence in the past, questions remain about whether these words have actually motivated internal change within the organizations themselves. Whereas the NBA and NFL are made up of primarily Black players, their front offices and coaching staffs do not come particularly close to mirroring that diversity on the whole.
Renie Anderson, chief revenue officer and EVP of NFL Partnerships, knows that policies like the NFL’s Rooney Rule, which requires teams to interview at least two minority candidates for head coaching positions and at least one for football operations and general manager jobs, aren’t enough on their own.
“The key point is, even on the executive side, we have to begin to train people,” Anderson said during Fortune’s Most Powerful Women Summit on Thursday. “If the answer is oftentimes, ‘Well, there just weren’t any people that were completely ready or qualified for this position,’ then we need to begin in the junior ranks and focus on training individuals in key areas of focus.”
Both Kate Jhaveri, EVP and CMO of the NBA, and Michele Meyer-Shipp, chief people and culture officer of MLB, reiterated Anderson’s message, with Jhaveri noting that the NBA has started an internal social justice task force focused on “increasing Black representatives across the NBA, both in the basketball side and the business side” and Meyer-Shipp speaking to MLB’s own efforts.
“We know we can do better,” Meyer-Shipp said. “There’s a great pipeline of programs that MLB runs right now to bring in talent at the junior level, but where we really need to double down our efforts is how do we get talent in at that lateral and experienced higher level in our front offices.”
Getting Black, Hispanic, and Latino talent in “key roles on the field” is equally important, she added. “What happened this summer and the attention and spotlight that has been shown on racial justice has made us realize we need to double down and accelerate those efforts.”
Of course, each of the sports league execs said they were proud of the way their organizations and their players have taken advantage of their platforms to advocate for meaningful change and reform.
“When we looked to the restart in general, we knew we had a unique opportunity with this single site to really think about how we could bring attention to these issues,” Jhaveri said of the NBA’s approach. “Then, when Jacob Blake was shot in Kenosha, the Milwaukee Bucks did not play their game, and that was a moment for us to step back and think, ‘Are we doing enough? And, how can we continue to further our collective action?'”


fortune--2020-10-01--Bristol Myers Squibb and Celgene got a beating in Congress on drug prices—but only Congress can fix

Bristol Myers Squibb and Celgene got a beating in Congress on drug prices—but only Congress can fix the problem

Good afternoon, readers.
Drug pricing is in the headlines once again. This time, Celgene and parent company Bristol Myers Squibb are in the spotlight.
The United States is one of the only countries in the world that mismanages checks and balances on drug prices. It’s what drives economic anxiety for patients who have chronic illnesses and have to reload on their supply every month without knowing if a company may arbitrarily raise its prices.
It’s an issue that afflicts the most afflicted. Harmed most are those who depend on the biopharma industry’s admittedly remarkable innovations but may not be able to get their hands on treatments because of a labyrinth of middlemen, a lack of transparency, and a deference to the most powerful players.
The Food and Drug Administration (FDA) can only judge a drug by safety and efficacy standards—and those standards don’t necessarily mean that an approved drug is a whole lot better for you than others already on the market.
Cost-effectiveness is out of the agency’s purview. In short: Drug makers can charge you whatever they want if their therapy makes it past the regulatory green line. And they’re free to hike prices whenever they want, too.
Big pharma companies like to argue that this is the cost of innovation. Hey, if we can’t raise prices every single year for a drug we developed a decade ago which took hundreds of millions of dollars to create, how can we develop more in the future?
This is a uniquely U.S. position. Pretty much no other country buys it. And we got to witness a tangible case study about this dilemma, and the moral hazard it presents, during a Congressional probe on Wednesday focusing on Celgene, the biotech that was snatched up in a massive deal by Bristol Myers Squibb late last year.
Celgene’s cancer drug Revlimid saw massive price hikes year-over-year in order to reach sales targets, according to a scathing Congressional probe on Wednesday.
Revlimid was first approved in 2005. Yes, 15 years ago. It’s an important treatment which has helped patients with a rare form of blood cancer called multiple myeloma. It hasn’t changed on a biological or molecular level since then—yet, curiously, its price kept rising, as Congresswoman Katie Porter of California said in searing questioning on Wednesday.
Porter pointed out that Celgene had a structure set up where executive compensation was tied to sales goals for Revlimid. In fact, the drug’s price has been hiked 20 times in the past few decades in order to make up for lagging sales by Celgene, according to an extensive investigation by the House Oversight Committee.
Those are the kinds of facts that will outrage the public. But the larger issue is that Celgene, under the law anyways, did nothing wrong. Congress called them out. But Congress is also the only entity that can fix the problem.
Read on for the day’s news, and see you next week.
Sy Mukherjee
sayak.mukherjee@fortune.com
@the_sy_guy
DIGITAL HEALTH
The World Health Organization (WHO) looks to big tech during the pandemic. My colleague Nicole Goodkind has an excellent report on how the World Health Organization (WHO) is relying on Big Tech to tackle the COVID pandemic. In an interview with the global agency's chief information officer Bernardo Mariano Jr., Nicole delved into issues such as the future of dealing with outbreaks and the platforms which can support those efforts. "I understand that each sector may have its own interests, but that doesn’t mean that we can’t share the common goal to make sure that we’re better prepared for a pandemic. That we have the right technology, the right data and the right predictive models to minimize the impact on people’s lives and also the impact on the economy and social problems that we currently have with the pandemic," said Mariano. (Fortune)
INDICATIONS
Moderna's CEO says a vaccine won't be ready until next year. Despite President Trump's claims that a COVID vaccine will be available in mere weeks or months (more on that below), C-suite executives from companies like Moderna that are working on such drugs would beg to differ. Moderna got some of the biggest hype at the head of the crisis for its vaccine candidate. But CEO Stephan Bancel said on Thursday that even if its vaccine gets an emergency use authorization from the FDA by late fall, wide-scale distribution won't happen until next spring. (CBS News)
THE BIG PICTURE
The health care industry's needs in an election year. I encourage readers to read through our election package and what this race means for businesses at large. Of course, here at the Capsule, we focus on health care—and my colleague Erika Fry nails what the industry wants out of this bizarre presidential referendum. We can talk about everything ranging from COVID to Obamacare (and we will), but here's one of the biggest takeaways from Erika that gets to the heart of the ideological debate: "Both parties believe health care spending is out of whack. But they’re divided over the best way to address the issue. While the Republicans are generally in favor of more competition to control costs—price transparency has been an elusive goal of the Trump administration—the Democrats argue for a combination of competition and regulation," she writes. (Fortune)
A presidential debate filled with lies about health care. Speaking of health care... I doubt many readers are unaware that Tuesday night's presidential debate was somewhat embarrassing. There was shouting. There was constant interruption. There was confusion. But there were also a litany of lies on the specific issue of health care, ranging from the science of COVID to medical policy at large. I attempted to parse through a confusing standoff in this breakdown. (Fortune)
REQUIRED READING
What business needs from the 2020 election, by Fortune Staff
White House unveils new stimulus package, by Lance Lambert
What the unbanked need from the 2020 election, by McKenna Moore


fortune--2020-10-01--Chrissy Teigen and John Legend publicly grieve the death of baby Jack

The celebrity couple has long found a way to make their online presence seem intimate, real, and fun, letting people into their lives via carefully curated photos and lots and lots of sharing. But by sharing the painful end of Teigen’s pregnancy, the pair have done the world a favor by acknowledging the dark times, too.
Teigen’s third pregnancy was revealed in a music video for Legend’s latest single “Wild.” Later, on her social feeds, she shared it had been a surprise, unexpected delight in a difficult time.
But on Tuesday, Teigen wrote on Twitter that she’d been having “scary” complications, including bleeding and a “huge clot,” and that “the scramble to hear the heartbeat seemed like hours. I never thought I’d relief sigh so much in my liiiiife.” Teigen had remained hospitalized, “to kind of get through the danger zone or whatever.”
And yet, for all their candor, it still came as a shock that the pair chose to post photos of their palpable grief after their baby died, including a photo of Teigen cradling a discreetly swaddled infant, her husband consumed by pain.
“We are shocked and in the kind of deep pain you only hear about, the kind of pain we’ve never felt before. We were never able to stop the bleeding and give our baby the fluids he needed, despite bags and bags of blood transfusions. It just wasn’t enough,” she wrote on Instagram.
The post reminded me of an extraordinary story in The Atlantic that chronicled the work of Todd Hochberg, a photographer with a poignant specialty: He photographs families in the hospital after the death of a baby. He calls himself a bereavement photographer, and has come to embrace the unique comfort his work can provide.
“For parents, these photographs document one of the worst days of their life. But they also represent the few cherished memories they will ever have of their child,” says the writer Sarah Zhang. “Hospitals used to whisk stillborn babies away from their parents, but they now recognize the importance of memories in grieving.”
In this fascinating interview, Hochberg shares how he transcended his anxiety about being present at such a difficult time, and what it means to make a portrait of a family in shock. “The photographs are one more thing to help them bond and grieve more completely. They affirm their baby’s life, validate the feelings they’ve had,” he says. “There could be many years of hopes and dreams for this baby’s existence, and to not have evidence—I use the term touchstones. The photographs become touchstones for a family’s own experience and their own feelings.”
Grief is not something modern culture handles well, and I expect the response to Teigen’s post about losing the baby they call Jack will be mixed. “Jack worked so hard to be a part of our little family, and he will be, forever,” she said in her post. “To our Jack—I’m so sorry that the first few moments of your life were met with so many complications, that we couldn’t give you the home you needed to survive. We will always love you.”
To the degree with which their fans were looking forward to watching Jack grow up, it is now a shared grief, of a sort. But for those who have lost and who suffer or are engulfed by the death of a loved one—and specifically, a lost pregnancy—the couple’s public expression of their anguish offers a different, and perhaps more powerful comfort: Grief is normal, universal, and you are not alone.
Ellen McGirt
@ellmcgirt
Ellen.McGirt@fortune.com
Happy Independence Day Naija
Even Google is celebrating he 60th anniversary of Nigeria's independence In the wee hours of October 1, 1960, Britain's Union Jack was replaced with Nigeria's new flag as a designate sent by Queen Elizabeth II handed Nigeria's constitution over to Abubakar Tafawa Balewa, the country's new prime minister. "It was celebrations all over the place," Tanko Yakasi, 93, tells Al-Jazeera. "There were high expectations and the [Nigerian] political class really believed that they would be able to change the fortune of the country for the better." While it has been a difficult road for the nation, today is a time to celebrate Nigeria's rich cultural heritage and almost boundless creativity. I'm including this tribute to the late Chinua Achebe, the father of contemporary African literature, just because. Below, you'll find a celebratory anniversary concert that boasts the "largest national sing-off in history." It's joyous, is what it is. #NigeriaIndependence
Nigerian Independence Day Concert
raceAhead is edited by Aric Jenkins.
Today's mood board
It's October 1st.


fortune--2020-10-01--Magic Leap’s Peggy Johnson: Becoming CEO of a pivoting business doesn’t mean jumping off the ‘glass

Magic Leap’s Peggy Johnson: Becoming CEO of a pivoting business doesn’t mean jumping off the ‘glass cliff’

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Earlier this year, Magic Leap CEO Rony Abovitz resigned from the augmented reality headset company he founded in 2010. It was clear that the device his company had spent nearly a decade developing wasn’t viable for the consumer market, though it had previously been heralded the industry leader.
Abovitz’s departure came one month after the company had laid off one-third of its staff, following attempts to sell itself. While the move coincided with mass layoffs across the country owing to the coronavirus pandemic, some employees didn’t buy COVID as the root of Magic Leap’s immediate struggles, Bloomberg reported.
Despite the company’s uncertain future, when Peggy Johnson heard Abovitz was stepping down, she raised her hand for the job. At the time, she was Microsoft’s EVP of business development—she’d been one of Satya Nadella’s first hires—and she had experience with augmented reality, working with Microsoft’s HoloLens as well as Qualcomm’s Vuforia product.
“I had an ambition for a while to be a CEO, but I knew it needed to be the right fit for me,” Johnson told Fortune senior writer Maria Aspan along with attendees of Fortune’s virtual Most Powerful Women Summit on Thursday in her first interview since she assumed the role in August. “I had had a great run at Microsoft, and I loved it, but I just wanted to step into that role. When you look around, there are so few women CEOs, and even fewer in the tech industry. And I just wanted to take the reins and do it.”
HoloLens had a similar trajectory to Magic Leap. It was first envisioned as a gaming device, but because of its high price tag, it’s now targeted more toward business. Under Johnson’s leadership, that’s the direction Magic Leap is headed today.
Sensing trouble, when Johnson assumed the role, many onlookers used the phrase “glass cliff” to indicate the belief that Johnson was taking on leadership of a failing company and thus doomed to fail herself.
“I don’t worry at all about it,” Johnson said in response to these concerns. “And frankly, sometimes it’s exhausting that that word is put forward when a woman steps into a CEO job. I chose this. And I chose it because of all of the elements that were in place.”
Johnson listed Magic Leap’s device itself as well as its IP portfolios and “diverse, talented team” as elements she identified that would position the company for future success as it transitioned toward the enterprise space.
Now, in line with her business development background and drawing upon her 35-year career, Johnson says she’s focused on growing the company’s list of partnerships. Magic Leap is reportedly in talks with Amazon regarding implementing its cloud services, though Johnson did not discuss any developments with Fortune.
“What I’m focused on is ensuring we’re picking the right areas of enterprise to focus on,” she said, citing training, remote assist, and 3D visualization as the three primary use cases the company is zeroing in on. Given the rise of remote work owing to the COVID pandemic, Johnson says she sees promise for teams to meet virtually and review product designs.
For another example, far-flung diagnostics professionals may be able to help fix machinery: If a person on a factory floor is wearing a headset mounted with a camera and a screen, a remote worker can circle components and identify problems.
Meanwhile, Magic Leap is deploying its own technology to a similar end. It recently used augmented reality headsets to host a board meeting, providing the illusion that avatars of board members were seated inside Johnson’s home.
“They all showed up in the room behind me, in my library,” Johnson said. Amid the pandemic, “it felt finally, that emotional factor that you get in a physical meeting was back again.”


fortune--2020-10-01--Anita Hill remembers Ruth Bader Ginsburg: ‘You don’t have to be in the winning column to be powerful

Anita Hill remembers Ruth Bader Ginsburg: ‘You don’t have to be in the winning column to be powerful’

The passing of Supreme Court Justice Ruth Bader Ginsburg last month sent the country into a state of mourning and also political chaos, two elements that many felt were at odds with one another. While many wanted to take the time to reflect upon the actions of the 87-year-old feminist icon, who was the driving force behind the legal fight for women’s equal rights in the 1970s, others immediately began to think about who would replace her on the court and how the fight would play out just weeks before the 2020 presidential election.
As vigils were being held outside courthouses across the country, President Donald Trump was working on selecting his pick for Ginsburg’s replacement, Amy Coney Barrett. As Ginsburg shattered yet another ceiling, becoming the first woman and first Jewish American to lie in state in the U.S. Capitol, the President and Senate Majority Leader Mitch McConnell were figuring out how to push their nominee forward and buck election-year precedent. Democrats, meanwhile, geared up for a fight.
Even Ginsburg’s last words were political in nature. “My most fervent wish is that I will not be replaced until a new President is installed,” she dictated as a statement to her granddaughter just days before her death.
@hilariekm, Venture Partner, NEA, shares: "In September 2019, I had the honor of introducing RBG at the University of Chicago’s Harris School of Public Policy (my Alma mater) where she was interviewed by @DeanKateBaicker."
1/2 pic.twitter.com/1RdbUPTqBN — Fortune MPW (@FortuneMPW) October 1, 2020
Her straightforward and policy-minded focus up until her last moments were not out of character, according to Lisa Caputo, executive vice president of marketing, communications, and customer experience at The Travelers Companies Inc. Caputo remembered working at the White House on the Sunday when President Bill Clinton interviewed her for her role on the Supreme Court. Caputo was particularly taken aback by Ginsburg’s casual garb, juxtaposed with the President’s suit and tie.
“She was on the level,” Caputo said, speaking during Fortune’s Most Powerful Women virtual summit on Thursday. “Disarmingly so.” The President remarked that he had “the conversation of a lifetime” with the Justice, Caputo recalled.
Ginsburg was pragmatic, added Anita Hill, professor of law, public policy, and women’s studies at Brandeis University. Ginsburg understood that change took time and that a dissent could be just as powerful as a ruling. “You can actually make change when the decisions go in the other direction,” said Hill, who first met the Justice at a conference a year after the congressional hearings in which Hill accused then Supreme Court nominee Clarence Thomas of sexual harassment. “You don’t always have to be in the winning column to be powerful.”
"The most memorable part of this experience was talking in the green room about her life and passion for justice for all. Thought that went through my head, "if not for her, none of this for some many women, myself included."—@hilariekm, Venture Partner, NEA#FortuneMPW
2/2 pic.twitter.com/PktFdwONiJ — Fortune MPW (@FortuneMPW) October 1, 2020
Hill recounted a story she’d heard: that Ginsburg had taken her book and prominently displayed it on her bookshelf at the Supreme Court. There was “a feeling she had taken a part of me there, which was the only way I was going to get there in the 1990s,” Hill recalled. “It was the affirmation I needed. Not that I wanted her to pick sides, but I wanted someone to acknowledge that I had a side that was worth hearing.”


fortune--2020-10-01--‘There is no shortage of Black talent’—CEO of Black leadership organization says

Charlie Scharf, the CEO of Wells Fargo, touched off a controversy last month by blaming the lack of Black employees at the bank on a “limited pool of Black talent.”
Many people shot back that Scharf is flat-out wrong. Among them is Crystal Ashby, the interim CEO of the Executive Leadership Council (ELC), an association of senior Black executives.
“The reality is there is no shortage of black talent,” said Ashby, speaking at Fortune’s online Most Powerful Women Summit on Thursday. “We happen to be everywhere.”
According to Ashby, perceptions of a so-called pipeline problem arise from a failure by companies to look beyond traditional places for executives. Too often, she says, executives turn to their own networks to fill a role—networks of people who typically resemble them.
Beyond looking outside traditional confines for talent, Ashby says it’s critical for firms to cultivate the talent they already have. This includes ensuring they are assigned new and challenging tasks, and giving them “P&L experience”—a term that describes working with balance sheets and on projects that directly affect a company’s profits and losses.
Such P&L experience is critical, says Ashby, because it is a prerequisite to gaining entry to C-suite level positions. Likewise, she recommends placing Black executives on succession planning committees since those bodies often find future CEOs among their own ranks.
Companies’ failure to facilitate Black leadership is apparent from recent surveys. According to one cited by Fortune’s Kristen Bellstrom, Black people account for only 4% of board positions at the 3,000 largest publicly traded companies—while Black woman make up just 1.5%.
Firms that fail to create Black upward mobility within their ranks only exacerbate the problem, says Ashby.
“If who you recruit looks up and don’t see themselves,” she says, “they will leave.”


fortune--2020-10-01--How Sam’s Club helped small businesses through COVID

When Sam’s Club was launched 37 years ago by Walmart founder Sam Walton, the idea was to offer low prices to small businesses in the way the warehouse retailer’s larger sibling had done for everyday people.
All these years later, SBE’s (small business enterprises) like corner stores and restaurants remain a core part of Sam’s Club clientèle, accounting for as much as one-third of revenues by some estimates. So it was imperative as the pandemic broke out for Sam’s to help those customers weather a crisis that has been much harder on small business than large corporations.
“We had every club manager ring up their top 50 SBE’s,” Sam’s Club CEO Kathryn McLay told Fortune‘s Beth Kowitt at the Most Powerful Women Summit on Thursday. “‘As you’re thinking about setting your business back up, what do you need? How can we help you? How do we get you access to plexiglass? How do we get you access to masks, to gloves?” she recalled. She added: “We really want to be an enabler to help support them.” There are nearly 600 Sam’s Club U.S. locations.
McLay, an Australian who became Sam’s Club CEO in November after a few years at Walmart, recalled that it was on a March tour of a store in Chicago that she realized how serious the COVID crisis would be, noting anxiety on customers’ faces as they panic-shopped. It was so hectic, she found herself helping bring carts back to the front of the club, as the chain calls its stores, in an all-hands-on-deck moment.
At the same time, the pandemic has not been without benefit for Sam’s Club. Like its sibling Walmart and rivals Costco and Target, Sam’s has seen business boom during the crisis: in the fiscal second quarter, Sam’s comparable sales grew 17.2%, excluding fuel and tobacco, while digital sales rose 39%, the result of years of investments in Sam’s e-commerce infrastructure and initiatives. Crucially, membership income, a top priority for McLay, rose 7.8% in the quarter. Attracting new members is essential in sustaining sales growth.
And Sam’s tech initiatives helped spur its strong numbers this year. Those include the Scan-and-Go tech it developed that allows shoppers to ring up their own orders as they walk a club and check themselves out, as well as curbside delivery for shoppers wanted to minimize time in stores.
“All of this disruption actually gave usy an opportunity to accelerate our strategy,” she said. “The pandemic gave us momentum behind our strategy.”


fortune--2020-10-01--What, exactly, does the U.S. Space Force do? Its secretary is glad you asked

Since President Trump established the U.S. Space Force as an independent military branch in December 2019, the agency has been brunt of some humor—with Netflix going as far as creating a parody show of the same name, starring Steve Carell.
But as Barbara Barrett, secretary of the U.S. Air Force, would tell you, the Space Force will play a valuable role in the day-to-day lives of Americans.
“Why would you need a Space Force? It’s sensible to ask. When we think about how much of America’s way of life today depends on space, it’s huge,” the Air Force chief—who also oversees the Space Force—said during a panel at Fortune’s Most Powerful Women Virtual Summit on Thursday. “I’ve often said that before your first cup of coffee in the morning, you’ve probably used space. But you may not know about it; you may not have seen the connection. Often your alarm clock may be linked to a GPS system, you may look at the traffic, the weather—all of those are space assets.
“Your power or water is probably connected through space control,” Barrett added. “If you use an ATM; farmers monitor their crops; we’re looking at wildfires through space lenses. Much of what we do today is happening because of space assets.”
While all of these assets may not be directly controlled by the Space Force, Barrett noted the significance of the Space Force being a military branch. “Our space assets were built at a time when we thought it was a time of benevolent environment,” she said. “As my predecessor, Heather Wilson, said, ‘It’s as though we built a glass house before we knew about stones.’ We now have assets upon which we depend, but they are vulnerable; they aren’t protected. So we’re looking at ways to protect them, replace them with things that are more…jam-proof.”
Barrett, a trained attorney, counts former Supreme Court Justice Sandra Day O’Connor as a mentor and said this week in particular—in which Ruth Bader Ginsburg was laid to rest—was one think about “how much those early women did for others.
“If you can see it, you can be it,” Barrett said. “[O’Connor] inspired me to think that girls can grow up to be women to lead people and establish policy.”


fortune--2020-10-01--Companies need to emphasize skills over degrees, IBM chair Ginni Rometty says

Companies in all parts of the economy could shift their hiring criteria to emphasize skills over degrees in order to build a more diverse workforce and create more economic opportunity, IBM executive chair Ginni Rometty says.
“Can you embrace people that do not have a four-year degree and give them a path into your company to start?” the longtime IBM veteran asked on Thursday at Fortune‘s Most Powerful Women Summit.
At IBM, 43% of all open job requisitions no longer require a four-year degree, she said. “It didn’t dumb down our workforce,” she added. “What we found is their ability to perform, their curiosity, matched everyone’s.”
During her tenure at IBM, Rometty says she saw that the rise of digital technology by itself was not creating a more equal society. “The digital era, it became clear that this was no going to be an inclusive era,” she said. “There were going to be haves and have nots. And it was going to move so fast it would leave people behind.”
“Economic opportunity is the way to social equality,” she added.
Companies should also continue to improve the skills of their workers after hiring them. Rometty advocated using artificial intelligence apps to help steer workers to improve their skills, because current skills become outdated after about five years. “Give (workers) an A.I.-driven learning system,” she says, referencing the suggestion system at Netflix.
“If I serve you up shows you want to watch, you watch more shows—just like learning,” she says. “I serve you up what I know works for you, you will learn more, and I now have the data so you’ll learn more, you’re promoted more, you get paid more.”
Rometty headed IBM as CEO from 2012 until earlier this year, before handing off to current CEO Arvind Krishna and becoming executive chair of the company’s board of directors. She will retire from the board at year end, but has a general idea about what she’d like to do next.
“I want to do something that really brings all the under-served communities into our economy,” Rometty says.


fortune--2020-10-01--Obama: Social media is isolating and dividing Americans

Former U.S. President Barack Obama said the Internet and social media has helped isolate the American people and aided in perpetuating their own views, regardless of whether they’re true.
“With the proliferation of the Internet and Facebook…people have gotten even more stuck in their own narrow biases,” he said during Signal, Twilio’s developer conference, on Thursday. “One of the things we’re going to have to figure out is how do we rediscover some common culture when you’ve got a bazillion websites and 100 channels?”
Obama said he’s concerned with the “splintering” of U.S. media that has created alternate realities for different Americans depending on what they watch and read. The problem is amplified by social media and other websites, he said.
The comments come during a contentious election year, when presidential candidates Joe Biden and Donald Trump—along with their respective parties—have become increasingly divided. Meanwhile, social media services like Facebook and Twitter have come under fire from both sides of the aisle for what they allow politicians to post on their services or say in ads. Posts disseminating misinformation, conspiracy theories, and attempts to suppress voters have permeated services like Facebook, Twitter, and YouTube.
Obama said he’s concerned that society is losing an understanding of truth and facts. He said once people have fallen into their own perceived reality, it’s hard for them to break out of that to see the fuller picture.
“Everyone wants to believe what they want to believe,” he said, before evoking the late U.S. Democratic Sen. Daniel Patrick Moynihan. “You’re entitled to your own opinions, but you’re not entitled to your own facts.”
Although Obama criticized Internet services for fueling division, he also suggested that they have created more opportunities for people to access information. He also said that if used properly, social media networks can serve as valuable tools to better inform people and create more understanding and less division.
“The virtual world works best when it translates into action and activity and conversation and face-to-face interactions in the real world,” he said. “That forces you to see people in their complexity.”
Obama said his presidential campaign used tools like social network Myspace and the event planning service Meetup to organize volunteers around the country and get people together for face-to-face conversations. It’s something he says helps change Internet services from possible sources of isolation to tools that can form in-person communities.
“I continue to believe the Internet and social media are hugely powerful tools to build communities across boundaries and borders,” he said. “But I think it’s very important for us to break down the wall where we think there’s a virtual world and a real world.”


fortune--2020-10-01--5 new books to read in October

5 new books to read in October

A biography of one of America’s best-known, but least understood, food world personalities; an acerbic look at some of Hollywood’s biggest films from the former Jezebel writer and author of Shrill; and an inspiring book on leadership from one of Silicon Valley’s first female African-American CEOs.
Here are five new books to consider reading in October.
Courtesy of Grand Central Publishing
Available Oct. 6
One of Silicon Valley’s first female African-American CEOs, Shellye Archambeau recounts in Unapologetically Ambitious (Grand Central Publishing) how she overcame the challenges she faced as a young Black woman, wife, and mother, managing her personal and professional responsibilities while climbing the ranks at IBM and subsequently in her role as CEO. Part memoir, part motivational business book, Archambeau details the risks she took and the strategies she followed to steer her family, her career, and her company toward success.
Courtesy of W.W. Norton and Company
The Man Who Ate Too Much: The Life of James Beard by John Birdsall
Available Oct. 6
Written by former restaurant critic and food scribe (and James Beard Award winner), John Birdsall pens what could be the definitive biography of America’s best-known food personality and the national culinary landscape he shaped. In The Man Who Ate Too Much (W. W. Norton & Co.), the first biography of Beard in 25 years, Birdsall suggests Beard’s struggles as a closeted gay man directly influenced his creation of an American cuisine. Starting in the 1920s, Beard escaped loneliness and banishment by traveling abroad to places where people ate for pleasure, not utility, eventually finding acceptance at home by crafting an American ethos of food likewise built on passion and delight.
Courtesy of Hachette
Available Oct. 20
In Shit, Actually (Hachette), New York Times columnist and bestselling author Lindy West unpacks the world of beloved rom-coms and other genre cult classics to dissect the culture (and monsters) they created. (If you’ve gotten this far, you probably know the name of the film being parodied in the book title.) From Dirty Dancing to The Texas Chainsaw Massacre, West leans on her razor-sharp wit in dissecting some of the most well-known movies of the past several decades, some of which, it could be argued, define their generations, wading into the gray area between celebrating and criticizing these films. Not surprisingly, many famous quotes and characters haven’t aged well, but West suggests that doesn’t mean we have to abandon them altogether. Still, we can’t let them off the hook either.
Courtesy of Vintage
Finding Latinx: In Search of the Voices Redefining Latino Identity by Paola Ramos
Available Oct. 20
In recent years, the term “Latinx” has emerged as a gender-neutral alternative to Hispanic and Latino. And while it has been picked up in saturating detail by various news organizations, that doesn’t mean the people it claims to represent have embraced it. A Pew Research poll found in August that only one in four people who identify as Hispanic in the U.S. have heard of the term, and only 3% total use it. In Finding Latinx (Vintage), journalist and activist Paola Ramos embarks on a journey to find the communities of people defining the controversial term. From indigenous Oaxacans in upstate New York to “Las Poderosas” fighting for reproductive rights in Texas, Ramos chronicles how “Latinx” has given rise to a sense of collectivity and solidarity among Latinos unseen in this country for decades, asking the reader to expand their understanding of what it means to be Latino and what it means to be American.
Courtesy of New Press
Let’s Talk About Your Wall: Mexican Writers Respond to the Immigration Crisis edited by Carmen Boullosa and Albert Quintero
Available Oct. 27
Despite the U.S. media’s extensive coverage of the southern border and Trump’s proposed wall, many Americans have had little access to the multitude of perspectives from Mexico on the ongoing crisis. Novelist Carmen Boullosa and Alberto Quintero, editor-in-chief of Literalia, a digital publishing and translation platform for Mexican writers, address this imbalance with a collection of essays—translated into English for the first time—from journalists, novelists, and documentary-makers who are Mexican or based in Mexico. Let’s Talk About Your Wall (New Press) uses the controversial border wall as a starting point to discuss the history of U.S.-Mexican relations as well as questions of sovereignty and citizenship, while serving as a counterpoint to the racist bigotry and irrational fear that consumes the debate over immigration.


fortune--2020-10-01--Giant cryptocurrency exchange BitMEX hit with criminal and civil money laundering charges

The federal government filed civil and criminal charges on Thursday against one of the world’s largest cryptocurrency exchanges, BitMEX, and four of its top executives.
The charges, which may disrupt a key component of the global cryptocurrency market, sent most cryptocurrencies into an immediate selloff. Within two hours of the charges becoming public, the price of Bitcoin dropped more than 3%.
The civil charges against BitMEX and affiliated entities, filed by the Commodity Futures Trading Commission, allege that the company operated an unregistered trading platform and that it failed to implement anti–money laundering controls, such as checking the identities of people trading on the service.
New York federal prosecutors filed parallel criminal charges against BitMEX CEO Arthur Hayes, cofounder Benjamin Delo, chief technology officer Samuel Reed, and Gregory Dwyer, head of business development. The government similarly alleged that the executives had failed to establish anti-money laundering practices, such as collecting user identity information and reporting suspicious transactions, required under the Bank Secrecy Act. The charges are punishable by up to five years in prison, according to prosecutors.
Prosecutors said that Reed was arrested in Massachusetts on Thursday, while Hayes, Dwyer, and Delo remain at large.
“Registration requirements are a cornerstone of the regulatory framework that protects Americans and U.S. financial markets,” James McDonald, division of enforcement director for the Commodity Futures Trading Commission, or CFTC, said in a statement. “Effective anti–money laundering procedures are among the fundamental requirements of intermediaries in the derivatives markets, whether in traditional products or in the growing digital asset market.”
BitMEX, which is legally headquartered in the Indian Ocean archipelago Seychelles and primarily operates out of Hong Kong, is among the world’s largest cryptocurrency trading platforms by volume, processing close to $2 billion in trades per day. It’s best known for offering cryptocurrency derivatives, including futures, for digital tokens such as Bitcoin and Ether.
In its complaint, the CFTC said that since its founding in 2013, BitMEX has collected more than $1 billion in trading fees.
The CFTC alleges that much of BitMEX’s trading volume and profits are from U.S. customers, despite the fact that, like many other international cryptocurrency exchanges, Americans cannot legally use it. Visitors to the exchange’s website from American IP addresses receive a warning to that effect and are blocked from registering.
But prosecutors in the criminal case allege that the four defendants “knew of customers residing in the United States who continued to access BitMEX’s trading platform” despite that nominal prohibition. U.S. users are often able to access offshore cryptocurrency exchanges using VPN software, which masks a user’s location. Many overseas exchanges take no additional action to stop this behavior.
Further, as described in the 40-page civil complaint from the CFTC, BitMEX actively courted U.S. users despite being legally barred from serving them. That continued even after the platform reached a smaller settlement with U.S. regulators in 2016 over commodities trading violations. For example, according to the CFTC complaint, BitMEX hired marketing and customer service staff who worked in New York and New Jersey.
“We strongly disagree with the U.S. government’s heavy-handed decision to bring these charges,” BitMEX parent company HDR Global Trading Limited said in a statement, “and intend to defend the allegations vigorously. From our early days as a start-up, we have always sought to comply with applicable U.S. laws, as those laws were understood at the time and based on available guidance.”
In a separate statement, lawyers for Greg Dwyer said they were “surprised and dismayed” by the charges, and that Dwyer had “complied fully with the CFTC investigation and was never so much as invited to speak with prosecutors in the United States Attorney’s Office in Manhattan, always worked in good faith to comply with all applicable regulations and requirements, and helped BitMEX establish an international business that operated with the highest integrity. We will strongly contest these charges.”
Other global cryptocurrency exchanges have previously been targeted for money laundering violations. That includes at least one, Russia-based BTC-e, which was shut down by U.S. authorities after criminal and civil actions in 2017.
Nic Carter, a cryptocurrency analyst and venture investor, speculated following the announcement of charges that BitMEX’s operations and funds could be similarly frozen. That could create a huge disruption in global cryptocurrency markets: BitMEX holds roughly $2 billion worth of Bitcoin, or just over 1% of the total supply.


fortune--2020-10-01--History indicates the stock market may be heading for a strong Q4

Despite ending on a rough note with several straight weeks of losses to end September, Q3 was actually a surprisingly strong quarter for investors, with the S&P rising 8.5%. And according to history, that bodes well for Q4.
What happens to the S&P 500 when the usually weak Q3 is up a lot (>7.5%)?
Well, Q4 has gained every single time, up 11 for 11, with an average return of 7.3%. pic.twitter.com/QIMWsrUzAW — Ryan Detrick, CMT (@RyanDetrick) October 1, 2020
As LPL Financial’s Ryan Detrick points out, following big gains for markets (7.5%+) in Q3, stocks have “gained every single time, up 11 for 11, with an average return of 7.3%” in the fourth quarter for the S&P 500 since 1950.
“The third quarter is usually weak, but when it is really strong, like it was in 2020, this says the rally isn’t over yet,” Detrick wrote in a note Thursday.
Typically Q4 is historically the best quarter of the year for investors, with the S&P 500 up 3.9% on average and higher almost 79% of the time, Detrick points out.
But to be sure, 2020 is anything but predictable, and markets have recently been bombarded by a will-they-won’t-they debate in Congress over passing new stimulus. Kicking off the first day of Q4, October 1, markets traded up roughly 0.5% in early afternoon trading on hopes the White House and Democrats might reach a compromise.
But apart from stimulus concerns, analysts caution the month of October tends to be volatile. In fact, “investors may be convinced that Halloween was purposely placed in October because the market’s actions can be so spooky,” CFRA’s Sam Stovall wrote in a recent note. That’s because the month tends to have some of the biggest gains and worst declines, Stovall wrote. Plus, in an election year, September and October are often weaker months for the markets.
This year, those like Edward Jones’s Nela Richardson think “the choppiness we saw in September will spill over into October,” she recently told Fortune. “It’s unlikely given the election and the near-term uncertainty about stimulus that we’ll see the smooth rally that we saw this summer.”
Still, looking to historical returns, investors shouldn’t write off Q4 just yet.


fortune--2020-10-01--Inside ‘Save Yourselves!’—a socially distant comedy for our times

Imagine going on a remote vacation with your partner and purposely taking a break from technology, in an effort to better connect with each other, only to eventually realize that the planet is under attack from harmless looking but vicious alien creatures.
That’s what happens in the new comedy Save Yourselves!, which comes to select theaters Friday before its digital release next week. While the film eerily overlaps with aspects of the socially distant times we live in today, filmmaker Eleanor Wilson came up with the concept three years ago while in upstate New York with bad cell phone reception.
“I was just thinking about how paranoid I get when I’m disconnected from my phone, and this idea came [to me]—what if something bad actually did happen?” she tells Fortune.
The film was shot in 2019 and completed right before premiering at the Sundance Film Festival earlier this year. “And then every other festival was canceled,” says Alex Huston Fischer, who cowrote and codirected Save Yourselves! with Wilson. “We were very lucky.”
The movie centers on Brooklyn couple Jack (John Reynolds, Search Party) and Su (Sunita Mani, GLOW). The filmmakers had written the script with Mani in mind (Wilson points out that Fischer went to college with her and has worked with her before) and were fans of Reynolds’s work in Search Party. For their part, the actors were also already friends via the New York comedy scene, Reynolds says.
“Knowing John was on board was the ultra-cherry on top,” says Mani. “I was super-excited to do this with him.”
And portraying this particular couple also came easily to them. “Knowing each other and having this shared sensibility even though it’s in this goofier bombastic comedy capacity, we just brought a shared language to Jack and Su,” says Mani. “It was just really easy to be real and natural.”
Sunita Mani (left) as Su and John Reynolds as Jack in “Save Yourselves!” Courtesy of Bleecker Street
Fischer and Wilson wanted the movie to feel somewhat classic, incorporating elements of revered rom-coms like When Harry Met Sally as well as the “curiosity” and “mystery” reflected in earlier sci-fi and adventure films by the likes of Steven Spielberg.
The aliens in the film look like round shaggy balls—or “pouffes,” as they’re called by the characters. “What could possibly be in this cabin that they don’t realize is an alien?” says Wilson while addressing how they landed on the design. “We knew we didn’t want the aliens to have a face.”
“When you go into the history of furry aliens in pop culture, we’re in good company with Tribbles [from Star Trek] and Critters,” she adds.
The creative team used practical effects for the most part to bring the so-called pouffes to life on-screen, manipulating them in ways inspired by the facehuggers seen in Aliens.
“It was fun to see which practical and old-school movie effects they were going to bring on which day,” Reynolds says. “The pouffes do a lot—they fly and run and shoot their tongues and murder people. It was fun to see what sort of magnets they were going to use or how much slime was going to be on it.”
As far as the timing of their film’s release is concerned and its strange connection to what the world is experiencing today, Fischer says when they were first making it, they initially “thought that the movie was relevant, but a couple of decades off.
“One benefit we found is that everybody knows what a sourdough starter is now, so we don’t have to worry about people not getting that,” he adds in reference to one minor plot point.
The actors, meanwhile, find themselves relating to their characters more than they could have expected.
“I feel personally like my life’s starting to parallel Jack’s with making grocery lists and washing groceries and making go-bags and trying to be prepared,” Reynolds says. “I spent some time in a cabin this summer, and I was chopping wood while my girlfriend watched me struggle, and I was like, ‘My life is a joke.’”
“We are fighting for our lives in certain aspects socially and politically,” Mani adds. “But it’s also like we’re trapped in our homes making grocery lists at the same time. It’s so strange. It is so bizarre.”
Clockwise from top left: Writer-directors Eleanor Wilson and Alex Huston Fischer, John Reynolds, and Sunita Mani on the set of “Save Yourselves!” Pedro Vivas Hernandez—Bleecker Street
Without delving into spoilers, Save Yourselves! does conclude on something of an open-ended note, and the filmmakers acknowledge that different people may absorb the ending differently. The actors also find themselves going back and forth on whether the ending is positive or negative.
“I would encourage people to follow their heart in the moment,” says Reynolds of the ending.
“And get off your phone,” adds Mani, who echoes his “in the moment” sentiments. “Put your phone down.”
Save Yourselves! hits select theaters Oct. 2 before being released digitally Oct. 6.


fortune--2020-10-01--These 10 female journalists deserve justice immediately

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Women journalists are particularly prone to face gender-based violence, harassment, and intimidation in the process of doing their jobs.
Worse, these women are often deterred from reporting such abuses, due to personal threats, fears of professional repercussions, and the likelihood that those who could help them seek recourse will not believe them. As a result, these journalists are effectively silenced. Some may decide to cover a different topic to protect themselves, and others may leave the field entirely.
In fact, nearly one out of every three women journalists considers pursuing another profession upon facing online attacks and threats, according to a 2018 report by Trollbusters and the International Women’s Media Foundation (IWMF). This harassment of female journalists—both online and offline—is not confined to countries traditionally viewed as hostile to the press; rather, a 2019 Committee to Protect Journalists (CPJ) survey of Canadian and American female and nonbinary journalists found that over 70% of respondents had experienced safety issues or threats.
It is this tragic reality that has led Fortune partner One Free Press Coalition (OFPC), with the release of its latest “10 Most Urgent” list, to call attention to the female journalists in most immediate need of help.
Since last spring, Fortune has copublished a monthly ranked list of the 10 most urgent press freedom cases, assembled by the OFPC in partnership with the CPJ and the IWMF. By spreading this information, Fortune hopes to bring awareness to these individuals and help achieve freedom and/or justice for them.
All attacks on journalists are attacks on press freedom, and all who have been imprisoned, harassed, and even killed for doing their jobs also deserve justice. Read last month’s list here for information about some of these individuals.
Trial repeatedly delayed for imprisoned journalist at heightened health risk.
In August, Egyptian state prosecutors filed additional charges against Solafa Magdy, who has been held in pretrial detention since November. The new claims accuse Magdy of membership in a terrorist group, spreading false news and misusing social media while weathering the pandemic in jail alongside her husband, enduring inhumane conditions, medical neglect and increased risk of contracting Covid-19. Magdy’s arrest stemmed from freelance coverage of immigration and human rights in Cairo.
Journalist serving life in prison since Uighur protests 10 years ago. Uighur journalist Gulmire Imin has served more than 10 years of a life sentence behind bars. One of several administrators of Uighur-language web forums who were arrested after the July 2009 riots in Urumqi, in the Xinjiang Uighur Autonomous Region, Imin was charged with organizing an illegal demonstration, separatism and leaking state secrets by phone to her husband, who lives in Norway. China is the leading jailer of journalists, counting 48 in detention as of 2019.
News website founder fights fines and six-year sentence.
In September, the EU Parliament called on President Rodrigo Duterte to drop all charges against Maria Ressa and a former colleague at Rappler, the privately owned news website she founded. They are convicted of cyber libel stemming from a 2012 Rappler article about a local businessman’s alleged ties to a former judge, who was later impeached for corruption, and purported links to drug and human trafficking rings. On June 15, the Manila Regional Trial Court ordered each journalist to pay $7,950 in fines and moral damages and serve up to six years in jail. Neither will be jailed or required to pay while their appeal is pending.
Reporter who disappeared at bus stop has been missing eight months. A reporter for the TV broadcaster Cable VRAEM in the central Peruvian city of Ayacucho, Daysi Lizeth Mina Huamán has been missing since January 26. On the day she disappeared, Mina voted in Peru’s congressional elections, filed a report on the elections, then was last seen at a Santa Rosa bus station. She planned to take a bus to the town of San Francisco to meet her boyfriend, who reported to authorities the next day that she was missing. About a week later, family members reportedly found Mina’s identity card and other personal documents along the side of a road between Santa Rosa and San Francisco. Authorities have still not provided any information to the family or the public since Mina’s disappearance.
Journalist held two years without formal charges.
The case of Nouf Abdulaziz indicates how dangerous a beat focused on gender can be. The Saudi blogger was arrested in June 2018 in connection to her reporting on women’s rights as part of a broader wave of arrests aimed at activists who pushed for gender equality in the kingdom. Without formal charges, she is being held at Riyadh’s al-Hair Prison and has allegedly been tortured. Tying Egypt for leading jailer of journalists, Saudi Arabia held 26 journalists behind bars according to CPJ’s 2019 prison census.
Reporter begins 3.5-year prison sentence for 2014 arrest.
Five years after court authorities determined sentencing, freelance sports reporter Nada Sabouri began a 3.5-year jail term in August at Tehran’s Evin prison. Her charges date to 2014, when she worked as a reporter for the economic daily Kasbokar. She was arrested at the time, and released on bail, for covering a rally on behalf of political prisoners at the presidential office and charged with “colluding against national security” and “disturbing public order.” Iran has repeatedly sentenced journalists to lengthy jail terms but then released them on bail, leaving journalists technically free but silenced by authorities’ ability to summon them at any time.
Independent investigation needed into journalist’s killing three years ago.
This month marks three years since the car bomb killing of Daphne Caruana Galizia, a prominent investigative journalist and blogger who reported on government corruption and the Panama Papers. Maltese authorities detained one suspect last year in connection to the murder, in addition to three men who have been in jail in connection to the murder since December 2017. CPJ and other rights organizations have repeatedly called on Maltese authorities to ensure the investigation into the murder is independent and free from political interference.
Journalist detained almost eight months after arrest and charges believed to be a set up.
Journalist Frenchiemae Cumpio has been detained since February 7 and could face 6 to 12 years in prison for charges of “illegal firearms possession.” Cumpio worked as executive director of the Eastern Vista news website and radio news anchor at Aksyon Radyo-Tacloban DYVL 819. Prior to her arrest, she frequently covered alleged police and military abuses and had recently faced harassment and intimidation from people she believed to be security agents. A court denied Cumpio’s lawyers’ request to drop the charges; they told CPJ they believe the firearms and explosives were planted to justify the illegal arrest.
Court rejects four journalists’ appeal to prison sentence and fine.
In June, Burundi courts rejected four journalists’ appeal after they were convicted in January of attempting to undermine state security. Agnès Ndirubusa, head of the political desk, and broadcast reporter Christine Kamikazi, were covering regional clashes for Iwacu, one of the country’s last independent outlets, when they were arrested last October alongside two of their colleagues. All four are sentenced to 2.5 years in prison and a $530 fine.
Iowa reporter among many arrested and facing charges during U.S. protests.
As of September 21, journalists have been arrested more than 109 times at protests in the U.S. this year. That includes Des Moines Register reporter Andrea Sahouri who police pepper-sprayed and arrested on May 31. She was charged with failure to disperse and interference with official acts and has pleaded not guilty. The first charge is punishable by a fine between $65 and $625 or prison in lieu of a fine, and interference with official acts carries a fine of at least $250.
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fortune--2020-10-01--Bed Bath & Beyond stock jumps 30% on first sales gain in years

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It wasn’t too long ago that Bed Bath & Beyond was presumed by many investors to be moribund. But a surprise jump in comparable sales last quarter fueled by improved e-commerce has renewed faith on Wall Street that the home goods retailer is carving a new place for itself in shoppers’ habits.
Bed Bath & Beyond reported on Thursday that comparable sales, a metric that strips out the impact of stores newly opened or closed, rose 6% in the three months ended August 29th. The source: an 89% jump in web sales that show Bed Bath & Beyond is adapting well to shoppers going online during the COVID-19 crisis. Its digital business is now one-third of total revenue.
Analysts had been expecting comparable sales to dip slightly, and the surprise gain sent Bed Bath & Beyond shares up 30% in morning trading. The company, which has taken big steps to shore up its finances in the last year and switched out much of its c-suite, has now seen shares nearly quintuple since a low in March.
The retailer’s resurgence stems from a deft mix of better merchandise selections as well as quick, effective deployment of services like in-store and curbside pickup for online orders, as well as same-day delivery. While these are now commonplace among big retailers, Bed Bath & Beyond ramped them up quickly.
Bed Bath & Beyond is also benefitting from a wider surge in home goods shopping that is also lifting sales at chains like Target, Williams-Sonoma and Walmart, as at Lowe’s and Home Depot for bigger-ticket items.
“When home is everything, we’re really poised to be the epicenter of that,” CEO Mark Tritton told CNBC. “We were agile about getting after that.”
Bed Bath & Beyond returned to profit in the quarter with a net income of $217.9 million on sales of $2.69 billion, compared to a loss a loss of $138.8 million, a year earlier on sales of $2.6 billion. Overall sales dipped slightly because the company closed some stores.
But the company has helped itself by streamlining its offering which had grown unwieldy, allowing it to reduce what it sells at clearance prices. It also did well with the back-to-college season despite all the uncertainty around students ability to return to campus: sales of items for college dorms rose 21% during the quarter.
Bed Bath & Beyond is also refreshing its store brands under Mark Tritton, the private brand guru who came to the company last autumn from Target. Tritton’s work was crucial to Target’s turnaround, something that will serve Bed Bath & Beyond well as it heads into the holiday season.