fortune--2020-12-17--Ahead of an IPO, Robinhood agrees to pay $65 million to settle SEC charges

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Robinhood has raised hundreds of millions in recent months as the pandemic has multiplied demand.
Just in: The online brokerage agreed Thursday to pay $65 million to settle accusations from the Securities and Exchange Commission that it misled consumers between 2015 and 2018. The U.S. watchdog said the company failed to adequately execute trade orders at best prices and also failed to disclose how it made much of its money: by selling stock trades.
Robinhood has neither admitted nor denied the accusations. This all comes as Robinhood has been getting its house in order ahead of a rumored IPO in 2021.
A BARKING SPAC: Pet subscription company BarkBox agreed to go public via merger with Northern Star Acquisition Corp., a special purpose acquisition company in a deal that will value the company at about $1.6 billion. The duo will list on the NYSE as “BARK.”
Alongside the capital from the SPAC itself, which is led by Snap and Sonos board member Joanna Coles as well as majority owner of the New York Islanders Jon Ledecky, BarkBox will also get some $200 million from accompanying transactions from investors including Fidelity and Senator Investment Group.
The deal comes amid a surge in interest for pet supplies. Petco filed for an IPO just this month. BarkBox meanwhile is backed by venture capital firms including RRE Ventures and Lerer Hippeau.
THE WORST FIRST-DAY LISTING OF A 2020 UNICORN: Shares of Wish, the discount e-commerce retailer, dropped in their first day of trading Wednesday, valuing the company at $14 billion or so on a fully diluted basis by the end of the day. Falling about 16.6% by the market’s close that day, Wish’s debut is the worst among the 31 billion-dollar-plus companies to have gone public this year. The debut comes as other unicorns seeking to go public such as Affirm and Roblox have pushed their IPO timelines to next year after seeing the much maligned “first-day pops” of DoorDash and Airbnb’s respective listings. When asked why Wish didn’t also push its timeline back, Wish CFO Rajat Bahri told Term Sheet he believed the IPO to be “one step of many,” adding: “There is never perfect timing, and markets are good right now.” How the company performs in the long term is what is key.
Lending marketplace Upstart meanwhile jumped 47% in its debut on Wednesday.
IT’S YOUR LAST CHANCE!: What will 2021 bring for the dealmaking world? I welcome your business predictions from the broad (where will be the strongest areas from M&A?) to the specific (who will Microsoft buy next? Who is the next WeWork?).
You know where to find me—either email me at Lucinda.shen@fortune.com or tweet at this new Twitter thread by end of day Thursday.
On Friday, I’ll feature highlights from your answers, alongside your name and title, unless you explicitly indicate that you’d only like to use your first name.
Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com
***
In this week’s episode of our Brainstorm Tech podcast, Michal Lev-Ram talks to Lise Buyer of Class V Group about non-traditional methods of going public: SPACs and the auction model. Both are gaining popularity; Buyer explains why. Then, Brian O’Keefe speaks with Threshold Ventures’ Emily Melton about how the rush to go public looks from the VC world, and what trends she’s seen that will carry over into 2021. Listen to the episode here.
VENTURE DEALS
- WeDoctor, a Chinese health tech company backed by Tencent, is nearing a $350 million raise ahead of its IPO, per Bloomberg. Read more.
- Lalamove, a Hong Kong-based logistics company, is look to raise at least $500 million at a roughly $8 billion valuation, per Bloomberg. Read more.
- Bolt, an Estonian Uber rival, raised €150 million (about $182 million). D1 Capital Partners led the round.
- Paxos, a New York-based blockchain infrastructure company, raised $142 million in Series C funding. Declaration Partners led the round and was joined by investors including Mithril Capital, PayPal Ventures, RIT Capital Partners, Ken Moelis, Alua Capital, and Senator Investment Group.
- Neuron23, a South San Francisco and Munich-based biotech focused on neurological and immunological diseases, raised $113.5 million in Series A and B funding. Westlake Village BioPartners and Kleiner Perkins led the $33.5 million Series A while Redmile Group led the round the $80 million Series B.
- Oscar, a New York-based health insurance company, raised $140 million. Tiger Global Management led the round and was joined by investors including Dragoneer, Baillie Gifford, Coatue, Founders Fund, Khosla, Lakestar, and Reinvent.
- Lydia, a Paris-based fintech, raised an additional $86 million in Series B funding. Accel led the extension.
- Brainly, a New York-based online learning company, announced today raised $80 million in Series D funding. Learn Capital led the round and was joined by investors including Prosus Ventures, Runa Capital, Manta Ray, and General Catalyst Partners.
- Bestow, a Dallas, Texas-based life insurance company, raised $70 million in Series C funding. Investors included Breyer Capital, Valar Ventures, New Enterprise Associates, Core Innovation Ventures, Morpheus Ventures, and Sammons Financial.
- Epirus, a Los Angeles-based maker of software applications for the defense and commercial sectors, raised $70 million in Series B funding. Bedrock Capital led the round and was joined by investors including L3Harris Technologies, Piedmont Capital Investments, 8VC, Fathom Capital, and Greenspring Associates.
- BigID, a New York-based privacy and data protection company, raised $70 million in Series D funding valuing it at over $1 billion. Salesforce Ventures and Tiger Global led the round.
- H1, a New York-based maker of a tech platform for healthcare organizations, raised $58 million in Series B funding. IVP and Menlo Ventures led the round and were joined by Transformation Capital, Lux Capital, Lead Edge Capital, Novartis dRx, and Y Combinator.
- Aceable, an Austin, Texas-based online driver’s ed company, raised $50 million. HGGC led the round.
- Cargo.one, a Berlin-based maker of a digital booking platform for air cargo, raised $42 million in Series B funding. Bessemer Venture Partners led the round and was joined by investors including Index Ventures, Creandum, Point Nine, and Next47.
- Cypress.io, an Atlanta, Ga.-based testing framework for software developers, raised $40 million in Series B funding. OpenView Venture Partners led the round.
- Lyte, a San Francisco-based maker of a ticketing platform for live events, raised $33 million in Series B funding. Investors include Social Capital, musician Quincy Jones, Rocketship VC, Jackson Square Ventures, Accomplice, and Correlation Ventures.
- Ramp, a New York-based corporate card company, raised $30 million in funding from D1 Capital and Coatue Management.
- Salary Finance, a U.K.-based fintech company, raised $27 million in Series D funding. Experian and Legal & General led the round.
- ZeroAvia, a Hollister, Calif.-based company focused on hydrogen-fueled flight, raised $21.4 million in Series A funding. Breakthrough Energy Ventures and Ecosystem Integrity Fund led the round and were joined by Amazon Climate Pledge Fund, Horizons Ventures, Shell Ventures, and Summa Equity.
- Little Spoon, a New York-based maker of baby foods, raised $22 million. Valor Equity led the round.
- CloudTrucks, a San Francisco, Calif.-based virtual trucking company, raised $20.5 million in funding. Caffeinated Capital led the round and was joined by investors including Craft Ventures, Khosla Ventures, SciFi VC, Kindred Ventures, Abstract Ventures, and Better Tomorrow Ventures.
- Diameter Health, a Farmington, Conn.-based clinical insights and data company, raised $18 million in Series B funding. Centene Corporation led the round and was joined by investors including Optum Ventures, LRVHealth, Connecticut Innovations, and Activate Venture Partners.
- Crehana, a Mexico-based skills training platform, raised $17.5 million in Series A funding. Mountain Nazca led the round and was joined by investors including Endeavor Catalyst, IFC World Bank Group, Salesforce Ventures, Alive Ventures, Dila Capital, and Rethink Education.
- Bambee, a Los Angeles-based company offering HR managers, raised $15 million in Series B funding. QED Investors led the round and was joined by investors including Alpha Edison and Mucker Capital.
- Carlsmed, a San Diego, Calif.-based medical device company, raised $10 million in Series A funding. U.S. Venture Partners led the round and was joined by investors including The Vertical Group, Cove Fund, and Wavemaker Three-Sixty Health.
- Projector, a San Francisco-based maker of a collaborative graphic design platform, raised $10 million. Foundry Group led the round and was joined by investors including Mantis Venture Capital, Van Wickle Ventures, Upfront Ventures, Mayfield Fund, and Upside Partnership.
- Motorq, a Palo Alto, Calif.-based API company for cars, raised $7 million in Series A funding. Story Ventures led the round and was joined by investors including FM Capital and Monta Vista Capital.
- Storyboard, a Palo Alto, Calif.-based company for creating podcasts, raised $4.5 million in seed funding. CRV led the round and was joined by investors including Harry Stebbings (20MinuteVC), Operator Partners, Slack Fund, Dave Ambrose, and Matt Ziskie.
- OpenSensors, a London-based internet of things company, raised $4 million in seed funding. Crane Ventures led the round.
- Runway, a Brooklyn, New York-based company with video and photo editing tools powered by A.I., raised $8.5 million in Series A funding. Amplify Partners led the round and was joined by investors including Lux Capital and Compound Ventures.
- Revi, a San-Francisco-based startup serving restaurants, raised $2 million in seed funding. Ubiquity Ventures led the round and was joined by investors including Precursor Ventures and Designer Fund.
- Deed, a New York-based maker of a social impact and volunteering platform for businesses, raised $2 million in seed funding. Paua Ventures led the round.
- Gr4vy, a cloud payments company, raised $1.1 million. Activant Capital and Global Founders Capital led the round.
PRIVATE EQUITY
- EQT agreed to acquire a majority stake in Storable, an Austin-based maker of tech for self-storage businesses, valuing it at about $2 billion, including debt. Cove Hill Partners will retain a minority stake.
- Pivotal Group invested in SnapNurse, an Atlanta, Ga.-based nurse and medical staffing company. Financial terms weren't disclosed.
- Cimbria Capital agreed to acquire Madeira Global, a St. Petersburg, Fla.-based environmental, social and governance reporting firm. Financial terms weren't disclosed.
- Corsair Capital acquired a majority stake in Identity Intelligence Group, a Temecula, Calif.-based credit report and identity theft monitoring company. Financial terms weren't disclosed.
- Knox Lane invested in Fingerpaint, a Saratoga Springs, New York-based health and wellness marketing agency. Financial terms weren't disclosed.
- Morgan Stanley Expansion Capital led a $150 million investment in The Lifetime Value Co, a New York-based creator of online consumer and business information brands. Financial terms weren't disclosed.
- Providence Equity Partners is in talks to acquire a stake in Groupe La Centrale, a French classifieds group, from Axel Springer. Financial terms weren't disclosed. Read more.
- TA Associates and Rx3 Growth Partners invested in Mid America Pet Food, a Mount Pleasant, Texas-based maker of pet foods, acquiring their stakes from Trinity Hunt Partners. Financial terms weren't disclosed.
- Traject, backed by ASG, acquired Planoly, an Austin, Texas-based social marketing platform. Financial terms weren't disclosed.
- Spectrum Automotive Holdings, backed by Cornell Capital, acquired CalTex Protective Coatings, a Schertz, Texas-based provider of automotive appearance protection products. Financial terms weren't disclosed.
EXITS
- Bain Capital and Clayton Dubilier & Rice are bidding for Mediq, a Dutch health-care services provider owned by Advent International, per Bloomberg. Read more.
- Bertram Capital acquired Safety Products Holdings, an Oakbrook, Ill.-based maker of cutting tools, from Levine Leichtman Capital Partners. Financial terms weren't disclosed.
- QuestionPro acquired Enprecis Group, a Dallas, Texas-based customer service platform for the automotive industry, from Bregal Sagemount. Financial terms weren't disclosed.
- Tailwind Capital acquired ArrowStream, a Chicago-based maker of supply chain management software for the foodservice from Diversis Capital.
- The Vistria Group invested in Mission Health, a San Diego, Calif.-based home health and hospice services provider. HCAP Partners exited the investment.’
OTHER
- LGT will acquire UBS’s Austrian wealth management business. Financial terms weren't disclosed.Read more.
- Tilray (Nasdaq: TLRY) agreed to merge with Aphira (Nasdaq: APHA), a Canadian cannabis company, in a deal valued at about $3.9 billion.
IPOs
- The CI Galaxy Bitcoin Fund, a cryptocurrency fund from CI Financial, raised $72 million. Read more.
F+FS
- The Carlyle Group's AlpInvest Partners raised $9 billion for its most recent private equity secondaries fund, per Bloomberg. Read more.
- Gridiron Capital closed its fourth fund with $1.4 billion.
PEOPLE
- Maveron, a consumer-focused venture firm, hired Veronica Reaves and Jerry Lu as senior associates.
- Behrman Capital, a private equity firm, promoted Michael Rapport to partner, Calvert Thomas to principal, and Kyle Grace to vice president.
- Steadfast Financial, a New York-based investment advisor, hired Matt Buchwald, previously of D2iq, and Vivek Ramaswami, previously of Redpoint Ventures, as principals in the firm's venture practice.


fortune--2020-12-17--Robinhood agrees to pay $65 million settlement following SEC claims about trading

Sen. David Perdue ’ s suspicious stock success shows why members of Congress shouldn ’ t be allowed to trade @ @

Robinhood Markets has agreed to pay $65 million to settle Securities and Exchange Commission allegations that the broker failed to properly inform clients that it sold their stock orders to high-frequency traders and other financial firms.
Robinhood, known for its popular smart-phone app that offers commission-free trading, also agreed to have an outside consultant monitor its compliance with rules that require firms to provide best execution for trades. Robinhood has gained notoriety during the pandemic by attracting a massive customer base of younger investors.
The case involves disclosures from 2015 to late 2018 by a Robinhood unit, according to a Thursday SEC statement. The company, which didn’t admit or deny the regulator’s allegations, said it is now fully transparent in its communications with customers about how it makes money.
“The settlement relates to historical practices that do not reflect Robinhood today,” said Dan Gallagher, the firm’s chief legal officer. “We recognize the responsibility that comes with having helped millions of investors make their first investments, and we’re committed to continuing to evolve Robinhood as we grow to meet our customers’ needs.”
Controversial Practice
At the heart of the SEC’s case is payment for order flow, a controversial practice employed by almost all retail brokerages in which they sell customer orders to outside market makers. Critics argue that it’s riddled with conflicts that enable high-speed traders and other firms to profit by taking advantage of retail investors.
Robinhood has profited handsomely from payment for order flow, though it didn’t widely publicize that fact until October 2018, after Bloomberg reported that the firm made almost half its revenue by selling customers’ trades to Citadel Securities, Two Sigma Securities and other firms.
The settlement resolves one of several compliance headaches Robinhood is seeking to put behind it ahead of a potential initial public offering next year.
Still, issues keep popping up. On Wednesday, Massachusetts securities regulators filed a complaint against the company, alleging that it violated its responsibilities to puts its customers’ interests first. Specifically, the state said Robinhood’s app exposed users to “unnecessary trading risks” by promoting a “gamifacation” of stock investing to keep novice customers engaged.
Robinhood rejected the claims, arguing that the case lacks merit because the firm doesn’t make investment recommendations for clients.
Robinhood also faces additional scrutiny from the SEC and the Financial Industry Regulatory Authority, which polices brokerages. The regulators are investigating the company’s handling of a March trading outage that prompted a deluge of customer complaints, Bloomberg reported in August.


fortune--2020-12-17--France’s Macron tests positive, and now Europe is scrambling to put the lid on a potential COVID clu

France’s Macron tests positive, and now Europe is scrambling to put the lid on a potential COVID cluster

The news Thursday morning that French President Emmanuel Macron had tested positive for the coronavirus landed like a pre-Christmas bombshell not only in his own country—but also across the 27-country European Union, whose leaders have been shuttling in and out of in-person meetings for weeks, grappling with a looming economic crisis, Britain’s imminent Brexit from the EU, and of course, the pandemic’s second wave.
Now the question is: Could Europe’s leaders emerge as a COVID-19 cluster?
That worrying possibility was clearly on politicians’ minds after Macron’s infection was announced. Shortly after Macron tested positive, European Council President Charles Michel began self-isolating, as did Spanish Prime Minister Pedro Sanchez, both of whom met Macron in Paris on Monday—in Sanchez’s case, at a lunch with the French leader. The Portuguese Prime Minister Antonio Costa, who had lunch with Macron on Wednesday, also went into isolation, as did the Belgian Prime Minister Alexander De Croo.
Macron took the coronavirus test on Thursday morning after experiencing “the first symptoms” on Wednesday evening, according to the Elysée Palace. The statement did not say when the French leader had most recently tested negative, leaving unclear when he was infected and how long he might have been infectious. After the result came back positive, Macron immediately began a seven-day quarantine period inside the ornate presidential residence, along with his wife, Brigitte Macron. French Prime Minister Jean Castex and the National Assembly President Richard Ferrand also immediately self-isolated. Castex tested negative on Thursday.
But that leaves many politicians who could have been exposed to the virus. French government spokesman Gabriel Attal said contact-tracing had already begun, involving everyone Macron might inadvertently have infected—or perhaps have been infected by. “I must insist that the fact is the virus is circulating in France,” Attal said, reminding people to observe social distancing and health measures.
The list of Macron’s contacts over the past week is like a who’s who of Europe’s top political figures.
It includes 25 of the 27 EU leaders who met in Brussels for a crucial two-day summit last Thursday and Friday. The leaders have been in intensely close contact for weeks, often in person, piecing together a €1.8 trillion ($2.2 trillion) coronavirus relief package, and holed up in fraught talks over Brexit, which is due to take effect on Jan. 1—just two weeks away.
“This is a realization,” Brigitte Autran, a scientific member of the government’s COVID-19 vaccine committee, said on BFM Television on Thursday. “No one is immune to the virus, not even the head of state.” Macron’s infection came more than two months after President Trump tested positive for the virus.
Packed schedule
Of all Europe’s leaders, Macron, who turns 43 on Monday, is probably the most kinetic, with a packed agenda even during the pandemic, and a parade of world leaders who regularly arrive on his doorstep at the Elysée. A glance at his hectic schedule this past week—when he might well have been infectious—now makes for unsettling reading.
Last Monday, he met with top diplomats in Paris for the 60th anniversary of the Organization for Economic Cooperation and Development (OECD), and then he had lunch with Spanish leader Sanchez. He met climate leaders on Monday. On Tuesday, he held a defense and security council meeting, and met with the head of the International Committee of the Red Cross, as well as the leaders of France’s National Assembly, and had lunch with the French Prime Minister. On Wednesday, he had lunch with Portuguese leader Costa, and met with the entire French entire cabinet, which was seated shoulder-to-shoulder at the Elysée for its weekly meeting with the President. “We wore masks, except during lunch,” Damien Abad, leader in the National Assembly for the opposition Republicans party, said on BFM, of his Tuesday meeting.
Macron’s infection shows how exceedingly complicated it is to contain the second wave in Europe, a region of some 450 million people, many of whom crisscross borders easily, conducting extensive international business.
I witnessed that myself during a two-day visit to Brussels on Tuesday and Wednesday. The high-speed trains linking Paris and Brussels, a 90-minute journey, were full both ways, with not a spare seat.
In the European Parliament building in the Belgian capital, there were dozens of delegates in and out of small meeting rooms both days. Many of the 704 members of the EU Parliament remain in their home countries, logging into meetings on videoconference platforms. But many are there in person, attending to a dizzying range of issues.
On Wednesday afternoon, dozens of politicians were inside the Parliament’s grand chamber to approve the EU’s biggest-ever financial relief measures. The session was presided over by the two top EU leaders, Commission President Ursula von der Leyen and Michel, who removed their masks when they spoke, one after the other, from the podium, hailing the €1.8 trillion deal as a momentous accomplishment, after weeks of fractious negotiations. Later, Parliament President David Sassoli addressed about 20 journalists in a small conference room, along with opposition leaders from Belarus—who had flown in from Warsaw, Vilnius, and other EU cities.
Containing COVID-19 under these conditions, in the lives of regular people, has proved extremely difficult.
Like other leaders, Macron has struggled to find a balance between allowing the French to celebrate Christmas, without turning the holiday into a superspreader event that could send COVID-19 raging again. When stores reopened on Dec. 1, after a monthlong lockdown, thousands of people rushed in to do Christmas shopping, perhaps fearing another lockdown; outside Paris’s upscale Le Bon Marché department store, lines of shoppers stretched half a street block outside. The government has previously said they would lock down over Christmas if new COVID-19 cases rose above 5,000 a day. On Wednesday, France reported 17,615 new cases in a 24-hour period. So far, the government has yet to announce tighter pandemic restrictions.
The French government has ordered ski stations to remain closed during the holidays, as have the governments of Austria and Italy. Yet Switzerland’s ski resorts remain open—and many French will simply drive, or take a train, across the border, and head there instead.


fortune--2020-12-17--How to close the gender investing confidence gap

This is the web version of The Broadsheet, a daily newsletter for and about the world’s most powerful women. Sign up to get it delivered free to your inbox.
Good morning, Broadsheet readers! Pinterest’s $22 million gender discrimination settlement draws criticism, women aren’t leading coronavirus briefings in the U.K., and a survey finds that affluent women of color are more confident investors than their white peers. Have a thoughtful Thursday.
– Investing in yourself. While we’ve done extensive coverage of the gender pay gap and the gender wealth gap, we haven’t spent quite as much time on the investing gap. Women invest less than men do, and tend to report feeling less certain about their investing prowess (though studies suggest that when women do put their money in the markets, they tend to outperform male investors. Color me shocked.)
Given that context, I was fascinated by this new survey from JPMorgan, which Emma reported on this morning. It found that affluent Black and Latina women are more likely to say they feel confident when it comes to investing their wealth than white women do; the 1,375 women surveyed, about 43% of them women of color, all had at least $150,000 in investable asset levels. Emma writes:
“Seventy-five percent of the women of color surveyed said they felt confident about their financial goals in the year ahead, compared to only 50% of white women. Seventy-eight percent at least in part developed their financial know-how through their own research, like online educational resources or TV shows; only 47% of white women did the same.”
And that financial know-how comes despite a financial services sector that—according to 21% of respondents—has failed Latina and Black female investors. (Kelli Keough, head of digital and client solutions for JPMorgan Wealth Management, tells Emma that the bank is working to improve on this front by identifying the specific needs of these investors. One example: Black and Latina women tend to more interested than other investors in how their wealth can support their families, so advisers must look beyond the usual retirement-focused strategies.)
So, if the pros haven’t historically been much help, how and why are these women feeling so secure when it comes to the tricky business of investing? The JPM survey doesn’t conclusively answer those questions, but it does provide some hints: 84% of the affluent Black and Latina women surveyed had savings or investment accounts established for them as children, compared to 78% of wealthy white women. Sixty-one percent of the women of color said conversations about the importance of investing were part of their upbringing; 55% of white women said the same.
Given the staggering racial wealth gap in America, it’s not surprising that some families of color are making it a priority to teach their children—including their little girls—the critical importance of managing their money. That’s a simple and practical lesson that everyone should embrace, and which could help the next generation women in a major way. And for those of us who missed out on the early lessons, why not follow in the footsteps of these savvy Black and Latina investors and commit to owning our own continuing financial educations?
Kristen Bellstrom
kristen.bellstrom@fortune.com
@kayelbee
Today’s Broadsheet was curated by Emma Hinchliffe.
ALSO IN THE HEADLINES
- Who gets a settlement? Pinterest's $22.5 million gender discrimination settlement with former COO Françoise Brougher is seen by some as a sign of how the company has failed to make significant changes in response to allegations of racism. Former Pinterest employees Ifeoma Ozoma and Aerica Shimizu Banks came forward with allegations of racist and sexist treatment a few months before Brougher's suit, and each received less than one year’s severance in their settlements. Pinterest declined to comment. Fast Company
- 10 Downing, zero women. It's been a full six months since a woman has led a coronavirus press conference at 10 Downing Street in the U.K. The last female minister to lead one of these briefings on behalf of Prime Minister Boris Johnson was home secretary Priti Patel on May 22. Guardian
- #Resist? The word "resistance" took on new meaning during the Trump era, and Education Secretary Betsy DeVos wants to redefine it again during the Biden administration. She told career employees at the Education Department—who work under Republican and Democratic administrations—to "be the resistance" during the Biden era, according to this report. Politico
IN CASE YOU MISSED IT
- A major rally. Two years ago, Naomi Osaka "withered under excruciating boos" after defeating Serena Williams in the U.S. Open. Now the tennis star is known for her bold voice—whether she's turning a reporter's question on its head or wearing the name of a Black person killed by police violence on her mask. This profile chronicles her journey. New York Times
- Look up, Coca-Cola. In 2000, Coca-Cola settled a historic class-action lawsuit over racial discrimination. Ten years later, it looked like the company had successfully reformed, with Black representation in its executive ranks up from 1.5% to 15%. But 20 years later, the business has fallen behind again. “We didn’t keep our eye on the North Star,” says North America HR lead Valerie Love. Wall Street Journal
- Gebru + Google. Timnit Gebru, the A.I. researcher and expert who left Google in a dispute over a research paper, speaks to Slate about her experience at the tech giant. "They weren’t even treating me like a person," Gebru says of her time there. Google didn't respond to request for comment on this particular story. Slate
ON MY RADAR
Elizabeth Warren’s next book arrives in April Fortune
Ann Reinking dies at 71; dancer, actor, choreographer, and Fosse muse New York Times
The 21 best books of 2021 for working moms Working Mother
PARTING WORDS
"There's never been ‘You sing better than I’ or ‘I sing better than you.' ... With us, we don't roll like that."
-Patti LaBelle on her relationships with Gladys Knight and Nina Simone


fortune--2020-12-18--Sweden’s response to the COVID-19 pandemic has been a failure, says the King of Sweden

MacKenzie Scott is giving away her $ 60 billion fortune at a record pace

Swedes are rapidly losing faith in their country’s response to the pandemic, with even the King delivering a rare rebuke to those in charge.
Significantly more Swedes have gotten sick and died from Covid-19 than elsewhere in the Nordic region. And with Stockholm recently almost running out of intensive care beds, frustration levels are high.
“The Swedish people have suffered enormously in difficult conditions,” King Carl XVI Gustaf told state broadcaster SVT. When it comes to the strategy deployed in Sweden, he said, “I think we have failed.”
Much of the blame has been directed toward the chief architect of Sweden’s strategy, Anders Tegnell, its state epidemiologist. A poll published on Thursday showed that support for him and his employer has slumped over the past two months.
“Confidence is in a downward spiral,” said Nicklas Kallebring, an analyst at Ipsos.
Prime Minister Stefan Lofven also voiced his displeasure.
“The King observes, as we and many others have, that the fact that so many people have died cannot be seen as anything else than a failure,” Lofven told reporters in Stockholm on Thursday.
Meanwhile, Tegnell has continued to defend Sweden’s overall strategy of avoiding lockdowns. He also argues that there’s no real evidence that face masks work, and Swedes are among the only people left going about their daily lives largely mask-free, with shops, restaurants and gyms all still open.
In an interview with broadcaster TV4, Tegnell said no one can tell whether Sweden’s strategy has failed. He was responding to a report published earlier in the week that showed significant shortcomings in Sweden’s approach that led to excess deaths among the elderly.
“More or less all countries are struggling with this,” he said. But he also acknowledged that the situation in his home country is dire.
“We are beginning to approach breaking point in many different aspects,” he said. “I understand that health-care is having a very tough time now…the staff are worn out,” all of which means “that the pressure on care is becoming very, very great.”
Almost 8,000 Swedes have died of Covid-19. That compares with less than 1,000 in Denmark, about 480 in Finland and just over 400 in Norway.
In his interview with TV4, Tegnell said he was “surprised” by the intensity of the second wave of the pandemic.
“I think many, with me, are surprised that it has been able to come back so strongly,” he said.


fortune--2020-12-18--EU green-lights Google’s $2.1 billion bid to buy Fitbit

Google won European Union approval for its $2.1 billion takeover of health tracker Fitbit Inc., days after regulators proposed tougher rules to curb powerful technology firms’ push into new services.
The European Commission said Google’s pledge to maintain access for rival health and fitness apps and device makers for 10 years removed its concerns about the U.S. tech giant’s move into health data and devices. Smaller rivals previously complained that the company’s promises might not go far enough to stop Google shutting off access in future to rival products or services.
“The commitments will determine how Google can use the data collected for ad purposes, how interoperability between competing wearables and Android will be safeguarded and how users can continue to share health and fitness data, if they choose to,” Margrethe Vestager, the EU’s antitrust chief, said in a statement Thursday.
Approval comes in a harsh climate when Google and others are facing mounting scrutiny of acquisitions that help them push into new areas. Google announced its plans to buy Fitbit in November 2019, describing the bid for the smartwatch maker as a boost to its lagging hardware business.
Mountain View, California-based Google said it understood “that regulators wanted to look closely at this transaction, and we have worked constructively with them to resolve their concerns, including the set of legally binding commitments.”
Its promises “build on assurances we have made since the beginning that we are committed to protecting Fitbit users’ privacy and will continue to invest in and support manufacturers and developers,” the company said.
Privacy worries
Consumer and privacy advocates expressed disappointment at the EU approval. BEUC, a European consumer protection organization, said the decision showed “the inability of EU merger control to prevent companies like Google from ever expanding their market power.” Privacy International said the deal would “further strengthen Google’s capacity to exploit our data.”
Google pledged not to use Fitbit’s data about users’ health and fitness for online advertising and to store Fitbit’s data separately from its ad services. The company will ensure that European users can grant or deny Google access if they want Google services to link up with Fitbit information. The EU said it can extend this pledge for an extra 10 years if necessary “because of Google’s entrenched position in the market for online advertisement.
The company also commits to license information that ensures functionality for other devices that want to work with an Android phone for Bluetooth, camera or location access.


fortune--2020-12-18--Here’s how much Europe will pay for each COVID-19 vaccine

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The European Union has been securing COVID-19 vaccines in bulk, on behalf of its member states, but the prices have been under wraps—until now, thanks to Belgium’s budget chief.
Eva De Bleeker revealed Thursday how much European countries are paying, via a table she published on Twitter.
The tweet was reportedly made in error by De Bleeker’s communications team in the context of a political argument, and it was quickly deleted, but not before the Dutch-language newspaper Het Laatste Nieuws grabbed a screenshot and put it online.
De Bleeker subsequently insisted that the incident would not endanger Belgium’s access to vaccines, despite fears that she may have broken contractual terms.
Unsurprisingly, AstraZeneca’s vaccine—trial data for which indicates moderate efficacy—seems to be the cheapest, costing EU countries €1.78 ($2.18) per dose. The vaccine from Pfizer/BioNTech, which has been authorized for use in the U.K. and U.S. and is expected to gain EU approval next week, clocks in at more than 10 times as much: €12 ($14.70) per dose.
Moderna, which is hot on Pfizer’s heels, has the most expensive vaccine of the bunch, at $18 per dose.
Meanwhile, the Dutch-German Curevac vaccine has been secured at €10 ($12.25) a shot; Johnson & Johnson’s will cost $8.50 per dose, and Sanofi/GSK’s will cost €7.56 ($9.26) per dose.
The Commission also said Thursday it had completed exploratory talks with the U.S.’s Novavax about securing at least 100 million doses of its vaccine.
Just through the six deals it has already signed, the EU (population just under 450 million) has gained potential access to almost 2 billion vaccine doses, Commission spokesman Stefan de Keersmaecker told Fortune. However, he stressed that none have yet been approved by the European Medicines Agency (EMA), so “we continue to build our diverse portfolio of different vaccines.”
“We do not give any comments on prices,” he said. “Prices are covered by strict confidentiality clauses that we abide by.”
EU member states await a big decision by the EMA next week. If regulators green-light the COVID vaccines, countries could begin administering inoculations just after Christmas.
The secrecy surrounding the Commission’s negotiations with drugmakers has drawn criticism from many lawmakers and observers.
“National Parliaments and the public should have access to these deals once concluded,” the European Public Health Alliance said in a Thursday statement. “If there is a new round of joint procurement negotiations, transparency should be the starting point.”


fortune--2020-12-18--Creating a unified society is up to all of us

In the United States this year, the need for social justice, diversity, and inclusion led to a nationwide rally for change. It stands to reason, then, that companies are rethinking their approach to fostering a corporate environment that genuinely serves everyone. It is, after all, up to all of us to be the change we want to see.
Inequities in society have always been present, but social and racial tragedies amid the rise of COVID-19 sparked a truly national consciousness. The business community realized that it has a responsibility to denounce racism, bigotry, and all forms of discrimination and an opportunity to encourage dialogue to bring understanding and build bridges.
That includes those of us at Toyota. Our core principles—respect for people and continuous improvement—have long served to guide us. We seek to reflect these values in our workplace, in the communities in which we operate, and as part of our ongoing commitment to diversity and inclusion. We believe that diversity and inclusion is important to our corporate culture, employee engagement, and to our future success as a mobility company.
Toyota is a global company, but we have more than 47,000 employees in North America, not to mention millions of customers. Understandably there is an array of opinions on social and racial justice issues. We welcome the full spectrum of those views and believe it is important for us to facilitate a deep and constructive conversation where all voices are heard.
Because let’s be honest: While Toyota and many organizations have made great strides in becoming more diverse and inclusive, there is still much work to be done to engage and support key communities and ensure that opportunities and equity exist for every one of our employees.
Diversity is not just a matter of ethics—it’s good business. Research shows companies with effective corporate social responsibility (CSR) programs are more profitable.
In fact, companies with diverse management teams are…
—33% more likely to generate better-than-average profits;
—70% more likely to capture new markets; and…
—able to generate 19% more revenue from innovation than companies with below-average leadership diversity.
Corporations must also recognize the critical role the multicultural community plays in their business success. For example, the African-American community accounts for more than $1.3 trillion in consumer spending. How can we ignore a group of people that is so pivotal to the economy? And it doesn’t stop there: Latinx Afro-Latino, Asian-American, Native American, LGBTQ+, disabled, and veteran communities remain underserved despite contributing a great deal to corporate America.
As the chief diversity officer for Toyota Motor North America, it is both my passion and my mandate to help the multicultural community thrive. (And to those of you in that community, I say: We are here for you, we stand by you, and we are committed to supporting you.) Indeed, companies seeking to make meaningful progress in this area often solicit my advice.
Here’s what I tell them.
First, acknowledge and understand that these issues are real and genuine. Ask yourself: “Am I really looking at this fairly?” Many people ignore social inequities because it seems out of their control or they believe unconscious bias in the workplace is not prevalent. Once you acknowledge the problem, you can start looking for ways to make change.
At Toyota, for example, we have…
—held diversity training on unconscious bias for executives and employees;
—invited speakers to discuss social and racial justice;
—held listening sessions with employees;
—created opportunities for employees to get involved; and…
—established a social justice action committee and an executive diversity and inclusion committee to discuss issues and next steps.
Second, cultivate accountability and involvement at the leadership level. Diversity, equity, and inclusion must be a top strategic priority, and have tangible goals linked to a company’s mission and business strategy. At Toyota, this means maintaining the company’s leading market share for ethnic minorities and making a commitment to add more diverse dealers per year, among other initiatives.
Third, commit to the acquisition, growth, development, and promotion of minority employees through mentorship programs, professional development, and other initiatives that expand and enhance opportunities for minorities.
Fourth, embrace all communities beyond the corporate walls. That could mean supporting legislation that addresses social and racial injustices, financially investing in highly impacted communities, or funding initiatives focused on the education of minority youth. At Toyota we have formed strong relationships with our business partnering groups, dealers, political leaders, and community partners because we know that we can’t do it alone. We’re confident our combined efforts will make a difference.
It is clear that we as a nation cannot move forward if we leave others behind. As corporate leaders, we have a unique opportunity and responsibility to create a more equitable world where we all flourish. We must all aim to continuously improve our communities by addressing the inequities that surround us.
Sandra Phillips Rogers is general counsel, chief legal officer, and chief diversity officer at Toyota Motor North America.


fortune--2020-12-18--Why investors jumped on board the SPAC ‘gravy train’

The pandemic all but shut down IPO activity in March, and for a while it seemed as if companies would press pause on going public. But nine months later, the public markets are busier than ever—largely thanks to special purpose acquisition companies, or SPACs.
“Everybody jumped on board this gravy train,” Lise Buyer, founder and managing partner of Class V Group, tells Fortune’s Michal Lev-Ram and Brian O’Keefe on the latest episode of Fortune Brainstorm, a podcast about how technology is changing our lives.
Buyer is an authority on new ways of going public; she was part of the team that developed Google’s auction strategy for its 2004 initial public offering. The auction didn’t catch on at the time, but the company Unity Technologies revived the approach for its own debut this fall.
The SPAC, meanwhile, has been overhauled for the pandemic era. Until now, SPACs were usually a means of taking public companies that “perhaps weren’t ideally suited for a primetime IPO,” like online gambling or marijuana businesses, Buyer says. Investors have now repurposed the strategy, in which a business merges with a shell company, to debut firms that “can’t get out because of the pandemic.”
“Sponsors find them to be unbelievably lucrative,” Buyer says.
But it’s not only the public markets that have seen upheaval over the past several months. In the funding stages, companies this year saw new trends in venture capital investment. Emily Melton, managing partner for Threshold Ventures, describes this year’s changes this way: “We’re no longer little niche market.”
Melton, who also joined Fortune Brainstorm this episode, is a cofounder of the group All Raise, which pushes Silicon Valley to fund female founders and promote more women to decision-making roles at venture capital firms. While 2020 has included significant deal activity for startups as a whole, the industry has lost some of the progress it made in 2019 in backing female founders.
Fortune senior writer Maria Aspan appeared on this episode as well to discuss her recent magazine feature on a related subject: how some of the female founders who were seen as success stories in the industry were forced out of their companies.


fortune--2020-12-18--Looking back at a momentous year

Looking back at a momentous year

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning.
This is the last CEO Daily of 2020, and I am struggling with how to capture the enormity of the year in 300 words. So much has happened. It’s not the jarring rupture of a Pearl Harbor or a Kennedy assassination or a 9/11. But it is no less consequential—a clear break between past and future.
The virus was pernicious. Many of us lost friends and loved ones; many lost jobs; all have been disrupted. The deep fissures in our society that run along the lines of race, gender and education deepened, and the great divide between those companies that are tech savvy and those that are not widened. Our lives changed in myriad ways and won’t ever return to the previous state. For my small part, I know I will never again travel the globe at the pace I did in 2019, or commute from my home in Connecticut to Manhattan five days a week, or wear striped shirts that pixelate on Zoom.
Good things happened, as well as bad. The virus, as Scott Galloway put it, was an accelerant, allowing countless companies to innovate with an abandon they never would have thought possible. Institutional risk aversion melted away, as goals suddenly became necessities. The pharmaceutical industry was a leading example—abandoning its obsession with protecting IP in favor of a collaborative effort to develop new products to defeat the virus. Other industries followed similar paths. Fortune was no exception: our conference business went virtual virtually overnight, and the experience helped us launch a new platform for the next generation of leaders—Fortune Connect. The business cliché of the year applies broadly: “We did things in weeks and months that we thought would take years.”
And somewhat to my surprise, despite the pressures on the bottom line, business became better. I saw countless examples of companies paying closer attention to the health and well-being of their workers during the pandemic, promoting purpose rather than pushing products and services, and expressing a sincere desire to use the short-term crisis as an opportunity to build a stronger, more sustainable, long-term future. Stakeholder capitalism took another step forward.
So I’ll be leaving 2020 a little dazed, a lot disrupted, a bit saddened, but ultimately amazed at all that happened, and curious to see how much endures. And I look forward to rejoining all of you in January for the next part of the ride.
More news below. And check out Tarun Wadhwa’s argument for why innovation can’t happen on Zoom.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Google and Fitbit
Following a probe that was announced in early August, the European Commission has greenlit Google's proposed $2 billion takeover of Fitbit—with conditions. Google will need to keep Fitbit's user data in a separate "silo" that would stop it from boosting its ad business. Some are skeptical that this separation will work. Reuters
Brexit crunch
Oh look, there's another new deadline for the post-Brexit U.K.-EU trade talks. Except this time it's not coming from the U.K. or the European Commission, which is handling the negotiations: members of the European Parliament, which would have to approve any deal before it can take effect, have put their foot down, saying they want to see something by Sunday or they won't be signing anything this year. The Brexit transition period runs out on December 31. Markets are jittery. Guardian
China list
U.S. government officials are reportedly clashing over the breadth of the White House's list of Chinese-military-complex-linked companies in which Americans may not invest. State and Defense want the executive order to cover subsidiaries and affiliates, in order to avoid allowing loopholes, but Treasury wants to keep things lean, in order to avoid spooking the markets. Wall Street Journal
Coke cuts
Coca-Cola will shed around 2,200 jobs as part of a global restructuring drive. In the U.S., 1,200 people—around 12% of Coke's workforce on its home turf—will lose their jobs via layoffs and buyouts. Cuts had been planned for a while but the pandemic has battered the company, so they're being sped up. CNBC
AROUND THE WATER COOLER
Coinbase IPO
Crypto darling Coinbase has filed for an IPO. It's not yet clear how the conglomerate's flotation will be structured, nor has Coinbase revealed yet how much money it’s making, but the move certainly comes at a time when Bitcoin's soaring price is giving the scene a boost. Fortune
Tesla trade
Tesla joins the S&P 500 on Monday, so today will see the trade of a whopping $80 billion in the company's shares, as index-tracking funds scramble to ensure their portfolios are still tracking the index. Tesla will be the most valuable company to be admitted to the benchmark, and will account for more than 1% of it. Reuters
European vaccinations
The European Commission is promoting the idea that all EU countries will simultaneously start vaccinating their citizens on December 27-29, but the reality is that many national leaders won't want to wait a minute longer than is necessary (authorization should land just before Christmas), and some countries such as the Netherlands will likely start later, for various reasons. Politico
British vaccinations
Meanwhile in Brexitland, which was the first country to approve and start deploying Pfizer/BioNTech's vaccine, the rollout could be hindered by technical difficulties with the software that keeps track of who has received the jab. Without these records, some people may be missed in the vaccination drive, or they may get too many injections. Sky News
This edition of CEO Daily was edited by David Meyer.


fortune--2020-12-18--Worker advocates push to extend COVID-related emergency paid leave program

Like tens of millions of other parents nationwide, Jonathan and Sara Sadowski struggle to assist their four children, ages 5 to 11, with their online schooling at home. In addition, their eldest child, who has cerebral palsy and is in a wheelchair, needs special care.
So to help the kids and keep them safe—especially their oldest child—Jonathan opted to take 12 weeks of paid leave from his teaching job under a program authorized by an emergency federal law enacted in March.
“Qualifying for paid leave was a huge relief and has worked out really well,” said Jonathan, who lives in Concord, N.H.
But the family has learned about a new wrinkle: The 11-year-old needs surgery in January. The operation is expected to require a month or two of recovery. Unfortunately, Jonathan’s leave will be used up by then; what’s more, the emergency federal paid leave program it is based on lapses Dec. 31.
Unions and workers’ rights and consumer advocacy groups are this week waging a last-ditch effort to get Congress to extend the program into 2021. They argue that the program is a critical component helping to prevent the spread of the virus and providing financial assistance to struggling families.
They also assert that a number of unwise exemptions—plus a lack of enforcement and public awareness—have limited the program’s effectiveness.
“The emergency paid-leave provisions have been one important step in helping American families deal with this crisis,” said Sen. Kirsten Gillibrand (D-N.Y.). “Congress must extend the provision until this crisis is over. Paid leave is critical as the economy recovers.”
The program is among two dozen pandemic-related relief measures set to expire at the end of the year. Those include unemployment benefits, protections against evictions, student loan relief and payments for COVID testing.
The Democratic-controlled House twice approved bills extending most of those, including paid leave. But Republican leaders in the Senate have until this month refused to consider new relief and stimulus legislation. This week, negotiations have intensified on a compromise bill that extends some of the expiring measures. But an extension of paid sick days and paid leave is not included in that bill.
Capitol Hill staffers and workers’ rights advocates say a paid-leave extension could still be added to the relief bill or a government spending bill Congress must pass this month.
“It’s outrageous that paid leave is not in this legislation,” said Vicki Shabo, a senior fellow for paid-leave policy and strategy at New America, a Washington think tank. “The evidence is very clear paid sick days and leave help prevent spread of the virus, and it’s a benefit families overwhelmingly want and need.”
Neither the Trump administration nor President-elect Joe Biden responded to requests for comment, and neither has announced a position on the issue.
Paid sick leave “is in the public interest“
The current law requires businesses with fewer than 500 workers to allow their employees to take up to 10 days of sick leave at full pay and up to 50 more at two-thirds pay to care for a child when schools or day care centers are closed because of COVID-19.
The federal government covers the cost via tax credits to employers. The benefit covers mandatory 14-day quarantine periods for those exposed to the virus, whether they get sick or not.
Larger firms were exempted on the theory that most already provide paid sick days and some forms of extended paid leave—and don’t need federal subsidies.
But an analysis after the law was enacted found that the exemption leaves about 70 million workers in large businesses—roughly half the nation’s workforce—without the full protections offered under the COVID law.
The law and subsequent Department of Labor rules also permit firms with 50 or fewer employees to opt out of providing paid sick days or leave if they think their business will be adversely affected.
About 34 million people work for those small businesses—and the majority offer fewer than 10 paid sick days, if any. Few have extended paid leave.
In addition, the law has no guarantee of paid sick days or leave for the nation’s 13 million health care and emergency response workers.
The justification for that when the measure was enacted: Hospitals, clinics, nursing homes and emergency response companies needed to ensure that these essential workers would show up in a time of crisis.
“This was extremely shortsighted and bad policy,” said Pronita Gupta, director of job quality at the Center for Law and Social Policy in Washington, D.C. “We have seen the harmful outcome—the high number of coronavirus cases in health care facilities, especially among low-wage nursing home workers.”
Nor does the law offer extended paid leave for people who have COVID-19 or need to care for a family member with the disease beyond 10 days. Republicans opposed a broad-based benefit beyond at-home child care, advocates for the benefit noted.
“The problem is we now know that thousands of people who have COVID are sick for more than two weeks, some for months,” said Shabo. “These people need to be able to stay home and recover; that’s in the public interest as well.”
In a letter this month, a coalition of nine national public health groups urged Congress to extend the paid-leave benefits. “Paid sick leave can reduce the spread of COVID-19 in workplaces and communities by removing the barrier to employees staying home if they might have the virus,” the groups wrote. “Even one infection can set off an outbreak.”
Business groups are sympathetic, but some still oppose extending paid leave. Chief among them is the National Federation of Independent Business, a lobbying powerhouse that represents small businesses. Beth Milito, the group’s senior executive counsel, said that while small-business owners have been “highly sensitive” to their workers’ needs during the pandemic, mandating paid sick days and extended leave puts an undue burden on them.
“Figuring out who qualifies, monitoring who takes leave and then applying for the tax credit is all too much red tape,” Milito said. “It’s the hassle factor at a time when many businesses are barely making ends meet.”
Estimates of the program’s costs vary widely
Surveys show a majority of the estimated 70 million private- and public-sector workers covered under the law—after all the exemptions and carve-outs—don’t know about their right to paid sick days or leave.
“The lack of awareness has limited the potential of this benefit,” said Dawn Huckelbridge, director of the Paid Leave for All campaign, which is supported by a coalition of unions and employees and other groups. The Department of Labor, which administers the benefit, “simply fell down on the job,” she said.
Estimates last spring of the use and cost of the benefit varied widely—from around $20 billion to $105 billion.
But more recent estimates suggest it may be less. According to a Government Accountability Office report citing IRS data, as of the end of October about 150,000 employers had filed for paid family and sick leave tax credits, totaling $1.3 billion. The report noted, however, that many employers will likely wait until filing their taxes in the spring to claim the credit and recoup their costs.
The congressional Joint Committee on Taxation last month released fresh projections on the cost of an extension of paid leave—$1.4 billion if extended for two months and $1.8 billion for three months.
Although it’s too early for any full assessment of the paid-leave program’s impact, advocates point to a key study, published online in October in the journal Health Affairs. Researchers at Cornell University and the KOF Swiss Economic Institute found that in states where workers gained the right to paid sick leave under the emergency law, 400 fewer confirmed COVID cases were reported per day.
The researchers conclude: “Our findings suggest that the U.S. emergency sick leave provision was a highly effective policy tool to flatten the curve in the short run.”
KHN (Kaiser Health News) is a nonprofit news service covering health issues. It is an editorially independent program of KFF (Kaiser Family Foundation) that is not affiliated with Kaiser Permanente.


fortune--2020-12-18--What the markets want for Christmas: for starters, a trillion in stimulus spending

This is the web version of the Bull Sheet, Fortune’s no-BS daily newsletter on the markets. Sign up to receive it in your inbox here.
Happy Friday, Bull Sheeters. In the latest episode of Groundhog Day, Congress failed to reach a deal on a stimulus package, leaving investors—not to mention millions of struggling American families—in the lurch. Again.
Spoiler alert: they do it all over again today, and stocks will rise and fall on any perception of progress, regardless of how infinitesimal. The British-EU spin-off—called Brexit—is just as tedious.
Trade on Friday has been choppy on both sides of the Atlantic with U.S. futures flat, but off their lows. Adding to the volatility—it’s a quadruple witching day in the U.S.
Let’s check in on what’s moving the markets.
Markets update
Asia
The major Asia indexes are awash in red in afternoon trading with the Hang Seng down 0.7% .
are awash in red in afternoon trading with the down . The Trump Administration will add dozens of Chinese firms, including chips giant the country’s top chipmaker SMIC , to its trade block list, Reuters reports, a move that’s rocking Chinese markets. SMIC, at one point, was down 5% , in Hong Kong.
will add dozens of Chinese firms, including chips giant the country’s top , to its trade block list, Reuters reports, a move that’s rocking Chinese markets. SMIC, at one point, was down , in Hong Kong. Earlier this week, I shared survey data showing the stampede into emerging markets in recent months. Now, we have hard-currency data. Spoiler: the in-flows volume into EM is at the fastest pace in seven years.
Europe
The European bourses were in the red out of the gates before rebounding. 90 minutes into the trading session, the Stoxx Europe 600 was up 0.2% .
were in the red out of the gates before rebounding. 90 minutes into the trading session, the was up . The brutal COVID second wave is adding to trading volatility. Yesterday, France’s Emmanuel Macron disclosed he’d tested positive, and now Europe’s capitals are scrambling to contain a feared COVID-19 cluster akin to the one we saw in Washington in October.
is adding to trading volatility. Yesterday, France’s disclosed he’d tested positive, and now Europe’s capitals are scrambling to contain a feared akin to the one we saw in Washington in October. Yesterday’s optimism for an imminent Brexit deal has faded. Britain is warning that talks have been “blocked and time is running out” as the two sides cannot reach an accord over fish… Fish? Yep, fish. The pound fell on the news.
U.S.
U.S. futures are trading sideways. That’s after the major averages notched a record-setting session on Thursday—all three closed at all-time-highs.
are trading sideways. That’s after the major averages notched a record-setting session on Thursday—all three closed at all-time-highs. I woke up this morning, and there was no deal on a new stimulus package—just like every morning for the past six months. Clearly, Congress isn’t data-dependent. Brutal jobless figures, anemic retail sales data, an escalating poverty rate—none of these flashing-red warning signs can bring them to an accord.
on a new stimulus package—just like every morning for the past six months. Clearly, Congress isn’t data-dependent. Brutal jobless figures, anemic retail sales data, an escalating poverty rate—none of these flashing-red warning signs can bring them to an accord. Shares in Alphabet’s Google fell a mere 0.95% yesterday even after the search giant got slammed with its third antitrust case in the past two months. My colleague, Aaron Pressman, combed through the 130-page Texas-led suit filed earlier this week, and decoded all the redacted passages. It’s worth checking out.
Elsewhere
Gold is down, trading around $1,885/ounce .
is down, trading around . The dollar is up as futures sink.
is up as futures sink. Crude is flat, but Brent futures are trading above $51/barrel .
is flat, but futures are trading above . Bitcoin continues to march higher. It’s up 3%, trading around $23,000.
***
By the numbers
$88 billion
We’ve talked quite a bit about IPOs here, but not so much about SPACs. A refresher: SPACs are blank-check companies formed with the express intention of merging with or acquiring another company. Usually, if such a deal isn’t consummated within two years, the seed investors get their money back. Over the past 28 months, 272 SPACS have formed, raising $88 billion. A successful SPAC is one that goes public and then finds a firm to merge with, essentially filling the empty box with an actual company. According to Goldman Sachs, an overwhelming number of SPACs (71%) have yet to find a dance partner. That’s not a great hit rate. The clock is ticking on all those misfit empty-box SPACs, and yet the money continues to flow into the creation of new ones. What could go wrong?
29%
Congratulations, Bitcoin bulls. Crypto has been the trade of the week, with Bitcoin up 29% in the past seven days. (To put that into perspective, the Nasdaq 100, hitting an all-time high yesterday, is up 3% over that same period.) This is one of those atypical trades in that it started out as a retail play, and now institutional types have jumped in. Maybe too many institutional types; Bitcoin now ranks as the third most overcrowded trade, according to BofA’s most recent fund manager survey.
25,000
This is the last Bull Sheet newsletter for 2020. The first issue came out in mid-January. At that time, I was writing to a smallish community of about 3,000 readers. We’ve since grown more than 8-fold over the past 11 months to come in right around 25K readers. By that measure, Bull Sheet has grown at a faster clip than Tesla, Moderna and the FAANG stocks. Thank you for indulging all those moments I went off script—i.e, to riff on my roast turkey recipe or to take you on a few journeys around Italy—detours that will do nothing for your portfolios. I will see you all back here in January, 2021. I want to wish you and your families a happy holiday season, and my very best wishes for a prosperous new year.
Buone feste, tutti!
***
Have a nice day, everyone. I’ll see you back here in 2021… But first, there’s more news below.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.
Today's reads
Insider trading on Capitol Hill. Watchdogs have long been concerned that lawmakers can trade (and, indeed, they have traded) on the classified information they routinely receive before the rest of us. As such, Congress passed the Stop Trading on Congressional Knowledge (STOCK) Act in 2012. The law isn't doing the job, argues these economists who, to prove their point, analyze a big basket of the 2,596 trades executed by Georgia Senator David Perdue in his six years on the job.
The IPO market. In this week’s episode of our Brainstorm Tech podcast, Michal Lev-Ram talks to Lise Buyer of Class V Group about non-traditional methods of going public: SPACs and the auction model. Both are gaining popularity; Buyer explains why. Then, Brian O'Keefe speaks with Threshold Ventures' Emily Melton about how the rush to go public looks from the VC world, and what trends she's seen that will carry over into 2021. You can listen to the episode here.
Some of these stories require a subscription to access. There is a discount offer for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.
Market candy
How's the economy really doing?
Not great. The New York Times' Ella Koeze puts together nine charts that show the state of the American economy. With just a week before Christmas, the numbers, in some respects, look Dickensian. For starters, since February, nearly 10 million more Americans have lost their jobs and more than 4 million have left the work force entirely. More families are falling into poverty, and cannot put food on the table... In short, they're looking for a Christmas miracle.


fortune--2020-12-19--Moderna vaccine cleared in U.S., boosting immunization effort

Trump pardons : 7 high profile people who may get one

Moderna’s Covid-19 vaccine was cleared by U.S. regulators, the second vaccine to gain emergency authorization this month as a historic mass immunization effort ramps up across the country.
The Food and Drug Administration’s decision to grant the authorization Friday for the shot’s use among adults means that two of the six vaccine candidates identified by Operation Warp Speed are now available to the public, a feat accomplished in less than one year. Shots from AstraZeneca Plc and Johnson & Johnson that have also received U.S. government support are expected to be submitted for review next year.
Developed with the National Institutes of Health, Moderna’s shot, like the one produced by Pfizer Inc. and BioNTech SE that was cleared last week, is based on messenger RNA technology that previously hadn’t been used in vaccines. For Moderna, whose stock-market ticker symbol is ‘MRNA,’ it is also the first product from the company to be cleared by regulators for use. An application for full approval is expected next year.
“With the availability of two vaccines now for the prevention of Covid-19, the FDA has taken another crucial step in the fight against this global pandemic that is causing vast numbers of hospitalizations and deaths in the United States each day,” FDA Commissioner Stephen Hahn said in a statement.
On Thursday, a group of outside advisers to the FDA voted 20-0, with one abstention, to back the shot, which isn’t yet approved in any other countries and hasn’t yet been used on anyone outside of a clinical trial.
Moderna’s vaccine is 94.1% effective at preventing symptomatic cases of Covid-19 and was able to prevent the most severe infections, according to the FDA’s analysis of clinical trial results. Pfizer and BioNTech’s vaccine is 95% effective. Both shots far exceed the minimum standard of 50% efficacy the FDA set for clearing any potential coronavirus vaccine.
Shipping and Storage
Like the Pfizer shot, Moderna’s is administered in a two-dose regimen. However, it doesn’t require special equipment to be kept cold. Pfizer’s vaccine must be stored in ultracold freezers, but Moderna’s can be kept in a standard freezer like those found in most home kitchens. That is expected to make it easier to distribute and for many pharmacies to handle.
Operation Warp Speed, the Trump administration’s effort to speed vaccine development, made more than $950 million available to Moderna to develop the vaccine. The U.S. has committed to spend billions to purchase 200 million doses, enough to immunize 100 million people, and has the option to purchase another 300 million.
The option to secure more doses could be especially crucial to the vaccine rollout in the U.S., one of the most far-reaching mass immunization campaigns ever undertaken, a massive logistics endeavor that the U.S. Army general in charge of Operation Warp Speed has likened to the D-Day invasion.
When it comes to rolling out a new product at enormous scale, Moderna, as a young company, is untested. However, it may account for half or more of the early U.S. vaccine inventory. That’s because while the U.S. purchased 100 million doses from Pfizer last summer — enough for 50 million people — it initially passed on the opportunity to acquire more. On Thursday, Moncef Slaoui, chief scientific adviser to Operation Warp Speed, said the U.S. is close to a deal for another 100 million Pfizer doses.
Pfizer, maker of some of the biggest-selling drug products of all time, like cholesterol fighter Lipitor and erectile-dysfunction drug Viagra, has said it would need to fulfill orders from other countries before satisfying any new U.S. demand for more shots.
Health and Human Services Secretary Alex Azar said on Wednesday that 5.9 million does of Moderna’s vaccine would be sent out nationwide rapidly after the authorization. He said that 2.9 million doses of Pfizer’s vaccine have already gone out and another 2 million doses of the Pfizer shot will go out next week.
Moderna expects to be able to produce 20 million doses for the U.S. by the end of the year, and another 85 million to 100 million doses in the U.S. in the first quarter.
Overall, it and its manufacturing partner Lonza Group AG plan to produce 500 million to 1 billion total doses of its vaccine in 2021. The European Union, Canada and Japan also have large purchase agreements with the company, and the U.K. has secured 7 million doses.
Biotech darling
Based in Cambridge, Massachusetts, Moderna became one of the most richly valued private biotechnology companies before selling shares to the public for the first time in Dec. 2018. Though it had been working to develop numerous vaccines from its early days, its work on a potential personalized cancer vaccine drew the most attention.
Investors were initially skeptical of the stock, given the company had no portfolio of approved products from which to draw a reliable stream of revenue, and between its debut and the start of this year it had declined roughly 15%. But since the company began working on its vaccine, the shares have soared, leaping by more than eightfold.
Moderna’s victory is likely to increase hopes for other pharmaceutical products based on the mRNA technology. According to BioNTech Chief Executive Officer Ugur Sahin, the first such drugs for cancer may be approved in two to three years. A Moderna vaccine combined with Merck & Co.’s immuno-oncology drug Keytruda helped shrink tumors in 5 of 10 patients with advanced head and neck cancer, according to a study presented last month.
Companies are working to find ways to use mRNA for flu vaccines, as well as treatments for heart failure and cystic fibrosis. Messenger RNA vaccines may help produce immunizations for viruses that have evaded more conventional shots. For example, Moderna is working on a shot for cytomegalovirus, which can cause birth defects when passed from pregnant mother to unborn child and has eluded researchers for 50 years.


fortune--2020-12-19--Pfizer, Trump, and Biden: A twisted triangle that’s complicating COVID-19 relief

On Nov. 18, nearly a year into a pandemic that has killed more than 300,000 Americans, a modern miracle occurred: Pharmaceutical giant Pfizer and its partner BioNTech announced that its vaccine candidate had been shown in clinical trials to have a 95% efficacy rate and no serious side effects. The rollout, they said, would begin within a month of emergency use authorization.
Operation Warp Speed, President Trump’s public-private partnership meant to facilitate the development, manufacturing, and distribution of COVID-19 vaccines was a success, it seemed: 100 million doses, enough for 50 million Americans to receive the two required shots, were on their way, and that was just the beginning. Vaccines would soon be available to anyone who wanted them. Mission accomplished.
Markets shot upwards; spirits were buoyed. After nearly a year of nationwide trauma, an end was in sight.
And then the trouble started.
Last week, the New York Times broke a story claiming that the Trump administration had turned down the chance to lock in an additional 100 million doses. Dr. Scott Gottlieb, a member of Pfizer’s board, later confirmed to CNBC that the White House had turned down multiple offers from the pharma company. Now they were promised to other countries.
Trump administration officials responded with muddled messaging. One official said that the offer was declined because there was no known efficacy rate, although Gottlieb said the doses were turned down again after trial data was released. Then, on Monday, officials denied that they had turned down any offer at all. At the same time, Pfizer CEO Albert Bourla said on CNBC that the U.S. government had recently asked him for those additional 100 million doses but that the time frame it wanted them in might now be unobtainable. Negotiations are ongoing, he said. Health and Human Services Secretary Alex Azar confirmed to reporters Wednesday that officials “are engaged in active negotiations” with Pfizer to purchase more doses.
But Azar also used the opportunity to seed some doubt about Pfizer’s abilities to deliver the basics. Pfizer had informed Operation Warp Speed “about various challenges they may have in their manufacturing,” said Azar. “We will ensure they fulfill their contractual commitment.”
Pfizer countered that it was on track to meet its supply promises. “Pfizer has not had any production issues with its COVID-19 vaccine, and no shipments containing the vaccine are on hold or delayed,” Pfizer spokesperson Sharon Castillo said. “We are continuing to dispatch orders to the locations specified by the U.S. government.”
The pharma giant said that any delays in the rollout could be chalked up to a lack of clarity from the Trump administration. Pfizer says that it has shipped 2.9 million doses of the vaccine to states, and that millions of doses are in warehouses ready to be sent out—the company just needs to know where to send them. It’s the government, Pfizer says, that’s being unclear about when and where they should go.
Now, some states are reporting that they have been told to expect far fewer doses of the Pfizer-BioNTech COVID-19 vaccine next week. There has been little explanation, a fact that has frustrated state leaders charged with overseeing the vaccination process. “This is disruptive and frustrating,” Washington Gov. Jay Inslee posted on Twitter Thursday after he learned from the Centers for Disease Control and Prevention (CDC) that his state’s allocation would be cut by 40%. “We need accurate, predictable numbers to plan and ensure on-the-ground success.”
California, Connecticut, Georgia, Hawaii, Illinois, Kansas, Montana, Michigan, Nebraska, Nevada, New Hampshire, and Indiana are also expecting slashed shipments.
“To slash allocations for states—without any explanation whatsoever—is disruptive and baffling,” said Nevada Gov. Steve Sisolak in a statement. His state’s allocation will fall by 42% next week.
Both sides have been accused of using the media to negotiate, and fingers have been pointed, quite publicly, in nearly every direction.
About a quarter of the U.S. population remains hesitant to receive the vaccine; 55% of respondents who were hesitant cited a lack of trust in the government, and 51% reported they are worried about the role politics played in the vaccine’s development. The confusion and back-and-forth between the Trump administration and Pfizer certainly won’t assuage any hesitancy around getting vaccinated. In order to reach the herd immunity threshold for COVID-19, between 50% to 80% of the population will need to be vaccinated. By contrast, the flu only needs between 33% and 44% of the population vaccinated to reach herd immunity. Even minimal levels of vaccine hesitancy could prevent that from occurring.
What we know
In July, the Trump administration agreed to purchase 100 million doses of the Pfizer vaccine ahead of Phase III trials; the deal would be made good as soon as the FDA approved emergency use of the vaccine. The $1.95 billion contract also came with an option to buy an additional 500 million doses, which appears to be the initial cause of disagreement.
“We have been and continue to negotiate with Pfizer for additional doses. At no time did Operation Warp Speed turn down an offer from Pfizer for any number of millions of doses having a firm delivery date and quantity,” a senior official at HHS told Fortune.
The official said that Warp Speed had asked for a “delivery schedule for doses in excess of the original 100 million so that we could finalize an updated agreement with Pfizer,” well before the data from Pfizer’s Phase III trial became available in November. The problem, he explained, is that Pfizer could not supply a delivery date or give a reasonable time frame for those additional doses.
This summer, Pfizer announced that it would have 100 million doses ready by the end of the year, but by November, a number of supply chain issues caused the company to scale the number back to 50 million doses, which would fully vaccinate 25 million Americans, further frustrating the Trump administration.
“Should at any time we feel we are being treated unfairly, we will use every lever at our disposal to address the situation,” the Trump administration official added, referring to ongoing negotiations.
That comment comes in reference to Pfizer’s request for the U.S. to exercise the Defense Production Act (DPA) in order to provide the company with additional equipment to aid in manufacturing more doses of the vaccine.
“I think it would be very positive, and I think that it will allow us to maximize what we can do,” said Bourla of the DPA on CNBC this week. “We are asking them right now…and I hope that they will do it very soon because, particularly in some components, we are running at critical supply limitations.” The DPA, a law that gives the President the emergency authority to “allocate materials, services, and facilities” for purposes of national defense, would help increase supplies of raw materials for the vaccines, which are often expensive and in short supply.
The disagreement, however, is over the conditions that come with the DPA—and the increased control the government would gain over the doses and Pfizer’s actions if it were invoked. Those controls could mean that the government would require Pfizer to prioritize the U.S. over other nations and perhaps renege on supply contracts across the world, say legal scholars.
The legal play
On Nov. 11, Pfizer entered into a supply agreement with the European Union for 200 million doses of its COVID-19 vaccine, which are expected to be delivered by the second quarter of 2021. On Wednesday, it was announced that the company would supply 100 million doses to China by the end of 2021.
If Pfizer agrees to the DPA, the federal government could require the U.S.-based company to prioritize the U.S. over deals with foreign countries, so long as the vaccine is produced in domestic factories. But the government won’t be able to control Pfizer’s manufacturing lines abroad and could potentially step into diplomatic trouble by forcing Pfizer to spurn its deals with foreign governments.
Experts in international pharmaceutical contracts say that it’s boilerplate for deals to include an explicit recognition that in some circumstances, such as if the U.S. demands the dosage first, the company can delay or end its contract without significant repercussions. While the contracts have not been made public, it’s likely that the federal government and Pfizer are working together to find and discuss what is possible within legal limits.
The U.S. is also engaged in a number of bilateral investment treaties with countries in Europe and across the globe, and these agreements typically provide investors with protections in one another’s markets. The federal government forcing a private company to void contracts for lifesaving medicines would likely raise some questions about violating the terms of the treaties. The U.S. has been working on such an agreement with China for years, and while nothing official is in place, there would certainly be damage done to the negotiating process.
Trump signed an executive order last week that prioritized vaccinating Americans before providing doses to other countries, but the EO was largely symbolic. It’s not clear if the President has the authority to prevent companies from fulfilling international contracts, and because Pfizer finalizes its vaccine in its Belgium factory, the President likely has little control over it. A summit held in honor of the order was quickly politicized, and representatives from Pfizer and Moderna did not attend, nor did any representatives from the Biden transition team.
Name your price
All signs indicate that ongoing negotiations around the vaccine have more to do with power than price tag. If anything, it appears that the Trump administration would like to spend more, so long as they have control over production. But cost still factored into earlier orders, according to officials.
“The simplest explanation [of why the U.S. initially turned down the extra doses of Pfizer’s COVID-19 vaccine] is one of two things,” said Christopher Snyder, a professor of economics at Dartmouth College and a member of Accelerating Health Technologies, a group focused on the financial and economic cases for vaccine development. “Either the negotiator knew the enormous economic value of the tranche of doses to the U.S. and botched the deal, or the negotiator botched the economic calculation of the enormous benefits to having these doses.”
Holding negotiations so publicly while holding up the possible delivery of more vaccination units is not worth the “couple of million of dollars” that may be saved by the Trump administration, he said. “The trillion-dollar risk to the health and welfare of the country is not worth taking…It’s worth a billion-dollar payment.”
Biden incoming
Whatever the holdup is, it will be handed over to the Biden administration a month from now. President-elect Joe Biden and his team will be left with the task of parceling out the bulk of the vaccinations that the Trump administration had purchased and negotiated for.
Initial fears that Trump and the General Services Administration’s refusal to onboard the Biden transition team would lead to delays in the vaccine distribution process have subsided, and Biden’s team appears to be regularly meeting with pharmaceutical executives without the Trump administration.
“We’re in regular conversations with Pfizer, Moderna, and other companies who are working to develop vaccines, and our focus is making sure safe and effective vaccines are available to all Americans and to the world as soon as possible,” TJ Ducklo, spokesperson for Biden’s transition team, told Fortune.
The transition team, said Trump officials, is receiving briefs about ongoing negotiations but is not directly involved. And Castillo, the Pfizer spokesperson, noted: “Pfizer is in regular communications with both the Trump administration and the Biden transition team.”
Yet, even with things on track, the Biden administration is still playing catch-up. Ron Klain, who will serve as White House chief of staff under Biden, told Meet the Press: “We’re going to have meetings between our top scientific advisers and the officials of these drug companies,” but the “bigger issue will be the mechanics of manufacture and distribution, getting this vaccine out. That really lies with folks at the Health and Human Services Department. It’s great to have a vaccine, but vaccines don’t save lives; vaccinations save lives…It’s a giant logistical project.”
Biden will work to depoliticize the nature of the vaccination, a goal that the Trump campaign had not worked toward.
Donald Trump Jr., the President’s eldest son and campaign surrogate, accused pharmaceutical companies, without evidence, of waiting to release clinical trial results of the vaccination until after November’s presidential election.
“They all knew it but kept it from the public on purpose,” he wrote on Twitter. “Big Pharma hates Trump for taking on the gouging of Americans with drug pricing while offering the same drugs elsewhere in the world for pennies in the dollar.”
Senate Democrats, meanwhile, have launched a probe into why the White House passed on Pfizer’s extra doses. “We are concerned the failure to secure an adequate supply of vaccines will needlessly prolong the COVID-19 pandemic in this country, causing further loss of life and economic devastation,” a group of lawmakers wrote to leaders of Operation Warp Speed.
Other options
This summer, the Trump administration signed six contracts with vaccine makers, including Moderna, the second company to have a COVID-19 vaccine approved for emergency use, and Johnson & Johnson, which just enrolled 45,000 participants for its late-stage vaccine trial.
The strategy was intended to maximize the success of finding a vaccine that worked—but also to be used as a bargaining chip. “You can make an economic case for saying, ‘Well, look, we have several successful manufacturers, AstraZeneca and Pfizer and Moderna, so we can be a little bit tougher in our negotiations,” said Snyder, adding that “it’s still a very bad economic decision.”
The government is contracted to receive 100 million doses of the Moderna vaccine—also a two-dose system, which would fully vaccinate 50 million Americans. Those will begin to ship immediately: Moderna plans to distribute 20 million doses this month. And unlike Pfizer, the government has a larger role in the development and manufacturing of this vaccine. Warp Speed provided Moderna with $4.1 billion in total, including the price for the doses.
Pfizer initially spurned additional funding to aid in manufacturing, claiming that there was a worry that government oversight would harm its work. That left administration officials with a limited understanding of what the company was doing on a week by week basis and an air of mistrust.
“We remain confident that across our portfolio of multiple vaccines we will have enough doses for any American who wants a vaccine by the end of Q2 2021,” said a senior Trump administration official.


fortune--2020-12-19--Zoom says it’s being probed by SEC, two U.S. attorneys offices

Zoom Video Communications said it has provided information to multiple U.S. prosecutors and regulators regarding interactions with China and other overseas governments, as well as security and user privacy matters.
The U.S. Securities and Exchange Commission and two U.S. Attorney’s offices have been investigating Zoom for months, the San Jose, California-based company said Friday in a blog post and a filing. The videoconferencing company disclosed the legal and regulatory scrutiny the same day a former employee was charged by the U.S. Department of Justice for assisting China to block a remote gathering on the service commemorating the anniversary of the Tiananmen Square uprising.
The China-based staffer, Xinjiang Jin, who also goes by “Julien Jin,” was charged in absentia for conspiring to censor Chinese dissidents by disrupting the Zoom conference in June. Jin was meant to be Zoom’s liaison with Chinese authorities on national security requests, but instead did the government’s bidding in concert with other employees, prosecutors said. Zoom said it terminated Jin’s employment during the course of an internal investigation, and has placed employees suspected of assisting him on leave until it completes the inquiry.
Read more: Ex-Zoom China Employee Is Charged With Censoring Dissidents
The videoconferencing provider also said it had received a grand jury subpoena in June from the U.S. Attorney’s Office for the Eastern District of New York, requesting information about interactions with foreign governments and political parties, including the Chinese government. The federal prosecutors also sought details on the company’s storage of and access to user data, its privacy policies and its actions around the Tiananmen meetings that Jin had allegedly disrupted.
In July, Zoom received subpoenas from the U.S. Attorney’s Office for the Northern District of California and the SEC. Both sought documents and information about security and privacy matters, such as Zoom’s data encryption, how the company calculates usage metrics and public disclosures about each. The prosecutors also asked for information about contact between Zoom employees and representatives of the Chinese government, as well as if a foreign government had ever tried to or succeeded in influencing the company’s policies, practices or actions relating to U.S.-based users. Zoom said it was “fully cooperating” with the inquiries.
Zoom’s popularity has exploded during the coronavirus pandemic with millions of people forced to remain at home to help prevent the spread of Covid-19. Workers, students and families count on the video-meeting service to keep them connected to colleagues, teachers and loved ones. At the end of October, Zoom said it had 433,700 customers with more than 10 employees compared with 74,100 in the fiscal third quarter a year earlier. The company’s stock has jumped 500% this year, closing Friday at $406.01 in New York.
Zoom settled a case in November with the U.S. Federal Trade Commission, which accused the software maker of deceiving customers about its platform’s level of security.
Update: This article has been updated with information about an SEC probe and a probe by U.S. attorneys.


fortune--2020-12-19--Google blames Gmail, YouTube outage on error in user ID system

Google diagnosed a widespread outage that knocked out major services earlier this week, such as Gmail and YouTube, as a mistake with its system for identifying people online.
Alphabet’s Google has several tools that enable it to verify and track logged-in users. In October, the company began moving those tools to a new file storage system, and in the process misreported portions of the data, according to a Friday post. That caused several of its services to go down for 47 minutes Monday morning, a rare technical misstep.
Google’s explanation comes amid heightened cybersecurity vigilance. A hack on software provider SolarWinds has exposed companies including Microsoft and multiple U.S. government agencies. A Google spokeswoman said on Friday that the internet giant has found no evidence the SolarWinds hack affected Alphabet or Google’s systems.
About 15% of requests sent to Google’s cloud storage service were disrupted during the Monday outage, the company said. The cloud division offers an identification service similar to one from Okta Inc.
On Tuesday, Google’s Gmail service had another disruption. The company attributed this to an issue with data migration.