DealBook Briefing: Behind Silicon Valley’s Big Cyberwarfare Pledge

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A ‘Geneva Convention’ for cyberwar?

In pledging not to help any government — including the U.S. — with cyberattacks against “innocent civilians and enterprises,” Microsoft, Facebook and 29 other tech companies are trying to distance themselves from the messy business of national cyberwarfare.

That may reassure some tech workers. (Earlier this month, Google employees protested their company’s work on a Pentagon project, saying the tech giant “should not be in the business of war.”)

The NYT’s David Sanger says the impetus came largely from Microsoft’s president, Brad Smith, “who has been arguing for several years that the world needs a ‘digital Geneva Convention’ that sets norms of behavior for cyberspace just as the Geneva Conventions set rules for the conduct of war in the physical world.”

Also striking: Who hasn’t yet signed, including Google, Apple and Amazon.

The context: The U.S. and Britain just yesterday warned about sweeping Russian cyberattacks on governments, businesses and private individuals.

Elsewhere in tech: Tesla halted production of its Model 3 to work out kinks. Netflix reported its strongest subscriber growth since going public. Investors are considering dropping Facebook from their FAANG bets, while a federal judge gave a photo-scanning lawsuit against the company class-action status. Amazon Business is reportedly holding off on selling drugs to hospitals. Coinbase is buying the paid inbox service And TaskRabbit has gone offline to investigate a possible hack.


Today’s DealBook Briefing was written by Michael J. de la Merced and Amie Tsang in London.


The U.S.-China fight has pushed deeper into tech

Trump administration officials said that moving to block China’s ZTE from using U.S. components wasn’t a trade-related decision. But it’s hard not to see as the latest salvo in Washington’s fight with Beijing, particularly over technology. (Another Chinese tech giant, Huawei, is scaling back its U.S. presence.)

China’s trade deficit with the U.S. is widening. But China offered an olive branch today by loosening regulations for foreign makers of electric vehicles.

On currency concerns: The Treasury Department chose not to label China as a currency manipulator. President Trump disagreed: “Russia and China are playing the Currency Devaluation game.” The truth is more complicated.

What was Michael Cohen doing for Sean Hannity?

Now that Mr. Hannity has been revealed as a legal client of Mr. Cohen’s, the media world has wondered what Fox News star wanted from the lawyer used by President Trump and the disgraced Republican donor Elliott Broidy.

Mr. Hannity has denied paying Mr. Cohen legal fees and asserted that none of their talks involved a matter involving him and a third-party — i.e., a settlement. (The talks, he said, were brief and about real estate.)

More eye-catching is the Fox News host’s contention that he might have slipped Mr. Cohen a few bucks for attorney-client privilege, which appears to be right out of “Breaking Bad.” (And legally erroneous.)

The political flyaround

• President Trump has nominated Richard Clarida, an economist specializing in monetary policy, as the Fed’s vice chairman. (NYT)

• Republicans want to run on tax cuts, but most Americans — including President Trump — seem uninterested. (NYT)

• The White House has ruled out further sanctions against Russia for its role in Syria, contradicting the ambassador to the U.N., Nikki Haley. (WaPo)

• James Comey’s book tour, with its attacks on President Trump, may damage his nonpartisan credentials, and has irritated Hillary Clinton supporters.

• The E.P.A. broke rules when buying Scott Pruitt’s $43,000 secure phone booth, a congressional watchdog found, while the Interior Department’s inspector general criticized Ryan Zinke for a $12,375 chartered flight. (WSJ)

Net-a-Porter founder’s next act: venture capital

Natalie Massenet had planned to largely retire after leaving the online luxury retailer. Instead, she has teamed up with the venture capitalist Nick Brown to form Imaginary Ventures, which recently raised $75 million to invest in direct-to-consumer start-ups.

More from Michael:

The deals flyaround

• 21st Century Fox’s general counsel, Gerson Zweifach, argued in an FT op-ed that his company deserves a quick decision on its bid for the British broadcaster Sky. (FT)

• Volkswagen is considering buying the rest of Navistar, the truck maker where it has a 17 percent stake. (WSJ)

• SoftBank and Apollo Global Management are each said to be pursuing a takeover of the newspaper publisher Tronc. Gadfly says that SoftBank isn’t being nice to bondholders.

• Carl Icahn has effectively gotten out of casinos by selling Tropicana Entertainment for $1.85 billion. He has also put up candidates to replace SandRidge Energy’s board.

• Big activist investors, including Bill Ackman and Nelson Peltz, lost money in the first quarter; smaller rivals did better. (Reuters)

• Marriott Vacations Worldwide is said to be in talks to merge with another timeshare services provider, ILG. (Reuters)

• In telecoms, Bouygues is said to be in talks with potential partners like CVC Capital about bidding for Altice’s France unit. (Bloomberg)

#MeToo takes center stage at the Pulitzers

The NYT and The New Yorker shared the most prestigious Pulitzer Prize, that for public service, for their work on covering the harassment scandals in business, politics and the arts. What began with the NYT’s exposé of Bill O’Reilly’s settlements over sexual harassment allegations exploded with the two publications’ investigations into Harvey Weinstein.

Here’s the full list of prizewinners.

Elsewhere in workplace news: At an NYT event, female U.S. senators recounted the challenges they have faced. And the investment firm Legal & General said that it plans to vote against the chairs of British companies if less than a quarter of their boards are women. And Nike’s head of diversity has stepped down.

Steve Ballmer’s ‘shareholder meeting’ for the U.S. is today

When the former Microsoft chief set up USAFacts, he described its main project to Andrew as a 10-K for the U.S. government. Today, Mr. Ballmer will present its findings at what USAFacts says is a sort of annual meeting for taxpayers.

Mr. Ballmer said of the latest report, “Public companies owe this level of transparency to shareholders; I think citizens, as America’s shareholders, deserve the same.”

Watch the livestreamed meeting today at 1 p.m. E.T.

Everytown lays out gun-control principles for investors

As more financial firms move to pressure gun makers and sellers into self-regulation, the advocacy group (backed by Mike Bloomberg) plans to ask them to press for more policy positions and operational changes.

Among them: Requiring background checks for all gun sales; more funding for the Bureau of Alcohol, Tobacco and Firearms; having gun makers require sellers to adopt a code of conduct; and adopting smart-gun tech.

Revolving door

• Kirkland & Ellis has poached two more lawyers from Cravath, Swaine & Moore: the litigators Sandra Goldstein and Stefan Atkinson. (Kirkland)

• Ben Frost, Morgan Stanley’s co-head of consumer and retail investment banking, is said to have left the firm and begun talks about joining Goldman Sachs. (Reuters)

• Lululemon named P.J. Guido as its new chief financial officer. It’s still looking for a C.E.O. (Bloomberg)

• The head of Cantor Fitzgerald’s broker-dealer unit, Shawn Matthews, is leaving to start a hedge fund. (Bloomberg)

The speed read

• The banking heir Matthew Mellon, from the Mellon and Drexel families of Bank of New York Mellon and Drexel Burnham Lambert, died at 54. And David Edgerton, a founder of Burger King, died on April 3 in Miami at 90.

• Eastern Europe’s fast-growing economies have severe labor shortages, and growing numbers of robots. (NYT)

• Steve Wynn has settled a long-running lawsuit over a dissolved shareholders’ agreement with his ex-wife, Elaine Wynn. (WSJ)

• The S.E.C. is investigating Guggenheim Partners over the purchases of three California mansions and loans to a now-bankrupt retailer. (FT)

• Larry Fink is finally a billionaire. (Bloomberg)

• Robert Mercer gave up his police badge in Lake Arthur, N.M., but he’s now volunteering for Sheriff Chad Day of Yuma County, Colo. (Bloomberg)

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