Good Wednesday morning. Breaking: S.&P. 500 futures are down after President Trump told Russia to “get ready” for a new bombing campaign in Syria. Some links require subscriptions.
The big takeaways from yesterday’s Facebook hearing
Andrew writes: These were the most important words from Mark Zuckerberg’s five-hour testimony: “I agree we are responsible for the content.” They may come back to haunt him, given his previous rejection of calling Facebook a publisher. He later backtracked and called his business a tech company, but his acknowledgment may fundamentally shift the conversation — and how the company operates. (All in all, Mr. Zuckerberg did better than anyone had expected.)
More from Peter Eavis:
Meanwhile, Andrew sees the prospect of a paid version of Facebook:
Mr. Zuckerberg’s second Congressional appearance, with the House Energy and Commerce Committee, starts today at 10 a.m. E.T. Here’s where it will be livestreamed.
• Paul Pendergrass writes, “If Mr. Zuckerberg can convince lawmakers and users that he is the most capable and determined person to fix his company’s problems, then the company can start turning the corner on this crisis.”
• Kara Swisher of Recode tweeted that Mr. Zuckerberg won yesterday’s hearing “not because he was so good (he was fine if a little flat), but because the senators really dropped every single ball possible.”
• Sara Fischer and Dan Primack of Axios write, “Mark Zuckerberg on Tuesday morphed from a shy tech nerd into a confident business executive who ran circles around lawmakers.”
• Shira Ovide of Gadfly writes: “Zuckerberg believes he’s giving users control, but he’s giving them the illusion of control. And that means the consent of Facebook users is not informed.”
Elsewhere in Facebook: Robert and Rebekah Mercer have tried to mend fences with the tech giant on behalf of Cambridge Analytica. Some user data obtained by Cambridge Analytica included private messages. Facebook collects more info about you than you realized. And could Instagram help bail out its parent company?
Today’s DealBook Briefing was written by Andrew Ross Sorkin in New York, and Michael J. de la Merced and Amie Tsang in London.
Bank of America limits gun deals
Add the U.S.’s second-biggest bank to the list of financial firms wading into the gun control debate. Bank of America said it would stop lending money to companies that make military-inspired firearms for civilians, such as AR-15-style rifles.
Bank of America works with “just a handful” of such manufacturers, according to its vice chairwoman Anne Finucane. Their reactions? “Mixed,” she said.
(Still unclear: how this affects Remington Outdoor, which owns Bushmaster and is getting through Chapter 11 bankruptcy proceeds with the aid of an asset-backed loan from Bank of America and several other institutions.)
The DealBook tally of financial firms that have taken steps to limit gun sales: Citigroup, Amalgamated, BlackRock, Bank of America. (Know of another? Do tell us.)
A thought bubble on the Michael Cohen raid
Why did Geoffrey Berman, the Trump-appointed interim U.S. attorney for the Southern District of New York, which oversaw the F.B.I. searches, recuse himself from the case? DealBook readers might recall that Mr. Berman was a longtime lawyer for Deutsche Bank, one of the few major banks that lent money to Trump in recent years.
On the legal issues behind the raid: Though President Trump has complained on Twitter that “attorney-client privilege is dead” after the F.B.I.’s searches at his personal lawyer’s office and hotel room, DealBook’s Peter Henning explains why that’s not the case. (So does George Conway, the husband of Kellyanne Conway.)
More on Mr. Cohen: The F.B.I. sought records related to payments to Stormy Daniels and Karen McDougal, who claim to have had affairs with Mr. Trump. And how the lawyer attracted federal attention.
The political flyaround
• Robert Mueller corner: President Trump is still seething about the special counsel, and advisers worry he will try to fire him or the deputy attorney general, Rod Rosenstein. He sought to shut down Mr. Mueller’s investigation in December, the NYT has reported, though it’s disputed whether he could fire him directly. Republican leaders in Congress still oppose legislation to protect the special counsel.
• What the tariffs on imported metal have cost a Pennsylvania manufacturer. And how China may be working around them, legitimately or otherwise. (It also seems to have returned to intellectual-property hacking.)
• Tom Bossert was forced out as the Trump administration’s homeland security adviser days after John Bolton became national security adviser. (NYT)
• The E.P.A. is reviewing threats to Scott Pruitt on social media to see if his costly security detail is justified. (NYT)
• Mr. Trump is skipping the Summit of the Americas this weekend and, critics say, missing an opportunity to mend fences with Latin America. Vice President Mike Pence will go. (Axios)
The heat is on Oleg Deripaska and other Russian oligarchs
Mr. Deripaska in particular is suffering from the U.S. sanctions against associates of President Vladimir Putin and their companies. According to analysts, traders and bankers , he may soon need Russian government support to stay afloat: Shares in Rusal, the aluminum producer he controls, have fallen 55 percent since Friday, when the sanctions were unveiled.
It’s a humbling blow to Mr. Deripaska, who has sought Western acceptance. A former State Department official told Bloomberg he “had it coming.”
The pain isn’t likely to end. A top U.S. Treasury Department official has warned of “consequences” if British firms continued to do business with sanctioned companies.
Another year, another set of Sprint-T-Mobile talks
After the two companies failed to reach a deal last year (and in 2014, and 2011), they’re back in talks, Michael hears. Shares in both companies jumped — Sprint 17 percent, T-Mobile 5.7 percent — after the WSJ reported on the restart.
It’s not exactly a surprise. SoftBank’s Masa Son bought control of Sprint planning to merge it with T-Mobile, the better to fight Verizon and AT&T. And most analysts agree that both companies need to become bigger to survive.
The deals flyaround
• The F.C.C. is reportedly pushing back on part of Sinclair’s plan to win approval of the $3.9 billion acquisition of Tribune — selling Tribune TV stations in New York City and Chicago to companies affiliated with the broadcaster’s founding family. (WSJ)
• Saudi Arabia agreed to a flurry of investments in France after Crown Prince Mohammed bin Salman’s three days there. The kingdom also sold $11 billion worth of bonds — just as Qatar was lining up its own debt sale.
• Carl Icahn agreed to sell Federal-Mogul to Tenneco for $5.4 billion, in an apparent blow to his dreams of an auto-parts empire. (Bloomberg)
• Aviation corner: Global Infrastructure Partners is reportedly considering selling its 42 percent stake in London Gatwick Airport. easyJet, Air France-KLM and Cerberus Capital Management have reportedly approached Alitalia about buying it together. Qatar and JetBlue have invested in JetSuite, a private jet company. And Google is reportedly in talks to buy Nokia’s in-flight broadband business.
• A group led by Patrick Soon-Shiong, owner of The L.A. Times, is reportedly close to buying the D.C. United soccer team. (FT)
• The investment firm Altaris agreed to buy Analogic, which makes M.R.I. and luggage-screening equipment, for $1.1 billion. (WSJ)
• Vitol and the Carlyle Group have scuttled an I.P.O. of Varo Energy, a fuel refiner and distributor. (FT)
• Volkswagen plans to oust its C.E.O., Matthias Müller, as it works to move past the diesel emissions scandal. He’s likely to be replaced by Herbert Diess. (NYT)
• The head of Britain’s Serious Fraud Office, David Green, is to step down; the C.F.O, Mark Thompson, will be interim director. (WSJ)
• A.P. Moeller-Maersk wants a female C.F.O., its first, to combat a widening gender gap in its senior management ranks. (Bloomberg)
The speed read
• The European Commission raided the London offices of 21st Century Fox as part of an antitrust investigation into sports programming. (Bloomberg)
• Martin Shkreli must pay a defrauded hedge fund investor $388,000 in restitution, a federal judge ruled. (CNBC)
• A fat-finger error at Samsung Securities involving more than $105 billion of accidentally issued shares has prompted South Korea’s National Pension Service to cut ties. (WSJ)
• Theranos reportedly laid off most of its remaining workers to put off bankruptcy. (WSJ)
• Bank loans to nonbank financial firms increased sixfold between 2010 and 2017 to a record high as banks tried to avoid direct exposure to riskier loans. (WSJ)
• Farmers are hitting the road to reach shoppers before Amazon does. (NYT)
• Norway’s sovereign wealth fund cannot invest in private equity, but may be allowed to put money into renewable infrastructure. (FT)
• China ordered Beijing Bytedance Technology to shut a popular joke-sharing app and delete its WeChat account as part of a censorship campaign. (Bloomberg)
• China’s central bank chief filled in details on President Xi Jinping’s promise to open up the financial sector. (Bloomberg)
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