DealBook Briefing: The Fallout from the Steve Wynn Scandal

Good Monday morning. This just in: Keurig Green Mountain plans to buy Dr Pepper Snapple. Steve Wynn has become the highest-profile C.E.O. enmeshed in #MeToo. How did President Trump do at Davos? And what is the government thinking about on 5G networks?

In the wake of a WSJ investigation into allegations of sexual assault and misconduct, the casino magnate’s empire has already taken a hit. He has also resigned as the Republican National Committee’s finance chairman.

But more pain is probably in store for Mr. Wynn, whom the veteran reporter Jon Ralston calls “the biggest name in the history of Nevada business.”

The corporate fallout

The Wynn board — long criticized as too cozy with its chairman — has already said that it will form an independent investigating committee.

Then there’s the question of what will happen to Mr. Wynn’s casinos, particularly in Macau, which accounts for the vast majority of Wynn Resorts’ revenue.

More from Daniela Wei and Bruce Einhorn of Bloomberg:

Whether Mr. Wynn will be ousted — for a second time — is unclear. He owns 21 percent of Wynn Resorts, but has no extra voting power.

The political fallout

Lawmakers are starting to distance themselves, with House Speaker Paul Ryan donating $1,000 he had received from a Wynn affiliate to charity. “We were in the dark for 24 hours,” one unnamed R.N.C. member fumed to Robert Costa of the WaPo.

Mr. Wynn wasn’t among the top 100 political donors in the 2016 election cycle. But President Trump chose him as the R.N.C.’s finance chair, and he hosted a fund-raiser for the president at Mar-a-Lago on Jan. 20.

More misconduct news

• Senator Marco Rubio, Republican of Florida, fired his chief of staff this weekend over inappropriate relations with lower-level employees.

• Investment funds are piling into the settlement-advance industry, in which firms pay plaintiffs in anticipation of a big court victory.

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Today’s DealBook Briefing was written by Andrew Ross Sorkin in New York, and Michael J. de la Merced and Amie Tsang in London.

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Andrew’s take:

Per Daniel Yergin of IHS Markit:

And Ishmael Sunga of the Southern Africa Confederation of Agricultural Unions:

Mr. Trump’s speech, largely written by Gary Cohn and the White House staff secretary, Rob Porter, was both a defense of the White House’s nationalist policies and a case for international cooperation, on U.S. terms. (“America first does not mean America alone.”)

The bigger picture

While Mr. Trump sought to play down any isolationist tendencies — and the director general of the World Trade Organization said, “I haven’t seen anything at this point that we are in a trade war” — China was still in his sights.

A headline from The South China Morning Post: “China should ‘be ready for a trade war’ after Donald Trump’s Davos speech.”

(To many attendees, China remained the real star of this year’s World Economic Forum.)

A bit of color: Many C.E.O.s left Davos before Mr. Trump’s speech.

Also, this happened: Andrew was pelted with a snowball by Steven Mnuchin.

Depends what we’re talking about. Axios reported that the White House has considered creating a centralized, national 5G network for national security reasons, citing a National Security Council memo.

More from Jonathan Swan, David McCabe, Ina Fried and Kim Hart of Axios:

Bloomberg, citing its own sources, paints a slightly different picture: “The U.S. is in talks with private companies to build a secure 5G network amid concerns about China and cybersecurity.” The decision deadline is the end of September.

The bigger picture

AT&T, Verizon, T-Mobile and others have already spent billions of dollars on 5G networks. Given its speed and data capacity, it remains their biggest initiative, and it’s unclear how much control, if any, they would be willing to give up.

Any nationalization effort would run counter to how the government has handled wireless infrastructure for decades: by auctioning off the airwaves and letting private companies do the work.

From AT&T’s statement on the issue:

• Republican lawmakers warned Mr. Trump not to fire Robert Mueller, but showed little interest in a bill to protect him. (NYT)

• The Koch brothers’ political network plans to spend as much as $400 million on this year’s midterm elections. (Axios)

• A portrait of Paul Manafort as a dangerously successful foreign-policy entrepreneur. (Atlantic)

He spoke to Reuters shortly before being freed from detention in the Riyadh Ritz-Carlton over the weekend:

The prince denied forfeiting a significant part of his fortune or pledging donations to projects spearheaded by his jailer, Crown Prince Mohammed bin Salman. But analysts in the region still think his ultimate settlement will be pricey.

Shares in Kingdom Holding are back to where they traded before Mr. bin Talal’s detention.

The big questions: Will international businesses feel better about investing in Saudi Arabia after what the crown prince said was a crackdown on corruption? And how much will the kingdom collect from the royals who were detained?

In other Saudi news: The government still hasn’t decided where to list Aramco, and it may not begin trading on an international stock exchange this year. Meanwhile, the U.S. oil industry is still riding high.

That’s in the wake of the NYT Magazine’s inquiry into Devumi, a company that sold millions of fake followers (some using stolen identities) to the likes of Michael Dell and the Twitter director Martha Lane Fox. “Impersonation and deception are illegal under New York law,” the state attorney general said.

The big question

Do Twitter and other social media companies really want a crackdown? Here’s the take of Dan Leal, a pornographer who bought followers:

In other tech news: Intel’s initial disclosures about flaws in its chips included briefings for Chinese tech companies but not the U.S. government, the WSJ reported, citing unnamed sources.

• Sanofi agreed to buy Ablynx, a Belgian biotech company, for $4.7 billion. (Reuters)

• Three activist investors — Shah Capital, Barington Capital Group and NuOrion Partners — who together own a 3.5 percent stake in Avon plan to push the cosmetics maker into selling itself. (WSJ)

• Low interest rates, legal bills and capital demands have eroded profits at European banks, making the rationale for mergers more compelling. (Bloomberg)

• Alibaba and Foxconn led a $350 million fund-raising round by Xiopeng Motors, an electric carmaker that wants to be China’s Tesla. (Bloomberg)

• Leonard Green is near a deal to buy Pro Mach Group, a packaging company, for more than $2.2 billion, including debt, according to unnamed sources. (Reuters)

Coincheck, a Japanese digital currency exchange, promised to partially reimburse customers after being hit by a $500 million theft on Friday. But the heist has again raised the prospect of more regulation.

Coincheck has until Feb. 13 to explain the cause of the incident and how it will stop it happening again.

Another Bitcoin no-trade zone: Deutsche Bank’s wealth management unit is advising clients against investing in virtual currencies

• Ingvar Kamprad, who made a multibillion-dollar fortune with Ikea and introduced the world to cheap, Nordic-designed furniture, died on Saturday.

• William McDonough, who led the New York Fed through both Sept. 11 and the Long-Term Capital Management crisis, died last week.

— Bill Gates, speaking about social media, A.I. and many other topics in the NYT’s Table for Three column.

• Every major economy on earth is expanding. (NYT)

• The expansion of the U.S. economy rests on consumer confidence. But history indicates that it will eventually shift the other way, writes Robert Shiller. (NYT)

• The L.A. Times is expected to name Jim Kirk, former editor and publisher of The Chicago Sun-Times, as its next editor in chief. He replaces Lewis D’Vorkin, who touched off unrest in the newsroom. (NYT)

• Some consolation for the places that lost out on being Amazon’s HQ2: Their applications will help Amazon pick warehouse and secondary office sites. (NYT)

• In China, the collapse of a string of online investment companies has devastated small investors. Beijing is acting to tamp down on potential unrest. (NYT)

• HNA Group’s liquidity woes could test China’s legal system. (FT)

• Tech giants are scrambling to prepare for stringent new data privacy rules in Europe, with Facebook rolling out a new global data privacy center on Sunday. (NYT)

• Rob Norman, the retiring chief digital officer of GroupM talks to us about Facebook’s news plans. (NYT)

• Volkswagen, Daimler and BMW are struggling to deal with a public relations disaster that stemmed from their financing a test that used monkeys to monitor the health effects of diesel exhaust. (NYT)

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