LONDON — The courthouse should have already been closed for the day.
At a hearing that began at 5 p.m. on March 1, lawyers for Greensill Capital desperately argued before a judge in Sydney, Australia, that the firm’s insurers should be ordered to extend policies set to expire at midnight. Greensill Capital needed the insurance to back $4.6 billion it was owed by businesses around the world, and without it 50,000 jobs would be in jeopardy, they said.
The judge said no; the company had waited too long to bring the matter to court. A week later, Greensill Capital — valued at $3.5 billion less than two years ago — filed for bankruptcy in London. An international firm with 16 offices around the world, from Singapore to London to Bogotá, was insolvent.
Greensill’s dazzlingly fast failure is one of the most spectacular collapses of a global finance firm in over a decade. It has entangled SoftBank and Credit Suisse and threatens the business empire of the British steel tycoon, Sanjeev Gupta, who employs 35,000 workers throughout the world. Greensill’s problems extend to the United States, where the governor of West Virginia and his coal mining company have sued Greensill Capital for “a continuous and profitable fraud” over $850 million in loans.
At the center of it is Lex Greensill, an Australian farmer-turned-banker, who in 2011 founded his company in London as a solution to a problem: Companies want to wait as long as possible before paying for their supplies, while the companies making the supplies need their cash as soon as possible.
The Australian newspaper that he did the same for President Barack Obama in the United States.
Eventually, Mr. Cameron would become an adviser to Greensill. Julie Bishop, Australia’s former foreign minister, also joined the company as an adviser.
Greensill Capital’s defining year was 2019, when SoftBank’s Vision Fund, the $100 billion investment vehicle built to make huge bets on disruptive technology companies, invested $1.5 billion. On the day the first of two SoftBank investments was announced, Mr. Greensill told Bloomberg TV that his company would have “multiple opportunities” to work with SoftBank and the other companies in their portfolio.
Mr. Greensill had become a billionaire.
Carillion in 2018 and the Spanish renewable energy company Abengoa, which filed for insolvency in February. Abengoa, an early customer of Greensill, narrowly escaped bankruptcy in 2015 when its huge debt load — billions of euros — was revealed.
Regulators, auditors and ratings agencies have grown concerned about the lack of transparency that can make company balance sheets look stronger than they are. In June, the Securities and Exchange Commission asked Coca-Cola to provide more details about whether it was using supply chain finance after noticing an increase in its account payables of $1.1 billion.
After pleas from accounting companies, the rules might be tightened in the United States. In October, the U.S. Financial Accounting Standards Board said it would start developing stronger disclosure requirements, though two months later, an international accounting board decided not to do the same.
For Greensill Capital, signs of trouble began appearing in 2018, the year before SoftBank made its big investments.
GAM, the Swiss asset manager, rocked the London financial community when it suspended one of its top fund managers, Tim Haywood. He later lost his job for “gross misconduct,” Bloomberg reported, after an internal investigation raised questions about investments he made in companies tied to Mr. Gupta, who was fast-becoming a steel and metals tycoon. The middleman in the deals, Bloomberg said, was Mr. Greensill.
The next year, Mr. Greensill’s debt funds were attracting unusual interest from SoftBank. Even as the Vision Fund was investing in Greensill, a different arm of SoftBank poured hundreds of millions into the Credit Suisse funds, according to people with knowledge of the transactions. That arrangement put SoftBank in a complex position: One division was Greensill’s largest shareholder and another was a lender to Greensill, via the Credit Suisse funds.
BaFin said it had uncovered evidence that assets linked to Mr. Gupta listed on the bank’s balance sheet did not exist.
insolvency proceedings for Greensill Bank.
an 18 million euro state-backed loan in December from Greensill Bank. But two days later, the bank abruptly pulled back the funds, said Jean-Philippe Juin, a member of the Confédération Générale du Travail labor union representing the factory, where 600 people work.
While GFG said it had “strong cash flows” across the group, the workers at the Poitou plant were warned last week that there might not be enough money to pay their salaries for March, Mr. Juin said.
“Mr. Gupta presented himself to us as a savior, with hopeful words and many promises,” Mr. Juin said. “In the end, he turned out to be an empty shell.”
Michael J. de la Merced, Stanley Reed, Matthew Goldstein and Raphael Minder contributed reporting.
In the face of mounting pressure from prominent artists and activists about his financial ties to the convicted sex offender Jeffrey Epstein, the investor Leon Black told colleagues Friday that he would not stand for re-election as the chairman of the Museum of Modern Art, according to two people with knowledge of his decision.
Mr. Black announced his decision to the board’s executive committee at a specially convened remote meeting on Friday afternoon, according to someone with knowledge of the meeting who was granted anonymity because they were not authorized to speak about it. He planned to inform the full board of his intentions when it meets next week.
The news that Mr. Black did not plan to run for re-election as the museum’s chairman in June was the latest fallout from the revelation earlier this year that he had paid $158 million to Mr. Epstein for tax and estate advisory services — payments that began several years after Mr. Epstein had pleaded guilty in 2008 to soliciting prostitution from a teenage girl.
After the size of his payments was revealed in January, Mr. Black had initially announced that he would step down this year as chief executive of Apollo Global Management, the giant private equity firm he co-founded, but added that he intended to remain Apollo’s chairman. On Monday, Apollo made the surprise announcement that Mr. Black, 69, was stepping down as chief executive earlier than anticipated and giving up the chairmanship, citing his and his wife’s health as major factors in the decision.
his dealings with Mr. Epstein, who killed himself inside a Manhattan jail cell in 2019 while facing federal sex-trafficking charges.
By several accounts, Mr. Black had also wrestled with how to proceed at MoMA. Mr. Black decided to tell the executive committee that as a longtime supporter of MoMA, he did not want to become a distraction to the institution by seeking another term, said two people briefed on his decision. He is expected to remain on the board after stepping down as chairman.
Several artists and supporters of MoMA had said that Mr. Black’s decision to pay large fees to Mr. Epstein after his conviction — he also lent Mr. Epstein $30 million — raised questions about whether he should continue to represent the institution. Several MoMA trustees came to believe that Mr. Black had become a damaging distraction.
“I would feel ashamed to be associated with the MoMA if it takes a firm position in keeping someone who has been confirmed to have hurt basic values or has worked against truth and fairness,” the artist Ai Weiwei said in an email interview last month. “If so, I hope they won’t include any of my works in their collection.” He said Friday that it was “the right decision” for Mr. Black to step down.
And the recent pressure on Mr. Black from prominent artists and activists promised to escalate, with a 10-week “strike” against MoMA planned to start April 9.
in February had spoken out about Mr. Black, said that he believed that Mr. Black, and several other MoMA board members, should step down from the board altogether.
“MoMA has refused comment on every story that has emerged about Leon Black,” he said in an email. “The museum stays silent while we as artists are asked to speak. Beyond speaking, I look forward to collectively imagining an ecosystem that does not enlist our content to go on display in institutions whose board members create the very conditions in the world that many of us are devoted to dismantling.”
It was not immediately clear who would succeed Mr. Black at MoMA. Among those expected to be in contention are the board’s several vice chairmen as well as Marie-Josée Kravis, its president emerita.
There has been some concern among MoMA trustees that Mr. Black’s stepping down as chairman might jeopardize his potential future gifts of art or money to the museum, given his wealth and his museum-quality personal art collection.
In 2018, the same year he became chairman of the museum’s board, Mr. Black and his wife, Debra, gave $40 million to the museum, prompting MoMA to name its film center after them.
In 2012, he lent MoMA Edvard Munch’s 1895 version of “The Scream” — which he purchased for nearly $120 million — and in 2016, Mr. Black won the right to keep a large Picasso bust for which he had paid about $106 million and that featured prominently in MoMA’s acclaimed Picasso sculpture show.
extended Mr. Lowry’s contract until 2025, making him the longest-serving director since the museum opened in 1929. Mr. Lowry did not respond to requests for comment.
Microsoft also released on Monday the results of a survey of that it says shows the work force has changed after a year of working remotely. In the survey of more than 30,000 full-time and self-employed workers, 73 percent said they wanted flexible remote work options to continue, and 46 percent said they were planning to move this year now that they could work remotely.
“There are some companies that think we’re just going to go back to how it was,” Jared Spataro, the corporate vice president for Microsoft 365, said in an interview. “However, the data does seem to indicate that they don’t understand what has happened over the last 12 months.”
Jerome H. Powell, the chair of the Federal Reserve, said the Fed’s research into central bank-issued digital currencies is early and exploratory — and that U.S. officials would only consider issuing a digital dollar if they believed there was a clear use and if the idea had widespread public and political buy-in.
“You can expect us to move with great care and transparency,”Mr. Powell said on Monday at a Bank for International Settlements event on central bank innovation. “We would not proceed with this without support from Congress.”
Mr. Powell said that at this stage, the Fed is looking into whether there is even a need for a central bank digital currency — a technology-based instrument with official government backing. Payment systems are already speeding up and banks offer digital money in the form of bank deposits, he noted, so the need for a central bank version is an open question.
“Does the public want, or need, a new digital form of central bank money to complement what is already a highly efficient, reliable and innovative payments arena?” he said.
Central bank digital currency could offer benefits, Mr. Powell said — perhaps laying the groundwork for a more efficient, more inclusive payment system, and maintaining the dollar’s competitive position as the leading global currency. But there are also big risks. Digital currencies could bring cybersecurity vulnerabilities and the possibility of money laundering, and they might disrupt the stable relationship between customers, banks and the Fed.
“We’re sort of purveyors of stability,” Mr. Powell said Monday.
The Fed’s Washington-based board has begun experimenting with central bank digital currencies, and the Federal Reserve Bank of Boston is collaborating with researchers at the Massachusetts Institute of Technology on complementary research.
“The focus really is on developing and understanding the capabilities and limitations of the relevant technologies,” he said. “It’s not an attempt to create a prototype.”
Mr. Powell said regulation is not “where it needs to be” when it comes to stable coins — a type of cryptocurrency which has value tied to an outside asset. He dismissed the possibility that private stable coins could substitute for central bank money.
And when it comes to cryptocurrencies like Bitcoin that aren’t backed by some value anchor, Mr. Powell said they are risky assets as opposed to dollar-like money.
“Crypto assets, they’re highly volatile — see Bitcoin — and therefore not really useful as a store of value,” Mr. Powell said. “It’s more a speculative asset, that’s essentially a substitute for gold, rather than for the dollar.”
Last week, a presentation by a group of junior bankers at Goldman Sachs went viral on social media, in which they complained about what they described as workplace abuse, including 100-hour weeks.
The DealBook newsletter’s inbox has been overflowing with reactions, notably from current, former and aspiring investment bankers. Here’s what some had to say — most requested anonymity to speak freely about their experiences — edited and condensed for clarity:
“My view is that if it’s not to your liking, quit and find another line of work. It won’t pay as well, but it’s also possible that you won’t learn as much. I am still reaping the benefits of what I learned.” — Anonymous in Sydney
“I had heard all about the long hours, but once I was in it, I found that I had underestimated. I threw in the towel and left banking, because no amount of money was worth the terrible lifestyle.” — Anonymous in New York
“I knew I was worked like a donkey but quid pro quo. I could leave, work fewer hours and make less money. But I wasn’t interested in that.” — Anonymous in London
“In our day, we may have complained to our friends or our family, but we knew that short-term pain was good for long-term gain. I now live a comfortable life enabled by my first years at Goldman Sachs.” — Anonymous in New York
“We would do the math on the compensation and realize that we were making less than minimum wage per hour. It wasn’t worth being tortured. My health still suffers from my years on Wall Street.” — Anonymous in New York
“The learning experience was incredible and career-wise it set me on the right track. In hindsight, it could have actually killed me, but I was too young to realize this.” — Anonymous in Dubai
“Yes, we were ‘abused’ and yelled at, but this was expected and how we learned. My message for these analysts is: If you can’t stand the heat, get out of the kitchen.” — Anonymous in New York
“There is no money that rewards the mental and physical harm that investment banking does to you. Of course, it’s a hell of an experience, Excel and PowerPoint-wise.” — Anonymous in São Paulo
“I spent many long nights in the office at the behest of associates and V.P.s, most of the time for no reason but ‘they might need me.’ Then I joined the military, where I had better work-life balance and more respectful leadership than I did in banking.” — Anonymous in New York
“I am an incoming Goldman Sachs intern. I knew about the work conditions before applying to the job. Anyone engaging in a career at a top investment bank knows about it, or else they applied for the wrong reasons.” — Anonymous in Europe
Turkey’s currency tumbled on Monday after President Recep Tayyip Erdogan fired the head of the central bank, who had been in the job just four months and had pursued policies aimed at taming inflation. The Turkish lira plunged 10 percent against the U.S. dollar.
The removal of Turkey’s central bank chief, Naci Agbal, signals a return to the unorthodox policies that Mr. Erdogan has long favored, such as cutting interest rates to lower inflation, but which most economists regard as counterproductive. Mr. Erdogan has repeatedly meddled in the central bank’s activities and over the years traders have dumped the lira.
Since his appointment in November, Mr. Agbal has raised the central bank’s benchmark interest rate from 10.25 percent to 19 percent in an effort to slow the overheating economy, control inflation and lure in foreign investment. He had succeeded in pulling the lira up from its record low. The most recent increase in the benchmark rate was on Thursday and he was fired on Friday.
The annual inflation rate was officially 15.6 percent in February but is probably much higher.
The new central bank chief, Sahap Kavcioglu, a university professor and former member of Turkey’s National Assembly, said in a statement that he would continue to fight inflation. But on Monday, the lira was trading at about 7.93 to the dollar, compared with 7.22 on Friday. The plunge in value was a sign that currency traders expect him to bow to pressure from Mr. Erdogan to cut rates, worsening the inflation problem and pushing the country of 82 million people closer to economic collapse.
“We have abandoned our cautiously optimistic view on the lira,” Piotr Matys, a strategist at Rabobank wrote in a note. Mr. Kavcioglu’s comments suggest he is clearly in favor of lower interest rates to stimulate growth, he added.
Elsewhere in markets
The S&P 500 rose 0.1 percent in early trading on Monday, while the Nasdaq composite rose about 0.7 percent and the Dow Jones industrial average was slightly lower. European and Asian stock indexes were also mixed.
Yields on 10-Year Treasury notes fell to about 1.69 percent.
Shares in IAG, the airline group which owns British Airways, fell after the British government’s scientific advisers warned against overseas travel this summer. On Sunday, a government minister also indicated that travel restrictions could be extended. Shares in easyJet and Ryanair also fell.
Deliveroo, the food-delivery company, started taking orders for its initial public offering on Monday. The share sale would value the company up to 8.8 billion pounds ($12.2 billion). The company will be listed on the London Stock Exchange, and is the exchange’s largest I.P.O. this year.
Tokyo prosecutors on Monday charged two Americans with helping Carlos Ghosn, the former Nissan chief, jump bail in Tokyo, where he was awaiting trial on four counts of financial wrongdoing.
Japanese prosecutors said in an indictment that the two men, Michael Taylor, 60, a former Green Beret, and his son Peter Maxwell Taylor, 27, assisted Mr. Ghosn’s efforts to escape the country, helping him flee to Turkey and then on to Lebanon, where he has been beyond the reach of Japanese law.
American officials arrested the men last May in Massachusetts. Earlier this month, they were extradited to Japan, where they have been held in a Tokyo detention center while undergoing questioning by prosecutors. A third man believed to have aided Mr. Ghosn’s escape remains at large.
The Japanese authorities have accused Michael Taylor of helping Mr. Ghosn travel by train to the western city of Osaka, through security checks at a private jet terminal and then onto a plane bound for Turkey. Once there, Mr. Ghosn transferred to a flight bound for Beirut. Peter Taylor assisted in planning for the escapade, visiting Mr. Ghosn several times before the escape, officials say.
Mr. Ghosn and his son, Anthony Ghosn, paid more than $1.3 million to the Taylors and a company they controlled, U.S. prosecutors have said in court filings.
Mr. Ghosn’s case raised international concerns about what some critics call Japan’s system of “hostage justice,” which includes lengthy detentions of criminal suspects without charge. While in the United States, the Taylors fought a long legal battle to prevent their extradition, with their lawyers arguing that they could be subjected to harsh conditions in a Japanese jail.
For the past year, people trying to go to China have run into some of the world’s most formidable barriers to entry. To stop the coronavirus, China bans tourists and short-term business travelers outright, and it sets tough standards for all other foreigners, even those who have lived there for years.
The restrictions have hampered the operations of many companies, separated families and upended the lives of thousands of international students, report Sui-Lee Wee and Keith Bradsher for The New York Times. Global companies say their ranks of foreign workers in the country have dwindled sharply.
As deadlier and more infectious virus variants appeared in other countries in recent months, China introduced onerous new requirements.
At the end of last year, it essentially stopped allowing anyone to bring a spouse or child into the country.
Since January, travelers arriving in Beijing from countries with severe outbreaks have had to endure weekly anal swab tests while in quarantine, with fecal material tested for traces of the virus.
Last month, the government announced that travelers from more than two dozen countries would have to do two weeks of quarantine overseas before they were even allowed to fly to China. After landing, they were expected to spend two more weeks at a government-managed quarantine facility.
Officials regard travel restrictions as crucial to their success in containing the virus. Since the outbreak started, China has reported more than 101,000 Covid cases. Although questions have been raised about the accuracy of the numbers, they are far lower than in the United States, where 29.8 million people have tested positive for the virus.
China’s tough restrictions, including its recent ban on dependents, have exacted an emotional toll on some families who have been forced to live apart for months.
In February of last year, Jessie Astbury Allen took her two young daughters to England to wait out the outbreak as it swept across China, hoping they would reunite with her husband in Shanghai by Easter. It was a plan she would come to regret.
“I knew in my gut we were doing the wrong thing, but it was too late,” she said, weeping, as she described how she felt on landing at London’s Heathrow Airport.
Leon Black, the Wall Street billionaire who was the main client of the disgraced financier Jeffrey Epstein for the last decade of his life, is stepping down as chief executive and chairman of Apollo Global Management, several months ahead of schedule, the firm said Monday. Jay Clayton, the former Securities and Exchange Commission chairman who recently joined the firm as an independent director, will take over as chairman. Mr. Black said he had decided to leave now to focus on his family and his and his wife’s health. In January, the firm had said he would step down as chief executive before his 70th birthday in July while retaining the chairman role.
Canadian Pacific and Kansas City Southern announced plans on Sunday to combine in a $29 billion deal that would create the first railroad network connecting the United States, Mexico and Canada. It is an effort to capitalize on the flow of trade that is expected to increase as the three countries rebound from the pandemic. The boards of both companies have unanimously approved the cash-and-stock deal, which is expected to close by the middle of 2022, subject to customary approvals.
Saudi Aramco, Saudi Arabia’s national oil company, said on Sunday that its net income last year had fallen by 44 percent, to $49 billion, as lower oil prices stemming from the pandemic cut into earnings. The company’s chief executive, Amin H. Nasser, described 2020 in a statement accompanying the earnings data as “one of the most challenging years in recent history.” But Aramco, the world’s largest oil producer, said that it would stick by a pledge to pay a $75 billion dividend. Nearly all of the payment will go to the Saudi government, which owns about 98 percent of the company.
For a decade before the pandemic, small investors accounted for roughly a tenth of trading activity in the stock market. But in the last year, they have become responsible for close to a quarter, according to Goldman Sachs analysts.
The speculative appetite of small investors may seem at odds with an economy still reeling from a pandemic that has killed more than half a million Americans, decimated jobs and snuffed out businesses and livelihoods. But one of the biggest tools deployed by the U.S. government to cushion the economic blow — stimulus payments — is also driving a huge surge in investing by small traders, Matt Phillips reports for The New York Times.
Analysts at Deutsche Bank recently estimated that as much $170 billion from the latest round of stimulus payments could flow into the stock market. They conducted a survey of retail traders in which respondents said they planned to put roughly 40 percent of any payment they received — or $2 of every $5 — into the stock market. Traders between the ages of 25 and 34 said they expected to put half of their stimulus check into stocks.
“That could lead to a bit more mania, speculation in the market,” said Patrick Fruzzetti, managing director and partner at Hightower Advisors, an investment firm. The “stimmies,” he said — using a popular online term for stimulus checks — will go into people’s trading accounts, and “they will trade.”
In October 2015, a month after Volkswagen confessed to rigging diesel cars to conceal illegally high emissions, shellshocked company executives gathered in the brick-clad high-rise executive office building topped with a giant VW logo that looms over the carmaker’s main factory in Wolfsburg, Germany.
The executives authorized development of a collection of mix-and-match components that would serve as the basis for a range of electric models including sedans, S.U.V.s and vans, Jack Ewing reports for The New York Times. The standardized platform, called the Modular Electrification Toolbox, could also be used by other company brands, including Audi.
The platform will allow Volkswagen to exploit the big advantage it has over Tesla: size. With 665,000 employees and sales of 9.3 million vehicles last year, Volkswagen is the second-largest carmaker in the world after Toyota. It can spread the cost of developing new technologies over millions of vehicles and undercut Tesla on price.
The commitment Volkswagen made then is paying off now as the company rolls out a line of vehicles developed from the ground up to run on batteries, with more interior space and more appeal than adaptations of gasoline vehicles.
By 2025, Volkswagen will be able to produce electric vehicles for less than it costs to build a gasoline or diesel car, UBS analysts wrote in this month’s report. They cautioned that Tesla retained a significant lead in battery technology and autonomous driving software.
Leon Black, the Wall Street billionaire who was the main client of the disgraced financier Jeffrey Epstein for the last decade of his life, is stepping down as chief executive of Apollo Global Management, several months ahead of schedule.
Mr. Black also will give up the chairmanship of the private equity firm, which he helped found roughly three decades ago, according to a statement issued by the firm on Monday. Jay Clayton, the former Securities and Exchange Commission chairman who recently joined the firm as an independent director, will take over as chairman.
In a statement, Mr. Black, 69, said he had decided to leave now to focus on his family and his and his wife’s health. In January, the firm had said he would step down as chief executive before his 70th birthday in July while retaining the chairman role..
Apollo had previously announced that Marc Rowan, another Apollo co-founder, would succeed Mr. Black as chief executive following the release of a report by an outside law firm that detailed how Mr. Black had paid Mr. Epstein, the registered sex offender who killed himself in August 2019 while facing federal sex trafficking charges, $158 million in fees to Mr. Epstein and lent him nearly $30 million. The review found no wrongdoing by Mr. Black, who planned to remain as chairman.
The New York Times reported that Mr. Black had paid at least $75 million in fees to Mr. Epstein from 2012 to 2017.
Over the past several months, shares of Apollo have underperformed the stocks of other big publicly traded private equity firms.