U.S. Secretary of State Blinken Visiting Ukraine

LONDON — When Secretary of State Antony J. Blinken arrives in Ukraine early Thursday, he will encounter an all too familiar scene: a country struggling to defend itself from without and reconstruct itself from within.

It is little changed from the days when Mr. Blinken was a White House staffer in the Obama administration — and a warning that solutions might be years away still.

Mr. Blinken is the first senior Biden administration official to visit Kyiv, and his task when he meets with Ukraine’s president, Volodymyr Zelensky, will be to reassure him of American support against Russia’s ongoing aggression, which flared last month when Moscow built up more than 100,000 troops along Ukraine’s eastern border.

Russia began withdrawing those forces in late April but still has many of them and all their equipment in place. Moscow also continues to back a pro-Russian insurgency in a war in Ukraine’s east that has killed more than 13,000 people, according to the United Nations.

seeking evidence related to Mr. Giuliani’s role in the removal of the U.S. ambassador to Ukraine in April 2019.

Although that saga is unlikely to be on the official agenda or to affect U.S. policy, it is a vivid reminder of the power of anti-reform figures in the country. Ukrainian associates of Mr. Giuliani pressed Mr. Giuliani to oust the ambassador, Marie L. Yovanovitch, because they viewed her as a threat to their business interests, American diplomats testified during the impeachment hearings in 2019.

Though Mr. Blinken is no stranger to Ukraine, having visited repeatedly during the Obama years, he will be joined by one of the government’s top experts and strongest defenders of the country, Victoria J. Nuland, who last week was confirmed as the State Department’s under secretary for political affairs, its No. 3 position.

As the department’s top official for Europe and Eurasia in the Obama administration, Ms. Nuland became a loathed figure in the Kremlin over her ardent support for Ukraine’s 2014 revolution. Russian officials bitterly recall how Ms. Nuland passed out food to protesters in Kyiv before they toppled Ukraine’s Russian-backed president, Viktor F. Yanukovych.

Ms. Nuland’s visit with Mr. Blinken comes a few weeks before President Biden is likely to meet with Mr. Putin during a trip to Europe. For now, Mr. Taylor said, that meeting in June serves as “a hostage” that may be preventing the Russian leader from sending troops across Ukraine’s border, though analysts remain divided about Mr. Putin’s motives in ordering the buildup. Some believe he may be simply trying to intimidate Mr. Zelensky and put Mr. Biden off balance.

Combat has been taking place within Ukraine for seven years, as government forces battle separatists armed and funded by the Kremlin, and a European-led peace process is deadlocked.

Mr. Biden himself has had extensive experience in Ukraine, having led the Obama administration’s actions there as vice president. On Tuesday, he said his “hope and expectation” was that he will meet with Mr. Putin during his trip to Europe, a meeting at which Ukraine is sure to be a central topic of discussion.

With an eye on Russia’s threats and meddling, Ukrainian officials have said they are eager for more security aid from the Biden administration, but it is far from clear whether that will be forthcoming.

Asked last week whether Mr. Blinken might come bearing such offers, Philip T. Reeker, the State Department’s acting assistant secretary for European and Eurasian Affairs, pointed to $408 million in existing U.S. support, and said only, “I’m sure that will come up in our conversation.” Strong support exists in Congress for increasing that funding, Mr. Taylor noted.

During his visit, Mr. Blinken is expected to try to assess how much confidence to place in Mr. Zelensky, a former comedic actor elected in April 2019 with no political experience.

Just last month, President Volodymyr Zelensky donned a helmet and flak jacket to visit his soldiers in trenches at the front, showing defiance to the Russian military buildup. Praise and warm words of support flowed in from Ukraine’s Western allies.

In a statement, the State Department said Mr. Blinken would “reaffirm unwavering U.S. support for Ukraine’s sovereignty and territorial integrity. But he will also encourage continued progress in Ukraine’s institutional reform agenda, particularly anti-corruption action, with is key to securing Ukraine’s democratic institutions, economic prosperity and Euro-Atlantic future.”

In Kyiv, independent analysts have praised the tough-love policy.

“Biden is an opportunity Ukraine can use or lose,” Sergiy Sydorenko, editor of European Pravda, an online news outlet, said in an interview. “By the look of it, Biden really cares for democracy, and having a democratic Ukraine is vital for developments in the wider region, including Russia. But Biden’s support is not guaranteed.”

Anti-corruption efforts in Ukraine have been a mixed bag.

Earlier in his tenure, Mr. Zelensky’s political party and allies passed a law privatizing former collective farmland, a step toward unwinding corruption schemes in agriculture. He also formed an anti-corruption court, and this year, his government sanctioned oligarchs with ties to Russia.

But for Western donor nations that prop up the Ukrainian budget, a critical aspect of Mr. Zelensky’s presidency has been his relationship with an oligarch, Ihor Kolomoisky, whom Ukraine’s own banking regulators accuse of embezzlement. Mr. Kolomoisky denies the allegations.

In March, the Biden administration sanctioned Mr. Kolomoisky and members of his family, and the U.S. authorities have frozen or seized his commercial real estate assets, including an office tower in Cleveland.

Two years ago, a freshly installed Mr. Zelensky was put through the mangle of American politics. A hangover still lingers.

In a phone call in July 2019, while withholding military aid, President Trump asked him for the “favor” of investigating Mr. Biden, a political adversary, and members of his family. Mr. Trump accused Mr. Biden of wrongdoing when he was vice president in the Obama administration.

Untangling this situation became an early headache for Mr. Zelensky in the first months of his presidency.

With seemingly little choice and his country at war and in need of the military assistance, Mr. Zelensky leaned toward helping in the scheme to discredit Mr. Biden. But Mr. Zelensky’s plans to publicly announce the investigation in September in a CNN interview, something that would have sealed his support for Mr. Trump’s position, never came to fruition. By then, a C.I.A. whistle-blower’s warning about the scheme became public and Mr. Zelensky was spared the need to pick a side.

Mr. Zelensky insisted that he had tried to remain neutral throughout, and his aides note that he never publicly endorsed Mr. Trump’s dirt-digging effort.

They say they see no reason for Mr. Biden to hold a grudge.

Maria Varenikova contributed reporting from Kyiv.

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Hurt by Losses, Credit Suisse Faces Reckoning Under New Chairman

But risk problems lingered under the surface: The departure of longtime bankers during his tenure had cost Credit Suisse valuable institutional knowledge, and the bank had built an increased zeal for working with up-and-comers, like Luckin Coffee and Greensill.

In finance, risk management — the ability to take into account a sometimes-volatile mix of bank positions, market activities, assets and liabilities, and reputational and technological concerns to foresee potential losses — is a crucial skill.

But the bank’s approach has been extremely technical, said Arturo Bris, a professor of finance at the IMD business school in Lausanne, Switzerland. An overreliance on calculation can be a problem if those in charge aren’t taking a holistic view.

“Most of these failures have much more to do with human mistakes,” he said. “I don’t think they’re good risk managers.”

Consider the Archegos collapse: The prime brokerage head of risk who oversaw Credit Suisse’s dealings with Archegos had once handled the bank’s sales relationship with the firm. Above him was a chief risk officer whose background was in finance and compliance — not risk.

Credit Suisse has held more than a half-dozen executives responsible for its recent stumbles. The last day for Brian Chin, the chief executive of the investment bank, was Friday. Lara Warner, the chief risk and compliance officer, already departed. And then there was the departure of Mr. Gottschling, the board’s risk committee leader, who did not seek re-election at the annual meeting.

Now Mr. Horta-Osório will have to figure out whether Credit Suisse can steady its investment bank with personnel changes, or if a more serious makeover is in order.

If he chooses to make big changes, he may have to move swiftly.

“Shareholders and employees cannot wait for months for a new strategy,” said Manuel Ammann, a professor at the Swiss Institute for Banking and Finance at the University of St. Gallen. “They need to deliver fast.”

Anupreeta Das contributed reporting.

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U.S. Economy Rebounds as Pain Caused by Pandemic Eases: Live Updates

the first-quarter growth rate was 6.4 percent.

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“This was a great way to start the year,” said Gregory Daco, chief U.S. economist at Oxford Economics. “We had the perfect mix of improving health conditions, strong fiscal stimulus and warmer weather.”

“Consumers are now back in the driver’s seat when it comes to economic activity, and that’s the way we like it,” he added. “A consumer that is feeling confident about the outlook will generally spend more freely.”

Looking ahead, economists said they expected to see even better numbers this quarter.

“It’s good news, but the better news is coming,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics. “There’s nothing in this report that makes me think the economy won’t grow at a gangbusters pace in the second and third quarter.”

The expansion last quarter was spurred by stimulus checks, he said, which quickly translated into purchases of durable goods like cars and household appliances.

“This demonstrates the value of government intervention when the economy is on its knees from Covid,” he added. “But in the coming quarters, the economy will be much less dependent on stimulus as individuals use the savings they’ve accumulated during the pandemic.”

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Overall economic activity should return to prepandemic levels in the current quarter, Mr. Anderson said, while cautioning that it will take until late 2022 for employment to regain the ground it lost as a result of the pandemic.

Still, the labor market does seem to be catching up. Last month, employers added 916,000 jobs and the unemployment rate fell to 6 percent, while initial claims for unemployment benefits have dropped sharply in recent weeks.

Tom Gimbel, chief executive of LaSalle Network, a recruiting and staffing firm in Chicago, said: “It’s the best job market I’ve seen in 25 years. We have 50 percent more openings now than we did pre-Covid.”

Hiring is stronger for junior to midlevel positions, he said, with strong demand for professionals in accounting, financing, marketing and sales, among other areas. “Companies are building up their back-office support and supply chains,” he said. “I think we’re good for at least 18 months to two years.”

Spending on goods like automobiles led the way in the first quarter, but demand for services like dining out should revive in the second quarter, said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. “I think we will see a surge in services spending,” she said.

As more Americans become vaccinated, many economists expect a decline in new unemployment claims.
Credit…James Estrin/The New York Times

Initial jobless claims fell last week to yet another pandemic low in the latest sign that the economic recovery is strengthening.

About 575,000 people filed first-time claims for state unemployment benefits last week, the Labor Department said Thursday, a decrease of 9,000 from the previous week’s revised figure. It was the third straight week that jobless claims had dropped.

In addition, 122,000 new claims were filed for Pandemic Unemployment Assistance, a federal program that covers freelancers, part-timers and others who do not routinely qualify for state benefits. That was a decline of 12,000 from the previous week.

Neither figure is seasonally adjusted. On a seasonally adjusted basis, new state claims totaled 553,000.

“Today’s report, and the other data that we got today, signals an improving labor market and an improving economy,” said Daniel Zhao, senior economist with the career site Glassdoor. “It is encouraging that claims are continuing to fall.”

Although weekly jobless claims remain above levels reached before the pandemic, vaccinations and warmer weather are offering new hope. Most economists expect the slow downward trend in claims to continue in the coming months as the economy reopens more fully.

But challenges lie ahead. The long-term unemployed — a group that historically has had a more difficult time rejoining the work force — now make up more than 40 percent of the total number of unemployed. Of the 22 million jobs that disappeared early in the pandemic, more than eight million remain lost.

“The labor market is definitely moving in the right direction,” said AnnElizabeth Konkel, an economist at the online job site Indeed. She noted that job postings as of last Friday were up 22.4 percent from February 2020.

Still, she cautioned that industries like tourism and hospitality would probably remain depressed until the pandemic was firmly under control. She also stressed that child care obligations might be preventing people ready to return to work from seeking jobs.

“We still are in a pandemic — the vaccinations are ramping up but there is that public health factor still,” Ms. Konkel said. “We’re not quite there yet.”

The NBC sitcom “The Office” became a big streaming hit for Netflix and is now back in the Comcast fold, available on its streaming service Peacock.
Credit…Chris Haston/NBC

If you want a clear picture of the state of the media industry in upheaval, Comcast offers a good snapshot.

The company, which includes NBC, Universal Pictures, several theme parks, and the Peacock streaming service, beat Wall Street’s expectations in its first-quarter earnings report on Thursday as it continued to shift its emphasis from cable to digital.

To start, take these figures from its results:

Despite the regular pace of cord cutting, Comcast’s cable television business pulled in over $5.62 billion in revenue for the first quarter. That was flat compared with last year, but it’s still the company’s biggest business, accounting for a fifth of all revenue.

Peacock, on the other hand, is the fastest growing, but it loses the most money. Last year, it approached $700 million in pretax losses. This year, the streaming platform is expected to lose $1.3 billion as Comcast spends big to load it up with original shows and sports programming with the aim of attracting more viewers.

That’s the operating thesis behind every major media company today: replace the eroding base of profit-rich cable customers with loss-making streaming viewers in the hope that over time the digital audience will become more valuable. The Walt Disney Company, ViacomCBS, Discovery Inc. and AT&T’s WarnerMedia are all trying to make the transformation without entirely losing their shirts.

Peacock’s 42 million sign-ups should also come with an asterisk. The service is free and easy to join, but that doesn’t mean everyone is watching. (The figure includes paid versions of Peacock, which feature more content and fewer commercials.) A February report from the tech news site The Information revealed that a little more than 11 million households were watching the service.

Even so, the aim of Peacock is to replace the lost advertising from Comcast’s cable and broadcast channels as people continue to cut the cord. Peacock, which is available nearly everywhere, can also act as a hedge against other cable operators such as Charter or Cox when Comcast’s media division, NBCUniversal, negotiates carriage fees.

Peacock offers some of the most popular streaming shows, including “The Office,” a top hit on Netflix before it lost the rights to the series in 2021 when the license expired and the show reverted back to its owner, Comcast.

In a few years, Peacock will have the rights to stream National Football League games on Sunday alongside NBC as part of a new agreement. That could ruffle feathers with some of NBC’s affiliate stations if viewers drop TV and opt for Peacock to watch football. The streamer will also have some games exclusively. In March, the service added WWE.

Comcast sells something that has proved more durable than sports and entertainment: broadband, the piping that carries all streaming platforms. The company saw a surge in subscribers during the pandemic. In the first quarter, sales increased 12 percent to $5.6 billion. It’s likely to overtake cable television as the company’s biggest business.

At NBCUniversal, sales sharply dropped as movie theaters remained mostly shut and fewer people were visiting theme parks under the pandemic. Revenue fell 9 percent to $7 billion and pretax profit decreased 12 percent to $1.5 billion. Advertising at its television networks, which include NBC, MSNBC and Syfy, fell 3.4 percent to $2.1 billion.

Overall, the company beat expectations, reporting adjusted profit of 76 cents a share on $27.2 billion in revenue, and its stock was climbing on Thursday morning. Investors were looking for 59 cents in per-share profit and $26.6 billion in sales.

Microsoft will decrease the share of money it charges independent developers that publish computer games on its online store, starting in August, the company said on Thursday.

Developers will keep 88 percent of the revenue from their games, up from 70 percent. That could make Microsoft’s store more attractive to independent studios than competitors like Valve’s gaming store, called Steam, which typically starts by taking a 30 percent cut. Epic Games’ store takes 12 percent.

“We want to make sure that we’re competitive in the market,” said Sarah Bond, a Microsoft vice president who leads the gaming ecosystem organization. “Our objective is to have a leading revenue share and really a leading platform.”

The share of revenue that developers get to keep has come under greater scrutiny across the tech industry. Google and Apple have faced antitrust questions for the 30 percent fees they charge developers whose programs appear in their app stores.

Last year, Epic sued Apple and Google separately, claiming they violated antitrust laws by forcing developers to use their payment systems. Epic had tried to bypass the fees by letting customers pay for items in its Fortnite video game directly through Epic. That caused Apple and Google to boot Fortnite from their app stores.

Apple and Google have since reduced fees for some developers. Epic’s lawsuit against Apple is set to head to trial on Monday in U.S. District Court in Oakland, Calif.

A Shell recharging station for electric vehicles in the Netherlands. Despite investments in renewable energy, Shell’s profit last quarter was largely the result of rising oil and gas prices.
Credit…Koen Van Weel/EPA, via Shutterstock

Strong profit increases from two of Europe’s largest energy companies, Royal Dutch Shell and Total, demonstrated that what really matters for the financial performance of these companies remains the price of oil and natural gas.

Their recent investments in clean energy, described by company officials as essential for the future, remain marginal.

Total said that adjusted net income rose by 69 percent compared with the period a year earlier, when the effects of the pandemic were beginning to kick in, to $3 billion, while Shell said that what it calls adjusted earnings rose by 13 percent to $3.2 billion.

The main factor in the improved performance by both companies was a roughly 20 percent rise in oil prices along with an increase in natural gas prices, leading to higher revenues. During a news conference to discuss the results, Jessica Uhl, Shell’s chief financial officer, said that a $10 jump in oil prices would translate into a $6.4 billion increase in cash for the company’s coffers on an annual basis.

Shell, which cut its dividend last year for the first time since World War II, confirmed that it would increase the payout for the quarter by 4 percent, to about 17 cents a share.

Both companies have tethered their futures to generating and distributing renewable sources of energy. Shell in February said its oil production had peaked in 2019, and it has been investing in various clean energy ventures, including a network of 60,000 charging stations for electric vehicles. And Total has, among other things, invested in options to build offshore wind farms off Britain.

In its earnings statement, Total took the lead among the oil majors in providing details on its investments in renewable energy like wind and solar. The company said these businesses brought in $148 million for the quarter, measured as earnings before interest, taxes, depreciation and amortization. This figure was about 2 percent of the overall total for the company of $7.3 billion, according to analysts at Bernstein, a research firm.

Although Airbus reported a quarterly profit after a full-year loss for 2020,  “the market remains uncertain,”  said Guillaume Faury, the company’s chief executive.
Credit…Chema Moya/EPA, via Shutterstock

Airbus announced Thursday that it had returned to a profit in the first quarter following a 1.1 billion euro loss last year because of the coronavirus pandemic, but its top executive warned that the economic toll would continue.

“The first quarter shows that the crisis is not yet over for our industry, and that the market remains uncertain,” Guillaume Faury, chief executive of the world’s largest airplane maker, said in a statement.

Airbus booked a net profit of 362 million euros ($440 million) between January and March, compared with a loss of 481 million euros a year earlier, as cost-cutting measures — which included more than 11,000 layoffs announced last year for its global operations — bolstered the bottom line. Revenue fell 2 percent to 10.5 billion euros.

Airbus delivered 125 commercial aircraft to airlines in the three-month period, up from 122 a year earlier. Over all, Airbus delivered 566 aircraft to airlines in 2020, 40 percent less than expected before the pandemic.

Airbus has previously warned that the industry might not recover from the disruption caused by the pandemic until as late as 2025, as new virus variants delay a resumption of worldwide air travel.

Given the uncertain outlook, Airbus won’t ramp up aircraft deliveries this year. The company said it expected to deliver 566 aircraft on back order from airline companies, the same number as last year.

It maintained its forecast for an underlying operating profit of two billion euros for the year.

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Stocks on Wall Street jumped on Thursday, rising with European stock indexes, amid indications that the economy is moving toward a recovery to prepandemic levels.

The Commerce Department reported Thursday that the U.S. economy expanded 1.6 percent in the first three months of 2021, compared with 1.1 percent in the final quarter last year, or 6.4 percent on an annualized basis.

A day earlier, the Federal Reserve said that the outlook was improving and that it would continue to provide substantial monetary support, easing investors’ concerns that it would soon start easing the stimulus efforts it launched a year ago when the Covid-19 crisis forced a near shutdown of many parts of the economy.

“While the level of new cases remains concerning,” Jerome H. Powell, the Federal Reserve chair, said, “continued vaccinations should allow for a return to more normal economic conditions later this year.” The central bank kept interest rates near zero and said it would continue buying bonds at a steady clip.

The S&P 500 rose 0.7 percent. Market sentiment continued to rise after President Biden detailed more of his spending plans — which total $4 trillion — to fund expanded access to education and reduce the cost of child care, among other things.

Oil prices rose. Futures of West Texas Intermediate, the U.S. benchmark, climbed more than 2 percent to above $5 a barrel.

The Stoxx Europe 600 rose 0.3 percent as a measure of economic confidence for the eurozone surged higher.

  • Facebook shares rose nearly 6 percent after the company said on Wednesday that profit nearly doubled to $9.5 billion in the first quarter as advertising revenue and user numbers increased.

  • Apple shares rose about half a percent after the iPhone maker’s profit more than doubled to $23.6 billion in the first quarter. The company also said it would buy back $90 billion of its own stock, part of its continued program to return much of its earnings to shareholders.

  • Qualcomm, which makes chips for smartphones, rose nearly 6 percent after the company said its revenue increased 52 percent in the first three months of the year compared with the previous year.

  • Airbus shares rose 2.7 percent after the French plane maker said it had returned to a profit in the first quarter following a 1.1 billion euro loss last year. But the company’s chief executive added that the crisis was not over for the industry.

Amazon announced raises for half a million employees in its warehouses, delivery network and other fulfillment teams.
Credit…Chang W. Lee/The New York Times

Amazon will increase pay between 50 cents and $3 an hour for half a million workers in its warehouses, delivery network and other fulfillment teams, the company said on Wednesday.

The action follows scrutiny of Amazon from lawmakers and an unsuccessful unionization push that ended this month at its large warehouse in Alabama. In 2018, Amazon raised its minimum pay to $15 an hour. In recent months, it has publicly campaigned to raise the federal minimum to $15, too.

Amazon has been on a hiring spree during the pandemic. As more customers ordered items online, the company added 400,000 employees in the United States last year. Its total work force stands at almost 1.3 million people.

Amazon typically revaluates wages each fall, before the holiday shopping season. But this year, it moved those changes earlier, said Darcie Henry, an Amazon vice president of people experience and technology. The new wages will roll out from mid-May through early June. Ms. Henry said the company was hiring for “tens of thousands” of open positions.

Jeff Bezos, Amazon’s founder and chief executive, recently told shareholders in his annual letter that he recognized the company needed “a better vision for how we create value for employees — a vision for their success.” He said that Amazon had always striven to be “Earth’s Most Customer-Centric Company,” and that now he wanted it to be “Earth’s Best Employer and Earth’s Safest Place to Work” as well.

Amazon is scheduled to report quarterly earnings on Thursday.

Gary Gensler’s tenure leading the Securities and Exchange Commission is off to a rocky start: Alex Oh, who he named just days ago to run the regulator’s enforcement division, has resigned following a federal court ruling in a case involving one of her corporate clients, ExxonMobil.

In her resignation letter on Wednesday, Ms. Oh said the matter would be “an unwelcome distraction to the important work” of the enforcement division.

Ms. Oh’s resignation letter followed a ruling on Monday from Judge Royce C. Lamberth of the Federal District Court for the District of Columbia over the conduct of Exxon’s lawyers during a civil case involving claims of human rights abuses in the Aceh province of Indonesia.

According to Judge Lamberth’s ruling, Exxon’s lawyers claimed without providing evidence that the plaintiffs’ attorneys were “agitated, disrespectful and unhinged” during a deposition. He ordered Exxon’s lawyers to show why penalties were not warranted for those comments.

The ruling did not single out any lawyers by name. Ms. Oh was one of the lead lawyers for Exxon.

The judge’s order also granted the plaintiffs’ motion that Exxon pay “reasonable expenses” associated with litigating their request for sanctions and with an accompanying motion to compel additional testimony from Exxon related to the deposition.

Ms. Oh’s resignation letter did not mention the Exxon case by name, but a person briefed on the matter confirmed that the ruling from Judge Lamberth had prompted her to step down.

Ms. Oh, a former federal prosecutor in Manhattan who worked for the elite firm Paul, Weiss for nearly two decades, was picked by Mr. Gensler to oversee the S.E.C.’s 1,000-attorney enforcement division on April 22. The same day, she filed a notice with the court in the Exxon case saying she had withdrawn from the matter because she had resigned from the firm to join the federal government.

The civil litigation involving Exxon is nearly two decades old and involves allegations by the plaintiffs that Exxon’s security personnel “inflicted grievous injuries” on them. The lawsuit was brought under the federal Alien Tort Claims Act, which enables residents of other countries to sue in the United States for damages arising from violations of U.S. treaties or “the law of nations.”

Mr. Gensler said in a news release that Melissa Hodgman, who had been the enforcement division’s acting chief since January, will return to that position. Ms. Hodgman has been an enforcement attorney with the agency since 2008. He thanked Ms. Oh for her “willingness to serve the country.”

Ms. Oh could not immediately be reached for comment.

Brad Karp, chairman of Paul, Weiss, said the firm would not comment on the matter because it involved ongoing litigation. “Alex is a person of the utmost integrity and a consummate professional with a strong ethical code,” he added.

Ms. Oh is a highly respected lawyer, but her selection had been criticized by the Revolving Door Project, a good-government group, because she had been in private practice for so many years and had defended some of the largest U.S. companies.

  • Apple said on Wednesday that its profits more than doubled to $23.6 billion in the most recent quarter. Apple said its revenues soared by 54 percent to $89.6 billion. As usual, the main driver of Apple’s success was sales of the iPhone, which rose by 66 percent to $47.9 billion, its steepest increase in years. In the latest quarter, iPhones accounted for 54 percent of Apple’s revenues.

  • Facebook said on Wednesday that revenue rose 48 percent to $26.2 billion in the first three months of the year, while profits nearly doubled to $9.5 billion. Advertising revenue, which makes up the bulk of Facebook’s income, rose 46 percent to $25.4 billion. Nearly 3.5 billion people now use one of Facebook’s apps every month, up 15 percent from a year earlier.

  • Ford Motor said on Wednesday that the global shortage of computer chips will take a greater toll on its business than previously expected and would likely cut its vehicle production in the second quarter by about half. Ford expects the shortage to lower its operating profit this year by $2.5 billion, to between $5.5 billion to $6.5 billion. The company made a $3.3 billion profit in the first quarter, a turnaround from a year ago when the company lost $2 billion as the coronavirus pandemic was starting to shut down much of the world’s economy.

Increased supply-chain and freight costs for cereal makers could translate into higher retail prices for customers.
Credit…Sara Hylton for The New York Times

Before the pandemic, when suppliers raised the cost of diapers, cereal and other everyday goods, retailers often absorbed the increase because stiff competition forced them to keep prices stable.

Now, with Americans’ shopping habits having shifted rapidly — with people spending more on treadmills and office furniture and less at restaurants and movie theaters — retailers are also adjusting, Gillian Friedman reports for The New York Times.

The Consumer Price Index, the measure of the average change in the prices paid by U.S. shoppers for consumer goods, increased 0.6 percent in March, the largest rise since August 2012, according to the Bureau of Labor Statistics. Procter & Gamble is raising prices on items like Pampers and Tampax in September. General Mills, which makes cereal brands including Cheerios, is facing increased supply-chain and freight costs that could translate into higher retail prices for customers.

At the beginning of the pandemic, companies were focused on fulfilling demand for toilet paper, cleaning supplies, canned food and masks, said Greg Portell, a partner at Kearney, a consulting firm. The government was watching for price-gouging, and customers were wary of being taken advantage of.

Now that the economy is beginning to stabilize, companies are starting to rebalance pricing so that it better fits their profit expectations and takes into account inflation. “This isn’t an opportunistic profit-taking by companies,” Mr. Portell said. “This is a reset of the market.”

Gary Gensler, the chair of the Securities Exchange Commission, has some expertise with cryptocurrencies.
Credit…Kayana Szymczak for The New York Times

For many cryptocurrency supporters and investors, regulatory approval of a Bitcoin exchange-traded fund in the United States represents the holy grail. It would allow the crypto-curious to get exposure to Bitcoin without having to buy the tokens themselves, signifying that digital assets are really, truly mainstream.

But it’s not meant to be — yet. On Wednesday, the Securities and Exchange Commission delayed a decision on a Bitcoin E.T.F. proposal from the investment manager VanEck, saying it needs more time but offering no other explanation.

Delay is not denial, and it may be a good sign, Todd Cipperman, the founder of the compliance services firm CCS, told the DealBook newsletter. When considering the concept of a crypto E.T.F. in 2018, the S.E.C. raised questions about investor protection issues and put a “wet blanket on the whole idea,” he said.

Now, crypto is much bigger, and Gary Gensler, who taught courses about blockchain technology at M.I.T., is chair of the S.E.C. His expertise doesn’t guarantee success for crypto E.T.F.s, but it will be easier for an expert in the field to approve them, Mr. Cipperman suggested.

The S.E.C. gave itself until mid-June, with the option to take more time, but it must decide before year’s end. The regulator has rejected every proposal to date, starting with the first Bitcoin E.T.F. pitch in 2013, presented by the Winklevoss twins, which was eventually dismissed in 2017 (and again in 2018). There are several E.T.F. proposals on the table now, including one from the traditional finance giant Fidelity.

Canada is moving faster, approving all kinds of crypto E.T.F.s, after allowing its first Bitcoin E.T.F. in February. Hester Peirce, an S.E.C. commissioner and vocal crypto champion, told DealBook earlier this month that she has been “mystified” by her agency’s response to some prior applications, which met the standards in her view. With more players now engaging in the process, approval could be looming — eventually.

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Sotheby’s and Phillips Announce Departures and Arrivals

On Wednesday, two of the three major auction houses announced shifts in the makeup of their leadership teams.

Phillips announced that Stephen Brooks would become the company’s next chief executive as its former leader, Edward Dolman, transitioned to a new role as executive chairman. Separately, Sotheby’s said that the head of its fine art division, Amy Cappellazzo, would depart the company after more than five years guiding it toward billionaire clients and major sales; her duties will be divided among three different employees when she leaves the auction house this summer.

Changes in the upper echelons of the auction world demonstrate how companies are trying to reposition themselves for growth during the pandemic, said Natasha Degen, chair of art market studies at the Fashion Institute of Technology.

26 percent decline in global auction sales last year. “So auction houses quickly pivoted online. They have taken a real interest in new categories like NFTs, sneakers and streetwear. There are also more collaborations between auction houses and luxury brands.”

Credit…via Phillips

Earlier this week, Phillips revealed a new advisory service intended to help their clients find works of art in the primary market, which consists of galleries and artists’ studios. The initiative demonstrated how auction houses have taken the year to diversify their offerings, making incursions into business areas once firmly controlled by art galleries.

“Our ambition is considerable,” said Brooks, who regards the advisory service as part of a larger plan to accelerate growth at the auction house. Brooks, 56, a key member of the board of Christie’s and its executive management team for over 11 years, also has plans to expand Phillips’s footprint in Asia and the 20th-century art market. He added that he would like to see the company double the size of its overall business in the next five years.

At Sotheby’s, change involves a triumvirate of new positions. Brooke Lampley will oversee auctions and private sales for categories including old masters and contemporary art; Mari-Claudia Jiménez will lead the company’s global business development activities; and Gregoire Billault is being promoted to chairman of contemporary art.

Art Agency, Partners, in 2014. Two years later, Sotheby’s acquired the company for $85 million and she signed a five-year contract, which ended in January.

Her tenure at Sotheby’s helped cement her reputation as an industry rainmaker. In 2016, she organized an auction of the musician David Bowie’s trove of artworks and a year later oversaw the $110.5 million sale of a Basquiat painting. Earlier this year, she also helped secure the $150 million collection of the philanthropist Anne Marion, which will be auctioned at Sotheby’s this spring.

“You sort of know when it’s the right time to leave,” Cappellazzo said in an interview, declining to discuss her next venture except to say that it would not be in direct competition with Sotheby’s. “The real story is what I’m doing next, but first I want this chapter to finish.”

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Biden, Calling for Big Government, Bets on a Nation Tested by Crisis

“People are fed up with this,” said Senator Rick Scott of Florida, who heads the campaign arm for Senate Republicans leading into the 2022 elections.

Those attacks do not seem to carry the same sway that they did during Mr. Obama’s tenure, when the White House proposed a much smaller economic stimulus package than many economists thought was warranted given the huge erosion in household wealth after the financial crisis. Mr. Obama did raise taxes on high earners, including to help fund the Affordable Care Act, but not at a scale close to what Mr. Biden is proposing.

Mr. Biden might have Mr. Trump to thank for part of that shift. The pandemic aid bills he signed last year, with bipartisan support in Congress, might have helped reset the public’s views of Washington’s spending limits; “trillion” was a red line of sorts under Mr. Obama, but no longer.

Mr. Trump also pushed Congress to approve direct checks, an effort Mr. Biden continued, and began the Operation Warp Speed vaccine program that helped hasten the deployment of the most significant driver of economic activity this year: vaccinated Americans. As the economy reopens and people return to work, economic optimism is rising, though Republicans nationwide remain more pessimistic and are far more likely to oppose Mr. Biden’s plans.

In Washington, the president does not need Republican support to push through his agenda. He needs only his party to hold together in the House and the Senate, where Democrats enjoy majorities by thin margins, and move as much spending and tax policy as possible through the process known as budget reconciliation. The maneuver bypasses Senate filibusters and allows legislation, like Mr. Biden’s relief bill this year, to pass with only majority-party votes.

That process will give large sway to moderate Democrats like Senator Joe Manchin III of West Virginia, but so far that group has not flinched at the scale of Mr. Biden’s ambitions. Mr. Manchin has said he will support $4 trillion in infrastructure spending.

It is unclear whether Mr. Biden can hold Mr. Manchin and others on his people-focused spending, like the education and child care efforts unveiled on Wednesday. His administration is trying to make the case on productivity grounds, casting the plan as investing in an inclusive economy that would help millions of Americans gain the skills and the work flexibility they need to build middle-class lifestyles.

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The S.E.C.’s director of enforcement stepped down just days after taking the job.

Gary Gensler’s tenure leading the Securities and Exchange Commission is off to a rocky start: Alex Oh, who he named just days ago to run the regulator’s enforcement division, has resigned following a federal court ruling in a case involving one of her corporate clients, ExxonMobil.

In her resignation letter on Wednesday, Ms. Oh said the matter would be “an unwelcome distraction to the important work” of the enforcement division.

Ms. Oh’s resignation letter followed a ruling on Monday from Judge Royce C. Lamberth of the Federal District Court for the District of Columbia over the conduct of Exxon’s lawyers during a civil case involving claims of human rights abuses in the Aceh province of Indonesia.

According to Judge Lamberth’s ruling, Exxon’s lawyers claimed without providing evidence that the plaintiffs’ attorneys were “agitated, disrespectful and unhinged” during a deposition. He ordered Exxon’s lawyers to show why penalties were not warranted for those comments.

the plaintiffs that Exxon’s security personnel “inflicted grievous injuries” on them. The lawsuit was brought under the federal Alien Tort Claims Act, which enables residents of other countries to sue in the United States for damages arising from violations of U.S. treaties or “the law of nations.”

Mr. Gensler said in a news release that Melissa Hodgman, who had been the enforcement division’s acting chief since January, will return to that position. Ms. Hodgman has been an enforcement attorney with the agency since 2008. He thanked Ms. Oh for her “willingness to serve the country.”

had been criticized by the Revolving Door Project, a good-government group, because she had been in private practice for so many years and had defended some of the largest U.S. companies.

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South African President Appears Before Corruption Investigators

JOHANNESBURG — Three years ago, amid a flurry of corruption scandals that rocked South Africa, President Cyril Ramaphosa assumed power on promises to root out graft and restore public confidence in the governing party, the African National Congress.

But over the past year, those efforts have been threatened by a brazen show of defiance from his predecessor, Jacob Zuma, who has snubbed a commission investigating graft during his tenure, refused to appear before the country’s highest court and lobbed attacks on its judges.

Mr. Ramaphosa appeared before corruption investigators himself on Wednesday to account for his party’s scandals and sought to reinforce his vision for a corruption-free A.N.C. His appearance sent a message to a disillusioned nation: No one in South Africa — even a sitting president — is above the law.

“When I was confirming that I would be appearing, I happened to be talking to one of my colleagues who is also a head of state,” Mr. Ramaphosa said in his opening statement. “His reaction was, ‘Ah, how can you do that as head of state?’ I said: ‘This is how our democracy works.’”

from state coffers during Mr. Zuma’s tenure, according to government estimates.

Mr. Ramaphosa’s testimony on Wednesday is the first in four days of questioning at the South African Commission on State Capture, an inquiry into the endemic graft during that period. He was called to answer questions both in his role as the current leader of the A.N.C. and as Mr. Zuma’s former deputy.

As part of its broad probe, the panel is investigating whether the current president was directly involved in corruption in his previous role overseeing the A.N.C.’s deployment of often unqualified loyalists to key government positions. Those appointments, according to testimony to the commission, contributed to the hollowing out of the state and led to backdoor deals that drained public funds.

His testimony comes as the inquiry prepares to deliver its final report in June and as Mr. Zuma — the center of the investigation — has staunchly resisted calls to appear before investigators.

In recent months, the former president defied a court order to appear before the commission, prompting its chief investigator to seek a two-year prison sentence for contempt of court. When the country’s top court heard that case last month, Mr. Zuma again refused to appear — a move that many saw as an open challenge to the country’s democratic institutions.

Mr. Zuma, who denies all accusations against him, has accused the corruption inquiry’s leader, Deputy Chief Justice Raymond Zondo, of harboring a personal vendetta, and has attacked the investigation itself.

“What we’ve seen the last couple of months is an attack led by Jacob Zuma on the constitutional system,” said William Gumede, the chairman of the Democracy Works Foundation, a South African nonprofit group. “This is really a moment in our country where we have to decide if we are either for constitutional democracy or we reject it fully.”

The stark contrast between Mr. Zuma’s and Mr. Ramaphosa’s willingness to engage with the commission reflects an escalating showdown within the A.N.C., Nelson Mandela’s once-celebrated movement for liberation which has governed the country since apartheid ended in 1994.

In recent years, the party has become deeply divided between those loyal to Mr. Zuma — and his vision of a liberation party that stands above the law — and those who support Mr. Ramaphosa’s efforts to overhaul it.

“Both represent two different faces of the party, the democratic and the undemocratic. Both are battling for the soul of the A.N.C.,” Mr. Gumede said.

In his testimony on Wednesday, Mr. Ramaphosa offered a thinly veiled but damning condemnation of Mr. Zuma and his allies who are also under investigation for graft, which Mr. Ramaphosa, analysts and watchdog groups have said remains a problem within the party’s ranks.

Many have been emboldened by Mr. Zuma’s recent defiance in efforts to hold officials accountable. They include another top A.N.C. official, Ace Magashule, who has refused to step down from his current post despite corruption charges prosecutors recently laid against him. He denies the charges.

“The position of the A.N.C. on leaders and members who have been complicit in acts of corruption or other crimes: Their actions are a direct violation not only of the laws of the Republic, but also of the A.N.C. constitution, its values and principles,” said Mr. Ramaphosa, sitting before the commission’s chief investigator in a large wood-paneled auditorium. “Such members must face the full legal consequences of their actions.”

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John C. Martin, 69, Dies; Led Drugmaker in Breakthroughs

John C. Martin, who became a billionaire by developing and marketing a daily single-dose pill that transformed H.I.V. into a manageable disease and who popularized another drug that cures hepatitis C, died on March 30 in Palo Alto, Calif. He was 69.

His death, in a hospital, was confirmed by Gilead Sciences, based in Foster City, Calif., where he was chief executive from 1996 to 2016 and executive chairman from 2016 until he retired two years later. The cause was head injuries suffered the day before, when he fell on a sidewalk while walking home in Old Palo Alto, according to the Santa Clara County medical examiner.

A chemist who rocketed from research director to chief executive of Gilead in six years, Dr. Martin turned a struggling pharmaceutical firm with a staff of 35 into a $100 billion company based in Foster City, Calif., with some 12,000 employees.

Gilead jolted the industry with several major scientific breakthroughs, beginning with the development of the first anti-influenza pill, Tamiflu, which the company licensed to the Swiss drugmaker Hoffman-La Roche in 1996. Its advance against hepatitis C came in 2014, with the marketing of Sovaldi, which has been said to cure 90 percent of patients with that liver virus.

Atripla, which combined Truvada with Bristol-Myers Squibb’s Sustiva in a single pill, replacing as many as 32 separate medications that some patients were taking daily to treat the virus, which can lead to AIDS.

The single-pill treatment was meant to be more than a convenience. By making it easier for patients to self-medicate, they were more likely to take the full doses that were prescribed, reducing the risk that they could become breeding grounds for drug-resistant strains of the disease.

During Dr. Martin’s tenure, Gilead also created remdesivir in 2009, which proved ineffective in its original mission, to treat hepatitis C and other viruses, but which turned out to be a therapeutic weapon during the Covid-19 pandemic.

While the company’s annual revenue soared past $20 billion and its products were hailed as medical miracles, the federal Department of Health and Human Services successfully claimed that Gilead had infringed government patents in making Truvada. The company also drew fire from state and federal regulators over the prices it charged — $1,000-a-month for Sustiva and $1,000 for each hepatitis pill.

donated drugs in some cases and that it had partnered with local manufacturers in developing countries to produce discounted generic versions of some treatments for H.I.V. and hepatitis C.

“John’s legacy,” Daniel O’Day, the company’s chief executive, said in a statement, “will be felt for generations to come, living on through the scientific progress made under his leadership and the programs he championed that expanded access to medications for people around the world.”

the $11 billion takeover of Pharmasset, a developer of antiviral drugs, in 2012. In addition to running Gilead, Dr. Martin was president of the International Society for Antiviral Research from 1998 to 2000.

His marriage to Ms. Martin ended in divorce. Among his survivors are their son and daughter, his three siblings and his partner, Lillian Lien-Li Lou, who was listed in a recent filing as the secretary-treasury of the John C. Martin Foundation, whose stated mission is to improve health care for medically-underserved populations.

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L.A. Schools Superintendent Austin Beutner Stepping Down

Austin Beutner, who took the helm of the Los Angeles public school system, the second-largest in the nation, during a leadership crisis and shepherded it through the coronavirus pandemic, says he will leave his post as superintendent at the end of June.

“This job is extraordinarily demanding, even in ordinary times,” Mr. Beutner, 61, said in an interview, adding, “It’s been a long three years.”

Los Angeles school trustees had asked him to extend the three-year contract he signed in 2018. But Mr. Beutner, a former financier who has served as a publisher of The Los Angeles Times and a deputy mayor, wrote in a letter to the board on Wednesday that he preferred to move on.

Across the country, pandemic-fatigued civic leaders are reassessing their service.

Nearly one-fifth of the mayors in Massachusetts have said they will not run for re-election. In San Francisco, where political controversies over school names consumed the school board while families clamored for a return to face-to-face classes, the superintendent decided to stay on only after the board agreed in writing not to adopt any new mandates unrelated to reopening, for the time being.

settled after six days. Then in 2020 came the pandemic, emptying classrooms of the roughly 650,000 students the district serves, most of them from low-income households.

Operating under emergency powers and leveraging his contacts in the philanthropic and private sectors, Mr. Beutner was both praised and criticized for his handling of the pandemic.

The district set up an extraordinary social-service net, providing more than 123 million meals to needy children and adults, more than 30 million masks and other items, as well as mass Covid-19 testing and vaccination.

But California was among the last states to resume in-person instruction, in part because Mr. Beutner had agreed with the district’s teachers to make reopening conditional on access to vaccination.

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