Thursday, 1 July 2021
Carbon Capture Startup Sees Its New Tech as a Profitable Investment
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Philippines Warns of Taal Volcano Eruptions, Urges Evacuations
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Inside the Paul Weiss-Apollo relationship
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Good morning and welcome to Insider Finance. I'm Dan DeFrancesco, and here's what's on the agenda today:
- Inside the relationship between law firm Paul Weiss and private-equity giant Apollo Global Management.
- Lenders are looking to artificial intelligence to help with credit decision, but using the tech poses its own risks.
- The burden of bank fees is falling on those least capable of paying them.
We've opened up nominations for our next class of Wall Street rising stars. We want to spotlight the standouts in investment banking, investing as well as sales and trading. Here's how to nominate someone.
Like the newsletter? Hate the newsletter? Feel free to drop me a line at ddefrancesco@businessinsider.com or on Twitter @DanDeFrancesco.
Law firm Paul Weiss' relationship with Apollo has been lucrative. Insiders say it's also sowed tensions within the firm and altered its DNA.
Over the past decade, Paul Weiss has boosted its profits with the help of legal fees from its large private-equity client, Apollo Global Management. The account also changed the law firm's culture, insiders say, and opened it up to criticisms about its independence.
Read more from our exclusive report.
AI can help reduce inequity in credit access, but banks will have to trade off fairness for accuracy - for now
AI-based lenders say that their models can eliminate discrimination, but there are risks to these models - including the quality of the data we feed them. Read the full story here.
Consumers have more banking options than ever before, but few are owned by or designed for underrepresented communities
Of the nation's 5,000 FDIC-insured banks and credit unions, only 3% cater to or are owned by minorities. Get the full rundown here.
Banks earn billions of dollars charging overdrafts fees, and the burden falls on those least able to afford it
Banking fees - particularly overdraft charges - don't affect all Americans equally. In fact, overdraft fees are often paid by those with the lowest balances in their checking accounts. Here's what else you need to know.
Payday lenders target communities of color. But fintechs offering small-dollar loans and flexible wages may help break the debt trap.
Payday lenders target Black and Latinx communities, setting up more stores in minority neighborhoods. Fintechs offering small-dollar loans and early access to wages could prove a replacement for those in need of short-term cash. More on that here.
A top currency investor at $1 trillion Insight Investment breaks down why bitcoin isn't the new gold
Francesca Fornasari explained why bitcoin may not be an effective inflation hedge. Here's what she told us.
Odd lots:
Benchmark's VC Model Strained by Newcomers, Supersize Rivals (The Information)
Nomura Loses 20 Investment Bankers in Asia After Bonus Payouts (Bloomberg)
Lazard Mandates Vaccines, Allows Work From Home Twice a Week (Bloomberg)
Paris gets new JPMorgan trading hub in post-Brexit push (Reuters)
Credit Suisse Weighs Overhaul of Wealth Management Business (Bloomberg)
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10 Things in Politics: Trump Org could crumble in trial
Welcome back to 10 Things in Politics. Sign up here to receive this newsletter. Send tips to bgriffiths@insider.com or tweet me at @BrentGriffiths.
- Won Mississippi: Congrats to the Mississippi State Bulldogs, who won the Men's College World Series last night with a 9-0 victory over Vanderbilt in the deciding game of the finals. This is Mississippi State's first team title in any sport, ending a drought that dates back to 1895.
Here's what we're talking about:
- News of a Trump Organization indictment raises the stakes for Donald Trump
- Former staffers of Sen. Kyrsten Sinema say working for her was a nightmare
- Bill Cosby was set free thanks to a deal he made with someone who became a Trump impeachment lawyer
One thing to watch for: President Joe Biden and the first lady, Jill Biden, are set to tour the area where a Surfside, Florida, condominium building partially collapsed.
1. A MAJOR DAY IN TRUMPWORLD: Former President Donald Trump's legal problems are about to get a lot worse. The cornerstone of the former president's brand, the Trump Organization, along with Allen Weisselberg, one of his most loyal aides, are said to have been indicted, with the charges expected to be made public later today.
My colleagues dived into how things could unfold from here:
Going after Trump's company is a rare move: Prosecutors would most likely have to show that at least one executive - referred to as a "high managerial agent" in New York state law - engaged in or at least tolerated misconduct. Legal experts say the strategy could make it easier for prosecutors to garner cooperation. And the risks to the Trump brand are substantial.
- Key quote: "If, and more likely when, the golden paint is tarnished or fades from what might become a Titanic of an organization post-indictment, not only will banks, lenders, and business associates begin to flee, the financial consequences may send employees running for lifeboats and pointing a finger at the captain to protect themselves before everyone is submerged along with the former president," Jeremy Saland, a former prosecutor in the Manhattan district attorney's office, told my colleagues.
Should this go to trial, experts expect a document-intensive case: Manhattan and New York prosecutors went all the way to the Supreme Court to obtain Trump's tax returns and financial records. Experts also said the relatively small size of the company meant few employees would be likely to testify, but this could also limit the company's defense.
Weisselberg is the ultimate Trump insider: He has served the family since the '70s and was the only non-Trump to oversee Trump's trust while he was in the White House. Jennifer Weisselberg, Weisselberg's former daughter-in-law, previously told my colleagues that prosecutors were trying to flip him.
- She also detailed Weisselberg's role, including how he may have skirted tax rules: "It was like, 'OK, the way we're going to maestro this is instead of a raise, we're going to pay my daughter's tuition,'" she said of Weisselberg's approach. "'Instead of a raise, we're going to pay for the apartment.'"
More on the key people to watch as the case unfolds.
Samuel Corum/Getty Images
2. Former staffers of Sen. Kyrsten Sinema say working for her was a nightmare: Sinema, a Democrat from Arizona, has gained a reputation for overseeing an office that's tough for junior employees to work in, even by Capitol Hill standards. "It's probably the worst job I've had in my entire life," said one former staffer who previously worked elsewhere on the Hill.
3. Bill Cosby released from prison after court overturns sexual-assault conviction: Pennsylvania's highest court ruled that Cosby's deal with a local prosecutor in 2005 should have precluded him from being charged in the case that eventually landed him behind bars. That prosecutor, Bruce Castor, made headlines earlier this year as one of Trump's impeachment lawyers.
- A Cosby accuser said her stomach was "lurching": "I am deeply distressed about the injustice of the whole thing," Victoria Valentino, who accused Cosby of rape, told ABC.
4. Two children are among 18 confirmed dead in Florida condo: Two young sisters - Lucia, 10, and Emma Guara, 4 - are the youngest victims identified so far among the rubble of a partially collapsed condominium building in Surfside, Florida, the Miami Herald reports. Still, 145 people who lived in the tower remain missing.
VIDEO: Why the Miami condo may have collapsed, and how it could happen again
5. Donald Rumsfeld's legacy: Rumsfeld is the only person to have led the Pentagon twice: once as the youngest defense secretary and later as the oldest. Rumsfeld's second stint, during the George W. Bush administration, dwarfs his legacy, as he led the department into wars in Afghanistan and Iraq. He died Tuesday at 88. More on his influential and controversial legacy, including his role in the Iraq War.
- He was instrumental in the push for "enhanced interrogation techniques," or torture: In a memo approving the use of torture, Rumsfeld asked why detainees might be required to stand for only four hours at a time.
6. The cost of inequality: A new Insider series dives into how and why inequity persists in the institutions that govern daily life in America while illustrating the real economic cost to society.
Some key findings:
7. Republican lawmakers flocked to the border: The GOP sees immigration as one of the key issues to retaking the House, Politico reports. Roughly two dozen GOP lawmakers traveled to a Texas border town before Trump's visit to argue that the Biden administration was failing to properly secure the border.
8. China marks a century of communist rule: Anyone who tries to bully China will face "broken heads and bloodshed in front of the iron Great Wall of the 1.4 billion Chinese people," President Xi Jinping said at a mass gathering Thursday, the Associated Press reports. Xi's comments come as Beijing and Washington continue to clash over trade and human rights.
- China appears to be building more than 100 new silos for its nuclear missiles: The belief, an arms expert told The Washington Post, is that "China is expanding its nuclear forces in part to maintain a deterrent that can survive a US first strike in sufficient numbers to defeat US missile defenses."
9. Historians ranked Trump the lowest of any president from the past 150 years: The latest edition of C-SPAN's historian survey ranked Trump among the worst presidents in US history. The survey since 2000 has been taken each time there's a new president, and the latest pegs Trump even below William Henry Harrison, who died just 32 days into his term. At the same time, Barack Obama cracked the top 10 for the first time. Here's where everyone else stacked up.
10. 'You CLEARLY owe it to yourselves': The former New York Times Styles editor Choire Sicha recently quit his high-profile job - and offered some brilliant advice for anyone feeling burned out. "You can't solve your own burnout," he wrote. "You can only change the system or your situation." Read more from his helpful advice.
- Plus, it turns out job-seekers actually have all the power right now. Here are the questions you should ask in your next job interview.
Today's trivia question: On the heels of a historic day for college athletics, which president is credited with helping lead to the creation of the NCAA? Email your guess and a suggested question to me at bgriffiths@insider.com.
- Yesterday's answer: It took until 2005 for every state to have two statues in Statuary Hall. New Mexico's statue of Po'pay, who is known for leading an 1860 Pueblo revolt against Spanish settlers, was the 100th statue.
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