ReportWire

Tag: Corporate crime

  • US: French cement firm admits Islamic State group payments

    US: French cement firm admits Islamic State group payments

    NEW YORK — French cement company Lafarge pleaded guilty Tuesday to paying millions of dollars to the Islamic State group in exchange for permission to keep open a plant in Syria, a case the Justice Department described as the first of its kind. The company also agreed to penalties totaling roughly $778 million.

    Prosecutors accused Lafarge of turning a blind eye to the conduct of the militant group, making payments to it in 2013 and 2014 as it occupied a broad swath of Syria and as some of its members were involved in torturing or beheading kidnapped Westerners. The company’s actions occurred before it merged with Swiss company Holcim to form the world’s largest cement maker.

    The payments were designed to ensure the continued operations of a roughly $680 million plant that prosecutors say Lafarge had constructed in 2011 at the start of the Syrian civil war. The money was to be used to protect employees and to keep a competitive edge.

    “The defendants routed nearly six million dollars in illicit payments to two of the world’s most notorious terrorist organizations — ISIS and al-Nusrah Front in Syria — at a time those groups were brutalizing innocent civilians in Syria and actively plotting to harm Americans,” Assistant Attorney General Matthew Olsen, the Justice Department’s top national security official, said in a statement.

    “There is simply no justification for a multi-national corporation authorizing payments to designated terrorist organizations,” he added.

    The charges were announced by federal prosecutors in New York City and by senior Justice Department leaders from Washington. The Justice Department described it as the first instance in which a company has pleaded guilty to conspiring to provide material support to a foreign terrorist organization.

    The allegations involve conduct that was earlier investigated by authorities in France. Lafarge had previously acknowledged funneling money to Syrian armed organizations in 2013 and 2014 to guarantee safe passage for employees and supply its plant.

    In 2014, the company was handed preliminary charges including financing a terrorist enterprise and complicity in crimes against humanity.

    A French court later quashed the charges involving crimes against humanity but said other charges would be considered over payments made to armed forces in Syria. That ruling was later overturned by France’s supreme court, which ordered a retrial in September 2021.

    The wrongdoing precedes Lafarge’s merger with Holcim in 2015.

    In a statement, Holcim said that when it learned of the allegations from the news media in 2016, it voluntarily conducted an investigation and disclosed the findings publicly. It fired the former Lafarge executives who were involved in the payments.

    “None of the conduct involved Holcim, which has never operated in Syria, or any Lafarge operations or employees in the United States, and it is in stark contrast with everything that Holcim stands for,” the company said. “The DOJ noted that former Lafarge SA and LCS executives involved in the conduct concealed it from Holcim before and after Holcim acquired Lafarge SA, as well as from external auditors.”

    The Islamic State group is abbreviated as IS and has been referred to as the Islamic State of Iraq and Syria, or ISIS.

    ———

    Tucker reported from Washington.

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  • Head of zero-emission truck venture found guilty of fraud

    Head of zero-emission truck venture found guilty of fraud

    NEW YORK — The wealthy founder of Nikola Corp. was convicted Friday of charges he deceived investors with exaggerated claims about his company’s progress in producing zero-emission 18-wheel trucks fueled by electricity or hydrogen.

    A jury reached the verdict against Trevor Milton after deliberating for about five hours in federal court in Manhattan.

    At trial, the government had portrayed Milton as a con man while his lawyer called him an inspiring visionary who was being railroaded by overzealous prosecutors.

    Those prosecutors alleged that Nikola — founded by Milton in a Utah basement six years ago — falsely claimed to have built its own revolutionary truck that was actually a General Motors Corp. product with Nikola’s logo stamped onto it. There also was evidence that the company produced videos of its trucks that were doctored to hide their flaws.

    Called as a government witness, Nikola’s CEO testified that Milton “was prone to exaggeration” in pitching his venture to investors.

    “The lies — that is what this case is about,” prosecutor Matthew Podolsky told the jury in closing arguments Thursday.

    Defense attorney Marc Mukasey urged acquittal, saying there was “a stunning lack of evidence” that his client ever intended to cheat investors.

    Milton, 40, had pleaded not guilty to securities and wire fraud. He resigned in 2020 amid reports of fraud that sent Nikola’s stock prices into a tailspin.

    At one point, the trial was delayed for more than a week after Milton’s lawyer tested positive for the coronavirus.

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  • Nikola founder Trevor Milton found guilty of securities fraud over misleading statements

    Nikola founder Trevor Milton found guilty of securities fraud over misleading statements

    A federal jury in New York convicted Nikola Corp. founder Trevor Milton of securities fraud for what prosecutors said were his repeated lies about the development of the company’s zero-emissions trucks and technology.

    The guilty verdict caps the downfall of Milton, who founded Nikola
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    in his basement in 2015 and took it public in 2020 at a valuation of $3.3 billion, when the company hadn’t sold a single truck. The company’s market valuation briefly exceeded that of industry giants such as Ford Motor Co.
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  • Puerto Rico to probe power bill complaints following outage

    Puerto Rico to probe power bill complaints following outage

    SAN JUAN, Puerto Rico — Puerto Rico’s Energy Bureau announced Thursday that it will investigate how a private company has handled complaints about electric bills after Hurricane Fiona knocked power out to the entire island.

    The announcement comes as a growing number of customers in the U.S. territory complain about being charged for electricity when they didn’t have power and receiving higher than normal power bills.

    The Independent Office of Consumer Protection urged the bureau last week to investigate difficulties in filing such complaints.

    The bureau called on Luma Energy to immediately stop any practice that prevents consumers from objecting to bills via telephone or online, and to extend the deadline for clients to file their complaints, among other things.

    It also demanded that Luma Energy submit evidence within 10 days that it was complying with the bureau’s orders.

    Luma said in a statement that during Hurricane Fiona and the state of emergency — as a way to prioritize critical calls — it implemented a temporary measure to direct billing inquiries only through its app, web portal, mail or in-person visits.

    “As soon as the emergency passed, we resumed our normal operations, and customers have been able to discuss their bills by phone,” the company said.

    Of Luma’s 1.47 million clients, more than 8,800 remain without power almost a month after Hurricane Fiona hit Puerto Rico’s southwest region as a Category 1 storm.

    Luma officials have noted that restoring power in part has been complicated by the crumbling state of Puerto Rico’s grid, which was razed by Hurricane Maria in 2017. Reconstruction of the grid has only recently started.

    Luma, which took over the transmission and distribution of power in Puerto Rico more than a year ago, has faced growing criticism about lengthy outages that occurred frequently even before Fiona hit.

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  • Texas Pete maker sued for crafting its hot sauce in — gasp — North Carolina

    Texas Pete maker sued for crafting its hot sauce in — gasp — North Carolina

    Some Texas Pete customers are hot under the collar about where this sauce is actually cooked up. 

    A California man has filed a class action suit against the hot sauce maker, claiming it “capitalizes on consumers’ desire to partake in the culture and authentic cuisine of one of the most prideful states in America” with a name and label that plays up Texas — yet, the product is actually whipped up in Winston-Salem, N.C.

    Hey, at least it wasn’t made in New York City!

    The complaint filed by the Clarkson Law Firm on behalf of customer Philip White says that the dissatisfied customer bought a bottle of Texas Pete for about $3 at a Ralph’s Supermarket in September 2021, because he believed it was made in Texas. The suit claims that White would have passed over the bottle of Texas Pete if he knew it really came from North Carolina.

    But with a name like Texas Pete, as well as a label featuring “distinct Texan imagery” like the “lone star” from the Texas flag and a cowboy, the suit says that consumers like White looking for an authentic Texas hot sauce are being misled. 

    “Because there is nothing ’Texas’ about Texas Pete, [the company’s] deceptive marketing and labeling scheme violates well-established federal and state consumer protection laws aimed at preventing this exact type of fraudulent scheme,” the suit states. 

    Garner Foods told MarketWatch in a statement over email that, “We are aware of the current lawsuit that has been filed against our company regarding the Texas Pete brand name.  We are currently investigating these assertions with our legal counsel to find the clearest and most effective way to respond.”

    It should be noted that both the Texas Pete and T.W. Garner Food Co. websites point out that the hot sauce is made in North Carolina. What’s more, the back label on the hot sauce bottle also reveals that it is made in the Tar Heel State. 

    But the suit argues that “consumers do not view the back label of the products when purchasing everyday food items such as hot sauce.” The plaintiffs are asking for unspecified damages, as well as for Texas Pete to change its label and advertising practices. 

    This brings to mind an Illinois woman’s $5 million suit against Kellogg last year, claiming the company is misleading consumers by selling “Frosted Strawberry Pop-Tarts” that barely contain any strawberries. 

    Or when Starbucks faced backlash several years ago as more consumers started realizing their beloved pumpkin spice lattes didn’t actually contain any pumpkin. The coffee chain has since tweaked the recipe to squeeze in autumn’s signature gourd.

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  • Families of crash victims rain wrath on Airbus, Air France

    Families of crash victims rain wrath on Airbus, Air France

    PARIS — Distraught families whose loved ones died in Air France‘s worst-ever crash on Monday shouted down the CEOs of the airline and of planemaker Airbus as the two companies went on trial on manslaughter charges for the 2009 accident over the Atlantic Ocean.

    Cries of “Shame!” erupted in the courtroom after the executives took the stand.

    The crash of storm-tossed Flight 447 en route from Rio de Janeiro to Paris killed all 228 people aboard and had lasting impact on the industry, leading to changes in regulations for airspeed sensors and in how pilots are trained.

    The victims came from 33 countries, and families from around the world are among the plaintiffs in the case, fighting for more than a decade to see it come to trial.

    “It’s very important that we made it to the trial stage. … Thirteen years of waiting, it is almost inhuman,” said German Bernd Gans, who lost his daughter Ines in the crash. Another man came to the trial with a sign reading: “French Justice. 13 Years Too Late.”

    The official investigation found that multiple factors contributed to the crash, and the companies deny criminal wrongdoing. The two-month trial is expected to focus on pilot error and the icing over of external sensors called pitot tubes.

    An Associated Press investigation at the time found that Airbus had known since at least 2002 about problems with the type of pitots used on the jet that crashed, but failed to replace them until after the crash.

    Airbus CEO Guillaume Faury took the stand on the opening day to say: “I wanted to be present today, first of all to speak of my deep respect and deepest consideration for the victims; loved ones.”

    “Shame on you!” family members retorted.

    “For 13 years you have shown contempt for us!” one shouted.

    Air France CEO Anne Rigail met similar emotions when she told the court she was aware of the families’ pain.

    “Don’t talk to us about pain!” rose an angry voice.

    The presiding judge called for calm and the proceedings resumed.

    Air France has already compensated families of those killed. If convicted, each company faces potential fines of up to 225,000 euros ($219,000) — a fraction of their annual revenues. No one risks prison, as only the companies are on trial.

    Still, the victims’ families see the trial itself as important after their long quest for justice, and aviation industry experts see it as significant for learning lessons that could prevent future crashes.

    The A330-200 plane disappeared from radar over the Atlantic Ocean between Brazil and Senegal with 216 passengers and 12 crew members aboard.

    As a storm buffeted the plane, ice disabled the plane’s pitot tubes, blocking speed and altitude information. The autopilot disconnected. The crew resumed manual piloting, but with erroneous navigation data. The plane went into an aerodynamic stall, its nose pitched upward and then it plunged into the sea on June 1, 2009.

    It took two years to find the plane and its black box recorders on the ocean floor, at depths of more than 13,000 feet (around 4,000 meters).

    Air France is accused of not having implemented training in the event of icing of the pitot probes despite the risks. It has since changed its training manuals and simulations. The company said it would demonstrate in court “that it has not committed a criminal fault at the origin of the accident” and plead for acquittal.

    Airbus is accused of having known that the model of pitot tubes on Flight 447 was faulty, and not doing enough to urgently inform airlines and their crews about it and to ensure training to mitigate the risk. The model in question — a Thales AA pitot — was subsequently banned and replaced.

    Airbus blames pilot error, and told investigators that icing over is a problem inherent to all such sensors.

    The companies’ “image, their reputation” is at stake, said Philippe Linguet, who lost his brother on Flight 447. He expressed hope the trial would expose the failings of Airbus and Air France — two major players in the industry and in the French economy — to the world.

    Daniele Lamy, who heads an association of victims’ families, said they are bracing for a difficult trial.

    “We are going to have to unfortunately relive particularly painful moments,” she said. But she called the trial a welcome opportunity after prosecutors initially sought to close the case.

    “This will allow the family to express themselves, to express their suffering over 13 years,” she said.

    ———

    Angela Charlton and Masha Macpherson contributed to this report.

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  • Former Uber security chief guilty of data breach coverup

    Former Uber security chief guilty of data breach coverup

    SAN FRANCISCO — The former chief security officer for Uber was convicted Wednesday of trying to cover up a 2016 data breach in which hackers accessed tens of millions of customer records from the ride-hailing service.

    A federal jury in San Francisco convicted Joseph Sullivan of obstructing justice and concealing knowledge that a federal felony had been committed, federal prosecutors said.

    Sullivan remains free on bond pending sentencing and could face a total of eight years in prison on the two charges when he is sentenced, prosecutors said.

    “Technology companies in the Northern District of California collect and store vast amounts of data from users,” U.S. Attorney Stephanie M. Hinds said in a statement. “We will not tolerate concealment of important information from the public by corporate executives more interested in protecting their reputation and that of their employers than in protecting users.”

    It was believed to be the first criminal prosecution of a company executive over a data breach.

    A lawyer for Sullivan, David Angeli, took issue with the verdict.

    “Mr. Sullivan’s sole focus — in this incident and throughout his distinguished career — has been ensuring the safety of people’s personal data on the internet,” Angeli told the New York Times.

    An email to Uber seeking comment on the conviction wasn’t immediately returned.

    Sullivan was hired as Uber’s chief security officer in 2015. In November 2016, Sullivan was emailed by hackers, and employees quickly confirmed that they had stolen records on about 57 million users and also 600,000 driver’s license numbers, prosecutors said.

    After learning of the breach, Sullivan began a scheme to hide it from the public and the Federal Trade Commission, which had been investigating a smaller 2014 hack, authorities said.

    According to the U.S. attorney’s office, Sullivan told subordinates that “the story outside of the security group was to be that ‘this investigation does not exist,’” and arranged to pay the hackers $100,000 in bitcoin in exchange for them signing non-disclosure agreements promising not to reveal the hack. He also never mentioned the breach to Uber lawyers who were involved with the FTC’s inquiry, prosecutors said.

    “Sullivan orchestrated these acts despite knowing that the hackers were hacking and extorting other companies as well as Uber,” the U.S. attorney’s office said.

    Uber’s new management began investigating the breach in the fall of 2017. Despite Sullivan lying to the new chief executive officer and others, the truth was uncovered and the breach was made public, prosecutors said.

    Sullivan was fired along with Craig Clark, an Uber lawyer he had told about the breach. Clark was given immunity by prosecutors and testified against Sullivan.

    No other Uber executives were charged in the case.

    The hackers pleaded guilty in 2019 to computer fraud conspiracy charges and are awaiting sentencing.

    Sullivan was convicted of of obstruction of proceedings of the Federal Trade Commission and misprision of felony, meaning concealing knowledge of a felony from authorities.

    Meanwhile, some experts have questioned how much cybersecurity has improved at Uber since the breach.

    The company announced last month that all its services were operational following what security professionals called a major data breach, claiming there was no evidence the hacker got access to sensitive user data.

    The lone hacker apparently gained access posing as a colleague, tricking an Uber employee into surrendering their credentials. Screenshots the hacker shared with security researchers indicate they obtained full access to the cloud-based systems where Uber stores sensitive customer and financial data.

    It is not known how much data the hacker stole or how long they were inside Uber’s network. There was no indication they destroyed data.

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  • Former Uber security chief guilty of data breach coverup

    Former Uber security chief guilty of data breach coverup

    SAN FRANCISCO — The former chief security officer for Uber was convicted Wednesday of trying to cover up a 2016 data breach in which hackers accessed tens of millions of customer records from the ride-hailing service.

    A federal jury in San Francisco convicted Joseph Sullivan of obstructing justice and concealing knowledge that a federal felony had been committed, federal prosecutors said.

    Sullivan remains free on bond pending sentencing and could face a total of eight years in prison on the two charges when he is sentenced, prosecutors said.

    “Technology companies in the Northern District of California collect and store vast amounts of data from users,” U.S. Attorney Stephanie M. Hinds said in a statement. “We will not tolerate concealment of important information from the public by corporate executives more interested in protecting their reputation and that of their employers than in protecting users.”

    Sullivan was hired as Uber’s chief security officer in 2015. In November 2016, Sullivan was emailed by hackers, and employees quickly confirmed that they had stolen records on about 57 million users and also 600,000 driver’s license numbers, prosecutors said.

    After learning of the breach, Sullivan began a scheme to hide it from the public and the Federal Trade Commission, which had been investigating a smaller 2014 hack, authorities said.

    According to the U.S. attorney’s office, Sullivan told subordinates that “the story outside of the security group was to be that ‘this investigation does not exist,’” and arranged to pay the hackers $100,000 in bitcoin in exchange for them signing non-disclosure agreements promising not to reveal the hack. He also never mentioned the breach to Uber lawyers who were involved with the FTC’s inquiry, prosecutors said.

    “Sullivan orchestrated these acts despite knowing that the hackers were hacking and extorting other companies as well as Uber,” the U.S. attorney’s office said.

    Uber’s new management began investigating the breach in the fall of 2017. Despite Sullivan lying to the chief executive officer and others, the truth was uncovered and the breach was made public, prosecutors said.

    Sullivan was fired. The hackers pleaded guilty in 2019 to computer fraud conspiracy charges and are awaiting sentencing.

    An email to Uber seeking comment on the conviction wasn’t immediately returned.

    Some experts have questioned how much cybersecurity has improved at Uber since the breach.

    The company announced last month that all its services were operational following what security professionals called a major data breach, claiming there was no evidence the hacker got access to sensitive user data.

    The lone hacker apparently gained access posing as a colleague, tricking an Uber employee into surrendering their credentials. Screenshots the hacker shared with security researchers indicate they obtained full access to the cloud-based systems where Uber stores sensitive customer and financial data.

    It is not known how much data the hacker stole or how long they were inside Uber’s network. There was no indication they destroyed data.

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  • Elon Musk would lose 13.5 million Twitter followers if he scraps most spam accounts; Justin Bieber would lose 27.6 million, data finds

    Elon Musk would lose 13.5 million Twitter followers if he scraps most spam accounts; Justin Bieber would lose 27.6 million, data finds

    Elon Musk would lose about 13.5 million Twitter followers, if he pushes through his plan to get rid of most spam accounts, according to data crunched by CodeClan, a Scottish digital skills academy.

    The Tesla Inc.
    TSLA,
    -3.84%

    CEO on Tuesday gave up a legal battle and agreed to pay $44 billion to take over the social-media company. Musk has said he wants less than 5% of Twitter
    TWTR,
    -2.35%

    accounts to be spam.

    But Musk’s losses pale in comparison with singer Justin Bieber, who would lose 27.6 million of his 114.2 million followers, according to the data.

    Britney Spears would lose the highest percentage of fake followers out of the top 20 with some 48% of her 55.8 million followers being classified as fakes.

    See also: Elon Musk says Twitter will eventually be part of ‘X, the everything app’

    Former President Barack Obama would lose 19.3 million of his 131.9 million followers, the data shows.

    Among other high profile names; Katy Perry has about 23.3 million fakes among her 108.9 million followers, or 21.4% of the total; Rihanna has about 26.5 million fakes, or 24.9% of her 106.5 million followers; Lady Gaga has 10.9 million fakes in her roster of 84.7 million followers, for 12.9% of the total; Kim Kardashian has about 14 million fakes, or 19.4% of her 72.4 million followers, and Ellen DeGeneres has about 24.4 million fakes, equal to 31.5% of her 77.5 million followers.

    See now: Elon Musk’s legal battle with Twitter may be over, but his war with the SEC continues

    In the world of politics, Indian Prime Minister Narendra Modi has about 17.5 million fakes in his 78.8 million followers, equal to 22.2% of the total.

    CNN Breaking News has about 7.7 million fakes, or 12.2% of its 63.1 million followers. Bill Gates has about 14.3 million fakes, or 24.2% of his 58.9 million followers. And NASA has some 14.7 million fakes, or 26.8% of its 57.1 million followers.

    Twitter shares were slightly lower premarket, while Tesla was down 1.1%.

    Shares of Digital World Acquisition Corp.
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    +0.03%
    ,
    the special-purpose acquisition company, or SPAC, buying the company behind former President Donald Trump’s Truth Social social-media company, was slightly higher premarket after falling more than 5% Tuesday in the wake of the Musk/Twitter news.

    The SPAC has fallen 67% in the year to date, while the S&P 500
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    -1.28%

    has fallen 20%.

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  • Elon Musk wants to move forward with his purchase of Twitter. Here’s how some Twitter users reacted.

    Elon Musk wants to move forward with his purchase of Twitter. Here’s how some Twitter users reacted.

    Elon Musk sent a letter to Twitter
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    indicating he intends to move forward with his original proposal that he acquire the company for $54.20 a share, according to a filing from the Securities and Exchange Commission.

    The Tesla Inc.
    TSLA,
    +2.90%

    CEO agreed to buy the social media company back in April for $44 billion, but in recent months said he wanted to terminate the deal, publicly citing concerns about bots on the platform. The two sides had been entrenched in a legal battle over the past few months, and a Delaware Chancery Court judge was scheduled to hear arguments on the case in October, a case Wedbush analyst Daniel Ives said Musk was “highly unlikely” to win.

    See also: College students who got low grades complained about their ‘dismissive’ professor. Then NYU fired him.

    Twitter users reacted to the news on Tuesday afternoon, many of them joking about a potential resolution to the seemingly never-ending Elon Musk Twitter saga.

    One Twitter user said she believes Musk will look to reinstate the account of former President Donald Trump, which was banned shortly after the attack on the Capitol on Jan. 6, 2021. Trump has claimed he won’t return to Twitter even if the Musk deal is executed, and he’ll continue to post on his platform, Truth Social.

    See also: Trump’s Facebook ban may end as soon as January 2023, Meta executive says

    “We’re doing a big platform right now, so I probably wouldn’t have any interest,” the former president said.

    Another user tweeted that supporters of the meme crypto dogecoin
    DOGEUSD,
    +1.11%

    are excited by Musk’s move to proceed with the deal. Musk has touted dogecoin on several occasions in the past few years.

    Similar to bitcoin, dogecoin is a peer-to-peer, open-source cryptocurrency. It trades under the ticker symbol “DOGE” and features the face of the shiba inu from the popular Doge meme as its logo. Dogecoin was up as much as 9.16% after the Bloomberg news was published.

    Musk has not publicly commented on the report, but one Twitter user pointed out that he tweeted about his satellite internet project Starlink after the news broke, but did not mention Twitter in any way.

    A report from The Wall Street Journal stated Musk’s legal team relayed the proposal to Twitter’s team “overnight Monday.”

    Shares of Tesla Inc. dipped after the news, and are now up just 1.31% during Tuesday’s trading. Shares of the EV maker were up as much as 5.65% on the day before the Musk news.

    See also: SPAC backing Trump’s Truth Social hit by news Musk is again offering to acquire Twitter at original price

    The news comes a few days after hundreds of text messages from Musk’s phone were made public as evidence in Twitter’s lawsuit.

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  • Twitter stock surges 22% after Elon Musk gives up bot battle and commits to $44 billion deal

    Twitter stock surges 22% after Elon Musk gives up bot battle and commits to $44 billion deal

    Tesla Inc. Chief Executive Elon Musk now plans to close his proposed $44 billion deal for Twitter Inc., according to a Tuesday filing that arrived less than two weeks before a judge was scheduled to hear a case on the disputed acquisition.

    Musk’s lawyers sent a letter to Twitter’s management team indicating that he was proposing to move forward with the original acquisition terms late Monday, and that letter was released as a filing with the Securities and Exchange Commission Tuesday afternoon. A Twitter spokesperson later confirmed to MarketWatch that the company intended to proceed with the deal for $54.20 a share.

    Twitter
    TWTR,
    +22.24%

    shares jumped 22.2% to $52 in Tuesday’s session, after an hours-long trading halt that started after Bloomberg News first reported the move around noon Eastern time, suggesting a possible end to the legal saga between the two parties. The increase is the second best daily percentage gain on record for Twitter stock, behind only the 27.1% gain experienced when Musk disclosed his initial ownership stake in Twitter in April. Twitter was the best performing stock Tuesday in the S&P 500 index
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    +3.06%
    ,
    and is now up 20.3% on the year.

    The two sides have been locked in a legal battle for months, and a Delaware Chancery Court judge was expected to hear from both sides in a five-day trial slated to begin Oct. 17. The Wall Street Journal reported Tuesday that the Delaware judge asked the two sides to come up with a plan by the end of the day that could bring about an end to the litigation.

    “Musk could see the writing on the wall that he was going to lose the trial,” said Josh White, an assistant finance professor at Vanderbilt University, in an email to MarketWatch. “By doing this, he can save legal costs, time and ultimately losing in a very public trial.”

    See also: Here’s how Twitter’s users reacted to Musk agreeing to buy the platform

    Musk agreed in April to buy Twitter in a deal that valued the company at roughly $44 billion, but he later said that he was terminating the deal. The Tesla
    TSLA,
    +2.90%

    CEO cited concerns about bot activity on Twitter and said he believed the company’s management team wasn’t accurate in its public disclosures about the extent of spam activity on the platform.

    White noted that text messages released in conjunction with the case showed that Musk was aware of Twitter’s bot issue before going forward with his original deal offer, and he doubted that Musk would be able to show that “something really changed” after that point.

    “If he offered less than $54.20, Twitter might have proceeded with the trial, and he would be deposed,” White continued. “By offering the original price, he maximizes the chance that Twitter accepts and the trial ends. I expect Twitter’s board to accept the deal and for it to close rather quickly.”

    Wedbush analyst Daniel Ives agreed that the Tesla leader’s latest move marked a “clear sign that Musk recognized heading into Delaware Court that the chances of winning vs. Twitter board was highly unlikely and this $44 billion deal was going to be completed one way or another,” he wrote in a note to clients. “Being forced to do the deal after a long and ugly court battle in Delaware was not an ideal scenario and instead accepting this path and moving forward with the deal will save a massive legal headache.”

    Opinion: Twitter stood up to Elon Musk and won, but will it feel like a win once he owns it?

    Vanderbilt’s White noted that a deal at the original price would be a “big” win for Twitter shareholders.

    “The stock price of Snap
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    +8.42%

    and Twitter seemed to trade around the same price level before the offer,” he told MarketWatch. “Snap is now a ~$10 stock with a $17 billion market cap. So Twitter’s shareholders win by getting $54.20 rather than having the price drop to $10-20 per share.”

    Additionally, he deemed Delaware business law another winner: “This deal shows that even the richest man in the world cannot overcome well-written contracts enforced in a neutral and fair way by the Delaware courts.”

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  • Ruptured oil pipeline off California approved for repairs

    Ruptured oil pipeline off California approved for repairs

    LOS ANGELES — A Texas oil company was granted permission to repair an underwater pipeline that ruptured off the coast of Southern California a year ago, spilled tens of thousands of gallons of crude, and forced beaches and fisheries to close.

    The U.S. Army Corps of Engineers granted the approval Friday to Amplify Energy Corp., clearing the way to rebuild the aging pipeline that burst months after it was apparently weakened when it was snagged by the anchors of ships adrift in a storm.

    The Oct. 1, 2021, rupture spilled about 25,000 gallons (94,600 liters) of oil into the Pacific Ocean, closed miles of beaches for a week, shuttered fisheries for months and coated birds and wetlands in oil.

    The approval to rebuild the pipe running from an oil rig off Huntington Beach to tanks in Long Beach comes less than a month after Amplify pleaded guilty to federal charges of negligently discharging oil. The Houston-based company and two subsidiaries also agreed to plead no contest in state court to polluting water and killing birds.

    Amplify said the approval will allow it to remove and replace the damaged segments of pipe from the ocean floor.

    It estimated the work would take up to a month after a barge is in place. If it passes a series of safety tests after being fixed, the company said it expected to begin operating in the first quarter of 2023.

    Environmentalists who want the pipeline shut down criticized the permit approval and renewed calls to put an end to offshore oil operations.

    “The Biden administration just ramped up the risk of yet another ugly oil spill on California’s beautiful coast,” said Brady Bradshaw of the Center for Biological Diversity. “Unfortunately, people living near offshore drilling infrastructure are all too familiar with this abusive cycle of drill, spill, repeat.”

    On Wednesday, the environmental group sued the federal government for allowing the platform where the pipeline originated to operate under outdated plans that indicated the platform should have been decommissioned more than a decade ago. The lawsuit also said the Bureau of Ocean Energy Management failed to review and require plan revisions, despite the spill.

    Amplify contended that the spill wouldn’t have occurred if two ships hadn’t dragged their anchors across the pipeline and damaged it during a January 2021 storm. It said it wasn’t notified about the anchor snagging until after the spill.

    While the size of the spill was not as bad as initially feared, U.S. prosecutors said the company should have been able to turn off the damaged line much sooner had it recognized the gravity of a series of leak-detection alarms over a 13-hour period.

    The first alarm sounded late on the afternoon of Oct. 1, 2021, but workers misinterpreted the cause, according to the federal plea agreement.

    When the alarm sounded throughout the night, workers shut down the pipeline to investigate and then restarted it after deciding they were false alarms. That spewed more oil.

    It wasn’t until after daybreak that a boat identified the spill and the line was shut down.

    As part of a federal court agreement to pay a $7 million fine and nearly $6 million in expenses incurred by agencies including the U.S. Coast Guard, the company and subsidiaries agreed to install a new leak-detection system and train employees to identify and respond to potential leaks.

    The company agreed to plead guilty to six state misdemeanor charges and pay $4.9 million in penalties and fines as part of a settlement.

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