MONDAY KETCHUP: Nepo Soros is antiwoke catnip, JPM settles Epstein, Icahn win-loses at Illumina, and diversity isn't a body count (STUDY)

Live from Ari-loves-candy-palooza, it’s yet another Manic Monday edition of Business Pants. Joined by the Lord of the BS. In today’s soggy tater tot called June 12, 2023: Sexy Story Updates and sleazy academic papers!

DAMION1

1. George Soros Hands Control to His 37-Year-Old Son: ‘I’m More Political’

1. George Soros, the legendary investor, philanthropist and right-wing target, is handing control of his $25 billion empire to a younger son—Alexander Soros, a self-described center-left thinker who grew up self-conscious of the family’s wealth and wasn’t thought to be a potential successor. 

2. The 37-year-old, who goes by Alex, said in the first interview since his selection that he was broadening his father’s liberal aims—“We think alike,” the elder Soros said—while embracing some different causes. Those include voting and abortion rights, as well as gender equity. He plans to continue using the family’s deep pockets to back left-leaning U.S. politicians.

3. “I’m more political,” Alex said, compared with his father. He recently met with Biden administration officials, Senate Majority Leader Chuck Schumer (D., N.Y.) and heads of state, including Brazil’s President Luiz Inácio Lula da Silva and Canada’s Prime Minister Justin Trudeau to advocate for issues related to the family foundation.

2. Crispin Odey to leave hedge fund after sexual misconduct claims, partners say

2. Partners at a prominent finance firm have said its founder, Crispin Odey, is leaving after sexual assault and harassment allegations.

3. His exit follows a Financial Times report that 13 women had accused Mr Odey of misconduct over 25 years.

4. Mr Odey has strenuously denied the claims and hinted that he could resist his ousting from the firm.

5. Odey Asset Management said that it took allegations of misconduct "extremely seriously".

6. Mr Odey had been at the helm of the hedge fund he founded in 1991 which, at its peak, managed more than £10bn worth of investments.

7. Mr Odey, a prominent Brexit backer, claimed to have made hundreds of millions of pounds as sterling plummeted in the aftermath of the referendum vote.

8. On Thursday, the Financial Times reported that the allegations dated back to 1998 and the latest alleged incident was in December 2021.

9. At the weekend, it emerged that there would now be a separation between Odey Asset Management Group - which Mr Odey had a majority stake in - and Odey Asset Management LLP or the "partnership".

10. The partnership's executive committee said it has removed Mr Odey as a partner and added: "He will no longer have any economic or personal involvement in the partnership."

11. "Odey Asset Management Group Ltd will also cease to be a member and the partnership will now be owned and controlled by the remaining partners and managed as an independent legal entity."

12. Odey Asset Management LLP will also undergo a "complete rebrand of the Partnership in the near future", the firm said.

13. No glass cliff here!

1. Sunday's letter to investors said Freddie Neave would take responsibility for the Odey European Inc (OEI) and OEI Mac funds, with James Hanbury assuming leadership of the LP Odey Opus Fund and Oliver Kelton taking charge of the Odey Pan European Fund.

14. BS: “Our People”

1. 6 portfolio managers = 6 white dudes

2. 3 senior researchers = 3 dudes (2 white; 1 north african)

3.  13 management team = 11 white dudes + 1 female lawyer and another woman

3. Silvio Berlusconi, billionaire media mogul and former Italian prime minister, dies at 86

1. Silvio Berlusconi was the billionaire Italian media mogul who served as the country’s prime minister multiple times over a period of nine years.

2. The tycoon was the controlling shareholder of Mediaset, Italy’s largest commercial broadcaster.

1. MFE - MediaForEurope N.V., formerly Mediaset Group (Italian: Gruppo Mediaset), is a Dutch-domiciled, Italian-based media and communications company which is majority-owned by Berlusconi family's Fininvest Group.

1. BS: Pier Berlusconi (25%); Marina Berlusconi (21%)

3. Berlusconi was convicted, but later cleared, of charges of having sex with an underage nightclub dancer at one of his wild “bunga bunga” parties.  

4. His promises to sell off his personal assets to avoid conflicts of interest were never fulfilled, which sparked controversy throughout his terms in office.

5. His tenure as Prime Minister was racked with scandalous sex affairs and poor judgement and decision-making

4. JPMorgan settles with Epstein victims just as case becomes class-action lawsuit

1. JPMorgan Chase said it has reached a settlement regarding victims of late sexual predator Jeffrey Epstein.

2. The bank’s litigation with the U.S. Virgin Islands in the Epstein matter remains, however. Its claims against former executive Jes Staley, who was friends with Epstein, are also active.

3. Last week, lawyers for a Epstein victim, called Jane Doe 1 in documents, asked the court to reopen JPMorgan CEO Jamie Dimon’s deposition.

4. David Boies, one of the lead lawyers for the victims, said the bank was prepared to pay $290 million to resolve the lawsuit. The parties initially had agreed not to disclose the settlement amount in their joint statement, as it was set to be included in a court filing within the next week.

5. The proposed deal would settle a lawsuit filed last November in Manhattan federal court by an unidentified woman on behalf of victims who were sexually abused by Mr. Epstein over a roughly 15-year period when they were teenage girls and young women, the suit said. The number of victims could potentially rise to more than 100.

5. Meta whistleblower says 'tens of millions' could die in the coming years if social media isn't overhauled

1. In 2021, Frances Haugen leaked internal Meta documents which showed the company knew it caused harm.

2. She told The Sunday Times that "tens of millions" will die if social media isn't overhauled.

3. She worked at Facebook until 2021, when The Wall Street Journal published documents that she leaked, known as "The Facebook Files."

1. They included research reports and employee discussions that showed that the company knew its platforms caused harm.

2. For example, The Journal reported that Meta downplayed Instagram's effects on teenagers' mental health, and Facebook helped spread religious hatred in India. 

4. Now, Haugen has written a memoir in which she says social media is still damaging due to a continued lack of transparency, The Washington Post reported.

1. She writes that Meta's profits were contingent on "no one knowing how large the gap between Facebook's and Instagram's public narratives and the truth had grown," per The Post.

2. And Haugen believes that the only way to change that is to overhaul our understanding of social media.

3. "The reality is that culture change is hard," she told The Sunday Times. "I view this book as part of how we build that consensus."

5. "A lot of people will die in the next 20 years if we don't solve this problem," she said, adding the figure would be "tens of millions." Haugen did not expand on the comment.

1. In 2018, United Nations investigators said Facebook "substantively contributed" to the Myanmar genocide, per Reuters. And Instagram made several policy changes after it was blamed for the suicide of a British teenager.

6. While Meta is coming under more scrutiny — it was last month handed a record-breaking $1.3 billion fine relating to data privacy — Haugen argues more needs to be done to stop it spiraling out of control.

6. Cops yell at stalled self-driving Cruise car to get out of the way during a mass shooting in San Francisco, video shows

1. A (GM) Cruise self-driving car seemed to block first responders during a mass shooting in San Francisco.

2. Videos show the car stalling in the street as police shout for it to move.

3. Cruise denied that the vehicle disrupted the emergency response.

1. Cruise replied in a series of tweets that its car "initially stopped as it was approaching an active emergency scene, then proceeded to perform a U-turn and pull over."

2. The company claimed emergency vehicles were still able to get around the taxi. However, Cruise did not address the police commands captured in the videos or how long the car remained in place.

7. Illumina announces CEO transition plan as Francis deSouza resigns

1. Illumina on Sunday announced its board of directors has accepted the resignation of CEO Francis deSouza.

2. His resignation came just weeks after activist investor Carl Icahn failed to oust him from the biotech company.

3. Charles Dadswell, Illumina’s senior vice president and general counsel, will act as CEO in the interim.

4. The board of directors is searching for a new CEO and is considering both internal and external candidates, according to a release. Charles Dadswell, Illumina’s senior vice president and general counsel, will act as CEO in the interim.

5. DeSouza’s resignation is effective immediately, but he will stay on in an advisory capacity until July 31.

6. Illumina, known for its DNA sequencing and array-based technology, has been in a heated proxy fight with Icahn, who owns a 1.4% stake in the company.

7. In late May, Icahn had urged shareholders to vote off deSouza and Chairman John Thompson from the nine-member board. Shareholders booted Thompson, but deSouza held onto his role until Sunday.

1. Francis A. deSouza: 71% YES

2. John Thompson: 66% NO

3. Say on Pay: 86% NO

4. Icahn group nominees:

1. Vincent J. Intrieri (66): 73% NO

2. Jesse A. Lynn (53): 91% NO

3. Andrew J. Teno (38): 59% YES

8. BS: proxy fight been going on for months

1. CEO deSouza (23%); Chair Thompson (19%); Robert Epstein (21%): longest serving director and Nom Chair

8. And finally, in a category usually removed for bros: failing upward??

1. Former co-CEO of failed U.S. lender First Republic lands on her feet with a new job—taking on one of the toughest tasks in international finance

2. The saying that in life when one door closes, another opens up, could certainly apply to Hafize Gaye Erkan. In January of last year, the native Turk abruptly resigned as co-CEO and heir apparent to First Republic Bank founder Jim Herbert after just seven months on the job.

3. While her past employer went on to make the mistakes that eventually led to its historic collapse, the 43-year-old later took over as the boss of Greystone. 

4. There the former Goldman Sachs managing director didn’t even last four months before jumping ship again, as the real estate finance firm announced in December she had sought “new opportunities in the financial sector.” 

5. Now it emerges that the Princeton-educated Erkan has been appointed the first woman to run the Central Bank of the Republic of Turkey (CBRT) as President Recep Tayyip Erdoğan reshuffles his cabinet at the start of a third term in office.

MATT1

Nerd Alert: WE ARE RIGHT

Paper: Diversity, Equity, and Inclusion 

Author: Alex Edmans, Caroline Flammer, Simon Glossner

Date: May 2023

Part of National Bureau of Economic Research papers

Upshot:

• We show that DEI is only weakly correlated with traditional measures of demographic diversity, such as the percentages of women and ethnic minorities in the board, senior management, CEO position, and wider workforce.

• TRANSLATION: COUNTING BODIES ISN’T DIVERSITY!

• Companies in strong financial positions (strong sales growth, strong dividends, but one year stock returns don’t matter) have better focus on DEI (for real DEI, not body count)

• Having diversity at the top… doesn’t matter?  Women in senior management is better for DEI, but female CEO and board members AREN’T necessarily

• Actual diversity is positively associated with 7 of 8 measures of profitability where body count isn’t - and the stock market still doesn’t reward it!

Methodology: 

• Used the Great Places to Work survey data (which, I mean… we OFFERED them Board Sabermetrics data and they turned it down for a company that does surveys for pay?)

• Identify 13 of 58 questions to employees taking the survey that are important for diversity (ie, “This is a psychologically and emotionally healthy place to work” and “I can be myself around here”)

• Compare it to demographics and financial returns

Board Sabermetrics moment:

• The paper talks about quotas, particularly in the Nordic countries - we handed our data to the Minister of Diversity in Denmark showing how Danish companies were among the worst at having diversity power vs. diversity representation.  

Alex - for your next paper, use our data - we have metrics showing which CEOs and boards actually have diverse power, and we didn’t have to sign an NDA with a surveying company to do it!