Netflix, struggling with subscriptions, lays off about 150 workers.

“Our slowing revenue growth means we are also having to slow our cost growth as a company,” the company said in a statement.


Credit…Mark Abramson for The New York Times

Following Netflix’s announcement last month that it lost subscribers for the first time in a decade, the streaming behemoth said Tuesday that it was laying off some 150 people across the company, primarily in the United States, representing 2 percent of its total work force.

“As we explained on earnings, our slowing revenue growth means we are also having to slow our cost growth as a company,” Netflix said in a statement. “These changes are primarily driven by business needs rather than individual performance, which makes them especially tough as none of us want to say goodbye to such great colleagues.”

In the first quarter earnings call in April, Netflix’s chief financial officer, Spencer Neumann, said that in the next two years the company intended to pull back on some of its spending. While Netflix will continue to dedicate some $17 billion annually to developing new television shows and movies, it will do so with less people working behind the scenes.

“We’re trying to be smart about it and prudent in terms of pulling back on some of that spend growth to reflect the realities of the revenue growth of the business,” Mr. Neumann said at the time.

There are likely to be additional layoffs later this year, according to a person with knowledge of the situation who spoke on condition of anonymity to discuss internal company matters.

Netflix, long the leader when it came to worldwide subscribers, said last month that it lost some 200,000 subscriptions in the first three months of the year and that it was expecting an additional two million to leave the service during the second quarter of 2022. The news sent shock waves through the entertainment industry, in which many companies have bet their futures on the continued growth of streaming.

In the weeks since the earnings announcement, Netflix announced it would do something its executives once vowed would never happen: allow subscribers the option to pay less for a version of the service that comes with ads. That is likely to happen by the end of year. At the same time, the company plans to crack down on password sharing, a practice Netflix believes has cost the company revenue from some 100 million unauthorized users, who are watching the service and not paying for it.

The Biden administration is expected to begin blocking Russia from paying American bondholders next week, increasing the likelihood of the first default of Russia’s foreign debt in more than a century.

An exemption to American sanctions has allowed Russia to keep paying its debts since February. That exemption expires on May 25.

The decision not to extend the exemption came after the Treasury Department and the State Department analyzed what would happen if Russia defaulted and determined that it would not have a significant economic impact, according to a person familiar with the deliberations.

The plan to let the carve-out lapse was reported earlier by Bloomberg News. A default would deal a symbolic blow to Russia, which has continued to make bond payments despite sweeping sanctions that have immobilized half of its foreign currency reserves. Russia has tried to make payments on dollar-denominated bonds in rubles and has threatened to file lawsuits to avoid default.

Russia has bond payments due on May 27 and June 24. It is not clear if it has any additional tools at its disposal to make them with the restrictions in place, which would forbid Americans from receiving interest, dividend, or maturity payments on Russian debt.

Treasury Secretary Janet L. Yellen said last week that the consequences of allowing Russia to default was still being studied.

“This is something that we are actively examining right now,” Ms. Yellen said at a Senate Banking Committee hearing. “We want to make sure that we understand what the potential consequences and spillovers would be of allowing the license to expire.”

She added: “We’re actively involved in an evaluation of the risks and impact of not renewing the license.”

Some Treasury Department officials have argued that the debt payment exemption was a useful way to help drain Russia’s resources. However, the Treasury Department ultimately determined that the remaining dollar bond payments did not represent a significant amount of money, the person familiar with the decision said.

The economic implications of a default for Russia and the world could be relatively small.

Economists estimate that Russia’s total foreign public debt amounts to about $75 billion, while Russia’s annual energy sales are worth about $200 billion. Investors have been anticipating a default since late February, and policymakers have suggested that a default does not pose a threat to the stability of the financial system.


Credit…Jim Wilson/The New York Times

Apple, in a blow to its efforts to restore normalcy to its operations, has suspended its requirement that employees return to the office this month for at least three days a week because of a resurgence of Covid-19 cases.

The reversal was welcome news for thousands of employees who pushed back against the company’s demand that they begin coming to the office three days a week in late May. Early this month, the group, which calls itself “Apple Together,” published a letter calling on the executive team to allow for a hybrid and flexible work schedule, saying they could collaborate remotely using online tools such as Slack and spare themselves hours of commuting.

One of Apple’s leading artificial intelligence engineers, Ian Goodfellow, resigned in early May because of the office return policy. Mr. Goodfellow didn’t respond immediately to requests for comment.

Apple said in a note to employees on Tuesday that it would proceed with a pilot program to bring some workers back to the office twice a week in the weeks ahead. It said anyone in that program who felt “uncomfortable coming into the office” would have the “option to work remotely.”

The company also asked that employees who do come to campus wear masks in common areas and elevators. It said it would continue to monitor Covid cases and provide employees with updates at least two weeks before any future changes to its office policy.

The pandemic hit less than a year after Apple celebrated the opening of its new, $5 billion headquarters in Cupertino, Calif., a splashy circular building that resembles a spaceship. It has largely sat unused for the past two years.


Credit…Jim Watson/Agence France-Presse — Getty Images

Jerome H. Powell, the chair of the Federal Reserve, said that the central bank is focused on getting rapid inflation under control and that it is ready to intensify its efforts to tamp down price pressures if they do not begin to ease as policymakers expect.

“What we need to see is clear and convincing evidence that inflation pressures are abating and inflation is coming down — and if we don’t see that, then we’ll have to consider moving more aggressively,” Mr. Powell said, speaking Tuesday afternoon on livestream hosted by The Wall Street Journal. “If we do see that, then we can consider moving to a slower pace.”

Consumer prices climbed 8.3 percent in April from the prior year, and while inflation eased somewhat on an annual basis, the details of the report suggested that price pressures continue to run hot.

The central bank has begun raising interest rates to try and cool the economy, announcing a quarter-point increase in March and a half-point increase earlier this month, which was the Fed’s largest increase since 2000. Mr. Powell and his colleagues have signaled that they will continue to push borrowing costs higher as they attempt to restrain spending and hiring, hoping to bring demand and supply into balance.

They could raise rates by half-percentage-point increments at each of the Fed’s next two meetings, Mr. Powell suggested after the central bank’s May meeting. He repeated that message on Tuesday.

“There was very broad support on the committee for having on the table the idea of doing additional rate increases of that magnitude at each of the next two meetings,” Mr. Powell said. “That’s short of a prediction.”

While Mr. Powell emphasized the economic outlook is very uncertain, he and his colleagues have suggested that they want to push interest rates up to a neutral setting — a place where they are neither stoking nor slowing growth — “expeditiously.” But Mr. Powell suggested that officials are willing to raise rates beyond that if it is necessary to do so to control inflation.

“We won’t hesitate at all to do that,” he said. “We will go until we feel like we’re at a place where we can say, ‘Yes, financial conditions are at an appropriate place, we see inflation coming down.’”

The Fed chair said that the central bank can no longer simply hope that supply chain issues improve and help inflation to fade, and that it has to instead be proactive in trying to restrain prices by cooling down the economy.

“We clearly have a job to do on demand — there is an imbalance in the economy broadly between demand and supply,” Mr. Powell said. He pointed in particular to the labor market, where workers are in short supply and wages are rising swiftly as employers compete to hire them.

“There’s more demand for workers than there are people available to work,” he said. “There’s a pathway for us to use our tools to try to moderate demand.”

He noted that the Fed lacks “precision tools” and that the central bank will have to slow the economy in the process of slowing down prices. Getting inflation down could be painful, he said, but he reiterated his hope for a “soft-ish” economic landing.

“Restoring price stability is an unconditional need — it’s something we have to do,” Mr. Powell said, calling price stability “the bedrock of the economy.”


Credit…Susan Walsh/Associated Press

Elon Musk, chaos agent.

Mr. Musk, the world’s richest man, continued creating confusion around his $44 billion acquisition of Twitter on Tuesday, even as the social media company tried to keep the deal on course. Early in the morning, the billionaire tweeted that “this deal cannot move forward” until he got more details about the volume of spam and fake accounts on the platform.

A few hours later, Twitter said it was “committed to completing the transaction on the agreed price and terms as promptly as practicable.” It urged its shareholders to back the bid by Mr. Musk, who appeared to be carrying out a public tweet-by-tweet negotiation even though he had struck the blockbuster deal to buy Twitter last month.

Mr. Musk’s increasingly skeptical — and erratic — comments about the takeover have kept investors, bankers and Twitter itself guessing about his motives. Some analysts figure that the 50-year-old is trying to drive down the acquisition price or walk away from the deal altogether. Many were unnerved by his methods, with market-moving pronouncements made off the cuff at conferences or in emoji-laden tweets in the middle of the night.

Yet his comments are in keeping with Mr. Musk’s longtime methods of operation, where he often wings it in the biggest moments, eschews experts and relies almost solely on his own counsel. Years ago, he said that he had stopped making business plans. And people close to Mr. Musk have said that he had no plan whatsoever when he piped up with an offer to buy Twitter last month.

“I think all of this is just him making a lot of noise and showing the kind of headaches that he would cause for the company if they were to try to litigate this,” said Ann Lipton, a professor of corporate governance at Tulane Law School.

Twitter’s shares fell 8 percent on Monday and rose more than 3 percent on Tuesday. They closed at $38.32 a share, far below the $54.20 a share that Mr. Musk agreed to pay for the company and below where it traded before the billionaire initially revealed in March that he had bought a big stake in Twitter.

Behind the scenes, the two sides are proceeding with the deal: They jointly put out a regulatory filing on Tuesday. Renegotiating a deal would not be easy for Mr. Musk. In addition to a $1 billion breakup fee, the deal with Twitter includes a “specific performance clause,” which gives the company the right to sue him and force him to complete the deal so long as the debt financing he has corralled remains intact.

Mr. Musk, who also leads the rocket company SpaceX and the electric carmaker Tesla, did not immediately respond to a request for comment. Twitter declined to comment.

Mr. Musk’s latest remarks about the Twitter deal center on the issue of fake accounts on the platform. Twitter has long said in regulatory filings that fewer than 5 percent of its accounts are fake — a figure that Mr. Musk said is hard to believe. In a tweet published at 3:32 a.m. Eastern time on Tuesday, Mr. Musk said the figure could be well above 20 percent, without providing information to support his claim.

“My offer was based on Twitter’s S.E.C. filings being accurate,” Mr. Musk said in the message.

Part of the reason that the issue of fake accounts has come to the forefront now is that Mr. Musk did not conduct due diligence on Twitter before agreeing to buy the company. Potential buyers usually go to extensive lengths to study a target’s business, customers, growth potential and stock price before making an offer. But according to a regulatory filing from the company on Tuesday, Mr. Musk told Twitter that completing due diligence on the social media company was not necessary before signing an agreement.

In the filing, Twitter also warned that “if the merger is not completed, and depending on the circumstances that cause the merger not to be completed, the price of our common stock may decline significantly.” Deal uncertainty can hurt company morale and add to employee turnover.

On Tuesday, two vice presidents and one department head notified colleagues they were departing the company for new opportunities, a Twitter representative said. The departures were earlier reported by Bloomberg.

20% fake/spam accounts, while 4 times what Twitter claims, could be *much* higher.

My offer was based on Twitter’s SEC filings being accurate.

Yesterday, Twitter’s CEO publicly refused to show proof of <5%.

This deal cannot move forward until he does.

— Elon Musk (@elonmusk) May 17, 2022

“If the bot figure is so important to his assessment of the value of the company, he should have done his due diligence on it before signing the deal,” said Erik Gordon, a professor of business at the University of Michigan. “And he should have added an explicit representation about bots to the contract.”

Mr. Musk has been building up the pressure on Twitter with his public comments questioning the deal. He began last Friday, tweeting that his purchase was “temporarily on hold” until he could get more details about the volume of spam and fake accounts on the platform. He later followed up saying that he was still “committed” to the deal.

Over the weekend, he tweeted that Twitter’s legal department had “called to complain” that he violated a nondisclosure agreement by discussing its bot sample size of 100. Mr. Musk’s deal with Twitter also has a non-disparagement clause that prohibits him from tweeting negatively about the transaction.

Then at a technology conference in Miami on Monday, Mr. Musk said striking a deal for Twitter at a lower price was “not out of the question” considering the questions about spam and fake accounts.

“The more questions I ask, the more my concerns grow,” Mr. Musk said at the event. “So you know, at the end of the day, acquiring it has to be fixable with a reasonable time frame and without revenues collapsing along the way.”

He added that it was a “material adverse misstatement” if Twitter said it has less than 5 percent of fake or spam accounts but the figure is actually significantly more.

“Material adverse change” clauses are used by buyers to get out of or renegotiate deals if there has been serious harm to a business. But such charges rarely prevail in court. Twitter’s bot count is unlikely to qualify as a material adverse statement, lawyers said, since Twitter has publicly disclosed similar figures quarterly and there would be no clear change to evaluate. And Twitter also cautions in its regulatory filings its bot estimates may be “higher” than it estimates.

Twitter’s deal contract has eight pages of “representations”: effectively promises about the state of the company at the time of the merger, though none pertain directly to its count of bots.

On Monday, Parag Agrawal, Twitter’s chief executive, also posted a lengthy thread detailing how the company calculates its number of bots. He said the company’s internal estimates for the last four quarters “were all well under 5 percent.”

Mr. Musk later responded to Mr. Agrawal’s tweet thread with a poop emoji. He also tweeted at the Securities and Exchange Commission, indicating that he wants the agency to look into the deal. (Mr. Musk has previously been the subject of S.E.C. inquiries.)

In its filing on Tuesday, Twitter also noted the significant challenges it weighed in deciding whether to accept Mr. Musk’s bid. Bret Taylor, Twitter’s chairman, spoke with several institutional shareholders who recommended that the board consider Mr. Musk’s proposal against the risks of pressing forward as a public company.

Twitter also said that while its management and bankers received interest from other “financial sponsors and institutional investors,” none of the interested parties put forward a specific counterproposal.

Ele Klein, co-chairman of the global shareholder activism group at the law firm Schulte Roth & Zabel, said Mr. Musk’s shenanigans have put Twitter’s board in a bind.

“It then becomes a question of, if you’re the company, even though you have a really great fact pattern, how long do you want to spend fighting,” Mr. Klein said. “Life’s too short to fight with Elon Musk.”

Mike Isaac contributed reporting.


Credit…Jim Wilson/The New York Times

As Elon Musk continues to cast doubt on whether his acquisition of Twitter will continue, the social media company is pressing ahead. In a lengthy regulatory filing on Tuesday, Twitter’s board urged shareholders to vote in favor of the deal and provided a play-by-play look into how the board reached an agreement last month with Mr. Musk.

The filing detailed the breakneck pace at which the deal came together and the frequent shifting of Mr. Musk’s whims as he moved from shareholder to board nominee to acquirer. It also showed Twitter’s continued commitment to the deal, even as Mr. Musk appeared hesitant: “This deal cannot move forward,” he tweeted early Tuesday, shortly before the filing was published.

“Twitter is committed to completing the transaction on the agreed price and terms as promptly as practicable,” Twitter said in a statement accompanying the filing. The value of Twitter’s stock could decline significantly if the deal does not move forward, Twitter said. Its shares have already fallen below their value when Mr. Musk first revealed his stake in Twitter, and they are now far below the price he is offering in his takeover bid, a signal that investors have doubts that a deal will close.

Twitter’s filing revealed new details about the deal-making negotiations, including the role of Twitter’s co-founder and former chief executive, Jack Dorsey, and Twitter’s conversations with other potential acquirers.

Mr. Dorsey suggested to Mr. Musk that Twitter should be taken private on April 5, shortly after Mr. Musk had agreed to join Twitter’s board, according to the filing. Mr. Musk had acquired a significant stake in Twitter and approached the company with suggestions for changes he believed it should make to its business. Although Mr. Musk said he was considering buying Twitter or launching a competitor, he agreed in late March that he would join the board.

But Mr. Musk’s thinking appeared to shift after the conversation with Mr. Dorsey. The former Twitter executive, who has argued that the social network should decentralize its business, said that Twitter could better execute on its goals and plans if it became private and no longer had to answer to Wall Street. During the discussion, Mr. Musk asked Mr. Dorsey if he would remain on Twitter’s board after his term expired in May. Mr. Dorsey declined, according to the filing.

Shortly after their conversation, Mr. Musk turned down the seat on Twitter’s board and said he would make an offer to acquire the company instead.

Mr. Musk’s bid materialized with unusual speed, and he goaded Twitter’s board to accept it, publicly tweeting hints that he might pursue a hostile takeover attempt if the board did not accept his terms via negotiations.

Behind the scenes, Twitter management and its bankers received interest from other “financial sponsors and institutional investors,” the company said in its filing, but none of the interested parties put forward a specific counterproposal.

Twitter’s board chair, Bret Taylor, also spoke with several of Twitter’s institutional shareholders to gauge their interest in Mr. Musk’s offer, the filing said. These shareholders said Twitter had failed to execute on its past opportunities to grow the business but that the recent replacement of Mr. Dorsey with a new chief executive, Parag Agrawal, could make them open to a plan for Twitter to remain independent. But they also cautioned Twitter to consider Mr. Musk’s proposal, which values the company at $44 billion, against the risks of pressing forward as a public company.

Those risks tipped the scales, Twitter said in its filing. If a deal with Mr. Musk did not solidify, other acquirers could swoop in and propose a lower price. The shares of many tech stocks, including Twitter’s, have slumped recently, making a quick turnaround on the public market more challenging.

In recent days, Mr. Musk has suggested that the presence of bots and spam accounts on Twitter could allow him to back out of the deal or renegotiate its price. Twitter estimates that these accounts make up less than 5 percent of its platform, but Mr. Musk has suggested that the total is far higher. An incorrect bot count could be grounds to give him an out, Mr. Musk said Monday at a conference. But if Mr. Musk tries to walk away, he could face a $1 billion breakup fee or, in certain cases, Twitter could sue him to pay the full price of the deal.


Credit…Jim Watson/Agence France-Presse — Getty Images

On April 4, Elon Musk revealed that he had purchased a sizable stake in Twitter. Three weeks later, Mr. Musk and Twitter reached a deal for the billionaire to acquire the social media company entirely and take it private. But now Mr. Musk says his bid is “temporarily on hold” until he can get more details to confirm that spam and fake accounts represent less than 5 percent of the social network’s total users.

Here are highlights of our coverage of the twists and turns in this saga:

Elon Musk Becomes Twitter’s Largest Shareholder (April 4): The Tesla chief executive, who has been critical of Twitter’s content moderation policies, has bought 9.2 percent of the social media company.

Elon Musk Joins Twitter’s Board, Pitching Ideas Big and Small (April 5): Free speech, open-source algorithms — and an edit button: The world’s richest person will soon help steer the social media platform where he has a huge following.

Elon Musk Will Not Join Twitter’s Board, Company Says (April 10): The announcement reverses a decision made days earlier. By not joining Twitter’s board, Mr. Musk will also no longer be bound by a previous agreement he had signed with the company.

Elon Musk, After Toying With Twitter, Now Wants It All (April 14): The billionaire executive recently became one of the company’s largest shareholders. Now he says he wants to buy the whole thing and change how it handles speech.

Twitter Counters a Musk Takeover With a Time-Tested Barrier (April 15): With a “poison pill” defense, Twitter seems intent on fending off the billionaire’s bid to buy it.

Elon Musk Races to Secure Financing for Twitter Bid (April 19): Mr. Musk is trying to shore up debt financing, including potentially taking out a loan against his shares of Tesla.

Elon Musk Details Plan for $46.5 Billion Twitter Takeover (April 21): The financial commitments from a group of banks put pressure on the social media company’s board to take his advances seriously.

Twitter in Advanced Talks to Sell Itself to Elon Musk (April 24): The company’s 11-member board held negotiations with Mr. Musk over his offer to buy the social networking service.


Elon Musk to Buy Twitter (April 25): The Tesla chief executive struck a deal to buy the site for roughly $44 billion. Here is how we covered the news in real time on the day Mr. Musk and Twitter announced their agreement.

Elon Musk Has Brought In New Investors to Fund His Twitter Deal, a Filing Shows (May 5): Mr. Musk revealed that he had raised around $7 billion from 18 entities to help fund his bid. The investors were a mix of Mr. Musk’s Silicon Valley friends as well as cryptocurrency companies, family offices, sovereign wealth funds, property firms and mutual-fund companies.

Elon Musk Says He Would ‘Reverse the Permanent Ban’ of Donald Trump on Twitter (May 10): Mr. Musk has said he wants Twitter to be a forum for debate, and he called the barring of Mr. Trump “morally wrong.” The former president has said he would not rejoin the platform.

Elon Musk Says His Takeover of Twitter Is ‘On Hold’ (May 13): Mr. Musk announced in a tweet that he wanted more details to confirm that spam and fake accounts represent less than 5 percent of the social network’s total users. About two hours later, Musk tweeted that he was still “committed” to the acquisition.

Elon Musk Says Twitter Deal ‘Cannot Move Forward’ Without More Information (May 17): In early-morning tweets, Mr. Musk called on Twitter to provide more data about the number of spam and fake accounts on the social media site. Twitter’s shares fell below the $54.20 a share that Mr. Musk agreed to pay last month to buy the social media company.

The German insurance firm Allianz will pay more than $6 billion over the implosion of a group of hedge funds two years ago that stuck public pensions, religious organizations, foundations and other investors with heavy losses.

An American subsidiary of the insurer, Allianz Global Investors U.S., pleaded guilty Tuesday to securities fraud for failing to stop the scheme, which came to light after the funds collapsed early in the pandemic, losing more than $7 billion before they were shut down, according to court filings by federal prosecutors.

The fraud involved three former portfolio managers, including the funds’ former chief investment officer, who misled investors for at least four years by concealing the risk they faced, prosecutors said. Gregoire Tournant, the former chief investment officer, tried to cover up the scheme and mislead investigators in spring 2020, prosecutors said.

Mr. Tournant was charged with fraud and obstruction of justice in an indictment unsealed on Tuesday. The other portfolio managers, Stephen Bond-Nelson and Trevor Taylor, pleaded guilty in March and are cooperating with the government, prosecutors said.

Damian Williams, U.S. attorney for the Southern District of New York in Manhattan, said the three men gave investors faked documents that “hid the fact that they were secretly exposing investors to substantial risk.”

Those investors included a number of pension funds: the Teamster Members Retirement Plan, the New England Health Care Employees Pension Fund, the Arkansas Teacher Retirement System, the Milwaukee City Employees’ Retirement System and Blue Cross Blue Shield’s national employee benefits committee. Under its plea agreement, Allianz said it would pay more than $5 billion in restitution to investors and more than $1 billion to the government, federal officials said.

But the consequences of the case reach beyond those affected investors. As a result of its guilty plea, Allianz said it would no longer be permitted to advise certain kinds of funds in the United States. The company said Tuesday that it had reached a preliminary deal to transfer management of approximately $120 billion in assets to a new partner, Voya Financial. Allianz said an agreement would be finalized in the coming weeks.

Allianz, which is the parent company of the giant mutual fund bond firm PIMCO, said it did not expect its other operations in the United States to be disrupted. Allianz said it expected to get a waiver from the Securities and Exchange Commission that would ensure the guilty plea will not affect the operation of either PIMCO or Allianz’s insurance business in the United States.

“We accept our corporate responsibility for the isolated but serious wrongdoing of these three former employees,” Allianz said in a statement. The firm said it supported investigators’ efforts and sought to reach “fair settlements” with clients who had been lied to.

A lawyer for the Allianz investment subsidiary entered the guilty plea on its behalf Tuesday afternoon. A statement of facts included in the plea documents said it had “made false and misleading statements to current and prospective investors that substantially understated the risks being taken by the funds.”

The Justice Department and the S.E.C. began examining the firm’s Structured Alpha Funds after they took heavy losses at the start of the Covid-19 pandemic, when stock prices nose-dived as lockdowns caused widespread economic upheaval. Authorities said the seeds of that destruction were planted years earlier by the funds’ managers, who fabricated risk reports, altered performance data and manipulated spreadsheets to lie about their investment strategy.

Prosecutors laid out a series of attempts to mislead investors. In one instance, authorities said, the portfolio managers reported a daily loss at 9.3 percent, halving the actual decline. In another, the portfolio managers told investors that a potential market crash would result in losses of 4.15 percent — a figure reached by dropping a digit from the actual estimate of 42.15 percent.

Investigators said the managers began misleading investors as far back as 2016, helping the firm generate $400 million in net profits from managing the funds, as well as large bonuses for themselves.

“The defendants’ conduct in this case was brazen,” said Gurbir S. Grewal, the director of the S.E.C.’s enforcement division.

Even so, authorities said, the investment firm’s oversight was too weak to catch the problem before it was too late: The company’s controls were riddled with holes that rendered them inadequate to police the managers’ trading.

After the funds came apart, investigators said, the cover-up began.

Mr. Grewal said when Mr. Bond-Nelson was confronted by S.E.C. staff members about a false statement he had made, he took a bathroom break and never came back. And Mr. Taylor met with Mr. Tournant at a vacant construction site to discuss how to respond to investigators’ questions, authorities said.

Mr. Tournant, 55, voluntarily surrendered to authorities in Denver on Tuesday morning to face charges including securities fraud, conspiracy and obstruction of justice. In a statement, Mr. Tournant’s lawyers, Daniel Alonso and Seth Levine, called the case a “meritless and ill-considered attempt by the government to criminalize the impact of the unprecedented, Covid-induced market dislocation of March 2020.”

The lawyers said Mr. Tournant was on medical leave at the time and had sustained losses to the “considerable investment” he had made in the fund.

“While the losses are regrettable, they are not the result of any crime,” the lawyers said.

In addition to his criminal case, Mr. Tournant faces civil charges from the S.E.C., which already agreed to settlements with Mr. Bond-Nelson and Mr. Taylor.

“The victims of this misconduct include teachers, clergy, bus drivers and engineers, whose pensions are invested in institutional funds to support their retirement,” said the S.E.C. chairman, Gary Gensler. “This case once again demonstrates that even the most sophisticated institutional investors, like pension funds, can become victims of wrongdoing.”


Credit…Caroline Yang for The New York Times

In the tragic, whirlwind year of 2020, with racial-justice protests prompted by the killing of Black men and women by police officers, the Black Lives Matter Global Network Foundation raised $90 million, much of it small donations from rank-and-file supporters of its cause. A recent tax filing from the group shows that by the middle of last year, more than half of that money had been granted to local organizations or spent on consultants and real estate, leaving the foundation with $42 million in assets.

The foundation’s finances have been subjected to criticism from both sides of the political spectrum. Many local groups that are part of the Black Lives Matter movement have called for more transparency and a greater role in decision making, as well as more money for the organizations led by activists on the ground. At the same time, opponents of the broader cause have tried to portray spending by one of the group’s founders as evidence of widespread mismanagement in a manner that appears intended to impugn the cause as well as the group.

“No one expected the foundation to grow at this pace and to this scale,” Cicley Gay, chair of the board of directors, said in a statement on Tuesday. “Now, we are taking time to build efficient infrastructure to run the largest Black, abolitionist, philanthropic organization to ever exist in the United States.”

Last month New York Magazine reported that funds raised by the foundation were used to buy a house in California for nearly $6 million in cash in October 2020. The tax filing shows property worth $5.9 million, held by a Delaware company. Identifying information about the company “is not being released here due to safety and security concerns and threats to B.L.M.G.N.F.’s leadership, staff and creators,” the form said.


Credit…Jae C. Hong/Associated Press

The release of Internal Revenue Service Form 990 for the Black Lives Matter Global Network Foundation was the first time the group offered an official accounting of its finances. It is also a delayed snapshot. The form covers the fiscal year that ended June 30, 2021, nearly a year ago.

Much of the outside critical attention on the group has focused on Patrisse Cullors, one of the founders of Black Lives Matter. Ms. Cullors stepped down as executive director of the foundation in May 2021. In an interview with The Associated Press at the time, she decried “right-wing attacks that tried to discredit my character.”

A family member, Paul Cullors, was listed on the tax form as receiving payment for “professional security services” amounting to $840,993.

“I think they are doing what a lawyer in this situation would advise them to do, which is be as open as you possibly can be and be as accurate as you possibly can be,” said Lloyd Hitoshi Mayer, a law professor at the University of Notre Dame who specializes in nonprofits. “They’re trying to be transparent. They’re trying to right the ship. There’s still work to do.”

In 2021, the foundation released its own report, not a mandatory federal tax filing but a voluntary accounting of its funds, in which it said that it raised $90 million in 2020, with the average donation being $30.64. At that time, the group said that it spent $8.4 million on operating expenses while disbursing $21.7 million in grants to about 30 organizations and to 11 Black Lives Matter chapters around the country.

On the tax form, the foundation said that for the overlapping fiscal year it received contributions and grants totaling $76.9 million, with total expenditures of $37.7 million. Those expenses included grants of $500,000 each to Black Lives Matter groups in Boston, Philadelphia, Detroit and elsewhere.

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The S&P 500, which has been teetering on the verge of a bear market, jumped on Tuesday for the second time in three days as investors weighed a number of reports that suggested consumer spending remained healthy.

The S&P 500 gained 2 percent and is now up more than 4 percent since Thursday’s close. The index is coming out of a six-week-long stretch of consecutive declines that knocked it down more than 11 percent, to as much as 18 percent below its record high in January. Now it is less than 15 percent off that peak.

The Nasdaq composite gained 2.8 percent on Tuesday.

  • Retail sales rose 0.9 percent in April, increasing for the fourth consecutive month, the Commerce Department said. The report eased concerns over an economic slowdown, but the data is likely inflated by elevated prices. The data, which isn’t adjusted for inflation, captured spending during a month when prices rose 0.3 percent from the prior month.

  • Home Depot rose 1.7 percent after the retailer reported on Tuesday that its sales grew 3.8 percent in the first three months of the year, to $38.9 billion. The home improvement store also provided an optimistic outlook for the year, expecting sales to increase by 3 percent.

  • Walmart fell 11.4 percent, its worst day since the 1980s, after the company reported on Tuesday that its profit fell 25 percent in the first three months of the year compared with a year prior. The company also lowered its financial outlook for the year.

  • Shares of Twitter gained 2.5 percent. Shares have fallen from nearly $52 a share last month as Elon Musk has created confusion around his willingness to go through with his purchase of the company. On Tuesday, he said he would proceed with his $44 billion acquisition of Twitter only if he got more details about the volume of spam and fake accounts on the platform. Mr. Musk’s deal for Twitter would have him pay $54.20 a share.

  • Oil prices rose slightly on Tuesday. West Texas Intermediate, the U.S. crude benchmark, fell 1.6 percent at $112.40 a barrel.


Credit…Erika P. Rodriguez for The New York Times

Walmart, the nation’s largest retailer, is being hit hard by inflation. The company reported on Tuesday that its profit in the first three months of the year fell 25 percent from a year ago, an unexpectedly large drop that Walmart blamed on broadly higher costs, particularly in labor and fuel.

“Bottom line results were unexpected and reflect the unusual environment,” Walmart’s chief executive, Doug McMillon, said in a statement. “U.S. inflation levels, particularly in food and fuel, created more pressure on margin, mix and operating costs than we expected.”

The drop meant that for the first time in many years, Walmart did not meet Wall Street’s profit expectations, an ominous signal for other companies trying to navigate the current inflationary environment.

Walmart’s earnings of $1.30 per share in the quarter were lower than the $1.48 expected by many analysts. The company’s shares fell 11.4 percent, their worst day since the 1980s.

The rare profit decline shows how inflation, which is running at a 40-year high in the United States, is rattling even a giant company like Walmart, which typically can use its size and scale to lower the costs of the goods that it sells.

The company’s first-quarter results also provided insight into the changing habits of the American consumer. The company’s executives said they had begun to notice inflation shaping behavior. Lower-income shoppers were buying more food and less general merchandise, like clothing and sporting goods. And instead of buying brand-name bacon and items from the deli, they were opting for more of Walmart’s own “private label” brands, which tend to be less expensive.

For more-well-off consumers, sales of big-ticket items like video game consoles and patio furniture were still strong.

“There is a lot of uncertainty moving forward,” Mr. McMillon told analysts on a conference call Tuesday morning. “Things are very fluid.”

Mr. McMillon said Walmart was caught off guard by how quickly inflation rose in the past few months, particularly the cost of fuel, which impacted its supply chain. The company also said that its labor costs were unusually high during the first three months of the year because it hired many replacement workers expecting that its core staff would be out sick with the Omicron variant of the coronavirus. But many of those workers returned soon than expected, creating overstaffing.

Asked by an analyst whether he had seen signs that inflation had hit its peak, Mr. McMillon said, “I am concerned that inflation may increase,” especially in food.

For the full year, Walmart now expects that the measure of profit that it forecasts for shareholders will fall 1 percent — a major shift in guidance from February, when the company projected that it would be able to grow profits by 3 percent this year.

Even as profit fell, Walmart managed to increase its global revenue, which rose 2.4 percent to $141.6 billion and was higher than expected. Sales in the United States were up 3 percent.

Going forward, the company expects sales to climb 4 percent this year, which is higher than the 3 percent increase it expected in February, a sign that consumer spending remains strong. Some companies, like PepsiCo, have reported jumps in revenue because consumers have continued to buy their products even after large price increases. But inflation has come on faster than expected, making it difficult for many businesses to recalibrate.

“We’re adjusting,” Mr. McMillon said in the statement. “And will balance the needs of our customers for value with the need to deliver profit growth for our future.”


Credit…Gabby Jones for The New York Times

Retail sales rose 0.9 percent in April, increasing for the fourth consecutive month, as consumer prices continue to escalate at their fastest pace in four decades.

The increase in spending in the United States last month follows a revised 1.4 percent month-over-month gain in March, when prices for gasoline soared amid Russia’s invasion of Ukraine. Gas prices cooled down slightly in April but were still at elevated levels, while oil prices remain volatile.

Consumers pulled back on spending at gas stations, where sales fell 2.7 percent in April, the Commerce Department reported on Tuesday, and the report showed that shopping at grocery stores and building material stores dropped last month.

Sales at restaurants and bars were up 2 percent in April, while spending at department stores was up 0.2 percent. Spending at car dealers, which has been hampered by supply chain disruptions and a global computer chip shortage, rose 2.2 percent last month.

Economists are laser-focused on upcoming reports on spending because they serve as indicators of how consumers are grappling with inflation and higher interest rates.

“Despite the surge in prices weighing on their purchasing power, the U.S. consumer now appears to be single-handedly keeping the global economy afloat,” Paul Ashworth, an economist at Capital Economics, wrote in a note.

The Commerce Department’s new data, which isn’t adjusted for inflation, was an early estimate of spending during a month when prices rose 0.3 percent from the prior month. The rapid pace of inflation has led companies to raise prices for their goods to cover the higher costs of commodities, labor and transportation. Companies like PepsiCo and Coca-Cola have introduced higher prices for their products, and airfares are also climbing.

To combat inflation, the Federal Reserve started lifting interest rates from near zero in March. Economists are worried that if interest rates are raised too fast, the move could lead the economy into a recession by slowing down consumer demand too much.

“To the extent that markets are worried about a growth slowdown, this is good news,” Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, wrote in a note, referring to Tuesday’s report. “But it is also a further catalyst for the Fed to raise rates even higher, in order to get inflation under control.”


Credit…Kin Cheung/Associated Press

For some experienced cryptocurrency investors, last week’s crash was par for the course. “Markets are seasonal; crypto is no exception,” the venture capital firm Andreessen Horowitz wrote philosophically in a new “state of crypto” report out on Tuesday. “Summers give way to the chill of winter, and winter thaws in the heat of summer.”

But for officials in Washington contemplating new rules for a slew of novel financial products, taking the nosedive in stride is tough. Many are calling for quick action, though that may end up being the only thing they agree upon easily, the DealBook newsletter reports.

Securities and Exchange Commission chairman Gary Gensler, for instance, speaking at a conference of Wall Street regulators in Washington on Monday, said crypto was “a highly speculative asset class” that left investors exposed to losses and fraud.

The Commodity Futures Trading Commission chairman, Rostin Behnam, told CNBC that crypto is “causing some confusion and some chaos,” and said that his agency should take on more regulatory responsibility over digital assets.

The Consumer Financial Protection Bureau chairman, Rohit Chopra, told Bloomberg that he thought there were many dangers for investors lurking in stablecoins — cryptos linked to assets like the dollar that are meant to hold a steady value but which last week proved problematic.

There is agreement on this much, at least. “The existing oversight is clearly inadequate,” said Salman Banaei, policy chief at the crypto company Uniswap Labs, who was formerly at the C.F.T.C.

The S.E.C. has proposed bringing exchanges and other firms that facilitate crypto trading under the same regulations that now govern stock markets and Mr. Gensler argues that most tokens should be registered as securities, which would mean disclosures for investors. Some lawmakers have also favored more reporting for crypto brokers for tax compliance.

As for stablecoins, the cryptocurrencies meant to be tied to a stable value asset like the dollar, some of which last week proved wobbly, a range of regulations may be needed. Stablecoins backed by traditional assets like cash and U.S. Treasuries could be regulated like banks, some say, with oversight possibly given to the Federal Deposit Insurance Corporation, but that would still leave others out of the picture.

Algorithmic stablecoins — like TerraUSD, which plunged last week and relies on an algorithm and trader interest in a linked cryptocurrency, Luna, to maintain its value — would not be included. Some lawmakers say that’s the right approach because algorithmic stablecoins aren’t tied to the traditional financial system, and therefore present less of a risk of causing a meltdown. But with crypto markets and investors increasingly connected to the older system, others argue that such distinctions are moot.


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Treasury Secretary Janet L. Yellen warned that Ukraine does not have enough funding to sustain its government and fend off Russia’s attacks.CreditCredit…Janek Skarzynski/Agence France-Presse — Getty Images

BRUSSELS — Treasury Secretary Janet L. Yellen urged European nations on Tuesday to step up their spending to support Ukraine as Russia’s attacks on the country’s critical infrastructure showed few signs of abating.

The United States and Europe have coordinated closely in enacting sweeping sanctions against Russia in the nearly three months since its president, Vladimir V. Putin, ordered an invasion. But they have been less aligned on the need to help prop up Ukraine’s economy and to assist with its rebuilding once the war ends.

Congress has already approved a $13.6 billion emergency spending package for Ukraine and is expected to approve another $40 billion worth of aid. While the European Union and international financial institutions have also been making large aid contributions, Ms. Yellen said that more must be done.

“I sincerely ask all our partners to join us in increasing their financial support to Ukraine,” Ms. Yellen said in a speech at the Brussels Economic Forum, according to her prepared remarks. “Our joint efforts are critical to help ensure Ukraine’s democracy prevails over Putin’s aggression.”

The Treasury secretary is in the midst of a weeklong trip to Europe, with stops in Warsaw, Brussels and Bonn, Germany, where she will meet her counterparts at the Group of 7 finance ministers summit. Aid to Ukraine is expected to be a central topic at that meeting.

Ms. Yellen said that Ukraine’s financial needs are immediate and that it lacks funding to pay soldiers, pensioners and employees to keep its government running.

“What’s clear is that the bilateral and multilateral support announced so far will not be sufficient to address Ukraine’s needs, even in the short term,” she said.

Whether her call will be heeded remains to be seen. European nations are facing their own economic strain, including rapid inflation and soaring energy costs, and big challenges lie ahead as they look to wean themselves off Russian energy.

Ms. Yellen said that the United States would help break Europe’s dependence on Russian energy, in part by increasing American exports of liquefied natural gas. She acknowledged some climate goals to reduce emissions could be set back by the need to rely on coal and fossil fuels, but she said the current predicament should be a reminder of the need to “redouble our efforts on clean and renewable energy.”

Energy is another major issue that policymakers will discuss at the Group of 7 finance ministers’ summit in Bonn later this week. The United States is expected to press the European Union to consider alternative options ahead of its plan to phase in a Russian oil embargo by the end of the year.

Treasury Department officials said on Tuesday that they wanted Europe to consider pricing mechanisms such a price cap or tariff that would eat away at much of Russia’s oil profits while still giving the country enough incentive to keep producing.

The Treasury officials declined to share their estimates for what impact an embargo would have on the price of oil, but they said that constraining global oil supplies risked pushing prices sharply higher at a time when inflation is already running hot.

Following a meeting with Ursula von der Leyen, president of the European Commission, Ms. Yellen told reporters that she believes that tariffs on Russian oil could be enacted quickly and combined with the phaseout proposal that Europe is considering.

“They’re talking about next year as a time frame and in the meantime it might be possible to combine a phaseout with a price mechanism,” Ms. Yellen said, referring to a tariff or price cap. “It is critically important that they reduce their dependence on Russian oil; we’re very supportive of it.”

She added that the United States would help to ensure that Europe has energy supplies to meet its needs.

In her speech, Ms. Yellen said Russia’s decision to cut of gas supplies to Poland and Bulgaria should be a lesson that Western nations should not trade national security for cheaper resources. That situation has now left them vulnerable to countries that can use their abundance of natural resources to disrupt markets.

She cited China as a concern in that regard because of its supply of rare earth minerals that are used to make airplanes, cars and high-tech batteries.

“China is building a consequential market share in certain technology products and seeks a dominant position in the manufacture and use of semiconductors,” Ms. Yellen said. “And China has employed a variety of unfair trade practices in its efforts to achieve this position.”

Still, Ms. Yellen made clear that she was not calling for more protectionism or a reversal of globalization. Instead, she said, nations should not put all their eggs in one basket when it comes to international trade.

“My point is to suggest that we should consider ways to maintain free trade and at the same time lessen some of these risks,” she said.

Many tech workers quit their jobs during the pandemic, part of the wave known as the Great Resignation. But some, it turned out, didn’t so much leave the work force as change their relationship to it, deciding that rather than commit to being an employee of one company, they could “rent” their skills to many.

Adam Grant, an organizational psychologist at Wharton, said not everyone is going to work this way. But for workers in the subset of the economy who want the flexibility and freedom to make their own schedules and choose whom they work with, collaborating with others in remote teams can feel more secure than being on your own.

It’s part of the “universal human quest,” according to Mr. Grant, to say, “I want to be unique, but I also want to belong.”

Mr. Grant has been interested in teams for quite some time. He’s written several books on the data and science behind the motivations that drive people and organizations. In 2018, he met Raphael Ouzan, an entrepreneur who was starting to notice that many of his peers were looking to escape rigid work structures that wouldn’t allow them to choose their collaborators or projects. The two kept in touch.

The gig economy was by then firmly entrenched, but most of the opportunities in that economy, whether working with Uber, DoorDash, Upwork or Fiverr, involved short-term, simple tasks.

“The system is very commoditizing,” Mr. Ouzan said. “There wasn’t much out there for people who want to pursue a craft with autonomy.”

In 2020, Mr. Ouzan helped start A. Team, a members-only platform for companies and those it calls “product builders,” or people who help develop software. Mr. Ouzan believes “cloud-based teams” can quickly integrate into any company, no matter where they are in the world, and represent the next generation of the gig economy.

A. Team now has 4,000 tech workers and over 200 companies on its platform. The company announced on Tuesday that it raised $55 million in funding in a round led by Tiger Global Management, Insight Partners and Spruce Capital Partners. Additional investments came from Jay-Z’s company Rocnation; the founders of CAA, Apollo and Fiverr; and Mr. Grant.

“So many of the greatest achievements in human history are attributed to groups of people, but also our biggest frustrations are when we’re working in teams of people,” Mr. Grant said. “I’ve been anticipating for years that the future of work would have more opportunities, especially for people in the knowledge and creator economies, to be freelance but have a structure behind that freelance.”

The pandemic has changed a lot about how we work, Mr. Grant said, and “a possible silver lining of Covid is we’ve been forced to be more thoughtful and more intentional about our collaborations.”

Amélie Beurrier, a product manager and designer, is one of those workers Mr. Grant is referring to. She has worked for start-ups and bigger companies like Amazon, but what she most enjoys is the freedom of working for herself while in teams with others. A little less than a year ago, she heard about A. Team from a friend and decided to apply to the platform. (A. Team has an application process that includes “technical interviews and algorithmic evaluation,” the company said in a statement, and members are “constantly evaluated” as they work on projects.)

Angelo Stracquatanio, the chief executive of Apprentice, which develops software for life sciences, turned to A. Team during the pandemic when his company needed to ramp up quickly. It gave him access to “20-plus engineers pretty much overnight,” he said.


Credit…Matt Rourke/Associated Press

The Federal Reserve has begun raising interest rates in an effort to cool off the economy before it boils over. By design, that means slower job growth — ideally in the form of a steady moderation in the number of openings, but possibly in pink slips, too.

In general, if the Fed’s path of tightening does prompt firms to downsize, that’s likely to be bad news for Black, Hispanic and female workers with less education, Lydia DePillis reports for The New York Times. Research shows that while a hot labor market tends to bring in people who have less experience or barriers to employment, those workers are also the first to be let go as conditions worsen — across all industries, not just in sectors that might be hit harder by a recession.

So far, initial claims for unemployment benefits remain near prepandemic lows, at around 200,000 per week. But some economists worry that they might not be as good a signal of impending trouble in the labor market as they used to be.

The share of workers who claim unemployment, known as the “recipiency rate,” has declined in recent decades to only about a third of those who lose jobs. These days, any laid-off workers might be finding new jobs quickly enough that they don’t bother to file. And the pandemic may have further scrambled people’s understanding of whether they’re eligible.

One good sign: Employers may have learned from previous recessions that letting people go at the first sign of a downturn can wind up having a cost when they need to staff up again. For that reason, managers are trying harder to redeploy people within the company instead. READ THE FULL ARTICLE →


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