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Brazilian stocks jump after court ruling likely cripples Lula’s chances for election run

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Former Brazilian President Luiz Inacio Lula da Silva is greeted by supporters during a rally in Santana do Livramento, Rio Grande do Sul state, Brazil March 19, 2018.

Diego Vara | Reuters

Former Brazilian President Luiz Inacio Lula da Silva is greeted by supporters during a rally in Santana do Livramento, Rio Grande do Sul state, Brazil March 19, 2018.

Brazilian stocks jumped on Thursday after a court ruled that former president Luiz Inacio Lula da Silva can be sent to prison while he appeals a corruption conviction. The ruling increases the likelihood of a pro-reform candidate to win the upcoming election.

The Bovespa index, the main stock index in Brazil, rose 1 percent, while the iShares MSCI Brazil exchange-traded fund (EWZ) climbed as much as 2.4 percent.

Brazil‘s supreme court made the ruling after a 6-5 vote, likely crippling da Silva’s chances of running for president again this year.

“The fact that he’s likely unable to run throws the race wide open,” said Lawrence Brainard, chief economist for emerging markets at TS Lombard. “The various polls with [da Silva] as a candidate show him as the leading candidate. The other candidates are sort of spread out.”

Da Silva, better known as Lula, was elected as Brazil’s president twice and served between 2003 and 2011. He was also one of the most popular Brazilian politicians in recent memory. Former U.S. President Barack Obama once labeled him the most popular politician on Earth. When he left office, Lula had an 83 percent approval rating.

Brainard notes that, with da Silva likely out of the picture, a centrist candidate pushing for economic reforms could emerge to win the October contest. “But no one knows who that will be,” he said.

Current President Michel Temer pushed to reform Brazil’s pension plan but failed, as his proposed measures were widely unpopular. The country’s pension plan was a contributing factor in Brazil’s deficit rising to 10 percent of GDP in 2015.

Da Silva was convicted of corruption earlier this year, making him the highest-profile casualty of “Operação Lava Jato” (Operation Car Wash), a sweeping corruption investigation that has rattled Brazil.

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Democrats prepare new relief bill

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Alphabet settles shareholder lawsuit

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Alphabet has reached a settlement on a shareholder lawsuit that accused the board of allegedly mishandling sexual misconduct by its executives.

Execs will not be able to receive severance or amend their stock sale plans while they are while they are subject to investigations or a lawsuit for sexual misconduct, according to a summary of the settlement provided by the plaintiffs’ attorneys. The settlement also eliminates mandatory arbitration and limits Google’s use of non-disclosure agreements for employees involved in these cases.

It also includes a $310 million commitment to fund and create a diversity, equity and inclusion advisory council comprised of outside experts.

In a post announcing the settlement, Google’s head of people operations Eileen Naughton said the company is committing to five new guiding principles and a list of detailed changes. 

Among those changes:

  • The Settlement prevents employees with 10b5-1 stock purchase plans from amending them while under investigation for sexual misconduct or harassment. This would prevent, for example, an executive under investigation from accelerating sales of stock.
  • Alphabet will commit $310 million to fund the DEI Council and diversity, equity, and inclusion initiatives over 10 years.
  • The Advisory Council includes outside experts including Judge Nancy Gertner, former EEOC Commissioner Fred Alvarez, and employment lawyer Grace Speights as well as internal leaders, including CEO Sundar Pichai who will participate for the first year.
  • The settlement requires Alphabet to amend its leadership charters for its Leadership Development and Compensation Committee — the committee that approved payouts to former Google executives Andy Rubin and Amit Singhal — to oversee data regarding reports and resolutions of claims of sexual harassment, discrimination and retaliation. It will also need to report to the board any compensation decisions for senior executives who may have engaged with claims of misconduct. Google’s chief diversity officer will also have access to misconduct allegation data and add it to its annual diversity reports.
  • On limiting Google’s use of non-disclosure agreements, employees of Alphabet, including its Other Bets segments, who settle claims will be able to discuss facts and circumstances of alleged harassment, discrimination or wrongdoing.
  • Google said it will also create a new “Employee Disciplinary Committee” to review the investigative team’s recommendations prior to taking disciplinary actions.
  • It will also expand its coaching for executives, and will emphasize that senior leaders will be held to a higher standard, “while ensuring fairness and consistency by having the relevant investigative team continue its existing practice of both formally calibrating corrective action recommendations and recommending a single disciplinary outcome,” plaintiffs’ attorneys stated.

“Over the past several years, we have been taking a harder line on inappropriate conduct, and have worked to provide better support to the people who report it,” Naughton stated. “Protecting our workplace and culture means getting both of these things right, and in recent years we’ve worked hard to set and uphold higher standards for the whole company.”

In early 2019, attorneys filed a lawsuit against Alphabet’s board of director’s on behalf of a company shareholder for allegedly shielding senior execs from accusations of sexual misconduct, claiming a breach of fiduciary duty, abuse of control, unjust enrichment and waste of corporate assets.

Google reportedly paid Android leader Andy Rubin a $90 million exit package, despite asking for his resignation after finding sexual misconduct claims against him credible, which led to a global walkout of employees and the amendment of some of its policies relating to sexual misconduct in 2018.

The settlement comes nearly one year after the board of Google parent company Alphabet formed a Special Litigation Committee of independent directors last year and hired the law firm Cravath, Swaine & Moore to conduct an investigation into sexual misconduct by executives, CNBC first reported last November.  

The investigation encompassed behavior by Alphabet’s Chief Legal Officer David Drummond — one of the highest paid executives at the time — who ended up retiring from the company shortly after, in January.

In a statement, the plaintiffs’ attorneys said:

“This settlement is likely to have lasting, long-term success in bringing about major, transformative changes at Alphabet because, subsequent to the filing of Plaintiffs’ lawsuit, many of the enablers and perpetrators were forced to step back or leave the Company altogether: Chief Legal Officer David Drummond—whose unpunished violations of the company’s relationships policy epitomized Google’s double-standard—resigned, and Eric Schmidt—whose open affairs and flouting of company policies set the tone for Google’s executives—left the Board.”

A spokesperson for Schmidt declined to comment. Drummond could not be immediately reached.

WATCH NOW: Why Alphabet’s investigating executives over inappropriate relationships

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Chinese electric car start-up Xpeng shows off new flying vehicle 

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Electric vehicle start-up Xpeng unveiled its first generation prototype for a flying vehicle at the Beijing Auto Show on Sept. 26, 2020.

Evelyn Cheng

BEIJING — Alibaba-backed Xpeng is putting money into flying car technology as part of the company’s long-term strategy. 

The electric automaker revealed Saturday at the Beijing Auto Show the first in a series of electric flying vehicles the start-up said it is developing.

With eight propellers and a capsule-like frame, the vehicle resembles a human-carrying drone more than a flying car. The prototype was developed by Xpeng Heitech, a technology unit majority-owned by Xpeng and CEO He Xiaopeng.

Xpeng said in a release that the unit is part of the company’s long term research and development, and the core businesses and development strategy remain unchanged. The company foresees benefits from the research in areas such as precision and mapping technologies. 

The flying vehicle can hold up to two passengers and is designed for low altitudes of 5 meters to 25 meters (16.4 feet to 82 feet), according to Xpeng. The project is in a concept phase, and the company said it will evaluate prospects of the space before proceeding with any substantial investment.

“This is a long-range R&D exploration for us to really think about mobility in a greater context,” Brian Gu, vice chairman and president of Xpeng, told CNBC in an interview on the sidelines of the Beijing Auto Show on Saturday.

“We think in the future not only electric vehicles will have the smart mobility autonomous driving features, but with other technology, enable other devices that can create a multi-dimensional ecosystem, that will be very exciting,” Gu said. “That’s why we are investing in that area, and doing some exploration.”

Regulation has been a major hurdle for the development of human-carrying drones and self-driving cars.

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