The daily business briefing: April 11, 2017
Tesla overtakes GM as the most valuable U.S. automaker, United Airlines slammed over video of passenger being dragged off flight, and more
Tesla surpasses GM as most valuable U.S. automaker
Tesla's stock continued its recent meteoric rise on Monday, propelling the electric car maker's market value higher than that of General Motors, making Tesla the most valuable U.S. automaker. Tesla shares rose by 3 percent on Monday, hitting the latest in a string of new highs at $313.73 in mid-afternoon trading. Tesla's climb came despite its $773 million loss in 2016, and the fact that its sales were just 76,000 last year, compared to GM's 10 million. Tesla made a quarterly profit twice as a publicly traded company, while GM made more than $9 billion in profit last year.
Critics slam United Airlines after passenger dragged off plane
United Airlines faced an angry backlash on Monday after video surfaced showing security officers dragging a passenger off an overbooked flight waiting to take off from Chicago's O'Hare Airport. United was making room on the plane for four employees of a partner airline, and officers pulled the screaming man out of a window seat, over an armrest, and down the aisle as other passengers protested. On the video, some are heard saying, "This is wrong" and "Busted his lip." A United spokesman said airline employees had no choice, and had to call authorities to remove the passenger when he refused to get off the plane on his own. The Chicago Department of Aviation put one of the security officers on leave pending an investigation, saying the incident "was not in accordance with our standard operating procedure." United CEO Oscar Munoz apologized for the "upsetting event" but said the passenger had been "disruptive and belligerent."
Wells Fargo takes back $75 million more from executives over fraud scandal
The Wells Fargo board said Monday that it would take back another $75 million in compensation from former CEO John Stumpf and former community banking head Carrie Tolstedt, two executives at the center of the bank's fake accounts scandal. A scathing report conducted by the law firm Shearman & Sterling for Wells Fargo concluded that there were plenty of clear warning signs as the sales scandal was developing, as thousands of employees created fraudulent credit card and bank accounts to hit ambitious sales targets. Among the red flags: Customers were not putting money into the unauthorized accounts.
Yellen says Fed shifting from boosting economy to preserving progress
Federal Reserve Chair Janet Yellen said Monday that the economy had improved enough to allow the central bank to shift its focus from boosting the recovery to sustaining the progress made since the Great Recession. "Before, we had to press down on the gas pedal trying to give the economy all of the oomph that we possibly could," Yellen said in Michigan. The Fed now is trying to "give it some gas, but not so much that we're pressing down hard on the accelerator." Fed policy makers have signaled that they plan to raise interest rates two more times this year, after a quarter-point hike in March, as they dial back on their efforts to stimulate the economy now that the country is near the goals of full employment and 2 percent inflation.
U.S. accuses notorious Russian spammer of fraud after his arrest in Spain
The Justice Department said in court papers unsealed on Monday that it was accusing a notorious Russian spammer, Peter Levashov, of wire fraud and unauthorized interception of electronic communications after his Friday arrest in Spain. As Levashov, 36, was being arrested while on vacation with his family in Barcelona, the Federal Bureau of Investigation and several private companies neutralized his online network of tens of thousands of computers infected with a malware known as Kelihos. Authorities said Levashov used the network to send hundreds of millions of spam emails worldwide each year, advertising counterfeit drugs, remedies for erectile dysfunction, and work-at-home scams, and used malware to get into victims' bank accounts. He is expected to be extradited to the U.S.