The daily business briefing: January 24, 2020

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Harold Maass
A 23andme kit
Matt Winkelmeyer/Getty Images for dick clark productions

1.

U.S. blacklists 4 companies for alleged Iran sanctions violations

The Trump administration on Thursday announced that it was blacklisting four international companies for allegedly facilitating exports by Iran's state-owned National Iranian Oil Company in violation of U.S. sanctions. The companies include Hong Kong-based broker Triliance Petrochemical Co., Hong Kong-based Sage Energy HK Ltd., Shanghai-based Peakview Industry Co., and Dubai-based Beneathco DMCC. The U.S. Treasury Department said it would freeze all assets of the companies that are within U.S. jurisdiction. U.S. companies and individuals also will be prohibited from having dealings with the firms. The blacklisting marked the latest in a series of steps Washington has taken to exert "maximum pressure" on Iran to accept tougher limits on its nuclear program. [Reuters, The Wall Street Journal]

2.

23andMe lays off 100 as sales fall

Home DNA-testing company 23andMe laid off 100 people on Thursday as it struggled to react to falling sales, CNBC reported. The layoffs amounted to about 14 percent of the company's staff. CEO Anne Wojcicki said she had been "surprised" at the drop in demand for testing kits that allow customers to find out details of their ancestry and genetic medical risk factors. "This has been slow and painful for us," she said, adding that she ordered the downsizing because that was "what the market is ready for." Wojcicki said several factors could be contributing to falling consumer demand, including privacy concerns and tightening household budgets in preparation for a possible economic downturn. [CNBC]

3.

Drug-company founder gets 5 years for opioid-spray bribery scheme

John Kapoor, the 76-year-old founder of Insys Therapeutics, was sentenced Thursday to five and a half years in prison for contributing to the opioid crisis. Kapoor was convicted of racketeering last May after a 10-week trial. Prosecutors said Kapoor ran a bribery and kickback scheme that involved millions of dollars paid out to get doctors to prescribe the Arizona pharmaceutical company's highly addictive fentanyl spray, Subsys, a painkiller for cancer patients. Bribes were disguised as sham speaking engagements. "Kapoor ran Insys without a moral compass," prosecutors wrote in recent court documents. Kapoor's lawyers said other executives developed the bribery scheme. The India-born Kapoor, they said, developed the drug after his wife died from breast cancer. [The Associated Press]

4.

Ex-Wells Fargo chief fined $17.5 million in bogus-account settlement

Federal regulators on Thursday fined former Wells Fargo chief executive John Stumpf $17.5 million in a settlement over his role in the bank's scandal involving fake accounts employees opened without customers' knowledge. Stumpf also agreed to be banned for life from working in the banking industry. The Office of the Comptroller of the Currency also announced that it was suing five other former Wells Fargo executives over their role in the scandal. "The root cause of the sales practices misconduct problem was the Community Bank's business model, which imposed intentionally unreasonable sales goals and unreasonable pressure on its employees to meet those goals and fostered an atmosphere that perpetuated improper and illegal conduct," the OCC said in the complaint. [The Associated Press]

5.

Stocks claw back after WHO eases coronavirus fears

U.S. stock index futures gained early Friday after the World Health Organization said China's coronavirus outbreak did not yet constitute a global health emergency. Futures for the Dow Jones Industrial Average, the S&P 500, and the Nasdaq were up by 0.2 percent or slightly more several hours before the opening bell. The Dow closed down by less than 0.1 percent on Thursday, while the S&P 500 and the Nasdaq gained 0.1 percent and 0.2 percent, respectively. Thirteen Chinese cities have been placed under lockdown to contain the potentially deadly virus, which has infected 830 people in China, and killed at least 26. The virus has spread to seven other countries, with some facing multiple cases but others, including the U.S., reporting just one patient. [CNBC, The New York Times]