2024-05-14 23:00

US may prosecute Boeing, decision by July 7 Boeing may face fines, tighter oversight if US prosecutes Boeing says it believes it honored 2021 agreement May 14 (Reuters) - The U.S. Justice Department said on Tuesday that Boeing Co (BA.N) New Tab, opens new tab had breached its obligations in a 2021 agreement that shielded the planemaker from criminal prosecution over fatal 737 MAX crashes in 2018 and 2019 that killed 346 people. The Justice Department said in a court filing in Texas that the U.S. planemaker had failed to "design, implement, and enforce a compliance and ethics program to prevent and detect violations of the U.S. fraud laws throughout its operations." Justice Department officials made the finding in the wake of a separate January in-flight blowout that exposed continuing safety and quality issues at Boeing. A panel blew off a new Boeing 737 MAX 9 jet during a Jan. 5 Alaska Airlines (ALK.N) New Tab, opens new tab flight, just two days before the 2021 agreement shielding Boeing from prosecution over the previous fatal crashes expired. The determination exposes Boeing to a potential criminal prosecution over the 2018 and 2019 crashes that could carry steep financial penalties and tougher oversight, deepening a corporate crisis and reputational damage stemming from the January blowout. While Boeing is now subject to prosecution as a result of breaching the 2021 agreement, the Justice Department said in the court filing, officials will consider steps the planemaker has taken to address and remediate violation of the pact before determining how to proceed. The Justice Department directed Boeing to respond by June 13 and intends to decide whether to prosecute Boeing by July 7, the filing said. Boeing confirmed it had received word from the Justice Department of its determination that the company breached the 2021 deal, known as a deferred prosecution agreement, or DPA. "We believe that we have honored the terms of that agreement, and look forward to the opportunity to respond to the Department on this issue," Boeing said in a statement late on Tuesday. "As we do so, we will engage with the Department with the utmost transparency, as we have throughout the entire term of the agreement, including in response to their questions following the Alaska Airlines 1282 accident." The Justice Department declined to comment beyond the court filing. Boeing's ongoing crisis has already resulted in a management shakeup and government investigations. During a U.S. Senate hearing in April, a Boeing engineer testified the company took dangerous manufacturing shortcuts with certain planes and sidelined him when he raised safety concerns, claims the company disputes. Relatives of people killed in the crashes and their lawyers, meanwhile, had argued that Boeing violated the 2021 deal with prosecutors, which required the company to overhaul its compliance program. Federal prosecutors had previously agreed to ask a judge to dismiss a criminal charge against the planemaker so long as it complied with the deal's terms over a three-year period. But the Jan. 5 in-flight blowout occurred just two days before the agreement expired. Justice Department officials weighed that incident as part of a broader probe into whether Boeing violated the deal, people familiar with the matter previously told Reuters. Justice Department officials are set to meet with family members of the victims of the previous fatal crashes and their lawyers on May 31 to discuss their decision, according to correspondence Reuters reviewed. "This is an important first step towards holding Boeing accountable for the deaths of 346 passengers and crew on the two flights," Paul Cassell, a lawyer representing victims' family members, told Reuters. "But now the Justice Department needs to move this prosecution forward, vigorously and effectively towards a conviction." Erin Applebaum, another lawyer for victims' family members, told Reuters that she and her clients were "pleased that DOJ has chosen to do the right thing" and hoped a prosecution would follow. NEXT STEPS In January 2021, Boeing agreed to pay $2.5 billion to resolve a criminal investigation into the company's conduct surrounding the previous fatal crashes. The company agreed to compensate victims' relatives and overhaul its compliance practices as part of the deal with prosecutors. The agreement gives U.S. officials six months from the deal's Jan. 7 expiration to decide whether to prosecute Boeing on a charge that the company conspired to defraud the Federal Aviation Administration or pursue other alternatives to dismissing the case. Prosecutors can extend the 2021 settlement for another year or push for oversight by a court-appointed monitor, a costly change from the 2021 agreement where Boeing was allowed to oversee its own changes to its practices. The Justice Department could also attempt to hit the planemaker with additional fines or push the company to plead guilty, an outcome that could affect Boeing's ability to secure government contracts, according to a Reuters review of prosecutors' actions following findings that companies violated other similar agreements. Breaches of such agreements deferring prosecution are rare. But the Justice Department under President Joe Biden has ratcheted up scrutiny on repeat corporate wrongdoers and has penalized companies that violate these deals. Just over a year ago, Sweden's Ericsson (ERICb.ST) New Tab, opens new tab agreed to pay a hefty fine and plead guilty after violating its own 2019 deal with prosecutors. Sign up here. https://www.reuters.com/business/aerospace-defense/us-says-boeing-breached-2021-deferred-prosecution-737-max-agreement-2024-05-14/

2024-05-14 22:00

May 14 (Reuters) - Eli Lilly (LLY.N) New Tab, opens new tab has entered into a settlement deal with a medi spa that had sold counterfeit versions of its popular diabetes drug Mounjaro and weight loss treatment Zepbound, the drugmaker said on Tuesday. As part of the deal, Totality Medispa will make a monetary payment to Lilly and will no longer use Lilly branding in the promotion of any of its products. The medi spa is expected to take several corrective actions including obtaining and distributing compounded tirzepatide products that are produced in compliance with U.S. federal law. WHY IT'S IMPORTANT Lilly and Novo Nordisk (NOVOb.CO) New Tab, opens new tab have sued several medi spas and compounding pharmacies to stop them from selling products claiming to contain the active ingredients (semaglutide and tirzepatide) used in the drugmakers' popular weight-loss drugs. CONTEXT Novo last year sued one compounding pharmacy and refiled a lawsuit against another after finding their products claiming to contain the active ingredient for its in-demand weight-loss drug Wegovy were impure, some by as much as 33%. Lilly said in March it had found bacteria and high levels of impurities in products claiming to be compounded versions of tirzepatide and has sued several medical spas, weight-loss clinics and compounding pharmacies to stop them from selling products purporting to contain tirzepatide, the active ingredient in its weight loss and diabetes drugs. Compounded drugs are custom-made medicines based on the same ingredients as branded versions, and often cheaper, but also subject to less regulatory scrutiny. KEY QUOTE "While this agreement is an important step forward, this is not a problem that Lilly can solve alone. We strongly support state and federal regulators taking action to deter and punish compounding pharmacies, counterfeiters, and others who put patients at risk by selling unsafe products claiming to be tirzepatide," Lilly said in its statement. Sign up here. https://www.reuters.com/legal/eli-lilly-reaches-settlement-with-spa-selling-mounjaro-zepbound-knockoffs-2024-05-14/

2024-05-14 21:52

May 14 (Reuters) - A large wildfire is slowly approaching the major Canadian oil sands city of Fort McMurray and around 6,000 people in four suburbs have been told to evacuate, local officials said on Tuesday. The fire, fueled by tinder-dry conditions and high winds, has been threatening the city in the western province of Alberta since last week. It is now about 7.5 km (4.7 miles) away from the Fort McMurray landfill, authorities said in an update. They also expressed hope that a favorable wind shift was expected Tuesday night, which could lead to winds from the west-northwest pushing the fire away from Fort McMurray. In addition to the harm that may befall people and property, the fire puts a large portion of Canada's oil production at risk. Fort McMurray is the hub for the country's oil-sands output and a huge wildfire in 2016 forced the evacuation of 90,000 residents and shut in more than 1 million barrels per day (bpd) of output. Alberta Wildfire Information Officer Josee St-Onge earlier said the blaze grew significantly on Tuesday and noted winds from the southwest were gusting as high as 40 km per hour (24.8 mph). "We're seeing extreme fire behavior. Smoke columns are developing and the skies are covered in smoke ... firefighters have been pulled from the fire line for safety reasons," she told a media briefing. The fire has grown in size and is now more than 20,940 hectares (51,740 acres), Alberta authorities said. In a statement, the local authority said residents in the suburbs of Abasand, Beacon Hill, Prairie Creek and Grayling had to leave by 4 p.m. Mountain Time (2200 GMT). People in other parts of Fort McMurray not under evacuation order are also starting to leave, said resident Elsie Knister, as she prepared to depart her downtown neighborhood on Tuesday afternoon. "People aren't waiting for an order, they're just going already," Knister, who also evacuated in 2016, said in a phone interview. "I feel sunk. I'm 71 and I don't want to go through this again, it's horrible." Officials said Fort McMurray is better prepared to fight the fire than it was in 2016. Much of the boreal forest surrounding the city burned in the 2016 fire, meaning there is less fuel available to the blaze now. "This fire activity is very different than (in) 2016 ... We have an abundance of resources and we are well positioned to respond to this situation," said regional fire chief Jody Butz. He said evacuees were encouraged to leave Fort McMurray but could remain in other neighborhoods in the city if they wished. The city has 250 to 300 firefighters available to help protect structures, Butz added. OIL SANDS Canada's oil sands industry produces roughly 3.3 million barrels per day of crude, two thirds of Canada's total output. Companies including Suncor Energy (SU.TO) New Tab, opens new tab, Canadian Natural Resources Ltd (CNQ.TO) New Tab, opens new tab and Imperial Oil (IMO.TO) New Tab, opens new tab have oil sands projects within 150 km of the city and many workers live in Fort McMurray. "This will put more people on edge, we'll have to see if the actual production sites themselves come under threat," said Martin King, an analyst at RBN Energy. "Back in 2016 the fires themselves were getting close so the companies evacuated people for safety, and of course the people that worked in these sites were evacuated and had nowhere to go so they ended up shutting down production." In neighboring British Columbia, a wildfire burning near Fort Nelson in the province's northeast grew in size but is moving away from the town, offering some relief to around 3,000 residents who were forced to evacuate, the provincial wildfire service said on Tuesday. Sign up here. https://www.reuters.com/world/americas/wildfire-forces-evacuation-four-suburbs-western-canada-oil-town-2024-05-14/

2024-05-14 21:49

May 15 (Reuters) - A look at the day ahead in Asian markets. Asian markets should open in upbeat mood on Wednesday as lower U.S. bond yields and a weaker dollar reflect expectations that the Fed will cut interest rates as early as September, but the apparent serenity could be shattered in a flash. The most obvious flash point is April's U.S. inflation report after Asia closes on Wednesday - punchier-than-expected figures will force investors to rethink their Fed outlook, lifting the dollar and yields, and weighing on risk appetite. Tuesday's U.S. producer price inflation report was, to quote Fed Chair Jerome Powell himself, "mixed" - price growth in April was hotter than expected, but prior data were revised down. Investors maintained a 'glass half full' stance though - equities rose, the dollar, yields and volatility drifted lower, and appetite for risky assets picked up. There's nothing immediately obvious on the Asian economic calendar that might rock the boat on Wednesday - Australian wage growth data, Thai consumer confidence and Indonesian trade figures are the main indicators on tap. The corporate calendar may generate a bit more trading activity in individual stocks, especially in Japan, where financial giants Mitsubishi UFJ, Mizuho and Sumitomo are all due to report full-year 2024 earnings. Markets in China, meanwhile, may not react all that positively to the new tariffs on $18 billion of Chinese imports confirmed by the Biden administration on Tuesday. China's commerce ministry said the move will "seriously affect the atmosphere of bilateral cooperation" and Italian Economy Minister Giancarlo Giorgetti said the G7 will discuss the risk of fragmenting global trade next week. China will almost certainly respond in kind, it just remains to be seen how forcefully. "Given the high stakes involved, this round of tariffs could ratchet up the trade tensions between the two countries in a way that is difficult to pull back from," said Eswar Prasad, trade policy professor at Cornell University and former IMF China department head. Chinese stocks have plateaued this week after mixed earnings, at best, from Alibaba and Tencent, and selling pressure on the yuan is increasing again - dollar/yuan's daily fixing rate has risen five days out of the last six. The dollar is also gaining ground on the Japanese yen, even though 10-year Japanese bond yields are marching to their highest level since November while U.S. yields slip. The yen's fragility is bound to put traders on high intervention alert. Here are key developments that could provide more direction to markets on Wednesday: - Australia wage growth (Q1) - Indonesia trade (April) - Japanese financials earnings Sign up here. https://www.reuters.com/markets/asia/global-markets-view-asia-graphic-pix-2024-05-14/

2024-05-14 21:34

SAO PAULO, May 14 (Reuters) - Brazil's JBS SA (JBSS3.SA) New Tab, opens new tab, the world's largest meat-packer, on Tuesday reported a net profit of 1.64 billion reais ($319.74 million) for the first quarter, which beat analysts' expectations by a wide margin, according to an earnings statement. After a strong quarter for its U.S. pork business and its beef and processed foods divisions in Brazil, JBS said earnings before interest, tax, depreciation and amortization, a measure of operating income known as EBITDA, was 6.4 billion reais in the period. Analysts had predicted JBS's net profit at 869.1 million reais, and EBITDA at 5.2 billion reais. Overall, JBS reported a 2.8% rise in net revenue globally to 89.1 billion reais in the quarter, partly reflecting more beef demand in Brazil, its home market. JBS, which derives most of its sales from the U.S., said the first quarter of 2024 was also marked by growth in the average price for wholesale pork cuts in that country, a reflection of stronger demand for that protein type resulting from the shift in consumption from beef to pork. Pork sales internationally also helped JBS's results and that of competitors, JBS said, citing USDA data indicating an 11% increase in pork exports, especially to Mexico, South Korea and Colombia, during the first quarter. Beef margins of the company's North America division, however, continued to be pressured by the livestock cycle in a seasonally weaker quarter, JBS said. This was in contract with JBS's Brazil beef business, where net sales rose by nearly 17% annually, driven by higher volumes sold and more cattle availability. Also in Brazil, JBS said its Seara processed foods division recorded net revenue of 10.3 billion reais, stable compared to the same period last year. Yet, the company reported a significant increase of 10 percentage points in the EBITDA margin from the first quarter of 2023 at that division, partly reflecting lower grain costs and better supply and demand dynamics. Sign up here. https://www.reuters.com/markets/commodities/brazils-jbs-earns-nearly-320-mln-q1-beating-analysts-expectations-2024-05-14/

2024-05-14 21:19

SINGAPORE, May 15 (Reuters) - Extreme temperatures throughout Asia last month were made worse - and more likely - as a result of human-driven climate change, a team of international scientists said on Wednesday. Billions of people across the continent were affected by record-breaking temperatures during April, with schools forced to shut down, crops damaged and hundreds of people killed by heat-related illnesses, climate experts from the World Weather Attribution group said in a report. Myanmar, Laos and Vietnam experienced their hottest April days on record, while temperatures in India reached as high as 46 degrees Celsius (114.8 Fahrenheit), they said. "From Gaza to Delhi to Manila, people suffered and died when April temperatures soared in Asia," said Friederike Otto, Senior Lecturer in Climate Science at the Grantham Institute of Climate Change and the Environment, one of the report's authors. "Heatwaves have always happened. But the additional heat, driven by emissions from oil, gas and coal, is resulting in death for many people." In the Philippines, one of the worst-hit countries, authorities issued health warnings, shut down schools and rationed electricity supplies as soaring temperatures threatened the country's power grid. The 15-day heatwave, which started in the middle of the month, would have been "virtually impossible, even under El Nino conditions" without the impact of man-made global warming, the report said. Parts of the Middle East saw record-breaking temperatures over April 24-26, with Tel Aviv hitting 40.7C. Extreme temperatures in western Asia were made five times more likely by climate change, the report estimated. "The heat that we saw is really compounding an already dire crisis at the moment in Gaza," Carolina Pereira Marghidan of the Red Cross Red Crescent Climate Centre said at a briefing on Tuesday. Temperatures around India's Kolkata in late April reached 46C, 10C higher than the seasonal average, with climate change making extreme temperatures throughout South Asia around 45 times more likely, the report added. Asian governments need to take action to adapt to soaring temperatures and minimise health risks, particularly in vulnerable sections of the population, said Marghidan. "Considering that rate at which extreme heat is rising... we see a big need for heat action plans to be scaled up and current plans to be improved across Asia," she said. Sign up here. https://www.reuters.com/business/environment/asias-extreme-april-heat-worsened-by-climate-change-scientists-say-2024-05-14/