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Morning Coffee: Behind the scenes at Google's sex scandal. Deutsche Bank’s one big ask

Google and its employees were rocked this week by a bombshell article from the New York Times that details multiple past accusations of sexual misconduct and one eye-raising exit package given to one of the accused former executives. Google spent Thursday attempting to reassure its staff and the general public of the state of its workplace culture and policies.

At the heart of the exhaustive report, which Google CEO Sundar Pichai said was “difficult to read,” are details surrounding the employment and eventual departure of Andy Rubin, creator of Android mobile software, who left the company in 2014. Sources told the Times that a female member of the Android team, with whom Rubin had been having an extramarital relationship, accused the executive of coercing her into performing oral sex in 2013, an incident that ended the relationship. The woman waited until 2014 to file a complaint with Google officials, which kickstarted an investigation that ultimately concluded that her claim “was credible,” according to the report.

Then-CEO Larry Page asked for Rubin’s resignation following the completion of the investigation. But it wasn’t as simple as having security walk him out to his car. Google reportedly agreed to pay Rubin $90 million as part of an exit package and “went out of its way” to make the split appear amicable, including a public farewell statement issued by Page. Google later invested in a venture firm that Rubin founded after leaving the search engine giant. A spokesperson for Rubin disputed the report, saying he had never been informed of any misconduct claims, any relationship he had with an employee was consensual and that he left on his own accord.

Meanwhile, a similar situation allegedly occurred in 2015, when a female employee accused a different executive of groping her at an offsite event. Google again found the accusations credible, according to the Times, but paid the executive millions as part of an exit package that included a provision that prevented him from working for a competitor. The executive’s exit was marked with a blog post in which he said he wanted to focus more on philanthropy and his family.

The story prompted Pichai on Thursday to send an internal memo to all Google employees, assuring them that sexual misconduct claims are treated seriously and that those found liable of misconduct or harassment aren’t provided with golden parachutes.

“In recent years, we've made a number of changes, including taking an increasingly hard line on inappropriate conduct by people in positions of authority: in the last two years, 48 people have been terminated for sexual harassment, including 13 who were senior managers and above,” the memo read. “None of these individuals received an exit package.”

Elsewhere, Deutsche Bank has cut 2,300 jobs since the second quarter, with plans to shed another 1,700 before the end of the year. Discussing the bank’s poor third quarter performance, Chief Executive Christian Sewing asked investors for something they tend not to enjoy providing: patience. Sewing warned that progress on revenues "will take a little longer.” Deutsche Bank stock fell nearly 5% by the end of the day.


UBS plans to cut costs by roughly $800 million over the next three years. Headcount and pay could both be cut to reach the goal. (Yahoo Finance)

Lazard CEO Ken Jacobs is open to the possibility of selling the firm’s asset management unit, if the price is right. Known mostly for its work in M&A, Lazard’s asset management business oversees $240 billion. (Bloomberg)

Will cryptocurrencies create profound change within capital markets? “40% chance crypto is a niche thing, 15% chance it goes huge, and 45% chance it collapses and goes away,” according to Tyler Cowen, professor of economics at George Mason University and a Bloomberg opinion columnist. (Bloomberg)

BlackRock is planning a massive expansion of its footprint in Atlanta. The money manager expects to increase headcount to 1,000 people by 2024, which is quite a lot considering only 15 employees currently call Atlanta home. It sounds like most the new hires will be in tech. (WSJ)

Wells Fargo’s chief administrative officer and chief auditor were put on leave after regulators expressed concerns about their failure to oversee problems that have recently haunted the bank. (WSJ)

Deutsche Bank has dismissed its asset management chief, Nicolas Moreau, and has replaced him with Asoka Woehrmann, head of the lender’s private-clients business in Germany. No reason has been given for Moreau dismissal. (WSJ)

U.K. regulators are investigating whether certain hedge funds have been buying market-moving exit polls and voter-opinion data from polling companies. (Bloomberg)

Want to have lunch with activist investor Bill Ackman? All you’ll need to do is beat the current bid of $4,500. The “estimated value” of the lunch is $10,000, so it’s kind of a bargain. (Charity Buzz)


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AUTHORBeecher Tuttle US Editor
  • An
    27 October 2018

    NYT bombshell article is pay-walled.
    In the interests of transparency, could Google please advise what the 48 people who were sacked were accused of, whether they admitted it or not, if not what their defence was, and how it was decided that they were guilty? Without further information, we can't be sure that these sackings were all justified, and I feel some may have been purely on the basis of an allegation or try and show that harassment is being 'taken seriously'. That may be unfair on Google and the accusers, but without more information it is impossible to tell, and to assume that all 48 sackings were justified without further information is unfair on the accused.
    What is meant by a 'credible' accusation - does that mean that Google believe that it might be true or that they feel that it is true on the balance of probabilities?

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