DealBook Briefing: Les Wexner Says Jeffrey Epstein Misappropriated His Money

A letter that Mr. Wexner sent to his foundation sheds light on how his life became intertwined with Mr. Epstein, who is accused of abusing underage girls.

August 8, 2019 Good Thursday morning. (Was this email forwarded to you? Sign up here.)

Les Wexner  Fred Squillante/The Columbus Dispatch, via Associated Press ‘My trust in him was grossly misplaced’ Les Wexner, the billionaire who controls Victoria’s Secret, was Jeffrey Epstein’s most prominent client. Now the retail executive has accused the financier of misappropriating “vast sums of money,” Steve Eder and Emily Steel of the NYT write. The most detailed account yet of their relationship is a 564-word letter that Mr. Wexner sent to his foundation yesterday. It sheds some light on how his life became intertwined with Mr. Epstein, who is accused of abusing underage girls. Mr. Wexner discovered misuse of his money in 2007, when he began to distance himself from Mr. Epstein. By that point, the Florida authorities had charged Mr. Epstein with molestation and unlawful sexual activity with a minor. The billionaire defended giving Mr. Epstein power of attorney, which let the financier hire people, sign checks and buy property on his behalf. Mr. Wexner said the move was “common in that context.” Some of the “misappropriated” money has since been recovered, Mr. Wexner said, including about $46 million worth of securities from two entities controlled by Mr. Epstein. Scrutiny of Mr. Wexner is set to continue. His company, L Brands, has hired outside lawyers to review any relationship that it had with Mr. Epstein. ____________________________ Today’s DealBook Briefing was written by Andrew Ross Sorkin in New York, and Michael J. de la Merced and Jamie Condliffe in London. ____________________________   Jeenah Moon for The New York Times China’s currency could weaken further China signaled today that it might continue to weaken its currency, Alexandra Stevenson of the NYT reports. • “China’s central bank on Thursday set the midpoint of the renminbi’s daily trading range above 7 to the American dollar for the first time in more than a decade.” • “The move in effect tells financial markets that Beijing expects the renminbi to continue to weaken versus the dollar, perhaps well past the 7-to-the-dollar level.” This doesn’t drastically change trade dynamics. There’s little difference between the currency’s midpoint being set at 7.0039 to the dollar, as it is today, and the 6.9996 point at which it was set yesterday. But the move is “likely to provoke more ire from the Trump administration,” Ms. Stevenson writes. A weaker currency helps Chinese factories offset the costs of American tariffs when selling goods to the U.S., and setting the midpoint above 7 suggests that the renminbi could weaken further. If the currency slides to 7.5 or 8 to the dollar, it could significantly undercut the impact of American tariffs. More: Could the trade and currency decisions of President Trump and his economic adviser Peter Navarro lead to recession?   Josh Edelson/Agence France-Presse — Getty Images The White House’s wrestle with social media The Trump administration continues to rail against what it says is bias against conservatives on social media. But as it also tries to police extremism in the wake of last weekend’s shootings, it could find itself in a tough spot. • The White House is reportedly drafting an “order that would address allegations of anti-conservative bias by social media companies,” according to Politico. It’s not clear what the contents of that order might be. • At the same time, it has invited tech companies to discuss the rise of violent online extremism, the WaPo reports, as the role of social media platforms and message boards in online radicalization becomes prominent. Those could be in conflict, according to Adi Robertson of The Verge: • “One shooting was apparently an act of far-right terrorism, based on an anti-immigrant screed posted online.” • “Preemptively flagging the shooter — or one of several far-right killers before him — could have looked like egregious anti-conservative bias.” An unnamed White House official played down that idea, telling Politico that tech companies have “a role, if not a responsibility” to “provide a platform that protects and cherishes freedom and free speech, but at the same time does not allow it to descend into a platform for hate.” The person didn’t elaborate on what that might look like, or how it would avoid violating the First Amendment. More: Here’s one take on how sites like 8chan and Reddit could be forced to clean up. And the owner of 8chan will travel to the U.S. to meet with Congress. ADVERTISEMENT There’s trouble in the bond markets All corners of the bond markets — from government debt to commercial bonds — are flashing warning signs that could foreshadow potentially huge problems for the economy. • The yield on the 10-year Treasury note fell briefly to under 1.6 percent yesterday, while yields on the 30-year note approached a record low of 2.106 percent. • That means the yield curve’s inversion, where yields on longer-term Treasury notes fall below those of shorter-term ones, has widened. That’s usually considered a strong predictor of recession. • Evidence is emerging that inflated ratings for commercial bonds — which were one cause of the 2008 financial crisis — persist, according to the WSJ. “We don’t trust the ratings,” one bond investor said. • “It is at least possible that this is the moment when the three-decade-long bull market in bonds has at last reached an untenable extreme, ready to snap back,” John Authers of Bloomberg Opinion writes. Shaktikanta Das, the governor of the Reserve Bank of India.  Divyakant Solanki/EPA, via Shutterstock Countries are slashing interest rates Central banks in India, Thailand and New Zealand unexpectedly cut interest rates yesterday. They were all spurred by worries that the trade war between the U.S. and China will wreak havoc worldwide, Alexandra Stevenson of the NYT writes. • The Reserve Bank of India cut its benchmark rate 0.35 percent, instead of 0.25 percent as expected. • New Zealand’s central bank cut its rate 0.5 percent. • Thailand’s cut its rate 0.25 percent, its first reduction since 2015. More countries could follow suit if Beijing continues to weaken its renminbi, “leading to a damaging currency war that could revive inflation and even further fray the bonds of global trade,” Ms. Stevenson writes. Financial markets were shaken. The S&P 500 dropped as much as 2 percent yesterday before closing up slightly. Crude oil prices fell more than 3 percent. President Trump urged the Fed to cut rates, too. “Our problem is not China,” he tweeted yesterday. “Our problem is a Federal Reserve that is too proud to admit their mistake of acting too fast and tightening too much (and that I was right!).”   Jeff Chiu/Associated Press Elderly bankruptcy is growing in America Patti Waldmeir of the FT takes a look at the rising number of American baby boomers declaring bankruptcy. • “Baby boomers aged 65 and older are racking up far higher levels of debt than their parents, who were raised during the Great Depression, and a growing minority are finding themselves tipping over from desperate financial trouble into bankruptcy.” • “In 1991, over-65s made up only 2 percent of bankruptcy filers, but by 2016 that had risen to more than 12 percent.” • “Over the same period, elders grew as a percentage of the U.S. adult population too, but only from 17 percent to 19.3 percent.” • “The culprits are vanishing pensions, soaring health care costs and tens of thousands of dollars in unpaid student loans for themselves, their children and even their grandchildren.” • “The baby boomer attitude to debt has not turned out to be as frugal as you would think,” Kevin Leicht, the head of the University of Illinois sociology department, told the FT. He cites jobs that don’t keep up with inflation and insufficient pensions as potential reasons behind the rising debt. Revolving door Jim Mattis is rejoining the board of General Dynamics, having resigned when he became Defense Secretary. Wanda Vázquez was sworn in as Puerto Rico’s governor, becoming the third person to hold the post in a week. Kimberly Breier, the State Department official who oversaw diplomatic affairs in the Western Hemisphere, is stepping down. Karen Simon, a veteran investment banker at JPMorgan Chase who most recently led a team that helps clients find board members, is retiring. The speed read Deals • SoftBank said it could start investing from its second Vision Fund as soon as next month. It also disclosed that its first Vision Fund experienced gains from investment in DoorDash, but a drop in the value of its stake in Uber. (WSJ, CNBC, Bloomberg) • Broadcom is reportedly near a deal to buy Symantec’s enterprise division, after failing to acquire the entire cybersecurity company. (WSJ) • Crown Prince Mohammed bin Salman of Saudi Arabia is reportedly still insisting on a $2 trillion I.P.O. valuation for Aramco. Advisers recommend a lower target. (Reuters) • WeWork has reportedly changed its corporate structure ahead of its I.P.O. to increase tax breaks for its co-founder, Adam Neumann, and early investors. (FT) • CBS and Viacom will report earnings today — but don’t expect them to announce their merger. (FT) Politics and policy • Visa’s C.E.O. said the payments giant would not block gun purchases. (CNBC) • President Trump said he supported more background checks for gun purchases, but rejected a ban on assault-style weapons. (Bloomberg) • Stephen Ross, who owns the Miami Dolphins N.F.L. team, defended plans to hold a fund-raiser for Mr. Trump. (Bloomberg) • The House Judiciary Committee sued to compel the testimony of Don McGahn, the former White House counsel. (NYT) • Mr. Trump said he was considering commuting the prison sentence of Rod Blagojevich, the former Illinois governor. (NYT) Trade • Secretary of State Mike Pompeo said the U.S. would be waiting “pen in hand” to sign a new trade deal with Britain when it leaves the E.U. (WSJ) • Chinese exports increased last month, despite the trade war with America. (FT) • Warehouses on America’s West Coast are bursting with imports that companies have stored to beat tariffs. (Bloomberg) • American soybean farmers are trying to find new markets now that sales to China have fallen and remain unpredictable at best. (CNBC) Tech • “Instagram’s lax privacy practices let a trusted partner track millions of users’ physical locations, secretly save their stories and flout its rules.” (Business Insider) • Facebook reportedly plans to take a first step toward increased integration of its services by rebuilding Instagram’s chat feature using Facebook Messenger’s technology. (Bloomberg) • The U.S. released a long-anticipated rule that restricts government agencies from doing business with Huawei. (NYT) • FedEx will stop domestic ground deliveries for Amazon packages at the end of August. (NYT) • Samsung struck a deal with Microsoft to make its smartphones work seamlessly with Windows PCs. (FT) • Microsoft contractors reportedly listen in on some Skype call recordings. (Business Insider) Best of the rest • Carlos Ghosn hasn’t seen his wife in months. That’s how Japanese prosecutors want it. (NYT) • Several European banks warned yesterday that they will continue to struggle as interest rates sink further. (WSJ) • How Walmart employees in El Paso used their active shooter training during last weekend’s attack. (NYT) • New state rules would make hundreds of thousands of additional people eligible for overtime pay. (WSJ) • Why it matters what kind of person your fund manager is. (Institutional Investor) Thanks for reading! We’ll see you tomorrow. You can find live updates throughout the day at nytimes.com/dealbook. We’d love your feedback. Please email thoughts and suggestions to business@nytimes.com.

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N.Y. Today: Times Square Is Safer Than You Think

What you need to know for Thursday.

View in Browser | Add nytdirect@nytimes.com to your address book. Thursday, August 8, 2019 NYTimes.com »

New York Today Times Square Is Safer Than You Think By AZI PAYBARAH It's Thursday. Kevin Durant, the basketball star who surprised many with his recent decision to play for the Brooklyn Nets, finally opened up. "I just like what they were building," he told Yahoo Sports. Weather: Partly sunny, with a chance of rain and thunderstorms in the evening. Expect a high in the upper 80s. Alternate-side parking: In effect until Sunday (Eid al-Adha). Hiroko Masuike/The New York Times Hundreds of thousands of people visit Times Square daily, lured by its bright lights, stores, restaurants and Broadway shows. Amid its chaotic streets and sidewalks, there is a tourist-friendly police substation, lots of uniformed officers and countless security cameras. It is possibly the last place on earth anyone with a recognizable face would want to hide. But on Tuesday night, the sound of a dirt bike backfiring was mistaken for gunfire, sending people running for their lives. The fear of gun violence in Times Square was reasonable, said Chief James R. Waters, who leads the Police Department's Counterterrorism Bureau. In the past two weeks, horrific mass shootings claimed more than 30 lives in Brooklyn, Texas and Ohio. [There was no gunfire in Times Square. But the panic was still real.] "We train the public, we ask the public, we implore the public — run, hide, fight," Chief Waters said. "They did what we asked them to do." Actually, Times Square is one of the safest places in New York. Last year, there were about 2,600 major crimes reported in the Midtown South Precinct, which includes Times Square, according to the police. That's a drastic drop from 1990, when nearly 23,000 major crimes were recorded. As of July 28, there have been no shootings reported this year in the precinct. (Over the same period last year, three people had been shot in one incident.) Spaces for pedestrians have also bolstered safety. About 10 years ago, the city began rerouting traffic to build plazas in Times Square. City officials have said the plazas reduced the number of pedestrians being hit by cars by 35 percent. The number of drivers and passengers struck by other motorists dropped by 63 percent. Times Square is safe, according to the data, but Americans may not feel safe there. Of course, major destinations like airports have long had enhanced security. Increasingly, places where crowds gather — Times Square, Madison Square Garden, Citi Field — have added additional protections. One of the last major incidents near Times Square occurred in December 2017, when a man detonated a bomb in a crowded subway passageway between the square and Port Authority stations. The man, Akayed Ullah, was injured and later found guilty of federal terrorism charges. In May 2017, a Honda Accord plowed into a sidewalk full of pedestrians and crashed three blocks later, killing one person and injuring 22. In 2010, a T-shirt vendor saw smoke coming out of a parked car and alerted a police officer. The area was evacuated, the Police Department's bomb squad was called in and found a crude bomb that had failed during detonation. Nobody was injured. State Senator Brad Hoylman, whose district includes Times Square, said that normally people might not have been sent running at the sound of a motorcycle backfiring. "I think the public is on edge, and this is the manifestation of the recent mass shootings," he said in an interview. "This is about your average citizen fearing for their lives in the crossroads of America," he added. People have long mistaken the sounds of fireworks and vehicles backfiring for gunfire. "But very rarely do you have a mass exodus the way that they did" in Times Square on Tuesday, Jumaane Williams, the city's public advocate, said. "That, I think, is unique to how much mass shootings have increased and been on the news lately." From The Times Hilary Swift for The New York Times That smell at the top of One World Trade? It's on purpose. As shootings spike in Brooklyn, the Police Department and prosecutors collide. Shirts for lifelong New Yorkers and those who would like to pass for one. A radical traffic experiment: Cars will be all but banned on a major Manhattan street. [Want more news from New York and around the region? Check out our full coverage.] The Mini Crossword: Here is today's puzzle. What we're reading A Hamptons fund-raiser for President Trump is set for tomorrow. The host, Stephen Ross, built Hudson Yards and owns Equinox and SoulCycle. [New York magazine] A husband stabbed his wife to death at Queens nail salon. [Daily News] The city has been enforcing its ban on single-use plastic foam plates and containers for a month. So far, 57 businesses have been fined for using them. [amNew York] Some parents in Gowanus and Red Hook want to stop the city from rezoning seven elementary schools in Brooklyn. [Chalkbeat] Sutton Place Park on the East Side of Manhattan isn't finished, but some residents are already rejoicing. [Our Town] Coming up today The Brooklyn Historical Society hosts a discussion on the history, politics and culture of black hair in America. 6:30 p.m. [$10] Try the tree pose at Battery Park City's outdoor yoga class at Rockefeller Park in Manhattan. 8 a.m. [Free] Celebrate salsa with rooftop dancing and a lesson at Bronx Terminal Market. 6:30 p.m. [Free] — Amy Osorio Events are subject to change, so double-check before heading out. For more events, see the going-out guides from The Times's culture pages. And finally: Is there really a place in Queens called Haberman? For about a year, Google was showing something curious on its map of New York City. Between the Queens neighborhood of Maspeth and Newtown Creek was a new name: Haberman. What is Haberman? A colleague of mine, Jeff Sisson, who is well-versed in map technology, went searching for answers. Here's what he found. A factory called Haberman's National Enameling and Stamping Company once stood in Maspeth and employed enough workers that a nearby Long Island Rail Road station was named after it. The factory eventually closed, and the Haberman station was discontinued in 1998 because of low ridership. But Haberman existed long enough for it to be added to a map created around 1967. And it appears the name was mistakenly added as a neighborhood in 1980 to the Geographic Names Information System, which is run by the United States Geological Survey. You can think of the G.N.I.S. as a dictionary of places. Then, according to Mr. Sisson, Haberman popped up as a neighborhood on Google Maps about a year ago. Why? Mr. Sisson guessed that Google could have relied too much on old data and not enough on local reporting. (I started my career writing about western Queens and had never heard anyone referring to a neighborhood called Haberman.) How Google chooses the names on its maps is often unclear, according to my colleague Jack Nicas, who last year wrote about mysterious names appearing on Google's map of San Francisco. For that article, the company declined to share how some place names came about, "though some appear to have resulted from mistakes by researchers, rebrandings by real estate agents — or just outright fiction," Mr. Nicas wrote. As for Haberman, I looked at Maspeth on Google Maps yesterday afternoon, and the name was no longer there. It's Thursday — ditch the map and find your own place. Metropolitan Diary: Leaving home   Dear Diary: Visiting New York as a young girl, the city felt like home in a way that nowhere else had. It made me feel empowered and powerful. At 5, I asked my parents to walk 10 paces behind me through Midtown. That's how I strode into the city as an adult: never expecting to leave. But one of the many things this city gave me was love, and love is taking me to California. It's not easy preparing to leave a home that you built, slowly, for so long. And it's not the home I expected. New York isn't the Broadway lights, the Statue of Liberty or bagels or Katz's or Central Park. It's the businessman who shouted a garbled 'blerg!' and grabbed me as I nearly stepped, texting, into an oncoming Toyota. It's the teenage boys who chased after me yelling, "You dropped your shrimp," when groceries fell out of my bag. It's the woman at 125th Street who, recognizing my distress about running late for work, yanked me onto a crowded No. 4 train, forcing other passengers to make room. It's the first kiss with the woman who would be my wife on Barrow Street, after stumbling out of Henrietta Hudson in the early morning. Sure, New York is rats and bad landlords and subway delays. But what I'll remember most about my home, when I'm away, is the kindness. Stay kind for me, New York. — Jordan Barillas

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