According to sources, the Justice Department and the SEC are investigating the collapse of Silicon Valley Bank. U.S. authorities are examining the failure of SVB for misconduct by management, including whether the stock sales by SVB executives in the days leading up to the bank’s collapse violated trading rules. More: - Separate probes are being carried out by prosecutors in the Justice Department’s fraud section, the U.S. Attorney’s Office for the Northern District of California, and the SEC.
- Massachusetts regulators are also investigating SVB’s executives’ trading, including what they knew or said about the bank’s business in the 90 days before it collapsed.
- Financial regulators shut down SVB on Friday after the bank was unable to raise new capital following a run on its deposits.
- The California Department of Financial Protection and Innovation closed SVB and appointed the FDIC as receiver.
- On Sunday evening, the Treasury Department, the Federal Reserve, and the FDIC released a joint statement guaranteeing all deposits in SVB and Signature Bank.
- Signature Bank was shut down on Sunday.
In related news: - Moody’s Investors Service changed its outlook on the U.S. banking system from stable to negative to “reflect the rapid deterioration in the operating environment.”
- The big three rating service warned it was downgrading or placing on review for downgrade seven other institutions.
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U.S. inflation rose 6% in February compared to a year ago, down from 6.4% reported in January. Core CPI, which excludes food and energy prices, rose 5.5% in February from a year ago, slightly down from the 5.6% reported in January. On a monthly basis, core CPI rose 0.4%. More: - Food prices rose 9.5% in February, compared to last year and 0.4% month-to-month.
- Egg prices rose 55.4% in February YoY, down from the 70% increase reported in January.
- Energy prices rose 5.2% YoY, with utility gas service leading the category, increasing 12.9% compared to last year.
- Used vehicle prices fell 13.6% YoY, and transportation services, which includes airlines, trains, and buses, rose 14.6%.
- U.S. stocks rose on Tuesday after a five-day losing streak amid contagion fears as Silicon Valley Bank and Signature Bank were both shut down by regulators.
- The Dow gained 336.26 points or 1.06%, the S&P 500 rose 1.68%, and the Nasdaq rose 2.14%.
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Meta Platforms announced it plans to cut 10,000 more jobs in the coming months and not fill 5,000 open roles. The new round of layoffs comes months after the company laid off 11,000 workers in November, roughly 13% of Meta’s global staff at the time. More: - CEO Mark Zuckerberg previously stated that the company planned to cut projects that weren’t performing or may no longer be crucial and remove layers of middle management to make decisions faster.
- In a blog post shared on Tuesday, Zuckerberg referred to 2023 as Meta’s Year of Efficiency, highlighting the company’s two main goals:
- To make Meta a better technology company and to improve its financial performance in a difficult environment so the company could execute its long-term vision.
- Meta expects to incur restructuring costs between $3B to $5B.
- Last week, the company confirmed it was exploring building a new standalone decentralized, text-based social network that could compete with Twitter.
- Meta shares rose 7.25% on Tuesday, closing at $194.02.
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A California appeals court ruled that ride-sharing apps like Uber and Lyft can continue treating the drivers as independent contractors, overturning a lower-court decision that banned them from doing so. The court also removed a clause that put restrictions on collective bargaining by workers. More: - In 2020, California sued Uber and Lyft, claiming the companies violated a new state law that sought to reclassify their drivers as employees.
- A legal battle led to Proposition 22, which asked California voters to allow ride-sharing and delivery apps like Uber and Lyft to classify their drivers as independent contractors.
- This limited the companies’ obligation to provide certain benefits.
- California voters approved Proposition 22 after its backers spent more than $180M to flood the state with advertising; however, a judge ruled that the proposition was unconstitutional and infringed on the state legislature’s power to set standards at the workplace.
- Uber, Lyft, and others appealed the judge’s ruling, and a California appeals court ruled in favor of the ride-share companies.
- Uber, Lyft, and DoorDash shares all closed in the positive on Tuesday.
- Uber rose 5%, DoorDash gained ~6%, and Lyft rose ~0.6%.
NOTE: Inside.com founder and CEO Jason Calacanis is an investor in Uber.
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OpenAI released the latest version of its language model, GPT-4, which it claims exhibits human-level performance on various professional and academic benchmarks. GPT-4 is available to OpenAI’s paying users through ChatGPT Plus, while developers can sign up on a waitlist to access the API. More: - On Tuesday, Microsoft announced that its new search platform Bing runs on OpenAI’s GPT-4.
- Several other companies have included GPT-4 in their businesses, including Stripe, Duolingo, Khan Academy, and Morgan Stanley.
- Stipe uses GPT-4 to scan business websites and deliver a summary to customer support staff.
- Language learning platform Duolingo has built GPT-4 into a new language learning subscription tier.
- Morgan Stanley announced on Tuesday it is testing GPT-4 to help its 16,000 advisors tap into the bank’s enormous repository of research and data.
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Volkswagen plans to invest €180B (~$193B) over the next five years to manufacture its batteries and expand in the U.S. and China. The German automaker aims to strengthen its position in China, despite rising pressure to diversify its supply chains and sales away from the Asian country. More: - CEO Oliver Blume said the company plans to use the investment to target growth in critical markets, noting that 2023 would be a decisive year for the firm.
- VW plans to use 68% of the investment, or about $131B, to develop EVs and new digital technology.
- According to sources, VW thinks it is unlikely that China will invade Taiwan in the short term due to the impact that would have on the country’s economy.
- On Monday, VW announced it would build its first North American battery plant in Canada, enticed by tax incentives for green energy in President Biden’s Inflation Reduction Act.
- VW said it took a €2B (~$2.2B) impairment charge related to the sale of its Russian business.
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- According to the FBI, Americans lost a record $10.3B to online scammers in 2022, up from $6.9B reported in 2021.
- Novo Nordisk plans to cut the U.S. list prices for several of its insulin drugs by up to 75%. The move comes following widespread pressure to cut diabetes treatment costs. Earlier this month, Eli Lilly said it would reduce the list prices of its insulin products.
- Silver Lake and CPP Investments have agreed to buy Qualtrics for $12.5B. The deal marks the second time the survey company has been acquired in less than five years.
- Tyson Foods plans to close two of its poultry plants and lay off about 1,700 workers. The company is closing its Van Buren, Arkansas, and Glen Allen, Virginia, chicken plants in May.
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 |  | Vanessa Omeokachie writes the daily Inside Business newsletter. Her interests include finance, technology, and entrepreneurship. In her free time, she enjoys reading, hiking, attending concerts and music festivals, traveling, and exploring. Connect with her on Twitter @VanessaOmeo or on LinkedIn. |   | | Editor | Aaron Crutchfield is based in the high desert of California. Over the last two decades, he has spent time writing and editing at various local newspapers and defense contractors in California. When he's not working, he can often be found looking at the latest memes with his kids or working on his 1962 and 1972 Fords. | |
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