Business

Abercrombie and Sex Trafficking

Former Abercrombie CEO charged with two others.

Remember that 90’s song from LFO with the lyrics, “I like girls that wear Abercrombie and Fitch.” Well, apparently the company's former CEO didn’t.

Mike Jeffries, the former CEO, and two other men have been charged in a federal indictment in New York with sex trafficking and interstate prostitution. Jeffries is accused of committing crimes targeting would-be male models while running the company. The indictment states that in some instances, Jeffires would even engage in “non-consensual” sexual activity with the men, who were trafficked in the U.S., as well as to England, France, Italy and Morocco. 

One of the other men in the indictment is Jeffries’ romantic partner, Matthew Smith, who are both accused of coercing men into sex acts and paying for dozens of others to travel around the world to have sex with them for money, with these men often under the assumption that it would lead to modeling work with Abercrombie.

The third defendant is James Jacobson, now 71, who was employed solely to recruit men “to perform commercial sex acts” for Jeffries, now 80, and Smith, now 61.

The indictment alleges these crimes took place from 2008 to 2015, involving more than 100 men, including at least one as young as 19 years old. 

Jeffries served as Abercrombie’s CEO from 1992 through 2014 and now lives in Florida. All three defendants face a mandatory minimum sentence of 15 years in prison if convicted of sex trafficking, and the potential for a life sentence on that charge alone. All three men were also charged with 15 counts of interstate prostitution, with each charge carrying a maximum prison sentence of 20 years. 

Jeffries was released on a $10 million bond, but must remain in his home and wear a GPS monitoring device. Jeffries is scheduled to be arraigned tomorrow afternoon at 3 PM ET on Long Island, NY.  

This comes a year after Abercrombie, Jeffries, and Smith, were sued in Manhattan federal court for allegedly turning a blind eye to sexual misconduct by the former CEO. Abercrombie and Fitch declined to comment on the matter. 

This news also comes in the midst of an Abercrombie turnaround, as their shares are up nearly 80% this year, after outperforming Nvidia and Meta in 2023.

Around the Water Cooler:

Tech

If Anyone Can Understand AI, it’s Congress

Tech companies call on congress for AI safety institute.

AI continues to grow at a rapid pace, to the point now where even the tech companies seem to have some concerns. A group of leading tech companies joined forces this week to call on Congress to permanently authorize the U.S. Artificial Intelligence Safety Institute by the end of the year. 

60 companies in total teamed up, calling for science-based standards to be implemented as AI guardrails. This group included Amazon, Google, Meta, Microsoft, OpenAI and others, as they signed a letter to Congress from the “Information Technology Industry Council and Americans for Responsible Innovation.” If you’ve spent any time on social media, or online at all, then you’ve noticed that it is becoming harder and harder to decipher what is actually real and legitimate, and what has been AI altered or created. 

The letter pointed to the fact that other nations are establishing their own AI safety institutes, something the U.S. should have, as well. The letter also mentioned that the U.S. has the opportunity to lead the world in AI safety, or concede that leadership to other countries - pointing out that they’re currently at a bit of a crossroads. We’ll see what, if anything, comes of it.

What’s Happening:

💨 Juul users receiving thousands of dollars from 300m settlement.

🌊 Mattel riding the Barbie wave? Profits are up.

Politics

Trump’s New Job, McDonald’s

Would you like fries with that?

McDonald’s is attempting to toe the line as well as they can this election. Despite the company allowing former President Donald Trump to “work” at one of their restaurants in Pennsylvania, the fast food chain is still remaining neutral. 

“Upon learning of the former president’s request, we approached it through the lens of one of our core values: we open our doors to everyone,” the company said in an email to its employees (which was later obtained by the Associated Press). “McDonald’s does not endorse candidates for elected office and that remains true in this race for the next president. We are not red or blue - we are golden,” the email continued. 

Trump spent Sunday cooking and serving french fries to McDonalds customers, as reportedly thousands of his supporters surrounded the restaurant. McDonald’s also told the Associated Press that franchises have also reached out to Vice President Kamala Harris and Tim Walz about visiting their restaurants, as well. 

Harris has repeatedly claimed that her first job was at McDonald’s. McDonald’s said they don’t have record of that (maybe it was McDowells?), however they don’t have records for all positions dating back to the early 80’s (when Harris would have been working). McDonalds said in an email that it’s “proud to hear” of “Harris’ fond memories working under the arches.”

Trump has claimed that he spoke with McDonald’s about Harris’ claim and said, “she shouldn’t lie about it. McDonald’s confirmed four times that she never worked here.”

In unrelated news (we think…), McDonalds announced an E. coli outbreak in their quarter pounders, which has led to 49 illnesses across 10 states and, unfortunately, one death so far. 

So now you can eat McDonalds AND lose weight! (We hope everyone is okay)

Around the Hill:

🕗 The clock is ticking on Kamala Harris.

🍑 Georgia all over Trump’s mind heading toward election day.

Finance

Are We Headed For Our Reckoning?

If we don’t curb our spending, hedge fund manager thinks so.

With Election Day just 12 days away, billionaire hedge fund manager Paul Tudor Jones is issuing some warnings for the country’s economic future. 

“We are going to be broke really quickly, unless we get serious about dealing with our spending issues,” Jones told CNBC Tuesday. 

His concern revolves around the already large fiscal deficit the U.S. government is facing, along with the promises of increased spending from both presidential candidates (assuming politicians actually follow through on their promises…). 

Jones is concerned that government spending could cause a big sell-off in the bond market, which would spike interest rates. He said he plans to not own fixed income and will be betting against the longer-dated part of the bond market. 

“The question is after this election… will we have a Minsky moment where all of a sudden there’s a point of recognition that what they’re talking about is fiscally impossible, financially impossible?” Jones asked. 

The federal deficit for 2024 has soared above $1.8 trillion, which is 8% higher than 2023. The deficit increased under both former President Donald Trump and current President Joe Biden. Jones said that Trump and Vice President Kamala Harris are “least suited for the job ahead of them” in regard to the budget. He also stated that he is still concerned about inflation. 

Jones founded his hedge fund more than 40 years ago and rose to prominence after correctly predicting the stock market crash in 1987. Could he be on to something once again?

From the Street:

⚡ Tesla shares jump 10% on profit beat.

📈 HubSpot to announce Q3 financials.

Global News

Leaked Docs Show Israels Attack Plan

Seriously, we gotta figure out how to keep this private.

Stop us if you’ve heard this before… but there has been yet another embarrassing leak of U.S. intelligence secrets… you were supposed to stop us…

The FBI is investigating the leak of classified documents that detailed Israeli preparations to retaliate against Iran. The bureau is probing the disclosure and “working closely with our partners in the Department of Defense and Intelligence Community,” the Federal Bureau of Investigation said in a statement on Tuesday.

“We’re not exactly sure how these documents found their way into the public domain. I know the Department of Defense is investigating this,” White House National Security Council spokesman John Kirby said. “I’m just not able to answer your question whether it was a leak or a hack,” he explained.

“We’re deeply concerned, and the president remains deeply concerned about any leakage of classified information into the public domain. That is not supposed to happen and it’s unacceptable when it does,” Kirby added. 

The leaked documents are descriptions of satellite images showing Israeli warplanes preparing for a strike and practicing air refueling, according to officials. The documents, which are marked “top secret”, were posted to the Telegram messaging app last week. They were attributed to the U.S. Geospatial Intelligence Agency and National Security Agency.

Around the Globe:

😦 North Korea has troops in Russia, I’m sure that’s fine.

💰 BRICS expansion talk in Russia at a gathering of World Leaders.

Entertainment

Blade Runner 2049 Producers Sue Elon

Well Tesla, but Elon makes a better headline.

Elon Musk has another target on his back, as a production company for “Blade Runner 2049” has sued Tesla, alleging that they fed images from the movie into an AI image generator to create unlicensed promotional materials (remember what we said earlier about AI guardrails?).

Alcon Entertainment filed the lawsuit in California on Monday, accusing Musk and his company of misappropriating the movie’s brand to promote its robotaxi at an unveiling earlier this month. The producer says it doesn’t want Blade Runner 2049 to be affiliated with Musk because of his “extreme political and social views.”

“Any prudent brand considering any Tesla partnership has to take Musk’s massively amplified, highly politicized, capricious and arbitrary behavior, which sometimes veers into hate speech, into account. Alcon did not want BR2049 to be affiliated with Musk,” the complaint said.

The complaint also names Warner Bros. Discovery for allegedly facilitating the partnership, as Tesla partnered with Warner for the robotaxi showcase, which was done in one of their studio lots. 

Alcon seeks unspecified damages, as well as a court order barring Tesla from further distributing the disputed promotional materials.

What to Know:

🎥 LA is becoming a Production Graveyard.

🤩 The Impact of Celebs on the 2024 Election.