According to filings made to the US Securities and Exchange Commission (SEC), Musk, who regularly puts out controversial Tweets, has taken a 9.2% stake in Twitter at the cost of $2.89 billion on Friday. 

Following the news, Twitter shares soared as much as 26% in pre-market trading, adding over $8 billion to its $31.5 billion market value prior to Musk’s interest being made public. Following the stock price jump, Musk’s shares are now worth approximately $3.6 billion. 

At the end of last month, Musk had said he was giving “serious thought” to creating a new social media platform after remarking that Twitter doesn’t allow for free speech. In a Tweet, the billionaire said, “Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy. What should be done?” 

Some analysts predict that Musk’s shareholding could lead to him taking an active interest in the social media platform which may result in a buyout. 

“We would expect this passive stake as just the start of broader conversations with the Twitter board/management that could ultimately lead to an active stake and a potential more aggressive ownership role of Twitter,” said Dan Ives, an analyst at Wedbush Securities.

Bosses at Royal Mail say £200 million will be spent on a buyback of shares while £200 million will be handed out as a special dividend. The company said it made the decision as it greeted a structural shift, “We believe the Covid-19 pandemic resulted in a structural shift, with a permanent step up in the level of parcel volumes compared to pre-pandemic levels, driven by increased online e-commerce activity.”

Royal Mail’s revenues have jumped from £5.7 billion to £6.1 billion while pre-tax profits were up from £17 million to £315 million in the six months to September compared with the same period last year.

Thanks to the changes, Royal Mail has said it expects to become debt-free within the subsequent two years. Its net debt has been reduced from £1 billion to £540 million in the past 12 months alone, with domestic parcel volumes up 33% compared to pre-pandemic levels. 

Exceeding analysts’ expectations, Barclays has posted a quarterly attributable profit of £2.1 billion, up from £90 million for the second quarter of 2020. According to Refinitiv data, analysts had predicted a net reported income of £1.7 billion for the three months up to the end of June. Investment banking fees were up 27%, whilst equities were up 38%. 

The bank has also announced that it will be increasing capital distributions to shareholders. Shareholders will receive a half-year dividend of 2 pence per share and an additional buyback of up to £500 million. Barclays shares are up by approximately 15% year-to-date. However, they were as much as 31% higher at the end of April 2021.

As detailed in its first-quarter earnings report, Barclays has also seen a substantial reduction in credit loss provisions and successfully released almost £800 million from its credit impairment provisions instead of the £1.6 billion charge incurred for the same period of 2020.

Credit Suisse on Thursday reported a net loss of 252 million Swiss francs ($275 million) for the first quarter following the implosion of US-based hedge fund Archegos Capital.

The bank reported that the loss reflected a “significant charge with respect to the US-based hedge fund matter in 1Q21 (first quarter), offsetting positive performance across wealth management and investment banking.”

In response, the bank raised roughly $2 billion to bolster its capital position. To do this, it sold mandatory convertible notes to "a selected group of core shareholders, institutional investors and ultra-high-net-worth individuals."

In total, Credit Suisse has issued notes that will convert into 203 million shares in the bank. Half of these will convert in six months’ time at a 5% discount against the market rate.

Archegos Capital, a relatively unknown family office in New York, collapsed last month after making a series of highly leveraged bets on media and tech stocks. Credit Suisse, which dealt with the firm, was rocked by the collapse; the bank made an immediate loss of 4.4 billion Swiss francs ($4.7 billion) and dumped $2 billion worth of stock to end its connection with Archegos. The bank also overhauled its leadership, with Chief Risk Officer Lara Warner and investment banking head Brian Chin stepping down in the aftermath of the loss.

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The $4.4 billion loss provision wiped out a 30% jump in Credit Suisse’s revenues for the first quarter, powered by an 80% revenue increase in its investment banking arm. The bank’s loss contrasts starkly with its 1.2 billion franc profit in the same quarter last year.

Credit Suisse is not the only major bank to have made significant losses on the collapse of Archegos. Last week, Morgan Stanley revealed a loss of almost $2 billion despite a 150% profit increase in the first quarter.

HSBC has acceded to investor pressure by tabling a shareholder vote on new plans to phase out the bank’s financing of the coal industry by 2040.

HSBC announced on Thursday that it would propose a special resolution to “set out the next phase” of its net zero plans. The special resolution will pledge to phase out all financing for coal-fired power and thermal coal mining in the EU and OECD by 2030, and globally by 2040.

Last October, HSBC committed to ensuring carbon neutrality across its client base by 2050, a move which environmental campaigners slammed as “baseline” for the banking industry. HSBC was also criticised for vagueness on the steps it would take to reach its goal.

Campaign group ShareAction coordinated with fifteen pension and investment funds earlier this year to organise a shareholder vote calling on HSBC to set clearer targets for reducing its financing for fossil fuel-affiliated companies, beginning with coal. Members of the investment group included prominent international asset managers and hedge funds such as Amundi and Man Group.

HSBC said in its Thursday statement that ShareAction and its allies had agreed to withdraw their resolution ahead of the annual general meeting to be held on 28 May.

HSBC CEO Noel Quinn hailed the agreement reached between the bank and campaigners. “This represents an unprecedented level of cooperation between a bank, shareholders and NGOs on a critical issue,” he said.

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The new special resolution will be binding if 75% of shareholders vote in favour.

HSBC is the second-largest financier of fossil fuels in Europe, according to the Rainforest Action Network, surpassed only by Barclays.

Barclays announced plans for a share buyback and a resumption of its dividend on Thursday as it revealed that its full-year numbers for 2020 came out at a £3.1 billion pre-tax profit.

Though the bank’s full-year profit was down 38% compared with 2019’s figures, Barclays still managed to defy analysts’ expectations of a pre-tax profit of £2.8 billion. This is partly owed to a slight increase in revenue, with its corporate and investment bank reporting a 35% jump in pre-tax profits for the whole of the year, the best on record for the division.

A large part of Barclays’ costs for 2020 stemmed from the bank’s decision to set aside £4.8 billion to cover loans that it considers unlikely to be paid back due to the economic impact of the COVID-19 pandemic. Its credit card and retail banking businesses were also struck by a downturn in demand, cutting pre-tax profits by 78%.

Barclays has been one of the largest providers of emergency loans during the COVID-19 pandemic, having issued around £27 billion to businesses and provided more than 680,000 payment holidays globally for customers with outstanding loans, mortgages and credit cards.

Despite its losses, the bank announced on Thursday that it would resume dividends, with payments of 1p per share issued to shareholders.

Barclays’ CEO, Jes Staley, expressed optimism on the back of the full-year earnings report. “Barclays remains well capitalised, well provisioned for impairments, highly liquid, with a strong balance sheet, and competitive market positions across the group,” he said.

“We expect that our resilient and diversified business model will deliver a meaningful improvement in returns in 2021.”

Separately from its results, Barclays also reported that its staff bonus pool for 2020 was 6% higher than the £1.5 billion pool it shared out in 2019.

A deal to merge Fiat Chrysler Automobiles (FCA) and PSSA Group was completed on Saturday. The combined company, Stellantis, will be the fourth-largest car manufacturer in the world by production volume, behind only Toyota, Volkswagen and Renault-Nissan.

The new company will be headed by former PSA boss Carlos Tavares, with other managerial positions to be confirmed in the coming weeks. It will begin trading in Paris and Milan on Monday and New York on Tuesday.

“The merger between Peugeot S.A. and Fiat Chrysler Automobiles N.V. that will lead the path to the creation of Stellantis N.V. became effective today,” the newly merged automakers said in a statement on Saturday.

The plan to merge the two was announced in October 2019, winning the approval of 99% of investors in both companies. FCA and PSA board members finalised the deal shortly afterwards.

According to new industry figures, Stellantis ranks as the world’s third-largest automaker by sales. At close of play on Friday, the company was valued at more than $51 billion.

FCA CEO Mike Manley, who will lead Stellantis’s key North American operations, has said that 40% of the company’s expected synergies would come from the convergence of platforms and powertrains and from optimising R&D investments. 35% will come from savings on purchases, and a further 7% will come from savings on general expenses and sales operations. Overall, Stellantis expecs to cut annual costs by over €5 billion without plant closures.

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The deal will bring several high-profile brands together, with Peugeot’s Citroen and Vauxhall joining Fiat, Jeep and Chrysler under the Stellantis umbrella. PSA will also gain increased access to American markets while FCA will be able to utilise PSA’s latest vehicle platforms, including those specifically designed for EVs, which will help it to achieve new emissions targets.

Laws governing financial crimes within the market haven’t always been as quick to catch up with the trend of crimes themselves, as has law regulating more traditional crimes such as larceny or robbery. However, when it comes to fraud, the law is fairly clear, and the penalties are steep.

A company director making a false or misleading statement is committing a federal offense that carries the threat of serious prison time .

Fraud can take a number of forms from the top of company leadership

A company director is the figurehead of corporate leadership, and speaks directly for the company. It is against the law to misrepresent information that is relevant to the company’s status in any way that may impact investment decisions, manipulate stock prices, or otherwise influence the course of business and the market.

A common instance of fraud is when a company’s directors mislead investors as to the real state of the company’s financial health. Another form of fraud may be presented internally, such as if a CEO sends a memo to their staff informing them that they are running a quarterly profit, when they are in fact running a deficit.

Whatever the means, the law itself is pretty clear-cut. The sentence for making false statements can increase when additional counts are involved, and corporate fraud also involves other financial crime elements.

Other common forms of fraud that may be included in a bundle of charges against a company director for making false statements include:

• Wire fraud
• Money laundering
• Conspiracy to commit fraud
• Accepting or soliciting bribes
• Market abuse and insider trading
• Falsifying documents

A company director is the figurehead of corporate leadership, and speaks directly for the company.

Regardless of the charges, however, any charge is bound to come on the heels of an extensive criminal investigation. This may start with a complaint or anonymous tip. It could also arise from suspicions on the part of competing firms or directly from regulators or legal investigators.

The criminal investigation

Just as there are a number of ways for company directors to commit fraud through the issuing or simple verbalizing of false or misleading statements, so too are there a number of ways to get caught. Some of the ways a company director may be exposed for illegally making a false statement include:

• Being caught lying directly to a law enforcement or regulatory agency representative (ex: the FBI)
• Being exposed by a whistleblower within the company for circulating false information internally
• Being investigated and exposed by a regulator for false information leaked or spoken to associates for the purposes of manipulating the market
• Being caught inflating numbers in company publications or company disclosures

Of this list, getting caught lying to investigators seems like an unlikely path to downfall for a chief executive, but it happens quite often. For example, former MiMedX CEO Parker Petit was convicted of fraud in November 2020 after the Securities and Exchange Commission (SEC) found that he had falsified the company’s actual financial situation in SEC filings, with the associated securities fraud charge carrying a maximum sentence of twenty years in prison.

While not the same as lying to police in the interrogation room, falsifying an SEC filing, while it seems a brazenly reckless move to make given the consequences, is a common cause for fraud charges.

Running a legal defence to prosecutorial offense

Unlike most criminals, guilty company directors in fraud cases tend to have some of the best legal representation available on the planet. There are a number of mechanisms and legal arguments that a good defense attorney or company’s general counsel can employ when their company director is charged with making false statements.

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A primary line of defence is to attempt to argue that the company director did not know that what they were saying was false. This argument could be supported by evidence that another member of the company falsified the information. It could be chalked up to accounting error.

While a tried and not always true method of defense, a common approach is to simply deny that the company director did make a false statement. This is certainly a tougher argument to make if documented evidence suggests otherwise. Ultimately, these cases will come down to a combination of the strength of the respective legal teams involved and the truth itself.

UK-based consumer goods giant Unilever said on Monday that it would give shareholders an advisory vote on its plans to curb emissions at its next annual general meeting in May, becoming the first blue-chip company to give investors a voice on its climate plan.

Unilever has set a goal to reach net zero carbon emissions from its own operations by 2030, and to reduce the average carbon footprint of its products by 50% by the same deadline. The firm announced in June that all of its products would be carbon neutral from production to point of sale by 2039, and now plans to create a €1 billion climate and nature fund to invest further in improving the environmental impact of its operations.

Unilever will publish a detailed action plan outlining how it expects to hit these targets in Q1 2021, after which it will report progress against the plan annually and seek shareholder approval of its current measures. This plan will be updated every three years.

“It is the first time a major global company has voluntarily committed to put its climate transition plans before a shareholder vote,” Unilever said in a statement.

In order to achieve its climate goals, the company said it would need to transition its operations to 100% renewable energy, eliminate deforestation from its supply chain and rework many of its flagship products.

“Climate change is the most pressing issue of our time and we are determined to play a leadership role in accelerating the transition to a zero carbon economy,” Unilever CEO Alan Jope said.

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Unilever is one of the world’s largest consumer goods companies, with a market cap of $120 billion. Through household brands including Ben & Jerry’s, PG Tips and Domestos, the company claims to reach over 2 billion customers worldwide.

SoftBank Group Corp is considering a new strategy to go private by slowly buying back outstanding shares until CEO and founder Masayoshi Son has a large enough stake to squeeze out the remaining investors, according to a report from Bloomberg News.

Sources said that the buyback process would likely take more than a year, necessitating the sale of SoftBank assets in order to fund stock purchases. Masayoshi Son would not be buying shares himself under the plan, though his stake in the company – which now stands at around 27%, would increase as other investors sell their stock.

Once Son reaches 66% ownership, Japanese regulations would allow him to compel other shareholders to sell.

The gradual buyback plan would offer several benefits, according to insiders; it would allow the company to buy its own stock when it slips and avoid the need to pay a premium of around 25% that would come with a formal buyout. Gradual buybacks would also be more likely to receive support from shareholders.

The Japanese billionaire said in February that he thought SoftBank performed better as a public company, though he has more recently declined to comment on potential plans for going private in the future. “If our shares drop down, I will buy back more shares more aggressively,” he said during a November conference.

SoftBank owns stakes in many tech, energy and financial companies including Alibaba, Uber and DoorDash. The onset of the COVID-19 pandemic saw its shares fall by a record margin in March, wiping billions from its value, though it has since rallied more than 160%. Its market cap currently sits at $124.5 billion.

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SoftBank shares rose as much as 7% on early Wednesday trading following Bloomberg’s report on the stock buyback debate.

Firms that advise institutional investors and other market participants on how to vote during shareholder meetings will be subjected to stricter regulation following the SEC’s vote on 22 July.

The newly amended rules will require proxy advisors to show their voting recommendations to public companies either before or at the same time as sending them to their clients. Additionally, they will be required to inform their clients of the public companies’ responses to their advice. In order to allow for this exchange of information, proxy advisors can ask public companies to file their proxy statements at least 40 days in advance of shareholder meetings.

Finally, the new rules will require proxy advisors to disclose any potential conflicts of interest alongside their voting recommendations.

Publicly traded companies have complained about the influence of proxy advisors over shareholder votes, with some asset managers using software to automatically match their ballots to advisors’ voting recommendations in shareholder meetings. In a comment letter to the SEC, Exxon Mobil’s vice president for investor relations described proxy advisors as “effectively our largest shareholders, despite having no direct stake in Exxon Mobil’s success.”

“The final rules require proxy voting advice businesses to hold themselves to a standard appropriate for the power they exercise,” said SEC Commissioner Hester Peirce in support of the rule.

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Proxy firms have criticised the ruling as a gift to large companies resulting from a decade-long campaign lobbying for stricter regulation of the advice that they issue.

“While the rules adopted today may appear less draconian than originally envisioned, they nevertheless serve as a blow to institutional investors seeking to judiciously monitor portfolio companies,” commented Gary Retelny, CEO of Institutional Shareholder Services.

SEC officials have announced that the new regulations will take effect for the 2022 proxy season and thereafter.

Below Lee Wild, Head of Equity Strategy at Interactive Investor, discusses dividend cheques and payouts to shareholders over the next month.

Over the next four weeks, some of the UK’s biggest companies will send dividend cheques to shareholders totalling a staggering £8.2 billion.  And the good news is that almost everyone invested in a pension will get something.

Whether directly, or indirectly through a fund or other collective investment, it’s almost certain most of us own a stake in Rio Tinto, Legal & General, SSE, Prudential, GlaxoSmithKline, Diageo, Barclays, Royal Dutch Shell (the largest company on the London Stock Exchange), and Lloyds Banking Group, the UK’s most widely-owned share.

This is a strong reminder that London is home to some of the world's best income stocks. These blue-chip dividends are not only among the most generous, but they are also affordable and sustainable, easily covered by profits and cash flow from operations.

There have been question marks around Royal Dutch Shell. It paid a total of $15 billion in dividends to shareholders in 2016, but the plunge in oil prices from over $100 a barrel to below $30 hit profits. However, the oil major has not cut its dividend since the Second World War, and chief executive Ben van Beurden had been borrowing to maintain that record.

But, after buying BG Group and completing over half its target for $30 billion of asset sales, Shell did generate enough cash over the past 12 months to cover both the dividend and reduce debt.

It’s also great to see Lloyds Banking Group and Rio Tinto back as serious income plays. Both have undergone major transformations following the financial crisis and collapse in commodity prices, and now yield 7% and 5% respectively.

After a six-year break during the financial crisis, Lloyds has successfully repaired its balance sheet and returned to the dividend list in 2015. It’s now expected to keep growing the dividend, and any increase in UK interest rates would be a significant boost to the lender’s profit margins.

Rio Tinto has staged an impressive recovery since the commodity sector crash finally ended 18 months ago, and streamlining the business has provided firepower to increase its latest interim dividend by 144% in dollar terms.

Barclays presents shareholders with a problem. As the only UK bank share in negative territory in 2017 so far, down over 14%, it’s the cheapest high street lender out there, trading at a discount to book value. Its restructuring is complete, too, but PPI and other conduct issues may continue to cap share price gains.

However, if City estimates are correct, the dividend will more than double in 2018 and give a forward yield of over 4%.

With interest rates at a record low, there are currently few asset classes that match equities for income generation potential. The global economy is ticking along nicely, company profits are improving and valuations do not appear stretched among this crop of blue-chips.

In the absence of any market event that significantly shifts the dial, it’s likely investors will continue to benefit as companies return those profits to shareholders.

*Excludes Rio Tinto Limited