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Chapter 1: What is the main topic discussed in this episode?
Good morning from the Financial Times. Today is Wednesday, June 3rd, and this is your FT News Briefing. The White House is trying to keep tabs on AI models, and the conviction of a famous short seller could change how people invest. Plus, sure, Deutsche Bank has had its problems, but the German lender has turned things around.
There are still some reputational issues that are ongoing, but I think people within the bank hope they are largely past that and that this new strategy will bear fruit.
I'm Mark Filippino, and here's the news you need to start your day. U.S. President Donald Trump signed an executive order on AI yesterday.
Chapter 2: What recent executive order did President Trump sign regarding AI?
It creates a voluntary framework that allows the government to vet AI models. The move comes after officials raised concerns about the security risks posed by frontier AI platforms, most recently Anthropix Mythos. The signed order asks AI labs to submit new models for security review up to 30 days before they are released to the public.
An earlier draft of the order proposed a longer 90-day period. But Trump pulled that version abruptly last month because of warnings within his administration that tighter oversight could hamper the growth of leading AI labs. Regulation of the technology has become a thorny issue for the president.
Some of his allies, including former White House chief strategist Steve Bannon, have called for the government to take control of leading AI models. A U.S. criminal conviction could have big consequences for how investors, like short sellers, do their bidding. On Monday, a jury in Los Angeles found Andrew Left guilty of securities fraud.
He's the founder of the online investment newsletter Citron Research. Federal prosecutors accused Left of making at least $16 million in, quote, a long-running market manipulation scheme. Left, though, maintains he was simply sharing opinions with his followers. He even said his conviction signaled a sad day for free speech. Kay Wiggins is the FT's U.S. legal correspondent.
She's here to tell us how the Andrew Left case could shake up investing. Hi, Kay. Hi, Mark. So tell me a little bit more about Andrew Left. What's his deal?
Yeah. So Andrew Left is among the most well-known short sellers in the US. By short sellers, that's somebody who bets against companies. He is a prolific poster on social media, particularly on X. He has been a regular on lots of business TV networks. He built credibility more than a decade ago when he accused Valiant, which is a pharmaceutical company, of accounting irregularities.
And those allegations were eventually confirmed. And he has since become a prominent figure who speaks publicly about the positions that he's taking in stocks.
So, Kay, why did prosecutors feel like Left was manipulating his followers?
So what they have accused him of doing is basically that they said that he would take a position in a stock, whether that's a long position, so betting that the share price would rise, or whether that's a short position, so betting that the price would fall.
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Chapter 3: How did Andrew Left's conviction impact short selling and investing?
I think so, to which you might dispute that. But it's certainly a safer approach to what they were doing beforehand. And I think it is now becoming a much more stable bank. And if you look at sort of his strategy, what it is focusing on now for the next three years, I think, was the time horizon is basically growing its corporate bank, in particular in Germany and Europe.
And that sort of business is a lot less risky and a lot less... capital intensive than some investment banking activities. And as you have a lot of fiscal stimulus in Europe and in Germany at the moment, as governments look to build infrastructure, invest more in defense. So Deutsche is really trying to get in on that and is hoping it will be able to capitalize on that.
Simon, what's next for Deutsche? I mean, will this turn around last or are there other obstacles that are standing in the bank's way?
I think there were a few things that still rear the head sort of from the bad days for Deutsche when it was deemed to be the sick bank of Europe, where the recently released Epstein files, sort of Epstein was a big Deutsche client for a while. So there are still some reputational issues that are ongoing. But I think people within the bank hope they are largely safe.
past that and that this new strategy will bear fruit. But if you look at the targets they're setting, so the profitability targets are still quite a bit weaker than some other European peers. There are other banks like Unicredit in Italy or Santander in Spain who are much more profitable and they are expanding and sort of pursuing bigger deals. So we will see.
I think the consensus is that they will probably likely hit these targets by 2028, but that would still, I suppose, keep them in the middle of the pack of European banks.
Simon Foy is the FT's European banking correspondent. Thanks so much, Simon.
Thanks, Mark.
Before we go, as you know already, the U.S.-Iran War is affecting shipping through the Strait of Hormuz, and there's one tycoon that is absolutely fed up with it. His name is Evangelos Maranakis, and he's one of Greece's biggest ship owners. He says he'd rather pay a $200,000 toll per ship to pass through the Strait of Hormuz than put up with, quote, this hassle.
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