Toyota will pay $60 million to settle a United States regulator’s charges it illegally prevented car buyers from canceling unwanted product bundles that increased their monthly loan payments, and tarnished buyers’ credit reports.

The Consumer Financial Protection Bureau (CFPB) on Monday said Toyota Motor Credit, the automaker’s US-based lending arm, will pay a $12 million civil fine and $48 million to car buyers harmed since 2016.

Toyota Motor Credit, based in Plano, Texas, provides financing for people who buy vehicles at Toyota dealerships, with nearly 5 million customer accounts as of Oct. 2022.

Monday’s settlement concerned “add-on” products, typically costing $700 to $2,500 per loan, that provide protection when vehicles are damaged, stolen or out of warranty, and when car buyers die or become disabled.

According to the CFPB, thousands of borrowers complained to Toyota Motor Credit that dealers lied about whether these products were mandatory, or rushed the paperwork so they would not realize how much they were paying.

The regulator said Toyota Motor Credit made it “extremely cumbersome” to cancel the bundles, including by routing more than 118,000 borrowers to a hotline where agents were instructed to dissuade cancellations, and often failed to provide refunds.

Toyota Motor Credit was also accused of falsely telling credit reporting agencies that borrowers had missed payments, and failing to promptly correct negative information for more than 27,500 borrowers.

Under a consent order, and without admitting or denying liability, Toyota Motor Credit agreed to make it easy to cancel unwanted product bundles.

It also agreed to more closely monitor dealers’ conduct, and ensure that employee pay and performance metrics are not tied to sales of the bundles.

Toyota did not immediately respond to requests for comment. — Reuters

LONDON – Crypto firm Tether said on Monday that it had frozen $225 million worth of its cryptocurrency which it said had been linked to a human trafficking group in Southeast Asia.

The United States Secret Service asked Tether to freeze the tokens during a “months-long investigative effort” by Tether and the crypto exchange OKX, Tether said in a blog post, without giving details about the scope or timescale of the investigation.

The Secret Service did not immediately respond to a Reuters request for comment.

Tether and OKX collaborated with the US Department of Justice (DoJ) on the investigation, Tether said without elaborating. A spokesperson for the DoJ did not immediately respond to requests for comment.

The crypto tokens were “linked to an international human trafficking syndicate in Southeast Asia responsible for a global “pig butchering” romance scam,” Tether said.

The term “pig butchering” typically refers to instances when a scammer builds trust with their victims over social media, messaging and dating apps, then pressures them to invest in bogus crypto or online trading schemes.

Tether did not give further details about the group or how they used the cryptocurrency.

Tether said it was its largest ever freeze of its token.

Hundreds of thousands of people are being trafficked by criminal gangs and forced to work in scam centres and other illegal online operations in Southeast Asia, the United Nations said in a report in August.

Tether is a so-called stablecoin, pegged to the US dollar. There are $87.9 billion tether tokens in circulation, making it the third biggest cryptocurrency after bitcoin and ether, according to CoinGecko data. — Reuters

Social media company X on Monday sued media watchdog group Media Matters, alleging the organization defamed the platform after it published a report that said ads for major brands had appeared next to posts touting Adolf Hitler and the Nazi party.

X, formerly Twitter, has faced growing outrage since Media Matters published the report on Thursday, which led IBM, Comcast and several other advertisers to pull ads from the platform in response.

In the lawsuit filed in a U.S. District Court in Texas, X claimed Media Matters “manipulated” the social media platform by using accounts that exclusively followed accounts for major brands or users known to produce fringe content, and “resorted to endlessly scrolling and refreshing” the feed until it found ads next to extremist posts.

Media Matters’ report misrepresented the typical experience on X “with the intention of harming X and its business,” the company said in the lawsuit.

The watchdog group did not immediately respond to requests for comment after the lawsuit was filed.

In an interview with Reuters earlier on Monday, Media Matters President Angelo Carusone said the nonprofit’s findings flew in the face of X’s statements that it had introduced safety protections to prevent ads from appearing next to harmful content.

“If you search for white nationalist content, there are ads flourishing. The system they say exists is not operating as such,” he said.

X said in the lawsuit that ads for IBM, Comcast and Oracle only appeared alongside hateful content for one viewer, which the company said was Media Matters.

“Data wins over manipulation or allegations. Don’t be manipulated. Stand with X,” X Chief Executive Linda Yaccarino posted on Monday.

Texas Attorney General Ken Paxton said on Monday his office was opening an investigation into Media Matters and that he was “extremely troubled” by allegations that the group manipulated data on X.

Since Musk purchased Twitter for $44 billion in October 2022, a stream of advertisers have fled the platform, wary of some of Musk’s controversial posts and layoffs of employees who worked to moderate content.

The platform’s U.S. ad revenue has declined at least 55% year-over-year each month since Musk’s takeover, Reuters previously reported.

Yaccarino told employees in a note on Sunday that while some advertisers had paused their investments following the report’s publication, the company had been clear about its efforts to fight antisemitism and discrimination. — Reuters

Some investors in OpenAI, makers of ChatGPT, are exploring legal recourse against the company’s board, sources familiar with the matter told Reuters on Monday, after the directors ousted CEO Sam Altman and sparked a potential mass exodus of employees.

Sources said investors are working with legal advisers to study their options. It was not immediately clear if these investors will sue OpenAI.

Investors worry that they could lose hundreds of millions of dollars they invested in OpenAI, a crown jewel in some of their portfolios, with the potential collapse of the hottest startup in the rapidly growing generative AI sector.

OpenAI did not respond to a request for comment.

Microsoft owns 49% of the for-profit operating company, according to sources familiar with the matter. Other investors and employees control 49%, with 2% owned by OpenAI’s nonprofit parent, according to Semafor.

OpenAI’s board fired Altman on Friday after a “breakdown of communications,” according to an internal memo seen by Reuters.

By Monday, most of OpenAI’s more than 700 employees threatened to resign unless the company replaced the board.

Venture capital investors usually hold board seats or voting power in their portfolio companies but OpenAI is controlled by its nonprofit parent company OpenAI Nonprofit, which according to OpenAI’s website was created to benefit “humanity, not OpenAI investors.”

As a result, employees have more leverage in pressuring the board than the venture capitalists who helped fund the company, said Minor Myers, a law professor at the University of Connecticut. “There is nobody exactly who is in the seat of an injured investor,” he said.

That is a feature, not a bug of OpenAI’s structure, which started out as a nonprofit but added a for-profit subsidiary in 2019 to raise capital. Keeping control of operations let the nonprofit preserve its “core mission, governance, and oversight,” according to the company’s website.

Nonprofit boards have legal obligations to the organizations they oversee. But those obligations, such as the duty to exercise care and avoid self-dealing, leave a lot of leeway for leadership decisions, experts said.

Those obligations can be further narrowed in a corporate structure such as OpenAI, which used a limited liability company as its operating arm, potentially further insulating the nonprofit’s directors from investors, said Paul Weitzel, a law professor at the University of Nebraska.

Even if investors found a way to sue, Weitzel said they would have a “weak case.” Companies have broad latitude under the law to make business decisions, even ones that backfire.

“You can fire visionary founders,” Weitzel said. Apple famously fired Steve Jobs in the 1980s, before bringing him back around a decade later. — Reuters

WASHINGTON – The United States will lay out the first international strategy to commercialize nuclear fusion power at the upcoming UN climate summit in Dubai, U.S. Special Envoy on Climate Change John Kerry will say on Monday, two sources familiar with the announcement said.

Fusion could have an important advantage over today’s nuclear fission plants that split atoms, as it does not produce long-lasting radioactive waste. If deployed successfully, it could also provide a cheap source of carbon-free electricity.

The former secretary of state will announce his plan to lay out the strategy that foresees strengthened cooperation with other countries aiming to speed commercialization on a tour of fusion company Commonwealth Fusion Systems near Boston. The UK and the United States on Nov. 8 signed a cooperation agreement on fusion.

Fusion, the process that powers the sun and stars to generate electricity, can be replicated on Earth with heat and pressure using lasers or magnets to smash two light atoms into a denser one, releasing large amounts of energy.

In August, scientists using laser beams at a national lab in California repeated a fusion breakthrough called ignition where for an instant the amount of energy coming from the fusion reaction surpassed that concentrated on the target.

Kerry, who as a U.S. senator more than a decade ago backed legislation that would fund fusion research at the Massachusetts Institute of Technology, will tour Commonwealth with Claudio Descalzi, CEO of Italian energy company Eni. Eni is working on four fusion research partnerships in Italy and the U.S., including one with Commonwealth.

“I will have much more to say on the United States’ vision for international partnerships for an inclusive fusion energy future at COP28,” Kerry said in a statement.

Decades of federal investment is transforming fusion from an experiment to “an emerging climate solution”, he added.

HURDLES

But there are hurdles to fusion’s producing commercial electricity. The energy output of last year’s fusion experiment at the U.S. National Ignition Facility was only about 0.5% of the energy that went into firing up the lasers, some scientists estimate.

Scientists have so far only reached scattered instances of ignition, not the many continuous ignition events per minute needed to generate electricity to power homes and industries.

There are also regulatory, construction and siting hurdles in creating new fleets of power plants to replace parts of existing energy systems.

Some critics say fusion will be too expensive and take too long to develop to help in the fight against climate change in the foreseeable future.

A source familiar with the planned announcement said the fusion strategy will be a framework that lays out plans for the global deployment of the technology that could gain support from international partners.

The source said COP28, which runs from Nov. 30 to Dec. 12, will “be the starting gun for international cooperation” on nuclear fusion, which Kerry will tout as a climate “solution, not a science experiment”.

Despite what scientists say is an urgent need for an energy transition to fight climate change, investment has slowed into many parts of the clean energy business this year due to economic uncertainty and inflation.

In 2023, international fusion companies have garnered about $1.4 billion in investments for a total of about $6.21 billion in mostly private money, the Fusion Industry Association (FIA) said, down from about $2.83 billion in new investment last year.

But the number of companies getting investments rose to 43 from 33, spanning a dozen countries, according to the FIA, including the U.S., where Commonwealth is one of about 25 companies. Other countries pursuing fusion include Australia, China, Germany, Japan, and the UK.

Of the two main types of fusion, one uses lasers to concentrate energy on a gold pellet containing hydrogen.

The other, on which Commonwealth and many other companies are focusing, uses powerful magnets to trap plasma, or gaseous hydrogen heated to about 100 million degrees Fahrenheit (55 million degrees Celsius) until atoms fuse. — Reuters

SINGAPORE – China is on track to meet a goal to bring its climate-warming carbon dioxide emissions to a peak before 2030, according to a poll of 89 experts from industry and academia published on Tuesday, though questions remain over how high the top will be.

More than 70% of respondents said China, the world’s biggest carbon dioxide emitter, will be able to meet the target, with two saying its emissions had already peaked, in a poll compiled by the Centre for Research on Energy and Clean Air (CREA), a Helsinki-based think tank.

Still, “experts remain concerned about how high the peak emissions would reach compared to previous levels,” CREA said, with a majority of respondents expecting the total to be at least 15% higher than the 2020 level.

Doubts have been cast on China’s ability to meet its 2030 pledge, as authorities continue to approve dozens of new coal-fired power stations to meet rising energy demand and avoid a repeat of the disruptive power outages that hit the country in 2021.

But CREA said respondents, including 64 based in China, were more optimistic about the country’s ability to meet its goal compared to last year, with the majority believing post-pandemic economic conditions were accelerating the energy transition.

Half of the experts surveyed by CREA said they believed China would reach peak primary energy consumption before the end of this decade, though nearly a quarter still forecast it would continue to rise even after 2035.

China’s reluctance to agree to a phasing-out of fossil fuels is expected to be a major sticking point at COP28 climate talks in Dubai starting next week, though Beijing is willing to agree to a new global plan to triple renewable energy capacity.

China also said in an agreement with the U.S. that it would “accelerate the substitution for coal, oil and gas generation” in order to secure “meaningful absolute power sector emission reductions” this decade.

CREA’s lead analyst Lauri Myllyvirta said last week it was likely China’s emissions had already gone into a “structural decline”, with renewable sources capable of meeting new energy demand. — Reuters