Huawei finally charged by the U.S. Justice Department

After months of rumors and dramatic news, like the arrest of Huawei's CFO while in-transit in Vancouver, we finally know what the U.S. is officially charging the company of: bank fraud, wire fraud, and violating U.S. sanctions. 

The charge goes as far back as ten years, alleging that the arrested CFO, Meng Wanzhou, intentionally covered up the company's relationship with a subsidiary, and misled banks about where money was really going:

According to the indictment, Meng in 2013 made a presentation to a bank executive in which she repeatedly lied about the relationship between Huawei and an Iranian company called Skycom. U.S. law prohibits banks operating in the United States from processing dollar transactions related to Iran through the United States.

Worse still? Authorities found evidence that the company offered rewards for employees that stole trade secrets, and when it discovered that the FBI was beginning an investigation, began relocating U.S. based employees back to China, out of the FBI's reach to avoid interviews.

U.S. relations with China are frostier than ever right now, and this news is likely to worsen the angry words the two have been lobbing over the fence over the last few weeks. With such a dizzying array of charges, it's hard to know what will happen to the company, at least on American soil: will it receive simply a fine, or are authorities considering going further and blocking the company from operating there entirely?

If this were to result in a similar ban to that of ZTE, which devastated the company in a matter of weeks, Huawei could end up in a similar situation despite having a much more global reach. Stay tuned, this wild ride isn't over yet.

Speaking of China...

There's a lot of movement, and slowdown, in China right now:

  • Research firm Canalys just announced that smartphone shipments fell 14 percent in China last year. That's interesting, considering that Huawei sales there are growing and iPhone sales are not.
  • Nvidia just blamed a 'deteriorating' Chinese market for a sizable upcoming earnings miss, saying it'll come in $500 million lower than expected. 
  • Apple has struggled to move production of even simple hardware to the U.S, and says it'll be staying in China for a long time to come.
  • All of this is spooking the market, which fell dramatically on basically all of today's news.

Tab Dump

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