German wings crash are suing the Arizona Flight School the pilot attended. He crashed the plane in the french alps, killing all 150 people on board. He was treated for depression before taking flying lessons. Tax officials from around the world met in paris today to discuss the fallout from the massleakage of Financial Data from the Panama Papers. They expose how the wealthy used Shell Companies to dodge tax obligations. If they defeat the memphis grizzlies, they will complete the season with a 73 wins, the most in history. Global news 24 hours a day, powered by over 2400 journalists in 150 bureaus around the world. Emily im emily chang, and this is bloomberg west. The latest from facebook, is the companys ad business facing a decline, and what type of hardware can they work on . All of that, ahead. Plus, a serious setback, regulators calling for a ban on founder Elizabeth Holmes, and a stop on medicare payments to the company. We will bring you the latest. And senators release a longawaited draft of encryption legislation that would force companies to comply with court orders for data. We will break down all the details. First to our lead, reports that u. S. Regulators are looking to leader Elizabeth Holmes from the company for two years. The president would also be barred, according to the wall street journal. They had a letter for centers to medicare services, proposed sanctions banning her from receiving payments from medicare. Over the last few months, the tests were not as accurate as they should be. Sheila is with us from new york, and max mason from our fast commentary section, as well, and greg ingles, chief executive of a clinical lab consulting, a firm that audits labs. And our guest host for the hour, keith rabois. Sheila, i will start with you. You did an indepth piece on theranos, and spoke with various people at the company. How serious is this . Sheila it is potentially devastating information for them. It is their main regulator, they have sent these proposed sanctions, send out this letter on 18th of march. They are saying theranos has not taken adequate steps to address insufficiencies that they found in their main lab. They were inspecting at the end of last year, and they sent the company a letter with five things they wanted addressed, including hemoglobin testing. Now it is saying the laboratorys obligation of compliance is not credible, and evidence of correction is not acceptable. They are basically telling theranos that they are unhappy with how the company has tried to address their concerns, and theyre threatening one of the harshest sanctions that they can place on any lab, which is to revoke their license and put them out of business. Emily a spokesperson says this is hypothetical. If sanctions are imposed, it could take months. The fact is, we have not received sanctions. Greg, you actually audit labs like this. You read through the entire report. What is your reaction . Greg frankly, anyone who is , and we havea lab had several of our senior inspections go over the finding, and had a discussion, they take a while. A lot of the beginning of the documentation books about 150 pages of citations, they were pretty cut and dry. Isgets worrying, when it across multiple departments, not just Standard Operating Procedures not being followed, but multiple Quality Control fails. It is as bad as we have ever seen. That is where it stands. There is a lot of stuff mostly centering around the competency of the personnel in some of the labs. Ive seen up to a 20, 25 page report. A lot is rectified in the paperwork process, but there are some fundamental things that are very, very wrong. They have not been addressed properly. The supporting documentation was not there to address the deficiencies. And that is why they were upset. Emily keith, this was a 10 billion company. Investors put money into the company, and did not have visibility into what is going on. It does not make Silicon Valley look very good. Keith this company is novel in a few different ways. First of all, it is a heavily regulated industry. When the company was not operating in the greatest zone, from what i could tell, it was operating in the black zone. I think companies and startups should take advantage of ambiguity, but there is a difference between violating a law, and violating regulations intentionally. Emily they say they flunked lab and operating where there is no right answer. 101. Keith right, and that is not ok for any startup. But they should do more like uber has done, where there is a gray zone. That is perfectly acceptable for startups, that is how we get innovation in america and the world. But where there is a clear line you cannot violate that line, ever, especially in a federal area. I used to be a litigator, i think the chance of challenging these sanctions is the burden is zero. So high in this particular case. This is a really significant sanction. If the sanctions happen, the company will have a lot of problems. The other is in this company is anomalous, there were no other traditional Silicon Valley bcs in this round. This did not go through standard diligence, that the companies we typically invest in, every day, would. That is one of the variables that is unique. Emily it is interesting, max. Theranos has failed to provide evidence that the tests actually work. That is the main thing regulators want. What is your take on what is going on here . Max it shows a pattern of behavior from the company, all that observers have ever wanted is detailed data, purity of studies, things that are really standard in the medical establishment, and especially, should be, for anything having to do with peoples health. The company says they will continue to provide data, submit to studies and medical conferences. But they have never given a timeline or unleashed visibly to the public. With this latest round of allegations and the potential suspension of their license, i think the time for them to continue a black box with their data is running out for the company. Emily max, sheila, greg, thank you all. Keith, youre sticking with me. Up next phase two of the , Facebook Developers process conference included a Virtual Reality headset, a selfie pick, coders. Om full of i interviewed the ceo on their ambitions and potential sharing problems, next. Emily turning now to facebook, shares of the social media giant slumped more than 3 at amid one point, heavy trading volume, among comments that spending on facebook was down 18 from the quarter before. Shares of later recovered after ad parlor clarify, just a junior level employee made that comment, and his data was incomplete. He did not provide proper context. Such a briefing will not happen again. In the meantime, their Developers Conference continued, with Mike Schroepfer talking about zuckerbergs 10 year plan. His keynote included a virtual selfie stick demonstration, showing the potential of social, Virtual Reality. I caught up with him later and talked about his new hire, regin a dugan. We are super fortunate to have her. There are so many things for us to do, so many things we want to embark on that we have not done yet. She is going to start kicking off some of those new initiatives. It is a little early she has not to talk about what she is going to do she has not gotten in the , building yet, but we hope to achieve this ambitious, 10 year mission that mark set out for us. Emily she worked at google. Broadly, do you see her working beyond these actual scenes . Mike she is going to be building things that are missionaligned. Everything we do is to connect the world. There is a lot under that umbrella. She will be doing things you have not seen from us, maybe like oculus, it will be confusing in the beginning, because people will be putting together the pieces. But it will all come together in terms of how this comes together to our mission. Emily i want to talk about personal sharing, because we have heard it is down on facebook, as opposed to news, or article sharing. What is actually happening with personal sharing, and what are you doing algorithmically, what do you want to be happening with personal or other types of sharing . Mike so many things are happening at once. Youre seeing the rise of live video, people watching a lot of live video. More news is consumed on facebook. The same thing happening where people are sending lots of private messages, the other whatsapp messenger. It will be interesting to see how this all shakes out. Emily what is the ideal mix . What you going for . Mike we are going for what people want. The right medium for the right conversation. There are times when you want to share something with all your friends, and times you one to share something with the whole world. There is probably a proper experience for each of those that we want to make our own. Emily on this personal sharing thing, algorithmically, what do you want . Are you algorithmically doing things to encourage more personal sharing . It is like an existential problem, because you actually have power over what people see. Algorithmically, how are you handling that . Mike there is lots that we do with news feed all the time. Where we askes people, did you like the stories you saw, would you like to see these things instead . Part of the goal is to give people what they really want. I said on stage here are all the , possible things you want to read, what are the things you actually want to see . If we dont build products that is the end goal. People like, it is a competitive market, and people will go use other things. Emily doesnt that change all the time . Mike things change. People did not know they wanted video and mobile, and now they do. We are seeing the rise of immersive video and vr, something we could have only dreamed of. Emily do you worry that this could hurt personal sharing, and what makes facebook great . Mike i dont think so. You want to watch something on tv, or go to a concert, humans are pretty natural about finding different groups they want to interact with. I think we can build products that hit all of those interactions. Emily lets talk about the virtual ai assistant. It is taken longer than we have expected. Mike it is not taking longer than expected, it is a test. I talked about some of the technology we have been employing to automate this and make it work well. The things of that is different about this, it is a mix of humans and artificial intelligence. What you can do is unlimited, you can do anything you want. It is a much Broader Service that develops, these technologies we will need over the decades. Emily facebook has built multiple platform products, mass distribution, and then changed spam,les to cut down on for example. But there are still investors out there that are skeptical. Should we invest our time in facebook . How concerned are you over that . Mike developers are smart and will use the tools for them. They this is a challenge in the are going to find ways to get distribution. Entire ecosystem. You talk to a developer, and how did they get featured on an app store or get more downloads . That is a very competitive market, very tough. Channels like messenger, maybe new channels are interesting for people. We are seeing tremendous pickup of navigation apps, ways for people to get reengaged. If we provide the right tools, to give people distribution, they will use it. Emily on the other hand, i have seen an uptick on messenger itself. What are you doing about that . Mike a lot of the work we are doing in ai and other systems, are there to help with spam. Im not sure if your experiences are indicative of what others have seen, but if there are 20 60 billion messages a day, we do our best. Emily my interview with ceo facebook Mike Schroepfer. I want to bring back my guest. I want to pick up keith with this idea of personal sharing. Because you have something to say about it. First of all, you chuckled when i asked what was the ideal mix. You said it is what people want. What is your reaction to that . Keith it is the best possible case mike is making, a substitution going on between private content shared between friends and family, to more broadly applicable content, streaming, orlive very private messaging. That is the best case. Without a doubt, a year ago, there was a significant decline in sharing new content on facebook. The executive team on facebook went into a panic from the very top down, to remedy this. So it is not something they are not concerned about. They signaled the red alarm, or send the bat signal internally. If you open your facebook app, you will see all the recent photos you have taken our prepopulated encourage you to to encourage you to share that photo or link. Facebook has a clever growth team, with very smart people working on encouraging users to share more. Mark is always focused on sharing. But maybe it has to change over time, but it will change, if sharing continues to decline. Emily Facebook Says sharing is overall very strong. One said, if there is a decline, facebook becomes a wellcurated twitter. You said it true, but if total sharing is in decline, which it has been for over a year, facebooks statement says sharing rates are on par. And you said that that was misleading, and talk about some of the panic, and say you might short twitter and facebook. Keith obviously misleading, if your executive team makes the number one priority sharing. The it depends on red alarm if it depends on youre happy with the results. What methodology you use. Back in the day, we could calculate what percentage of our users came from ebay in five different ways. Some were positive, some were worse. There is always room for how you describe the data publicly. That is why i say it is arguably misleading. It is clear that private sharing of content, content unique to me and my crowd is on the decline. , what is not there, is the total mix of sharing, how that is calculated, and what it is including. Is it including messenger . Messenger content must be going up, but it is not something me and my family could consume. We would not assume that, by intent. It changes the nature of facebook, and the longterm viability of facebook. Emily interesting. My colleague was recently speaking with someone no longer invested in facebook, and asked if you would like to invest again today. Take a listen. Yes, it would be. How about twitter . Evaluate companies regularly. As we are out of some of the positions, i dont follow them very closely. Emily not really interested in twitter at all, it seems from that statement. What do you see on the path for twitter, and for facebook, if overall user growth on twitter has plateaued, and on facebook, things are changing. The whole idea of what facebook is. Keith it is dangerous when you have a monopoly, a network effect. Flux may not always be your friend, it may take a while for people to figure out how to take advantage of that, or what it means for users. For example, private sharing may be better for snapchat, and public sharing better for things like twitter, which have a followmodel. When i want to proselytize to the world, i would rather send this to the broadest possible audience, which is better for twitter and facebook. For example, depending on how the content mix shifts depending , on how it shifts, the structural advantage of Many Companies may shift, also. He may be right about shorting twitter, but it could also be better for twitter if all the content shared in the world is mostly around politics and peoples perspectives on society, rather than things intimate to themselves. Emily interesting. Keith rabois with me for the hour. As we had to break, check out gopro spiking the most in two months. The company has gotten key talent. Details, next. Emily turning now to the broader markets, u. S. Stocks climbed the highest in four months. Bloombergs Ramy Inocencio joined us in new york, with what tech movers moved particularly far. Ramy basically, it was a broad green across the board. Lets see where the numbers stand. S p 500 up 1 , but that was the least of the gainers. The dow up higher, the nasdaq of the most, at 1. 5 . That is its highest since new years eve. Also, this good chinese data that we saw as well as earners , of these estimates over a jpmorgan. Lets take a look at some of the biggest point gainers at the nasdaq. This is where they are. Apple up by 1. 5 , but amazon even beat that, up by nearly 2 , alphabets up by 1. 2 . All seeing gains not seen in the past two or three months. In addition to that, i mentioned good chinese data. What we are seeing, here in the u. S. , chinesebased stocks are going above because of that data. On the order of 3 or even 5 in particular, the reason for this is because of chinas overseas shipments. Rose, a sign, they that chinas economy could be strengthening. Also, i want to look at a couple of stocks in the playful sector. First to activision, rising to a little more than 5 here. Boosting their price target up to five dollars. They say to expect a record year for blizzard, based on a new game. And they are optimistic on call of duty. Gopro shares rallying the most since july of 2014, up by a little more than 19 here. The news off of this, is a rare defection from apple to gopro. But danny custer, one of apples longestserving designers since could be pushed by gopro to be a 1990, little more classy, get some of the magic back. Emily . Emily all right, new yorks Ramy Inocencio. Coming up, draft encryption legislation is out, mandating that companies would have to comply for court orders requesting access to data. Show me movies with explosions. Show me more like this. Show me previously watched. Whats recommended for me. X1 makes it easy to find what blows you away. Call or go online and switch to x1. Only with xfinity. Carmakers are leading the best advanced since january, taking control of losses. The dollar fell the most since november, after the Monetary Authority said they would no longer see currency appreciation. Shows important economies are stagnant. It is the first time they have gone to a new currency standpoint from a recession. And it has been revealed that China Securities finest corporation is a top 10 shareholder in more than 600 companies, including the countrys biggest names. More than 80 , stateowned enterprises. They have been forced to reveal their stock holdings. Those are the headlines for bloomberg news, powered by over 2400 journalists in 150 bureaus thend the world, lets get latest from markets for you right now, he