THE WALL STREET JOURNAL. **** Wednesday, October 2, 2019 |B5
BYSARACASTELLANOSMORNINGSTARMONHEIM AM RHEIN, Ger-
many— Bayer AG appointed a
prominent U.S. agriculture ex-
pert to its board in the chemi-
cals and pharmaceuticals com-
pany’s latest effort to convince
investors that it has its trou-
bled crop-science business un-
der control.
Bayer said Ertharin Cousin,
a former director of the United
Nations World Food Program,
would succeed German man-
ager Thomas Ebeling on its su-
pervisory board.
Large Bayer shareholders
had expressed concern about a
lack of expertise among the
company’s nonexecutive direc-
tors in assessing the difficulties
Bayer has faced since acquiring
U.S. agriculture company Mon-
santo Co. last year.
With the acquisition, Bayer
inherited thousands of lawsuits
claiming that Monsanto’s
Roundup herbicide causes can-
cer. Bayer has argued that
Roundup is safe, but it lost the
first three U.S. jury trials,
which sent its share price
plummeting and frustrated
shareholders.
As tension rose between
shareholders and management,
culminating in a rare no-confi-
dence vote at this year’s gen-
eral meeting, investors pushed
the company to beef up its le-
gal expertise and bring in more
people to oversee an agricul-
ture business that now ac-
counts for nearly half of group
sales.
Ms. Cousin, a lawyer by
training, served as the U.S. am-
bassador to the U.N. Agencies
for Food and Agriculture from
2009 to 2012 and held several
positions in the private sector,
such as head of public affairs
at U.S. supermarket chain
Albertsons.
Bayer Chairman Werner
Wenning said Ms. Cousin’s “ex-
pertise and international expe-
rience at the interface between
government, business, aca-
demia and civil society” would
give Bayer new perspective.BYRUTHBENDERBayer’s
Board Adds
Farming
Expert
especially for individuals who
are not necessarily computer sci-
entists,” he said.
Earlier this year, one of the
Morningstar teams came up with
an idea for a tool based on rein-
forcement learning that looks for
patterns in regulatory filings.
Liberty Mutual has 270 em-
ployees, including software engi-
neers and data scientists, partici-
pating in DeepRacer.
“It’s a fun way for people to
get practical exposure for what
are very important algorithms in
a safe environment where
they’re not going to mess up any
core business applications,” said
James McGlennon, the insurer’s
chief information officer.ered cars, that could include
such tasks as staying close to the
centerline on the track, minimiz-
ing wide steering angles and
turning to avoid barriers and
crashes.
At Morningstar, more than
450 software developers, equity
analysts and quantitative re-
searchers have formed nearly
100 racing teams in 10 countries
since January, when Mr. Rhodes
began allowing employees to use
the technology.
Morningstar has invested
“north of tens of thousands of
dollars” on the miniature cars
and training software to date, he
said. “It’s bringing the virtual
[world] into the physical space,about machine learning in a
more engaging way than reading
scientific articles, Mr. Miller said.
The algorithms are complex
because they gather data on
their own, instead of being fed
millions of images to learn from,
said Peter Stone, professor of
computer science at the Univer-
sity of Texas at Austin.
Mr. Stone, who is president of
AI software company CogitAI
Inc., isn’t involved with Deep-
Racer.
Programmers write code to
reward the algorithms when
they do something right, such as
winning a race or avoiding an
obstacle.
In the case of algorithm-pow-of investment research firm
Morningstar. Thanks to the
training, the company expects to
have dozens of projects based on
reinforcement learning and
other machine-learning tech-
niques in deployment by the end
of 2020, he said.
Reinforcement learning can
also be used to help robots walk
faster or to develop security sys-
tems that automatically adapt to
different environments. It’s “a
pretty complicated technology
and there’s a pretty steep learn-
ing curve,” said Mike Miller, gen-
eral manager of AI devices at
Amazon Web Services.
AWS developed the program
to teach software developersEmployees at companies in-
cluding Morningstar Inc. and
Liberty Mutual Group Inc. are
learning about advanced artifi-
cial-intelligence techniques by
programming and racing minia-
ture self-driving cars.
The DeepRacer league, devel-
oped by Amazon.com Inc.’s Am-
azon Web Services cloud busi-
ness, is designed to teach a
branch of AI known as reinforce-
ment learning. In this type of
machine learning, algorithms
learn the correct way to perform
an action based on trial and er-
ror and observations.
The technique is different
from a type of AI commonly
used in business called super-
vised learning, in which algo-
rithms have to be fed with la-
beled training data to learn to
recognize images or make pre-
dictions. Here, the cars supply
their own data: images collected
with cameras.
Anyone with an Amazon Web
Services account can participate
in the league. Teams or individu-
als can compete online in virtual
races or in person at events
world-wide.
Teams build and train AI al-
gorithms using Amazon Sage-
Maker software, deploy them to
self-driving cars measuring
about 10 inches, then race them
around a track of roughly 17 feet
by 26 feet.
“It’s actually having practical
applications,” said James
Rhodes, chief technology officerInvestigo GmbH, a small
Zurich detective firm, in a
statement provided to Credit
Suisse and Swiss authorities
last week said its mandate was
to follow Mr. Khan at a dis-
tance and take pictures of peo-
ple he met with.
—Pietro Lombardi
contributed to this article.had tracked that of Mr. Thi-
ams for two decades, and in-
cluded stints alongside the
CEO at McKinsey & Co., Aviva
PLC and Prudential PLC before
he joined Credit Suisse in
2015.
Mr. Khan joined UBS three
months after quitting Credit
Suisse. He negotiated the un-
usually short mandatory break
between jobs with Mr. Rohner,
also without the involvement
of Mr. Thiam, The Wall Street
Journal reported previously.
Mr. Rohner confirmed Tuesday
that he handled the departure
talks with Mr. Khan.
On Sept. 17 in Zurich, Mr.
Khan spotted an investigator
following him. Mr. Khan filed a
complaint with police, and Zu-
rich prosecutors last week
said “temporary arrests” had
been made as part of the re-
sulting probe.
Despite the fact that the
bank’s shares have lost about
half their value since Mr.
Thiam took over in 2015, big
shareholders have largely wel-
comed his restructuring
moves.
He quickly ramped up
Credit Suisse’s focus on selling
investment and trading prod-
ucts to ultrawealthy clients.
He promoted Mr. Khan, hired
in 2013 as the finance chief of
the wealth management arm,
to run the bulk of that busi-
ness internationally.
Credit Suisse on July 1 said
Mr. Khan would leave the bank
to pursue his career else-
where. In a statement, Mr.
Thiam wished him well. In late
August, UBS named him co-
head of wealth management.day that the review studied
company emails and Whats-
App messages between
Messrs. Thiam and Bouée in a
period from around Aug. 22 to
Sept. 23, looking at all com-
munication considered poten-
tially relevant.
“The Homburger investiga-
tion did not identify any indi-
cation that the CEO had ap-
proved the observation of
Iqbal Khan nor that he was
aware of it prior to Sept. 18,
2019, after the observation
had been aborted,” the bank
said.
Mr. Thiam in a memo to
staff Tuesday said that it was
regrettable that the reputation
of the bank had suffered, and
that the surveillance was
“strictly an isolated incident
and full accountability for that
incident has been taken by the
individuals concerned.”
The resignation of Mr.
Bouée is effective immediately,
the Swiss bank said. Mr. Bouée
couldn’t be reached for com-
ment. He hasn’t responded to
previous requests for com-
ment over the past week.
“The board of directors
considers that the mandate for
the observation of Iqbal Khan
was wrong and disproportion-
ate and has resulted in severeContinued from page B1Operating
Chief Cited
In Probe
reputational damage to the
bank,” the bank said. Bank of-
ficials added they believed Mr.
Bouée acted in the bank’s in-
terest.
A representative for Mr.
Khan said he wouldn’t be com-
menting on the review.
The bank-commissioned in-
vestigation found that Mr.
Bouée ordered the bank’s head
of global security services,
who has also resigned, to start
the observation of Mr. Khan.
Bank officials and lawyers
said they didn’t have access to
testimony or evidence gath-
ered by Swiss police or prose-
cutors, who said last week
they opened a criminal inves-
tigation into possible assault
and threat based on Mr.
Khan’s complaint.
A spokesman for the Zurichprosecutor’s office said Tues-
day the investigation is ongo-
ing. In the case of the security
consultant’s death, the spokes-
man said there has been no
evidence of misconduct or in-
volvement by a third party.
Mr. Bouée will be replaced
as operating chief by James
Walker, who has held several
roles at the bank including fi-
nance chief of its U.S. subsid-
iaries.
The career of Mr. BouéeCredit Suisse’s CEO
said the surveillance
was ‘strictly an
isolated incident.’BUSINESS NEWS
Race Cars Teach Machine Learning
Amazon league’s mini
self-driving vehicles
train workers on
artificial intelligenceMorningstar’s Mumbai office hosted a DeepRacer event last week. The league was developed by Amazon Web Services.sions, which make up only
about 7% of total revenue.
TD Ameritrade, meanwhile,
derives about one-quarter of its
revenue from trading. For
E*Trade, commissions com-
prise about one-fifth of total
revenue.
Some e-brokers may need to
merge with competitors to sur-
vive, JMP’s Mr. Ryan said. That
process has already been under
way, with TD Ameritrade ac-
quiring Scottrade in 2017.
Asset managers also have
been shaken by the shift to-
ward ever lower fees. Investors’
surging demand for cheap in-
dex funds has thinned the ranks
of Wall Street stock pickers and
rewarded those players able to
meet investors’ appetite for
low-fee products. In some cases
fees have sunk to zero.Continued from page B1Last summer, Vanguard said
it was making online trading
free for almost all exchange-
traded funds bought and sold
through its brokerage platform.
A month later, Fidelity unveiled
the first zero-fee index funds.
Fidelity later expanded the
number of ETFs that trade free
on its own platform to more
than 500.
Fee-free financial advice also
is cropping up, disrupting the
business of old-school financial
advisers which typically charge
1% to 2% of a client’s assets an-
nually.
In 2014, Schwab announced
its system that uses algorithms
to provide portfolio-manage-
ment services. For some cus-
tomers it has waived fees for
the digital advice in exchange
for a relatively high cash allo-
cation that flows into Schwab’s
bank.
Online brokerages recently
have lost ground to the likes of
Robinhood.
Founded in 2012, Robinhood
has amassed around six million
users with its smartphone app
that lets investors buy and sell
stocks without paying a fee.
A spokesman for Robinhoodsaid, “The changes taking place
across the brokerage industry
reflect a focus on the customer
that’s been inherent to Robin-
hood since the beginning.”
Even the biggest, boldest
names in financial services
have been forced to play this
game. JPMorgan Chase & Co.
last year unveiled its You Invest
product, which offers custom-ers at least 100 free stock or
ETF trades a year and is aimed
at younger, first-time investors.
Bank of America Corp.’s Merrill
Edge also offers some commis-
sion-free online stock and ETF
trades, an offering it expanded
in February.
To make money, zero-com-
mission brokerages like Robin-
hood rely heavily on a practice
called “payment for order
flow,” in which they route cus-
tomers’ orders to buy or sell
shares to electronic-trading
firms such as Citadel Securi-
ties and Virtu Financial Inc., in
return for cash payments.
Schwab’s move on trading
fees is set to take effect Oct. 7.
It applies to commissions for
stocks, exchange-traded funds
and options listed on U.S. or
Canadian exchanges.
The financial-services com-
pany currently charges a com-
mission of $4.95 for online U.S.
stock, ETF and options trades.
Charles Schwab said clients
trading options will continue to
pay 65 cents a contract.
“We don’t want to fall into
the trap that a myriad of other
firms in a variety of industries
have fallen into and wait toolong to respond to new en-
trants,” Chief Financial Officer
Peter Crawford said in a note
on the company’s website. “It
has seemed inevitable that
commissions would head to-
wards zero, so why wait?”
Other online brokers grap-
pled with the prospects of a
race to zero.
A Fidelity spokeswoman de-
clined to say whether her firm
was considering a commission
cut of its own. “We will always
look for ways to leverage our
scale to deliver even more
value,” she said.
Vanguard is “happy to see
others in the industry continue
to follow our lead in reducing
the cost of investing,” a spokes-
woman said. E*Trade didn’t re-
spond to requests for comment.
Interactive Brokers said it
welcomed Schwab’s announce-
ment, which came just five
days after the firm unveiled its
commission-free “IBKR Lite”
platform.
“The more the merrier,” the
company’s Chairman and CEO
Thomas Peterffy said in an
email.
—Justin Baer and Dawn Lim
contributed to this article.Schwab
Cuts Trade
Fees to Z e ro
*Data are for the second quarter of each year.
Source: company reports and JMP SecuritiesSchwab’saverage
tradingcommission*$4001020302001 ’05 ’10 ’15 ’19Ertharin CousinANDREW MEDICHINI/ASSOCIATED PRESS
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