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WatchdogRaps FAAOversightOf BoeingReport notes lack ofurgency at agency andplane maker after firstcrash in October 2018

A protester was seized by police during a march Wednesday in Hong Kong against China’s new national security law.

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LOS ANGELES—For most ofthe spring, California seemed acoronavirus success story. Now,just weeks after it began toease lockdown restrictions, newcases of Covid-19 are explodingacross the U.S.’s most populousstate, and public officials arequickly retrenching.

On Wednesday, Gov. GavinNewsom outlined a slew of newrestrictions, including the man-datory closure of many barsand indoor restaurants, an ef-fective admission that, afterproceeding slower than otherstates in the early months ofthe outbreak, California re-opened too quickly.

Nearly 6,000 people testedpositive for the new coronavi-rus in the state Tuesday, andmore than 7,000 on Monday,the highest total during the

Who Is the Mystery ShopperAbandoning Thousands of Carts?

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Online merchants see lots of browsingby John Smith, but no buying

John Smith started shop-ping early on a recent Wednes-day and didn’t stop for days.

He visited an auto-supplysite where he loaded his cartwith a replacement turn-signallever, emergency strobe lightand two dozen other items. Hehopped over to a home-goodsmerchant for another 10 itemsincluding wood picture frames,address plaques, a towel rackand mailbox. He ordered oneof every kind of baby bundle,ranging from about $80 tonearly $500, from a site thatsells infant sleeping boxespopular in places such as Fin-land.

When the roughly 48-hourspree was over, John Smith did

what he always does. Hewalked away without buyinganything.

For more than a year, onlinemerchants selling items rang-ing from kayaks to keychainshave puzzled over the mysteryshopper with the generic namebehind thousands of aban-doned carts. Each cart hasonly one item.

It is more than a nuisance.John Smith’s activity skewsanalytics that online mer-chants use to advertise andmake other critical businessdecisions. The shopper alsouses a bunch of bogus emailaddresses, and sellers getwarned by their internet ser-vice providers for sending fol-low-up pitches to phantom

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BY PAUL ZIOBRO

Safety fixes after the firstBoeing Co. 737 MAX crash be-came snarled in Federal Avia-tion Administration delays andrepetitive analyses, wasting anychance U.S. regulators had toprevent the second fatal acci-dent, according to an investiga-tion by the Transportation De-partment’s internal watchdog.

The 52-page report re-leased Wednesday reiteratedpreviously known lapses bythe FAA and Boeing duringinitial safety approval of theMAX, but it also raised addi-tional questions about theseeming lack of urgency bothsides displayed during the fivemonths between the twocrashes to develop and imple-ment a safety fix covering theentire fleet.

Following the first MAXcrash, in October 2018, it tookthe FAA four months to agreeon a timetable for implement-ing fixes once they were de-vised, according to the reportby the DOT inspector general.

The narrative releasedWednesday also revealed thatFAA officials spent monthsconducting an inconclusive in-ternal review of problems withthe plane’s original certifica-tion. Launched in January2019, the review got boggeddown in bureaucratic proce-dures, never got finished andeventually was abandonedwhen a second MAX wentdown that March, according tothe inspector general.

The inspector general’s re-port provides fresh ammuni-tion for FAA critics in Con-gress who argue agencyofficials wasted their chanceto act swiftly and decisively toprevent the second, similarMAX crash that occurred less

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BY ANDY PASZTOR

HONG KONG—Thousands ofprotesters, unbowed by asweeping new national secu-rity law imposed by China,staged the largest show of de-fiance in Hong Kong this year,with some risking heavy

prison terms to chant slogansof liberation and demand inde-pendence.

Hundreds of Hong Kong po-lice officers moved in swiftlyto quash dissent and imple-ment the law, which gives Bei-

By Dan Strumpf,Mike Bird

and JoyuWang

jing much greater powers topolice the city and punishthose accused of subversionand supporting separatism.Police fired tear gas, pepperspray and water cannons todisperse protesters and raiseda banner to warn them thatthey could be violating thenew law.

At the end of Wednesday—the anniversary of HongKong’s 1997 handover fromBritish colonial rule—the pro-tests had dissipated, and po-lice had arrested about 370people, including 10 under thenew law, which one seniorChinese official described as a

birthday present to the city.Beijing faces difficulty in

suppressing dissent in a citythat has become a global fi-nancial hub built on the ruleof law and Western-style free-doms. The new security law,which carries penalties of upto life imprisonment, risks fur-ther inflaming antigovernmentsentiments in the city andtriggering responses fromWestern nations that criti-cized it as the greatest erosionof the city’s promised auton-omy since the handover.

U.K. Prime Minister BorisJohnson on Wednesday calledthe law a “clear and serious

breach” of an agreement withChina to keep Hong Konglargely autonomous until 2047.He said the U.K. would retali-ate with new rules making iteasier for around three millioneligible people from its formercolony to emigrate to the U.K.

One 78-year-old womanamong the protesters said shefled to Hong Kong in the 1970sto escape Communist Partysuppression during China’s

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Hundreds Arrested in ProtestsOver Hong Kong Security Law

InsideModerna, UnexpectedVaccine Front-Runner

It has no track record and an unsparing CEO. Can it yield a breakthrough?

Putin Wins Vote to Stay in Power

Russian President Vladimir Putin voted Wednesday in Moscow,as the country overwhelmingly approved constitutional changesthat would allow him to stay in power until 2036. A18

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U.K. offers refuge toterritory’s residents............. A10

New law erodes Hong Kongpress freedom......................... A10

THEMIDDLE SEATHow United’s new CEO

responds to thepandemic will shapeflying for years. A11

BUSINESS & FINANCESecond-quarter carsales fell sharplydespite deals anddiscounts. B1

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ployee turnover, according to current and for-mer staffers. Mr. Bancel’s admonitions ofsome underlings in group meetings motivatedsome to do better, and others to leave.

Today, Moderna represents one of theworld’s best shots at stemming a historic pan-demic. It’s a front-runner in the hunt for acoronavirus vaccine, vying against industryheavyweights with proven track records. Thequestion is whether Moderna’s vanguard sci-ence and tough management style is the rightrecipe for a vaccine breakthrough.

This summer, the U.S. government plans tofund and conduct decisive studies of three ex-

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At the year’s start, few outside the world ofbiotech had heard of a Boston-area companywith a New Age name and unproven approachto drugmaking. Most in the industry who didknow Moderna Inc. doubted its prospects. In-vestors barely had interest in the company,which had yet to produce a medicine.

Moderna and its staffers were dealing withother pressures. For nine years, chief execu-tive officer Stéphane Bancel nurtured a high-stress environment at the Cambridge, Mass.,company, characterized by high expectations,sharp critiques of workers and heavy em-

BY PETER LOFTUS AND GREGORY ZUCKERMAN

pandemic and a 45% increaseover the same day a week ear-lier. Hospitalizations are upmore than 50% from two weeksago, and the death rate is up16.8%. The percentage of testscoming back positive was 6%on Tuesday, up more than a fullpercentage point from twoweeks earlier.

Los Angeles County, home toa quarter of the state’s 40 mil-lion people, recorded nearly2,800 new infections Tuesdayand a record 2,903 on Monday.Sacramento County was almostout of open ICU beds Wednes-day. In Imperial County, in thestate’s southeast, patients arebeing transferred elsewhere be-

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BY IAN LOVETT

Covid-19 Success StoryUnravels in California

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States tighten rules for bars,citing infection risk................ A6

Companies wrestle with virusdisclosure...................................... B1

CONTENTSBusiness News B3,5-6Capital Account.... A2Crossword.............. A14Heard on Street. B12Life & Arts....... A11-13Management.......... B6

Markets..................... B11Opinion.............. A15-17Sports....................... A14Technology............... B4U.S. News............. A2-8Weather................... A14World News... A10,18

s 2020 Dow Jones & Company, Inc.All Rights Reserved

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What’sNews

Thousands of protesters,unbowed by a sweepingnew national-security lawimposed by China, stagedthe largest show of defi-ance in Hong Kong thisyear, with some riskingheavy prison terms. A1, A10 California’s governoroutlined a slew of new re-strictions amid an explosionof Covid-19 cases across thestate. Officials in New Yorkand Michigan also enactednewmeasures to contain thespread of coronavirus. A1, A6 Russians voted over-whelmingly to changetheir country’s constitu-tion, paving the way forPutin to remain in powerfor years to come. A18 The House passed a billextending the timelineinto next month for smallbusinesses to apply forforgivable loans, buildingon a surprise vote in theSenate a day earlier. A3 Trump threatened toveto an annual must-passbill if senators don’t re-move language that wouldrequire the Pentagon to re-name military bases thathonor the Confederacy. A4 Netanyahu’s plan to be-gin annexing parts of theoccupied West Bank thismonth faces a delay as theU.S. had yet to declare itsfull support for the move,Israeli officials said. A18 A federal judge struckdown the Trump adminis-tration’s policy barringnearly all Central Americanmigrants and others fromapplying for asylum at theU.S.-Mexico border. A3

Safety fixes after the firstBoeing 737 MAX crash

became snarled in FAA de-lays and repetitive analyses,wasting any chance U.S.regulators had to preventthe second fatal accident,according to a probe by theDOT’s internal watchdog. A1Major auto makersposted sharp drops in sec-ond-quarter U.S. vehiclesales, as sweet discountsand financing deals weren’tenough to offset factoryand dealership closures. B1Macy’s said nearly all itsstores have reopened, thoughit warned it could take othermeasures as states tallymorecoronavirus infections. B1McDonald’s is pausingthe reopening of dine-inservice in the U.S. amid therise in coronavirus cases. B3Apple is temporarilyclosing dozens of U.S. storesas the pandemic worsensin certain regions. B2 SoftBank is looking todistance itself fromWirecardafter helping to arrange a$1 billion investment monthsbefore the German fintechcompany went bust. B1, B4 John Paulsonwill converthis hedge-fund firm into afamily office, amove long tele-graphed as assets at his firmfell and returns declined. B1 The S&P 500 and Nasdaqrose 0.5% and 1%, respec-tively, in the first session ofthe quarter, while the Dowindustrials slipped 0.3%. B11 Saudi Arabia has threat-ened to ignite an oil-pricewarunless fellow OPECmembersmake up for their failure toabide by the cartel’s recentoutput cuts, delegates said.B11

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