KPMG scandal goes global, whistleblower rebuffed at the top

Good morning. Here’s what happened overnight and what you need to know today.

1.

KPMG global: KPMG’s whistleblower scandal has gone global, with The Financial Times reporting that KPMG’s whistleblower took his allegations to the firm’s global bosses after getting no satisfaction at home, but was rebuffed there too. The whistleblower alerted KPMG International chair Bill Thomas and global general counsel Anne Collins to the allegations in May 2025, about a year after first raising them with KPMG Australia, the paper said citing unnamed sources. KPMG International declined to investigate, with law firm Freshfields endorsing the position that it lacked authority to launch a probe. Back home, RBA governor Michele Bullock yesterday confirmed the central bank will re-tender multiple contracts with KPMG, including its FairCall whistleblower hotline worth $10,000 a year and its immigration services, after the consulting firm admitted it failed to adequately address its whistleblower’s allegations. Bullock told a senate committee hearing she did not think the central bank would reappoint KPMG to the whistleblower service, and signalled broader reluctance to contract with KPMG in future in light of allegations including unethical use of information to win contracts, mistreatment of whistleblowers and use of AI to cheat in exams. “I think we’d be looking very closely at KPMG,” Bullock said. Superfund Rest also told Bloomberg it was “concerned by the information in the public arena” and was seeking more information. (Capital Brief)(FT)(Bloomberg)

2.

Star power: SpaceX filed its Australian prospectus ahead of a 12 June offering that could value Elon Musk’s company at USD1.75 trillion, warning local retail investors that “an investment in SpaceX is highly speculative and you may lose the value of some or all of your investment.” Billed as the largest IPO in history when it floats on the Nasdaq, shares will be offered directly by lead Australian broker CommSec, with Macquarie Capital named Australian coordinator. The company aims to raise USD75 billion. Australian investors must apply for their allocation by 10 June with no Australia-specific allocation set aside, and the prospectus warns applicants may receive less than they applied for or nothing at all. Analysts have warned the valuation appears inflated as the offer generates massive hype, with investors around the world expected to vie for shares. CommSec will be eligible to collect a fee of 0.2% of the shares it allocates. Law firm Gilbert and Tobin received $1.8 million as Australian legal adviser and Mallesons received $750,000 for acting as adviser to the underwriters. (Capital Brief)

3.

Rocket fuel: Wall Street banks are competing to offer exclusive events over the coming week for wealthy clients seeking a slice of the SpaceX IPO, with JPMorgan boss Jamie Dimon hosting a livestreamed discussion with SpaceX president Gwynne Shotwell and CFO Bret Johnsen for more than 2,500 clients. According to reports, Bank of America is hosting a similar event headed by co-president Jim DeMare with the same SpaceX executives, streamed to more than 5,000 clients across its private bank and Merrill Lynch. Morgan Stanley has blanketed its Times Square headquarters with SpaceX branding, while Goldman Sachs installed silver rockets in its New York lobby. Goldman and Morgan Stanley are co-lead on the deal, with 23 banks in total working on the listing. The roadshow kicked off with a 17-minute video pitch on Thursday, with the share sale scheduled a week after on 11 June and trading to begin on the Nasdaq the following day. Meanwhile, the FT reported Goldman Sachs is pitching a USD1.78 trillion valuation on projections that SpaceX’s AI division revenue will surge roughly 100-fold from USD3.2 billion in 2025 to USD322 billion by 2030. SpaceX’s total revenue is expected to reach USD474 billion in 2030 from USD18.7 billion last year, the paper said citing Goldman’s projections. Elsewhere, crypto exchange Coinbase launched perpetual futures contracts tied to SpaceX for its international customers. (Bloomberg)(Reuters)(FT)

4.

Credit gate: Blackstone became the latest asset manager to cap withdrawals from its flagship private credit fund after investors sought to pull 10% of shares in the second quarter, a new record. The firm capped withdrawals from its flagship USD45 billion private credit fund, limiting redemptions to 5%. The move follows rivals Apollo Global Management, BlackRock, KKR and Ares Management, which capped redemptions earlier this year. It comes after Cliffwater’s flagship USD31 billion private credit fund earlier this week disclosed investors sought to withdraw 17%, while Swiss firm Partners Group capped withdrawals at one of its evergreen private equity funds. Underlying the stress, the official private credit default rate reached 6% as of the end of April, a record high since the inception of Fitch Ratings’ gauge. “The disease is spreading,” said Pierre-Yves Gauthier, chief executive of AlphaValue. Brett Klein, global head of corporate credit at Sculptor Capital, told the Bloomberg Global Credit Forum this week that investors are simply “recognizing that the double-digit returns in private credit are several hundred basis points lower.” Blackstone’s fund accounts for more than a tenth of the management, advisory and performance fees the firm drew in last year, and commitments have dropped 70% from their average monthly haul in 2025, the FT reported. (Bloomberg)(FT)

5.

Dip buyers: The Dow Jones Industrial Average hit a record high overnight as a wave of dip buying powered a rebound in stocks, with traders looking past Broadcom’s underwhelming outlook to fuel gains in healthcare and financial stocks. The S&P 500 was 0.48% higher in late afternoon trading in New York at the time of writing. The Dow was up 1.80% and the Nasdaq was little changed. A slide in oil helped sentiment as a US-mediated ceasefire between Israel and Lebanon offered to ease the way toward a peace deal, even as the truce was rejected by Hezbollah. Broadcom’s shares tumbled more than 11% after its forecast for AI semiconductor revenue of USD16 billion in the fiscal third quarter fell well below analyst expectations of USD17.2 billion. “The market is no longer paying endlessly for AI stamped on the box,” Mark Malek, CIO at Siebert Financial, said. Elsewhere, Bitcoin headed for its largest weekly loss since November 2022, falling as much as 5.5% to USD61,344 on Thursday after Michael Saylor’s Strategy sold bitcoin. (Bloomberg)(Reuters)(FT)

6.

No progress: A US-brokered ceasefire between Israel and Lebanon appeared to have had limited, if any, effect overnight, with Hezbollah leader Naim Qassem rejecting the deal hours after it was announced, calling it “absurd” and saying it amounted to a demand that his group surrender while Israel continued its offensive. Qassem said any ceasefire must include an end to Israel’s military campaign and its withdrawal from Lebanon, where Israeli forces have occupied broad stretches of territory since invading in March, the NYT reported. Israeli airstrikes continued to pummel southern Lebanon on Thursday, and Israel’s defence minister Israel Katz said the hundreds of thousands of people displaced from the south would not yet be allowed to return. Iran’s foreign minister Abbas Araghchi said “no tangible progress has been achieved in the negotiation process” with the US, the semi-official Tasnim news agency reported. US President Donald Trump said ceasefire talks were in the “final” stages, even after Iran fired missiles and drones at Kuwait and Bahrain, killing one person and injuring dozens at Kuwait’s main airport. Separately, Iran allowed UN atomic watchdog monitors to visit its Bushehr nuclear power plant this week but stonewalled inspectors’ demands to verify the condition and location of its enriched uranium stockpile, Bloomberg reported, citing an IAEA report. (NYT)(Bloomberg)

7.

Meta attacks: Mark Zuckerberg’s tech behemoth yesterday attacked Labor’s News Bargaining Incentive as “discriminatory” and a violation of the Australia-US free trade agreement in a scathing submission, echoing an April statement from White House spokesman Kush Desai who warned Trump remained “committed to defending America’s leading technology.” Assistant Treasurer Daniel Mulino dismissed the USD2.1 trillion company’s complaints, insisting Australia would push ahead with its plan to tax social media companies that walk away from the domestic news market. The intervention came as the Trump administration revived its sweeping tariff regime, threatening a fresh 12.5% tariff on Australia after the Supreme Court struck down most of his Liberation Day tariffs in February. Prime Minister Anthony Albanese rejected the justification (that Australia had failed to crack down on slave labour) calling any tariff on Australian exports “unjustified” and describing it as an “ideological disagreement.” Trade Minister Don Farrell voiced concern to US trade representative Jamieson Greer in a face-to-face meeting in Paris on Wednesday evening, the AFR reported. (Capital Brief)

8.

Wake-up call: Soaring nicotine use is funding a rampant illegal trade, with 80% of nicotine consumption in Australia now illegal and smoking rates up about 40% between 2017 and last year, Australian Bureau of Statistics data revealed this week. Conservative and independent crossbenchers are demanding a rethink of Australia’s tobacco excise, which has pushed the price of legal cigarettes beyond $50. One Nation MP Barnaby Joyce told Capital Brief the system is pushing more Australians to smoke and illegal products are blasting a hole of at least $7 billion in the budget through lost excise revenue. “This is creating Al Capone, it is not stopping people from smoking,” Joyce said. United Australia Party Senator Ralph Babet said prohibition “doesn’t work and has never worked” and called for the excise to be abolished entirely. Independent MP Allegra Spender said she was “open to” Labor tobacco tsar Julian Hill’s proposal to ban tobacconists and restrict cigarette sales to major retailers, but said impacts on law-abiding small businesses would require careful consideration. (Capital Brief)