Good morning. Issues around cryptocurrency, cybersecurity and efforts to encourage whistleblowers dominated the discussion at Tuesday’s WSJ Risk & Compliance Forum. But employee engagement during the pandemic was also top of mind, David Smagalla reports.

Employee engagement is seen by compliance professionals as instrumental in uncovering potential crimes within companies, Glenn Leon, senior vice president and chief ethics and compliance officer at Hewlett Packard Enterprise Co., said during a panel.

[Continued below…]

During the coronavirus pandemic, Mr. Leon initially saw a decline in incoming complaints and inquiries from employees. Although he isn’t sure of the precise reason behind the decline, his working theory is that people aren’t in the office as much engaging with managers face to face, and they may be seeking external sources to report on issues in the workplace.

“The more serious issues that come to our attention, they have not gone down too much,” he said. “We take all of our whistleblower complaints obviously very seriously, and…I view them as one of the more important tools that I have in my tool kit.”

For more highlights from the Tuesday’s event, read on ... 

Peter Harrell, senior director for international economics and competitiveness with the National Security Council, said the administration would move to address a range of risks around the emerging sector while seeking to position the U.S. as a leader in digital asset innovation. “You’re really seeing the administration at the beginning of what we expect will be an ongoing, quite aggressive effort to make sure we understand and address the whole range of risks that we see in the cryptocurrency space,” Mr. Harrell said.

—Dylan Tokar

Ramping up seizures is a key prong of the U.S. strategy to slow a spate of ransomware attacks that the White House has labeled a top national-security threat, said Leo Tsao, principal deputy chief of the Justice Department’s money laundering and asset recovery section. The focus on retrieving payouts comes alongside the Biden administration’s push to shore up firms’ defenses, disable hackers’ tools and pressure foreign governments to crack down on criminals.

—David Uberti and Maria Armental

Compliance departments need to focus their efforts on the "G" component of companies’ environmental, social and governance work, according to David Curran, co-chair of the sustainability and ESG advisory practice at law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP.

The "E" and the "S," which span ambitious corporate commitments to reduce greenhouse-gas emissions or make workforces more diverse, typically get more attention than the "G." But putting those promises into action in a way that keeps investors, regulators and other stakeholders satisfied involves methodical, process-based work in which compliance officers bring a lot to the table, Mr. Curran said.

“You have to develop away from just these gestures and create a standardized process,” he said. “Without a focus on the 'G' in complex organizations...whatever you commit to is likely to fall short if you don’t have a governance mechanism.”

Mr. Curran said compliance departments can help companies develop “ritualistic” processes for handling and reporting crucial ESG data, develop procedures for third-party verification and identify risks such as gaps in companies’ reporting. Mr. Curran said there have been years of “pent-up frustration” as companies try to figure out how compliance departments should relate to the ESG agenda. The increasing pressure on companies to show they are actually doing the things they say they are doing could point to a way forward.

“That’s what compliance does, you’re a governance function,” he said.

—Ed Ballard

Tuesday’s sentencing of Jose Carlos Grubisich, a 64-year-old Brazilian citizen, at the federal court in Brooklyn, N.Y., comes after his guilty plea in April. He pleaded guilty to one count of conspiring to violate the antibribery provisions of the U.S. Foreign Corrupt Practices Act and one count of conspiring to violate the books and records provision of the FCPA and failing to accurately certify Braskem’s financial reports as a corporate officer, the Justice Department said.

The controversy over what Facebook Inc. has said about social and emotional hazards stemming from its products could become a test of regulators’ growing interest in policing corporate risks that hurt reputations more than profits.

The Securities and Exchange Commission has been communicating with attorneys for Frances Haugen, the former Facebook product manager who blew the whistle on the company’s efforts to grapple with problems it played down in public, according to John Napier Tye, a lawyer representing her. Facebook didn’t respond to a request for comment and the SEC declined to confirm whether it is probing Ms. Haugen’s allegations.

But the agency is almost certain to be doing so, according to Marc Fagel, a former director of the SEC’s San Francisco office. “Given how much play this has gotten, especially with the revelation that the whistleblower went to the SEC, there is no way they are not looking at this and feeling pressure to bring some sort of case,” Mr. Fagel said.

• Lawyers for Theranos Inc. founder Elizabeth Holmes sought to show in court Tuesday that Safeway Inc. had responsibility for its failed partnership with the blood-testing startup, describing the grocery chain’s extensive resources and due diligence before inking the deal as evidence that the company wasn’t misled.

• The Labor Department signaled Tuesday evening that it is close to acting on President Biden’s plan to require private-sector workers get Covid-19 vaccinations or be regularly tested, a move that has drawn a mixed reaction from larger and smaller companies.
   
• U.S. officials have launched investigations, and shipping giant AP Moller Maersk has suspended five employees after a student at the U.S. Merchant Marine Academy alleged she was raped in the summer of 2019 while on a Maersk-operated ship.
   
• A former associate of Rudy Giuliani went on trial Tuesday on campaign-finance charges, bringing renewed attention to a key figure in former President Donald Trump’s first impeachment and the push by federal investigators to root out foreign influence in U.S. elections.
   
• Disgraced South Carolina lawyer Alex Murdaugh faces multiple challenges ahead, but the most immediate legal threat concerns insurance fraud.
   
• California will become the first state to ban the sale of gas-powered leaf blowers and lawn mowers under legislation signed by Gov. Gavin Newsom.

• Two nonexecutive directors at Fantasia Holdings Group Co. resigned, days after the Chinese developer rattled investors by unexpectedly failing to repay $206 million in maturing dollar bonds. The resignations of Ho Man, who had chaired the audit committee, and Priscilla Wong took effect immediately, Fantasia said late Monday in Hong Kong.
   
• The executive board of the International Monetary Fund said it has full confidence in Kristalina Georgieva as its managing director, putting an end to weeks of uncertainty while the board investigated her role in a data-manipulation scandal at the World Bank, where she had been chief executive.
   
• Hasbro Inc. Chief Executive Brian Goldner, who pushed the storied toy company far beyond playthings into movies and entertainment, died Tuesday, just days after he took a leave of absence for medical care.

Some energy companies are giving fossil fuels a carbon-neutral makeover, raising concerns that the pitch could undermine the case for less emissions.

The companies are selling fossil fuels bundled with carbon offsets and marketing the products as carbon neutral. While they acknowledge that the offsets alone aren’t enough to stop climate change, advocates of decarbonization say the offerings risk exaggerating the climate benefits.

• Oak Hill Advisors LP is hunting for $500 million worth of forestland with the aim of harvesting carbon offsets instead of timber. Oak Hill, which manages $52 billion and is best known as a big debt investor, is teaming up on the venture with Bluesource, a firm that creates and sells carbon credits. The companies said they expect to buy roughly one million acres of North American woodlands and manage the properties to generate so-called forest offsets.

• A widely anticipated surge in employees returning to the office after Labor Day never materialized. But as Covid-19 infection rates fall again, workers are trickling back to the office at the highest rate since the pandemic began. Office-building use has been slowly rising after a number of businesses required employees to return at least part of the week. In other cases, workers are returning voluntarily with summer vacations over and their children back in school.
   
• The White House on Wednesday is expected to announce a pledge from one of the country’s busiest ports to operate around the clock, a move aimed at easing cargo bottlenecks that have led to goods shortages and higher consumer costs.
   
• Southwest Airlines Co. pilots said the airline’s weekend meltdown reflected longer-running fatigue and frustration among its crew, leaving it vulnerable to further outages.
   
• China’s car sales declined in the third quarter from a year earlier, the first such drop in more than a year, as the global chip shortage continues to hold back the world’s largest auto market.
   
• China said it would allow the price of coal-fired power to rise more sharply, in the hope that market forces can address a power crunch that has threatened growth and caused ripple effects around the world.

Send comments to the Risk & Compliance editor, Jack Hagel, at jack.hagel@wsj.com.

Subscribe to The Morning Risk Report here.

Follow us on Twitter at @WSJRisk, @_MengqiSun and @dgtokar.