Good morning. The U.S. Justice Department broke its prior record for recoveries in corporate Foreign Corrupt Practices Act settlements in a single year after reaching a $1.06 billion agreement with Swedish telecom-equipment maker Ericsson on Friday.

The settlement—the largest so far this year and one of the largest ever in terms of fines collected by U.S. authorities—brings to $1.6 billion the total monetary sanctions collected by the Justice Department from corporations under the FCPA in 2019, according to Assistant Attorney General Brian Benczkowksi of the department’s criminal division. Ericsson will pay a $520 million criminal penalty and disgorge $540 million in illicit profits, the department said.

[Continued below...]

Ericsson entered into a deferred-prosecution agreement with prosecutors, which requires it to retain a compliance monitor for three years. A subsidiary, Ericsson Egypt Ltd., pleaded guilty in Manhattan federal court to conspiracy to violate antibribery laws. The wrongdoing occurred from 2000 to 2016 in Djibouti, China, Vietnam, Kuwait and Indonesia, where the company paid tens of millions of dollars in bribes, prosecutors said.

The Justice Department said the form and size of Ericsson’s settlement was influenced by a number of factors. It credited the Swedish company with conducting a thorough internal investigation but said the company had failed to voluntarily disclose the conduct, withheld certain information and failed to take disciplinary actions against certain employees involved in the conduct. Ultimately, Ericsson received a 15% reduction off its fine, prosecutors said.

Join The Wall Street Journal on Tuesday in London for a discussion about regulatory risk and geopolitics with Anna Bradshaw, a partner on the business crime team at Peters & Peters Solicitors; Neil Donovan, a senior associate at Freshfields Bruckhaus Deringer; and Sophie Heading, global geopolitics lead at KPMG International. Register here.

Neil Cole, former longtime chief executive of brand-management company Iconix Brand Group Inc. and brother of shoe impresario Kenneth Cole, has been charged with accounting fraud and obstruction.

Mr. Cole, who stepped down as CEO in 2015, was charged along with former Chief Operating Officer Seth Horowitz in Manhattan federal court in what prosecutors described as a scheme to inflate the value of the company by making its financial performance look better and trying to cover up the accounting discrepancies from auditors and regulators.

A representative for Mr. Cole’s attorneys called the charges baseless.

European powers will take the first step toward reimposing international sanctions on Iran in the coming weeks if Tehran further violates the 2015 nuclear deal, diplomats said.

The warning, an escalation of European pressure on Iran, puts the two sides on a collision course. A conflict is likely in early January, when Iran is set to announce fresh steps to breach the deal. Iranian officials say their moves respond to Europe’s failure to protect them from the impact of withering sanctions the U.S. imposed after President Trump withdrew from the nuclear accord last year.

• Iran Releases U.S. Citizen in Prisoner Swap

• The Securities and Exchange Commission rejected a proposal from the New York Stock Exchange to create a new type of direct listing that would let companies raise capital. The agency’s move throws a wrench into NYSE’s plans to create a new alternative to traditional initial public offerings.
   
• Deutsche Bank agreed to pay €15 million ($16.6 million) in penalties to end a probe into possible money-laundering and tax evasion involving German clients, closing an investigation that featured a high-profile raid of the bank’s Frankfurt headquarters in November 2018.
   
• President Trump said he would “temporarily hold off” designating Mexican drug cartels as terrorist organizations, about a week after he said the U.S. planned to do so.

PG&E’s collapse has exposed the California Public Utilities Commission’s failure to hold the utility accountable on safety. The CPUC for years focused attention elsewhere, on setting rates and pushing for cleaner power. Now, the agency tasked with regulating utility safety is struggling to refocus on the issue while also grappling with its failure to prevent the state’s second electricity crisis in two decades.

• PG&E Agrees to Pay $13.5 Billion in Settlement With Wildfire Victims
• PG&E Fire Victim Settlement Threatens Elliott Plan

• The Trump administration is considering adding some of Amazon’s overseas operations to a list of global marketplaces known for counterfeit goods, according to people familiar with the matter. The action would be taken by the U.S. Trade Representative’s Office, which publishes an annual list of “Notorious Markets” that identifies online and physical marketplaces believed to sell or facilitate the sale of counterfeit goods and pirated content.
   
• Boeing was hit with a proposed $3.9 million penalty by U.S. air-safety officials who said the company installed defective parts inside the wings of around 130 737 NG aircraft and then knowingly vouched they met all federal safety requirements. As part of Friday’s action by the Federal Aviation Administration, the agency indicated that the parts—designed to guide movable panels called slats on the front of wings—were used despite being identified as potentially substandard by a Boeing subcontractor in the fall of 2018.

An unprecedented trial challenging the merger of T-Mobile US and Sprint will test the federal government’s dominant role in deciding whether corporate rivals can join forces.

In a case slated to start Monday, a coalition of 13 states and the District of Columbia, all led by Democratic attorneys general, is suing to block the $26 billion plan to merge the country’s third- and fourth-largest carriers by cellphone subscribers into a nationwide heavyweight rivaling Verizon Communications and AT&T.

Federal antitrust and telecom officials, appointed by President Trump, approved the deal earlier this year, believing they addressed the merger’s shortcomings through concessions they required from T-Mobile and Sprint. Legal experts say it is unprecedented for the states to reject such a settlement and sue to block a merger of this size and national scope without the support or involvement of federal authorities.

Big makers and users of plastic packaging are betting on a recycling technology that has failed for decades to take off, as a public backlash and new rules push them to find ways to cut waste and greenhouse-gas emissions tied to plastic.

Plastic makers like BP and Dow, and packaging users like Coca-Cola, Danone and Unilever, are testing or investing tens of millions of dollars in the technology, called chemical recycling. The process uses chemicals or heat to break down plastic so it can be turned into clean, new plastic again and again while preserving quality—a Holy Grail for the industry.

• More than 40 laborers died in New Delhi after a fire engulfed a factory where they worked and slept, making it one of the worst fire tragedies in India’s capital in decades. The fire broke out early Sunday morning in a dense neighborhood in northern Delhi. The building was used to make paper products and women’s purses, and stored materials including plastic and cardboard.
   
• Parcel delivery and warehousing companies hired in big numbers last month as they geared up for the holidays by adding more than 13,000 jobs to operations closely tied to the surge in e-commerce.
   
• Trucking company Celadon Group and its affiliate entities have filed for bankruptcy under chapter 11 of the U.S. bankruptcy code, and will shut down its business operations effective Monday.

It is rare for a company’s stock to fall sharply after a poorly received advertisement, but recent history shows fitness-equipment maker Peloton Interactive shouldn’t expect lasting damage from social-media backlash over its recent commercial.

Peloton shares fell 15% Tuesday through Thursday, erasing nearly about $1.6 billion in market value, as late-night comedians and social media mocked the company’s holiday ad in which a man presented his wife with a Peloton bike. Adding pressure to the stock price was the company’s decision to cut its monthly subscription price to $12.99 a month from $19.49 in an effort to expand its customer base.

Brands including Nike, Procter & Gamble's Gillette and PepsiCo have released ads that stirred controversy in recent years. Some faced calls for boycotts and a brief drop in their stock prices, but all are trading at significantly higher levels today than when their controversial ads originally aired.

Subscribe to The Morning Risk Report here.

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

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