Good morning. Compliance efforts in a range of industries could become more difficult if the final outcome of Tuesday’s elections shows voters in several states approved ballot measures proposing expanded access to marijuana for recreational use and sports gambling.

California could become the 37th and by far the largest state to legalize sports and online betting if voters approve Proposition 27. Gambling companies, including DraftKings Inc. and FanDuel Group, have poured nearly $160 million into the measure, according to California campaign finance records, but have been significantly outspent by opponents, among them Native American tribes that operate casinos. The initiative looked unlikely to pass, according to polling in the run-up to the election.

Meanwhile, initiatives to legalize recreational marijuana use were on the ballot in five states. Polls suggested voters in Maryland would legalize recreational marijuana use, but the outcome of similar ballot measures in four other more politically conservative states—Arkansas, Missouri, North Dakota and South Dakota—was less clear as of last night. To date, 19 states and the District of Columbia have made adult recreational use of marijuana legal, but the use, sale or possession of marijuana remains illegal under federal law.

Financial services and compliance companies looking to provide services to cannabis businesses have so far faced spotty regulation and expensive compliance efforts. Although the cannabis industry can be lucrative, disparities between federal and state laws governing the use of marijuana and hemp, and the differences in laws across states, complicate compliance efforts.

The patchwork of state laws governing cannabis businesses–and the lack of federal laws protecting businesses providing services to them–will make an already complicated compliance job even harder for banks and other businesses, said Jodi Avergun, the chair of law firm Cadwalader, Wickersham & Taft LLP’s white-collar defense and investigations group.

Ms. Avergun, a former chief of the narcotic and dangerous drug section of the U.S. Justice Department’s Criminal Division, said that going forward, it is impractical to have multiple state regulatory regimes that financial service compliance professionals must monitor to ensure customers are complying with the law.

“And the increased popularity of individual cannabis legalization initiatives highlights the need for a uniform safe banking act to deal with the anti-money-laundering issues to be enacted,” Ms. Avergun added.

• Abortion Is on the Ballot in Five States in Midterm Elections

Speakers at the WSJ Risk & Compliance Forum on Nov. 16 include Brian Nelson from the U.S. Treasury Department and Robert Silvers from the Department of Homeland Security, along with multiple experts on corporate risk and compliance. Sign up here for discussions on economic sanctions, forced labor, climate change regulation, whistleblowers and cybersecurity.

UBS Group AG said Damian Vogel will take on the role of group chief risk officer at the financial services provider next May, following a decision by current risk chief Christian Bluhm to step down.

Mr. Vogel, who joined UBS in 2010 and has served in various risk leadership roles, is currently chief risk officer of UBS’s global wealth management business. UBS announced his promotion on Tuesday.

Mr. Bluhm, who was group risk chief since 2016, is stepping down to focus on his photography business and pursue opportunities in academia, UBS said.

–Richard Vanderford

German authorities searched the offices of UBS AG in Frankfurt and Munich on Tuesday, part of a money-laundering investigation into sanctioned Russian billionaire Alisher Usmanov, according to a person familiar with the case.

Mr. Usmanov is one of the highest-profile Russian oligarchs to be sanctioned by Western authorities following Russia’s invasion of Ukraine. Forbes estimates his net worth at $14.6 billion. His main publicly known asset is OOO USM Holding Co., a Russian metals, mining and telecom conglomerate in which he holds a 49% stake.

• The Supreme Court on Tuesday weighed whether to limit where companies can be sued, in a case that tests the reach of state courts to hear cases about injuries suffered outside their boundaries.
   
• The European Union’s competition watchdog said it would pursue an in-depth investigation into Microsoft Corp.’s planned $75 billion acquisition of Activision Blizzard Inc., adding to the global scrutiny of whether the deal could harm competition in the videogame industry.
   
• The European Union’s top court overturned a tax ruling against Fiat Chrysler from 2015, handing the bloc’s regulators a fresh setback in a crackdown on multinational companies’ efforts to financially shield their operations.
   
• A federal judge denied Elizabeth Holmes’s bid for a new trial, the latest setback for the Theranos Inc. founder who was convicted of fraud in January.

The midterm election results are rolling in this morning with Republicans favored to take the House majority and the fate of the Senate a tossup, though the results so far Wednesday have fallen short of the sweeping gains some in the GOP anticipated.

Tens of millions of Americans wrapped up voting and candidates closed out campaigns that revealed deep voter anxiety over the highest inflation in four decades, the state of the nation, abortion access and crime.

Republicans need just a net of five seats to regain the majority in the House of Representatives and end two years of Democratic control of Congress and the White House. Democrats currently hold 220 House seats, and Republicans have 212, with three vacancies.

• Midterm Electorate Deeply Troubled by Inflation, America’s Direction

Ukrainian President Volodymyr Zelensky said he was open to "genuine peace talks” with Russia, following pressure from Western backers to signal readiness for negotiations amid concerns about the rising costs of the eight-month war.

Mr. Zelensky said Ukrainian conditions for talks included returning Ukrainian control over its territories, compensating Kyiv for Moscow’s invasion and bringing to justice perpetrators of war crimes.

• To Aid Ukraine, EU Looks to Lock In $1.5 Billion a Month in Assistance

Hurricane season is nearly over, though one more storm is potentially heading for Florida. For insurers, the worries won’t end on Nov. 30.

Insurers are in the middle of negotiations with reinsurers, which are trying to boost rates by 10% to 30%. Nearly two-thirds of U.S. property-catastrophe coverage renews each Jan. 1, including for many large diversified U.S. and European insurers.

Farmers in Egypt, the nation hosting the U.N. climate change conference, known as COP27, are struggling after changing weather patterns have brought bouts of unusually intense heat and record-low temperatures that near freezing.

The Nile Delta is considered one of the most vulnerable large deltas in the world to be directly affected by climate change by 2050, according to the U.N.’s Intergovernmental Panel on Climate Change. Egypt derives three-fifths of its agriculture from this region which, in addition to being subject to changing weather conditions, is suffering from erosion and flooding.

• U.S. Climate Envoy John Kerry Rekindles Contact With China at COP27

• Xi Jinping emerged from a Communist Party congress with more power than any Chinese leader in a generation. Now, he’s turning his focus to shoring up foreign ties as he steels the country for heightened competition with the U.S.
   
• Foxconn Technology Group’s bid to continue iPhone production through a Covid outbreak depended on easing workers’ fears about a virus the government portrays as a deadly threat.
   
• The U.S. and Taiwan began two days of face-to-face meetings in New York on Tuesday aimed at strengthening trade and economic ties at a time of ramped-up tensions between Washington and Beijing.
   
• Tropical storm Nicole strengthened Tuesday morning over the Atlantic Ocean as it approached the Bahamas and is projected to reach hurricane strength before bearing down on the eastern coast of Florida on Wednesday, according to the National Hurricane Center.

The weekend arrest of Tyson Foods Inc. Chief Financial Officer John R. Tyson on public intoxication and criminal trespassing charges raises questions about how the controlling family will assess the 32-year-old’s ability to serve as finance chief of the publicly traded meat processor.

Governance experts, who raised questions about potential conflicts of interest when Mr. Tyson was named CFO, say the recent incident underscores those concerns and casts fresh doubts about how the board will handle potential performance issues given the family control of the company.

Cryptocurrency exchange FTX, just months removed from looking like a shining survivor in a struggling industry, succumbed Tuesday to a sudden liquidity crunch of its own and was taken over by rival Binance.

The deal signals a power shift in the crypto world, which has been decimated by rising interest rates and investors’ retreat from risk. The pact marks a victory for Binance founder Changpeng Zhao and a humbling comedown for Sam Bankman-Fried, the founder of FTX, which had been growing in size and recognition before a clash between the two men set off a series of events that shook investor confidence in his firm.

• Adidas AG said it tapped Bjørn Gulden to take over as chief executive of the sportswear giant, luring the executive away from crosstown rival Puma SE as it grapples with issues ranging from the future of its popular Yeezy sneaker brand to sliding market share in China.
   
• Kohl’s Corp. Chief Executive Michelle Gass is leaving the department-store chain early next month to join Levi Strauss & Co. with plans to have her take over as the jeans maker’s CEO.
   
• Teletherapy company Talkspace Inc., one of the best-known names in remote therapy, has picked a new CEO to help continue an overhaul of the business that began last year.

Meta Platforms Inc. said it would cut more than 11,000 workers, or 13% of staff, embarking on the company’s first broad restructuring to cope with a slumping digital-ad market and falling stock price.

In a message to staff on Wednesday morning, Chief Executive Mark Zuckerberg said the company, the parent of Facebook and Instagram, would cut staff across all of its businesses, with its recruiting and business teams disproportionately affected. The company is also tightening its belt by reducing its office space, moving to desk sharing for some workers, and extending a hiring freeze through the first quarter of 2023.

• Goldman Sachs Group Inc. has expressed interest in buying a payments-technology firm to further build out its credit-card capabilities, according to people familiar with the matter.
   
• Gap Inc. will sell its business in China and Taiwan to Chinese e-commerce services provider Baozun Inc. for up to $50 million, bringing an end to a bumpy 12-year foray in the region.