Good morning. The real estate sector faces the possibility of stepped-up regulatory scrutiny comparable to the controls affecting banks, as part of a U.S. push to fight money-laundering and corruption.

The Treasury Department’s Financial Crimes Enforcement Network, an anti-money-laundering watchdog, said on Monday that it was seeking public comment on its plan to increase oversight of all-cash real estate transactions.

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FinCEN said the “advance notice of proposed rulemaking” would help it “in preparing a proposed rule that would enhance the transparency of the domestic real estate market on a nationwide basis and protect the U.S. real estate market from exploitation by criminals and corrupt officials.”

The regulator’s current rules require title-insurance companies to report all-cash residential real-estate transactions valued at more than $300,000 in a dozen large U.S. cities.

More: Biden Administration Unveils Plans to Fight Corruption

The U.S. Treasury Department aims to ensure it will cost companies less than $50 per company on average to comply with a new beneficial ownership rule, a senior department official said on Monday.

Treasury’s anti-money-laundering unit, the Financial Crimes Enforcement Network, or FinCEN, has been tasked with writing regulations and building a database mandated by the Corporate Transparency Act that became law in January. The law requires certain U.S. and foreign companies to report beneficial ownership information to FinCEN upon formation and registration in the U.S. The information must also be reported when the companies change hands. 

Small businesses have been assessing potential costs of complying with the reporting requirements since such rules were proposed in Congress in 2019. Some thought the requirements would become a time burden, while others didn’t see them as onerous. 

Deputy Treasury Secretary Wally Adeyemo said the Treasury is aware of the compliance burdens that new rules can impose on companies, especially small businesses, and is working with the business community as the new reporting requirements are implemented.

“Treasury is taking an aggressive stance in its implementation of the CTA, pursuing an approach that will arm us with the information we need to deter and fight corruption at home and abroad,” Mr. Adeyemo said at a think tank event Monday.                                             

                                                                                             —Mengqi Sun

The Securities and Exchange Commission is probing two of the most notable SPAC deals struck this year, including former President Donald Trump’s venture, signaling that regulators are ratcheting up scrutiny of such deals and rushing to keep up with the frenzy of activity.

The SEC is investigating a potential merger between Trump Media & Technology Group and the special-purpose acquisition company Digital World Acquisition Corp., Digital World disclosed in a regulatory filing Monday. The SPAC, known by its stock ticker, DWAC, would inject cash into and take public a new social-media company Mr. Trump has planned.

• Lucid Is Subpoenaed by SEC Related to SPAC Deal; Shares Fall

• The U.S. Securities and Exchange Commission has opened an investigation into Tesla Inc. that touches at least partly on the company’s solar-cell activity.
   
• Congressional Democrats are debating whether increasing the $10,000 cap on the state and local tax deduction would benefit the rich too much, but some of America’s top earners—including private-equity managers and law firm partners—are already legally circumventing the cap on much of their income.
   
• The trial of Ghislaine Maxwell entered its second week Monday with the testimony of a woman who alleged that the British socialite befriended her and then facilitated her repeated sexual encounters with financier Jeffrey Epstein.
   
• New York City will require all private-sector workers be fully vaccinated against Covid-19, in what Mayor Bill de Blasio described as a first in the nation measure.

• The Biden administration won’t send U.S. officials to attend the coming 2022 Winter Olympics in Beijing, the White House said, deciding instead to hold a diplomatic boycott that drew immediate criticism from China.
   
• President Biden will speak Monday with European allies ahead of a call with Vladimir Putin in which he will warn the Russian president not to invade Ukraine, officials said.
   
• Saudi Arabia’s Crown Prince Mohammed bin Salman embarked on a rare tour of the Persian Gulf region in a bid to shore up his position with neighboring allies and build consensus on the threat posed by rival Iran as world powers hold talks to revive the 2015 nuclear deal.

Johnson & Johnson is trying to figure out how to divide its supply chain and substantial financial holdings as part of a planned split into two publicly-traded businesses.

The New Brunswick, N.J.-based healthcare and consumer-goods giant last month said it would split off its consumer-health business, which sells Tylenol medicines, Band-Aid bandages and Johnson’s Baby Powder, into a so-far unnamed company in 18 months to two years. The company is considering spinning out the unit and holding a stock offering.

• An activist investor is urging department-store chain Kohl’s Corp. to consider a sale of the company or a separation of its e-commerce business.
   
• Volkswagen AG Chief Executive Herbert Diess is likely to survive his latest clash with labor representatives over the pace of the company’s transformation to an electric-vehicle maker after weeks of negotiations produced a compromise that would strip the outspoken executive of some of his duties, people familiar with the talks said on Monday.

• The Delta-driven wave of infections wreaked havoc on supply chains when it tore across Southeast Asia this summer, disrupting production of everything from semiconductors to sneakers and raising prices for Western consumers. But countries like Vietnam and Malaysia have learned from that experience and are better prepared for fresh waves of the virus, economists and factory operators say, as the new Omicron variant spreads globally.
   
• New York law firm Cravath, Swaine & Moore LLP is moving away from its seniority-based compensation system, upending a hallmark of the firm’s culture that has made it a rarity in the cutthroat world of modern-day law firms.

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