Good morning. A senior U.S. Justice Department official defended the use of settlements that let companies avoid pleading guilty after senators questioned whether prosecutors have been too soft on corporate crime, including by not charging the Sackler family members who own Purdue Pharma.

• DOJ's view: Settlement agreements known as deferred prosecution agreements and nonprosecution agreements, which stop short of requiring corporate guilty pleas, don’t let businesses off the hook, Acting Assistant Attorney General Nicole Argentieri, who heads the department’s criminal division, said Tuesday at a U.S. Senate Judiciary Committee hearing.
   
• Argentieri defends settlements: “Those are really serious agreements that are highly negotiated,” she said. “They require forward-looking change by a company. They’re not a pass.”
   
• Concerns from Congress: Senators from both parties raised concerns about the Justice Department’s efforts to crack down on corporate crime. The lawmakers focused on the use of the settlement agreements along with decisions in some instances to not prosecute executives.
   
• DOJ dilemma: The Justice Department faces a balancing act in its approach to corporate prosecutions. Deals that let companies walk away without pleading guilty often receive intense criticism, but department policy is designed to provide incentives, including deferred prosecution deals, for companies that come forward and report wrongdoing that might otherwise go undiscovered.

Legal hurdles stack up for Gensler’s SEC.

Gary Gensler is facing a growing number of legal challenges as the Securities and Exchange Commission chair moves forward with wide-reaching efforts to squeeze Wall Street for the benefit of investors and companies.

What the agency is facing. A group of hedge funds sued the SEC on Tuesday in hopes of overturning a pair of recent rules requiring more disclosures around short selling and securities lending. The case was filed in the same conservative appeals court that looks set to kill another SEC rule aimed at getting investors more information about public companies’ share repurchases.

U.K. sets up new office to help enforce sanctions against Russia.

The U.K. government is establishing a new unit that will focus on stopping companies from evading export controls, particularly those against Russia.

The Office of Trade Sanctions Implementation will be responsible for the civil enforcement of trade sanctions and will have the power to issue civil monetary penalties on companies. The U.K. Department of Business and Trade intends to launch the OTSI next year.

• More than 190 governments at the United Nations climate conference approved an agreement Wednesday calling for the world to transition away from fossil fuels, sending an unprecedented signal to the global economy that governments are intent on cutting back on coal, oil and natural gas in the fight against global warming.
   
• Monday’s court ruling that Google maintained an illegal monopoly with its app store threatens to upend the $500 billion-a-year app-store economy.
   
• Tesla will recall more than two million vehicles over concerns over its Autopilot system, following a two-year probe by U.S. auto-safety regulators into crashes involving the driver-assistance technology.
   
• Private-equity firm GPB Capital Holdings, facing civil fraud allegations since early 2021, will be liquidated by a court-appointed receiver, signaling the end of a long wait for roughly 17,000 investors whose capital has been tied up since at least 2018.
   
• Should airplane mechanics be responsible for checking their own work? The question is the subject of a long-simmering feud between workers and executives at major aircraft manufacturers.
   
• New York’s top court ordered the state to draw new congressional district boundaries ahead of the 2024 elections, delivering a potential boost to Democrats in their effort to win a majority in the House of Representatives.
   
• The House is set to vote Wednesday on formally opening an impeachment probe into President Biden, as Republicans ratchet up their contentious investigation entering an election year.

Inflation edges lower, but still too high for the Fed.

The victory dance on inflation will have to wait.

Inflation has stabilized late this year at well below last year’s high but still above prepandemic levels, tempering hopes for near-term Federal Reserve rate cuts and maintaining price and interest-rate pressures on weary Americans.

The consumer-price index rose 3.1% in November from a year earlier, a slight slowdown from October but above June’s 3% reading, the Labor Department said Tuesday. Prices were up 0.1% from the prior month, stronger than the steady reading economists had expected.

• Where Are Interest Rates Headed? What to Expect From Fed Meeting

Chinese leaders vow to step up support for flagging economy.

Chinese leaders vowed to increase government spending and monetary support for the economy at an annual gathering, signaling they plan to stick with a measured approach to stimulus despite calls for bolder action.

The Central Economic Work Conference, which ended Tuesday, capped a bruising year for the country’s economy, which has struggled with a drawn-out housing crunch and weak consumption.

• China Turns the Tables on Wall Street
• U.S. Companies Are Finding It Hard to Avoid China

• Ernst & Young is laying off dozens of partners across all U.S. businesses, a deeper round of partner cuts than usual as the Big Four accounting firm faces slowing demand for certain services and seeks to cut costs following its failed plan to break up the firm.
   
• President Biden and Israel’s Prime Minister Benjamin Netanyahu clashed Tuesday over who should govern Gaza after the war, in a remarkable public display of differences emerging between the two leaders over the conflict.
   
• The United Arab Emirates is pushing for an international effort to resolve the Israeli-Palestinian conflict, as discussions gain momentum about how to rebuild and govern Gaza after the war between Israel and Hamas ends.
   
• The war in Ukraine has devastated Russia’s preinvasion military machine, with nearly 90% of its prewar army lost to death or injury, according to a newly declassified U.S. intelligence assessment shared with Congress.

• Apple is rolling out a new security setting for iPhones following Wall Street Journal reporting about a vulnerability that allowed thieves to break into victims’ devices and upend their lives.
   
• Israel’s military has begun pumping seawater into Hamas’s vast complex of tunnels in Gaza, according to U.S. officials briefed on the Israeli military’s operations.
   
• As rumors swirled last week that the University of Pennsylvania’s president was being pressured to resign, billionaire investor Bill Ackman tweeted “One down.”
   
• Ukrainian President Volodymyr Zelensky failed to break an impasse over military aid to his country in a last-ditch trip to Washington, drawing a sympathetic reception from Congress.
   
• Last year, companies pulled out the stops and partied in December. This year’s holiday parties are more likely to involve Santa cookies in the breakroom.

Follow us on X at @WSJRisk. Follow Risk & Compliance editor David Smagalla @DSmagalla_DJ and reporters Mengqi Sun @_MengqiSun, Dylan Tokar @dgtokar and Richard Vanderford @VanderfordRich.

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