Good morning. 3M agreed to pay more than $6.5 million to settle a U.S. foreign corruption probe after marketing employees of a China-based subsidiary took healthcare officials on secret tourist excursions to the U.S. and Australia.

• When? 3M’s China unit paid for the travel, meant to induce the officials to buy 3M products,  from at least 2014 to 2017, the agency said.
   
• What did 3M do? 3M’s China unit funded overseas tourist travel for officials at Chinese state-owned companies, claiming the trips were legitimate outings to conferences, educational events and healthcare facilities, the Securities and Exchange Commission said Friday. The agency said the conduct violated the books and records and internal controls provisions of the Foreign Corrupt Practices Act.
   
• Compliance missteps: The 3M unit’s staff misled the company’s compliance employees, getting approval for official itineraries but then circulating alternate itineraries via hand delivery and personal accounts on the messaging service WeChat, the SEC said.
   
• The company's response: 3M said it discovered in 2018 that the employees had “circumvented established procedural controls and company ethics policy to arrange prohibited entertainment activities such as guided tours and shopping visits, to foreign government officials.”

See also:

• 3M Nears Roughly $5.5 Billion Earplugs Settlement

U.S. tackles crypto tax mess.

The federal government is escalating efforts to make cryptocurrency investors comply with tax law, nearly 15 years after people started trading bitcoin.

What it means for the industry. When they are fully implemented, the rules will require crypto exchanges such as Coinbase to deal with the Internal Revenue Service in a manner similar to brokers who handle investors’ stock and mutual-fund portfolios.

Binance drops sanctioned Russian banks from peer-to-peer service.

Binance has stopped offering clients the option to pay one another through sanctioned Russian banks, days after a Wall Street Journal article detailed how the crypto giant was helping Russians move money abroad.

The cryptocurrency company’s peer-to-peer service no longer lists five sanctioned Russian lenders on its website as a method for users to transfer rubles to each other.

• Toronto-Dominion Bank said Thursday that it has been fielding inquiries from regulatory and law enforcement agencies related to a Department of Justice investigation implicating its U.S. businesses.
   
• Wall Street lenders prevailed in a closely watched legal case that threatened to upend the syndicated-loan market, a key source of capital for private-equity firms.
   
• The Federal Trade Commission suspended its challenge of Amgen’s $27.8 billion acquisition of Horizon Therapeutics, giving the agency time to weigh a settlement that would allow the deal to close with conditions.
   
• Rite Aid is preparing to file for bankruptcy in coming weeks to address mass federal and state lawsuits the drugstore chain is facing over its alleged role in the sale of opioids, according to people familiar with the company’s plans.
   
• The anti-racketeering law used against Donald Trump in Georgia is a powerful tool for prosecutors, but legal observers say the former president and his 18 co-defendants have several strategic plays they could use in attempting to beat charges that they conspired to overturn the 2020 election.

Are we ready for a $100 billion catastrophe? How about $200 billion?

Will America dodge another bullet? Years often pass without a major hurricane making landfall, and 2023’s storm season, set to peak in a couple of weeks, may be no different. What is different is the potential financial shock if one does hit.

What's happening? The National Hurricane Center issued its first-ever tropical storm watch for Southern California this month—a reminder that extremely unlikely events can, and do, happen. Another unlikely event occurred just over 30 years ago, when Hurricane Andrew landed in southern Florida during what was an otherwise light season.

What this could mean? At the time, Andrew was a wake-up call for the insurance industry, resulting in the rise of new kinds of reinsurers—firms that backstop other insurers—relying on computer models to price extreme risks. But were the same storm to repeat this year, it might cause a far bigger disruption. That is because a combination of climate change, economic and population growth, and inflation of all kinds has challenged insurers’ grasp of what exactly “the worst” entails.

• Taiwan’s leading presidential candidate warned of Chinese meddling in a pivotal election set to take place early next year and blamed Beijing for heightened tensions across the Taiwan Strait.
   
• Federal Reserve Chair Jerome Powell argued for holding interest rates steady for now, but kept the door open to raising them later this year if the economy doesn’t slow enough to keep inflation declining.
   
• Ideology is driving China’s economic policy to a degree not seen since the country’s opening to the West nearly half a century ago, deterring its leaders from taking steps to spur the sputtering economy.
   
• Commerce Secretary Gina Raimondo said she would use a four-day visit to China this week to ensure an easing in tense relations while standing firm in confrontations over technology restrictions and Chinese trade practices.
   
• As wildfire risk spreads from Oregon to Hawaii, utilities weigh whether to leave customers in the dark when winds pick up.
   
• Municipal bonds have a reputation for safety, but a financial meltdown at a sports arena in Mesa, Ariz., shows all munis aren’t created equal.
   
• Homeowners are increasingly forgoing home insurance, gambling that the likelihood of a disaster isn’t high enough to justify the cost of a policy.
   
• Rising temperatures are disrupting ecosystems around the world—and turning Maine lobstermen into kelp farmers.

Healthcare governance body warns hospitals face debilitating cyberattacks.

The largest healthcare accreditation body in the U.S. issued cybersecurity guidelines calling for hospitals to prepare for cyberattacks that could take down critical systems for a month or longer—measures that will require significant investment.

What do they need to do? Hospitals need to put in place tools and processes that anticipate technology critical for life and safety could be down, and find alternative ways to work without those systems, the nonprofit Joint Commission said.

• The claims agent in bankruptcy cases for Genesis Global Holdco, FTX and BlockFi said it was the victim of a cyberattack, and that data belonging to hundreds of claimants could have been accessed.

• Jerome Powell’s much-anticipated speech Friday did little to resolve the conflict gripping markets late this summer: whether a rapid climb in interest rates spells doom for the surprising 2023 stock-market rally.
   
• Many business owners can easily—and legally—dodge the $10,000 cap on state and local tax deductions, and that costs the federal government as much as $20 billion a year, according to a new estimate by the Tax Policy Center.
   
• Russia officially confirmed the death of Yevgeny Prigozhin, the Wagner paramilitary-group boss who controlled a vast business empire in Africa and led a short-lived rebellion against the country’s defense establishment before being killed in a plane crash Wednesday.
   
• J.M. Smucker is ordering workers to be at its Ohio headquarters for 22 ‘core’ weeks. It is a strategy that may resolve the tug of war over how we work.
   
• Workers are waking up to emails and team-meeting requests with a jarring message: They aren’t fired but their jobs are gone.
   
• The U.S. presidential election is more than a year away, but allies and adversaries around the world have already begun to contemplate—and even plan for—the return of Donald Trump to the White House.

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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