Good morning. Every day, around the clock, a small group of cybersecurity professionals scours Facebook, looking for the face of their boss, an Australian billionaire who is determined to take the social-media giant to court.

Like American financiers such as Bill Ackman, Andrew Forrest says he has spent years trying to get Facebook-parent Meta Platforms to do more to stop scam advertisements that use his likeness to promote fraudulent investment schemes.

Yet unlike other Meta adversaries, the mining executive has pledged to spend vast sums on his legal campaign. His U.S. federal lawsuit against Meta alleges that the company’s artificial intelligence-powered ad systems help create and amplify the false ads. It is one of the first cases in years that appears on track to break through broad immunity protections afforded to technology companies that host user-generated content. Last month, a federal judge rejected Meta’s efforts to dismiss the suit. The company has appealed.

• Section 230 protections. Legal experts say the case is one of the first where AI has played a role in litigation related to the 1996 law, often referred to as Section 230. Fraudulent celebrity ads have proliferated on social media in recent years, with X and Snapchat seeing crypto scams on their platforms, according to cybersecurity and blockchain researchers. The scams on Meta apps use ads to lure victims into joining chat groups on WhatsApp or elsewhere that steer them toward dubious investments. The schemes have cost small investors millions of dollars.
   
• AI content. Eric Goldman, a law professor at the Santa Clara University School of Law, said he was surprised by the judge’s ruling in the Forrest case given that a judge ruled in 2009 that Google wasn’t liable for ads that promoted scam ringtones. An important facet of Forrest’s case is whether the courts will view content that is AI-generated as originating from the user giving inputs—a scammer in this case—or Meta’s model. In 2009, the judge said the plaintiff had to establish Google’s involvement in “creating or developing” the words used in the ads.

B. Riley Financial stock plunges after subpoena acknowledgment.

Investment bank B. Riley Financial shares lost half their value Monday after its chairman disclosed subpoenas from regulators and said the company would suspend its dividend.

Bryant Riley, B. Riley's chairman and co-chief executive, acknowledged on an earnings call that the company had come under scrutiny because of connections to hedge-fund manager Brian Kahn.

• Read more: How an Unremarkable Deal Became a Big Threat to a Small Investment Bank

Broker-dealer fined for anti-money laundering failures.

OTC Link, a New York-based broker-dealer, agreed to pay $1.19 million to settle claims that it failed to file reports on suspicious financial transactions, the U.S. Securities and Exchange Commission announced Monday.

The firm, which operates several alternative trading platforms that deal predominantly in penny stock securities, failed to screen transactions on its platforms for possible money laundering activity, the SEC said. OTC settled the claims without admitting or denying the agency's findings.

• China’s central bank is set to conduct stress tests on financial institutions’ exposure to bond holdings, marking the latest efforts by authorities to rein in a monthslong rally and prevent fallout risks.

Israel puts military on high alert as U.S. sends assets to Middle East.

Israel put its military on high alert and the Pentagon said it is sending a guided-missile submarine to the region and speeding up the arrival of a second aircraft carrier, amid heightened concerns about a possible Iranian and Hezbollah response to the killing of militant leaders in Tehran and Beirut.

Israel set the high-alert level for its military for the first time this month after observing preparations by Iran and Hezbollah to carry out attacks, a person familiar with the matter said. Israel doesn’t know whether attacks are in fact imminent and is proceeding cautiously, the person said.

• U.S. Efforts to Calm Mideast Fighting Face Critical Week

• Inflation is slowing. So why doesn’t it feel that way? Many of the things that are hard to do without are still posting eye-watering price increases.
   
• Today’s housing market is the most difficult in decades, a great frustration for millennials and Gen Zers looking for a starter home. Baby boomers can relate.
   
• U.K. wage growth cooled in the three months to June, reassuring news for the Bank of England as it battles inflation, though persistent tightness in the labor market could give its rate setters pause when considering interest-rate cuts in the coming months.
   
• Economic sentiment in Germany slumped this month, as weakening views of the health of the global economy exacerbated an already gloomy outlook.
   
• Global oil-demand growth is still forecast to slow to under a million barrels a day this year and next, with a continued slowdown in Chinese consumption weighing on the outlook, the International Energy Agency said.
   
• The Organization of the Petroleum Exporting Countries slightly lowered its forecast for oil-demand growth, citing softening expectations for China at a time when market concerns over the top crude importer’s outlook have been weighing on prices.
   
• Residents in parts of Athens have been ordered to evacuate as emergency teams struggled to battle raging wildfires approaching the Greek capital during the country’s peak tourism season.

• For over two hours, Elon Musk and Donald Trump bantered on X about national security, energy policy, immigration and more, in a freewheeling conversation that gave the former president a forum to launch personal attacks on his political rivals as both men reveled in their largely shared vision for the country.
   
• Kamala Harris stopped in San Francisco on Sunday to fundraise from the big donors of the liberal city, which has become a crucial source of tech money.  Some tech executives may be hoping the candidate will oust Lina Khan, the Federal Trade Commission chair.
   
• Ukraine’s surprise invasion of Russia’s Kursk region has quickly gobbled up territory, embarrassing Russian President Vladimir Putin and boosting Ukrainian morale after a year of war largely spent in bloody defensive battles.
   
• The freshest force in American politics wears striped socks, has fire-engine red hair and comes bearing french fries.

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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