Good morning. The U.S. Justice Department launched its first cash-for-tips program last week, but some critics told Risk & Compliance Journal's Mengqi Sun they see potential flaws in the three-year trial plan such as the lack of a dedicated fund to pay whistleblowers and a $50 million award ceiling.

• What's the program all about? The pilot program, which began Thursday, offers financial payouts to people who give the Justice Department original information or analysis relating to financial crimes, bribery or healthcare fraud. Deputy Attorney General Lisa Monaco announced the program’s inception in March.
   
• Program's intended impact: The program is designed to bridge regulatory gaps among existing tips award programs at other agencies, and has similarities to the Securities and Exchange Commission’s whistleblower award program, observers said. The new program opens up opportunities for more individuals with information on a range of fraud and white-collar crimes to receive compensation, particularly if they might not have been eligible for other award programs.
   
• Right attitude for success? “This is a group that is enthusiastic about trying to bring whistleblowers in,” said David Kovel, an attorney for whistleblowers and managing partner at law firm Kirby McInerney. “It strikes me as it’s the right attitude for success.”
   
• Potential issues: But lawyers for whistleblowers or who work with companies on whistleblowing investigations said the program could be improved. Their concerns include the program’s funding source and anonymity protections, the absence of a minimum percentage payout, and unease about giving more discretion over the award process to the Justice Department.

Google loses antitrust case over search-engine dominance.

A federal judge ruled that Google engaged in illegal practices to preserve its search engine monopoly, delivering a major antitrust victory to the Justice Department in its effort to rein in Silicon Valley technology giants.

Google, which performs about 90% of the world’s internet searches, exploited its market dominance to stomp out competitors, U.S. District Judge Amit P. Mehta in Washington, D.C., said in the long-awaited ruling.

“Google is a monopolist, and it has acted as one to maintain its monopoly,” Mehta wrote in his 276-page decision released Monday, in which he also faulted the company for destroying internal messages that could have been useful in the case.

• Google’s Antitrust Loss Set to Reshape Search and Mobile Industries

Elon Musk revives lawsuit against OpenAI and Sam Altman.

Elon Musk revived his lawsuit against OpenAI in federal court, alleging that he was manipulated into believing that the artificial-intelligence company he was helping launch was a nonprofit.

What's in the new lawsuit? Sam Altman, chief executive of OpenAI, allegedly courted and deceived Musk, promising him they would pursue a nonprofit venture, according to the complaint filed in U.S. District Court in Northern California on Monday. Musk invested tens of millions of dollars and recruited top AI scientists for the project, according to the lawsuit.

• Fannie Mae and Freddie Mac are preparing to impose stricter rules for commercial-property lenders and brokers, following a budding regulatory crackdown on fraud in the multitrillion-dollar market.
   
• Glencore will pay $152.3 million in fines and compensation after failing to have taken necessary measures to prevent a business partner from bribing a Congolese public official in 2011, the Swiss attorney general ruled Monday, according to Dow Jones Newswires. 

Unraveling trades fuel global market rout.

The unwinding of some of Wall Street’s most popular trades intensified Monday, sending Japanese stocks to their worst day since the 1987 market crash and walloping U.S. technology shares.

The tech-heavy Nasdaq led the way, falling 3.4%. Every industry segment in the S&P 500 declined, pushing the broad index 3% lower. All 30 stocks in the Dow Jones Industrial Average ended lower and the blue-chip index shed 1034 points.

It is an example of the popular trades that are coming unraveled as investors mull weakening U.S. economic data and tech shares’ sky-high valuations while awaiting the Federal Reserve’s next move on interest rates.

• Market Selloff Upends Fed Rate-Cut Calculus
• Is This 1987 All Over Again? What’s Driving the Market Meltdown?
• This Doesn’t Look Like Recession. Here’s How One Could Happen.

CrowdStrike to Delta: Stop pointing the finger at us.

CrowdStrike says that it isn’t to blame for Delta Air Lines’ dayslong meltdown following the tech outage caused by the cybersecurity company, and that it isn’t responsible for all of the money that the carrier says it lost.

In a letter responding to the airline’s recent public comments and hiring of a prominent lawyer, CrowdStrike said Delta’s threats of a lawsuit have contributed to a “misleading narrative” that the cybersecurity company was responsible for the airline’s tech decisions and response to the outage.

• Midway through the year, leaders of some of the biggest companies are seeing signs of troubles in the world’s two biggest economies.
   
• Small businesses are facing steep increases​ in insurance costs this year—and that is prompting them to make difficult decisions on how they run their operations.
   
• The Middle East braced for another round of violence Monday, after U.S. Secretary of State Antony Blinken said on a call Sunday with Group of Seven foreign ministers that Iran could attack Israel within 24 to 48 hours, according to two diplomats briefed on the call.
   
• Debby was downgraded to a tropical storm Monday afternoon after hitting Florida with heavy rain and leaving one dead.
   
• More states pass laws are banning utilities from shutting off customers during extreme heat.
   
• The Reserve Bank of Australia left interest rates on hold, warning that inflation will remain a problem for some time yet.

Companies sue tech firms after outages, but it’s an uphill battle.

Companies including car dealerships, hospitals and airlines that have experienced operational problems after hacks or technical issues at their technology suppliers are seeking to recoup losses. But those filing lawsuits may face an uphill—and expensive—battle as they try to find an opening in contracts that generally protect vendors.

Contracts typically protect software companies in the event of problems or outages, specifying that customers can receive only 12 months of their fees in compensation if something goes wrong, said Melanie Alexander, a senior director analyst at research firm Gartner.

“That is probably not going to cover a lot of the expenses that the customer is going to have,” she said.

• Monday’s market meltdown was nerve-racking for traders around the world, but many self-directed individual investors couldn’t do much about it because of outages at major retail brokerages.

• Illegal migration has plummeted to the lowest monthly level since 2020, but the situation might not last.
   
• Recent economic turbulence threatens to reinforce voters’ view that the American economy is shaky, giving former President Donald Trump’s campaign a chance to shift onto stronger ground in his race against Vice President Kamala Harris.
   
• Bangladesh Prime Minister Sheikh Hasina resigned and fled the country on Monday after a government crackdown on violent student protests sparked a revolt against her rule.
   
• An Israeli military investigation that has roiled the country with allegations of sexual abuse by its own ranks was set in motion by doctors who reported injuries to a Palestinian detainee that were so severe they required surgery, medical staffers familiar with the matter said.
   
• Studies being used to decide whether the U.S. should authorize an ecstasy-based drug for traumatized patients missed serious side effects and were marked by bias.
   
• Bloomberg News is parting ways with the lead author of an article that incorrectly said Wall Street Journal reporter Evan Gershkovich had been released by Russia, among several disciplinary actions the news organization took after a review of the matter.

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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