Good morning. The Securities and Exchange Commission on Monday announced its first enforcement action against an issuer of nonfungible tokens, a corner of the digital-asset market that regulators had not yet touched.

The SEC said Los Angeles-based media and entertainment company Impact Theory raised $30 million by selling NFTs, known as Founder's Keys. Impact Theory said it was "trying to build the next Disney," and the NFTs would boom in value if the company succeeded.

Impact Theory agreed to pay $6 million to settle the SEC investigation, which found the company should have registered the NFTs with the agency and provided buyers with standardized financial and risk disclosures. Two of the SEC's five commissioners disagreed, writing that Impact Theory's statements about the NFTs weren't enough to merit SEC regulation.

"We do not routinely bring enforcement actions against people that sell watches, paintings, or collectibles along with vague promises to build the brand and thus increase the resale value of those tangible items," commissioners Hester Peirce and Mark Uyeda wrote.

Hawaiian Electric denies causing Lahaina fire.

Hawaiian Electric said Monday that its power lines weren’t responsible for the wildfire that destroyed the town of Lahaina, killing at least 115 people, and blamed Maui County firefighters for an inadequate response.

The company made the statements in a public response to a lawsuit filed last week by Maui County that blamed Hawaiian Electric, the local electric utility known as HECO, for the blaze, and sought damages for costs the local government has incurred.

• Lawyers Descend on Maui After Historic Wildfire

Russia turns to little-known shipping companies to secure drone supply chain, skirting U.S. sanctions.

Russia is adapting to Western sanctions on its military supply chain by turning to a netherworld of shipping and logistics companies to bring in more of the armed drones from Iran now playing a pivotal role in its war in Ukraine, according to an assessment from the government in Kyiv reviewed by The Wall Street Journal.

Five Russian-flagged ships—named Baltiyskiy-111, Omskiy 103, Skif V, Musa Jalil and Begey—have taken 73 trips across the Caspian Sea to ports in Iran over the past year, according to the Ukrainian government document, which is based on intelligence and other sources. None of the ships has been sanctioned by the U.S.

• U.S. and Allies Seek Long-Term Military Aid for Ukraine 

• A black lung resurgence is prompting new mining rules.
   
• American Airlines was fined $4.1 million for keeping fliers on planes too long, the largest fine ever levied by the U.S. Department of Transportation for tarmac delays.
   
• Mallinckrodt on Monday disclosed that it faces a grand jury subpoena over sales of controlled substances as it filed for bankruptcy for the second time in three years.

Exxon predicts world will miss climate-change targets.

Exxon Mobil says the global effort to curtail greenhouse-gas emissions isn’t on track to keep the planet’s temperature from rising beyond an increase of 2 degrees Celsius by 2050.

Carbon-dioxide emissions stemming from the world’s burning of fossil fuels and energy consumption will shrink to 25 billion metric tons in 2050, down 26% from a peak of 34 billion in the current decade, the oil giant said in an annual outlook on Monday.

• Polluted Air Shortens Lifespans More Than Tobacco, Study Finds

Idalia intensifies into hurricane, bears down on Florida.

Tropical Storm Idalia strengthened to a hurricane as it churned toward Florida early Tuesday, forcing emergency preparations and evacuations in the state. The storm is expected to make landfall Wednesday as an “extremely dangerous major hurricane” and lash the Gulf Coast, according to the National Hurricane Center.

• Companies are delaying upgrades, losing workers or avoiding hiring extra help and moving to charge customers more as a result of higher fuel prices.
   
• Terry Gou, the billionaire founder of iPhone assembler Foxconn Technology Group, said he plans to run for Taiwan’s presidency, complicating a closely watched contest that could reshape the island’s testy relations with Beijing and affect U.S. policy toward China.

Generative AI, by some estimates, stands to double the rate of U.S. productivity growth after a decade of widespread adoption and add trillions of dollars a year to global economic output. But such game-changing innovation is sure to bring plenty of disruption to the workplace. WSJ Pro in a new series examines how to leverage generative AI at work and navigate the risks and rewards of this transformative technology.

• You’ve heard of quiet quitting. Now companies are quiet cutting.
   
• OpenAI is launching a business version of its ChatGPT tool, putting the artificial-intelligence startup in direct competition with its largest backer and partner, Microsoft.
   
• A crisis that has engulfed Spanish soccer expanded in bizarre and unexpected directions Monday.
   
• Former President Donald Trump’s trial on charges that he conspired to overturn his 2020 election loss is set to start March 4, 2024—one day before Super Tuesday.

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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