Good morning. Elizabeth Holmes, the founder of Theranos Inc. who was convicted of defrauding investors, was sentenced to more than 11 years in prison, capping the extraordinary downfall of a onetime Silicon Valley wunderkind who promised to revolutionize blood testing.

U.S. District Judge Edward Davila, who oversaw the trial in which Ms. Holmes was found guilty of running a yearslong fraud scheme at her blood-testing company, delivered the sentence Friday in federal court. A jury convicted Ms. Holmes in January on four charges that she misrepresented the startup’s technology, finances and business prospects to investors.

Judge Davila ordered Ms. Holmes to serve 135 months, or 11.25 years, and to surrender on April 27, 2023. The sentence length falls in the midrange of those received by the dozen white-collar criminals with similar offenses cited by the government in its sentencing memorandum.

Ms. Holmes has 14 days to appeal her conviction; her lawyers will seek to let her stay out of prison pending her appeal.

Her sentence is a remarkable outcome for a startup executive buoyed by Silicon Valley’s fake-it-until-you-make-it culture, in which a founder’s vision and bravado are often the biggest draws of attention and money. In the case of Theranos, prosecutors showed that Ms. Holmes’s hype and hubris went beyond acceptable norms, misleading investors with claims that unproven technology was ready for real-world use and risking patients’ health by providing them with lab results that weren’t reliable.

“The fact that she was prosecuted, taken to trial and convicted goes a long way of sending a message to Silicon Valley about the line between puffery and sales pitches on the one hand, and material misrepresentations on the other,” said Amanda Kramer, a former federal prosecutor in New York and attorney with Covington & Burling LLP.

When FTX raised $420 million from an array of big-name investors in October last year, the cryptocurrency exchange said the money would help grow the business, improve user experience and allow it to engage more with regulators.

Left unmentioned was that nearly three-quarters of the money, $300 million, went instead to FTX founder Sam Bankman-Fried, who sold some of his personal stake in the company, according to FTX financial records reviewed by The Wall Street Journal and people familiar with the transaction.

Meawhile, the collapse of FTX has put its new management at odds with regulators in the Bahamas over who should control billions in sparsely documented cash and cryptocurrency assets that are presently out of customers’ reach. 

The dispute over which FTX entity controls customers’ deposits may determine how and when customers may get their money back, and whether their path to repayment will run through a bankruptcy court in Delaware or through a liquidation in the Bahamas.

• Bankrupt FTX Fires Three of Sam Bankman-Fried’s Top Deputies
• FTX Team Among Top Political Donors
• FTX Says Top 50 Creditors Are Owed $3.1 Billion
• Customers Worry They Will Never See Their Money Again
• Crypto Bank Silvergate Battles FTX Contagion Fears

• A Justice Department lawyer asked a federal judge to dissolve a partnership between American Airlines Group Inc. and JetBlue Airways Corp., winding down arguments in an antitrust trial that could determine the alliance’s fate.
   
• Attorney General Merrick Garland appointed a former federal and international war-crimes prosecutor as special counsel on Friday to oversee Justice Department investigations into former President Donald Trump.

Poorer countries secured a deal at United Nations climate talks to create a fund for climate-related damage as part of a broader agreement that failed to yield faster cuts in emissions sought by wealthy nations to avert more severe global warming.

The accord at the COP27 summit in this Egyptian seaside resort hands a victory to poorer nations that have demanded that money since the first U.N. climate treaty was signed three decades ago.

Ukraine’s retaking of Kherson is rippling across battle fronts far afield, as Moscow redeploys troops to regain the initiative and Kyiv seeks to expand its recent advantage over invading Russian forces.

Russia’s retreat from Kherson, the only regional capital it gained in almost nine months of fighting, was an embarrassing setback, but Moscow appears to have safely withdrawn many of its best troops, enabling them to shift elsewhere, say military analysts.

• Ukraine Urges Evacuations as Pressure on Electricity Grid Intensifies
• Russia Redoubles Attacks in Ukraine’s East After Retreat From Kherson
• U.S. Presses Allies to Tighten Up Sanctions Enforcement on Russia

Though Europe has filled its reserves of natural gas for this winter, the clock is already ticking to secure energy for the coming years, which are expected to remain dogged by threats of severe shortages,

The European Union’s gas storage is around 95% full, and many analysts say the continent might avoid an energy calamity this winter. But procuring gas for coming winters is widely anticipated to become more difficult for European countries now that they are mostly cut off from Russian supplies and global competition is growing for finite cargoes of liquefied natural gas.

• U.S.-Europe Trade Booms as Old Allies Draw Closer

Chinese leader Xi Jinping has packed the top ranks of the Communist Party with a new generation of leaders who have experience in aerospace, artificial intelligence and other strategically important areas, as Beijing seeks to become a science and technology superpower that rivals the U.S.

• Consumer Spending Slumps Amid Covid and Property Restrictions

• Iranian security forces swept through the country’s Kurdish region with helicopters and armored vehicles, firing live ammunition and raiding homes in search of opponents, a show of force that demonstrates how the government’s response to a two-month-old protest movement is taking a more violent turn.
   
• Turkey said it carried out a broad series of airstrikes in northern Syria and Iraq early on Sunday, intensifying a military campaign against Kurdish militants, whom the Turkish government blames for a deadly bombing in Istanbul a week ago.

The Public Company Accounting Oversight Board on Friday proposed tightening the rules that govern the controls audit firms use to assess the quality of their audits, a move aimed at improving the effectiveness of audits and better protecting investors.

A rule, if completed, would represent the first major change to the PCAOB’s standards on quality controls since it adopted them in 2003, shortly after the board was formed.

Walt Disney Co.’s board of directors on Sunday night replaced Chief Executive Bob Chapek with Robert Iger, the company’s former chairman and CEO who left the company at the end of last year, according to a company announcement.

“The board has concluded that as Disney DIS 0.38% embarks on an increasingly complex period of industry transformation, Bob Iger is uniquely situated to lead the company through this pivotal period,” said Susan Arnold, chairman of Disney’s board, in a statement.

“We thank Bob Chapek for his service to Disney over his long career, including navigating the company through the unprecedented challenges of the pandemic,” she added.

Sinking stock prices and a change in proxy-voting rules are emboldening many first-time shareholder activists to seek changes at some of the biggest names in American corporations.

Companies, always wary of activist advances, are feeling particularly vulnerable as a result of new rules imposed by U.S. regulators in September requiring the use of a so-called universal proxy card in corporate-director elections, bankers and lawyers say.

In the new format, directors nominated by a company must be listed on the same ballot as those put forth by activists, enabling investors to pick and choose, rather than voting entirely with either the company or the activist.

The first day of Twitter 2.0 got off to a chaotic start, after an avalanche of employees rejected Elon Musk‘s ultimatum that they commit to being “hardcore” and he raced to remake the social network to his liking.

Less than 24 hours after mass resignations rolled in, Mr. Musk called his remaining employees back to work on Friday morning, saying in a series of emails to staff that “anyone who actually writes software” should report to the company’s headquarters at 2 p.m. local time, adding that only those who can’t physically get there or have a family emergency are excused.

The email marked a sudden change after Twitter had told employees that their offices would be closed until Monday. Employees who had opted not to click “yes” on Thursday—meaning they effectively resigned according to Mr. Musk’s terms—weren’t locked out of their work email accounts by Friday morning, underscoring the uncertainty.

• Elon Musk Reinstates Donald Trump’s Twitter Account After Poll
• Tesla Board’s View That Musk Is Irreplaceable Emerged in Pay Trial

• Carvana Co., the used-car dealer that was a pandemic winner, is rushing to conserve cash as once-plentiful financing options dry up and business deteriorates.
   
• Volkswagen AG plans to stop manufacturing manual cars at one of its two China joint ventures, as Chinese consumers shift their buying from traditional combustion-engine cars to electric vehicles.
   
• Several of the world’s biggest tech companies are laying off employees. One company bucking the trend so far is TikTok.