Good morning. The Securities and Exchange Commission is dismissing 42 enforcement cases after finding that some of its employees improperly accessed legal records that should have been walled off from them, the agency said on Friday.

• Controversy over in-house courts: The dismissals involve cases pending in the SEC’s in-house courts, which have been a source of controversy for years. The move follows a broad review of records access that began last year, after the SEC disclosed a smaller number of instances in which clerical staff downloaded memos they weren’t supposed to see.
   
• Why they were dismissed: The SEC said it would dismiss its allegations even though the enforcement attorneys in charge of the cases didn’t see the restricted memos before they were used as the basis for an agency decision. The move to drop the cases, many of which were in litigation for years, was made to conserve resources, the SEC said.
   
• What's the concern? So-called independent agencies such as the SEC and Federal Trade Commission have their own court systems for adjudicating claims of wrongdoing that regulators make against businesses. Judges oversee trials and make initial decisions that can be reviewed by the agency’s commissioners. Many defendants and a growing number of corporations argue these in-house courts, which Congress authorized decades ago, are at odds with the federal government’s separation of powers. 

Other tipsters appeal after SEC awarded one whistleblower $279 million in Ericsson case.

Two whistleblowers who said they provided tips to the U.S. Securities and Exchange Commission and the Justice Department in a bribery case against Ericsson are both appealing the securities regulator’s decision to reject their claims while awarding another informant a record $279 million.

One person appealing named. The SEC issued the record award to one claimant in the Ericsson case last month, reports Risk & Compliance Journal's Mengqi Sun, but denied claims by two others, saying their information didn’t aid the agency’s enforcement action. One of the claimants appealing was identified as Liss-Olof Nenzell, a former Ericsson executive. The other remains anonymous, in keeping with whistleblower protection rules.

Meta requires office workers to return to desks three days a week.

Meta Platforms employees assigned to an office will have to start coming in three days a week starting in September, as the company shifts to a more structured hybrid schedule.

The change is meant to foster “the collaboration, relationships and culture necessary for employees to do their best work,” a spokesperson said. 

• Three companies with ties to former chemical maker DuPont said Friday they had agreed to pay $1.185 billion in the first major settlement in a landmark environmental fight in which hundreds of communities allege that so-called “forever chemicals” in firefighting foam contaminated drinking water.
   
• The federal judge handling Walt Disney Co.’s lawsuit against Florida Gov. Ron DeSantis recused himself.
   
• Companies are increasingly tasking finance chiefs with developing systems to address environmental, social and governance issues, in the face of coming federal climate-disclosure rules and pressure from shareholders and employees.
   
• A dispute over missing grain assets has pitted American investors against a Ukrainian firm and comes amid longstanding questions about Kyiv’s commitment to battling corruption.

China wants U.S. to feel risk when operating in its backyard.

The U.S. has warned that the two militaries aren’t communicating. China rebuffed Washington’s push for a face-to-face meeting between U.S. Defense Secretary Lloyd Austin and Chinese Defense Minister Li Shangfu at an annual security conference in Singapore this week, pointing to sanctions Washington has put on Li.

Feeling the pressure. Beijing’s determination to throttle the channels of communication reflects China’s anxiety over the U.S. military’s presence in its backyard and a determination to make Washington feel a sense of risk over those operations, political and military analysts say.

• As China Risks Grow, Manufacturers Seek Plan B—and C and D
• U.S. Defense Chief Rebukes China as Warships Transit Taiwan Strait

• President Biden signed into law bipartisan legislation that suspends the $31.4 trillion debt ceiling, narrowly avoiding an unprecedented U.S. default that could have pushed the economy into a recession and touched off a financial crisis.
   
• Ukrainian President Volodymyr Zelensky said he was ready to launch a long-awaited counteroffensive but tempered a forecast of success with a warning: It could take some time and come at a heavy cost.
   
• The Biden administration is ready to begin talks without preconditions with Russia on steps to limit nuclear arms after the New Start treaty expires in 2026, national security adviser Jake Sullivan said in a speech Friday.
   
• Friday’s jobs report does little to change the Federal Reserve’s debate over holding rates steady this month. But it strengthens the likelihood that officials would pair any June pause with a stronger preference to raise rates later this year.

Cybersecurity risks and privacy rules add pressure on boards.

Companies shouldn’t wait for new rules around cybersecurity, privacy and emerging technologies to be finalized before preparing for them, lawyers say, particularly as senior executives with the right experience can be hard to come by.

Proposed cybersecurity rules from the Securities and Exchange Commission would require public companies to disclose which board members have security knowledge or experience, along with details about the board’s approach to cyber oversight. 

“The board issue is coming fast and furious onto the table around the world,” Dominique Shelton Leipzig, a partner in the cybersecurity and data privacy practice at law firm Mayer Brown, said at the WSJ Pro Cybersecurity Forum on Wednesday.

• Saudi Arabia said Sunday it would cut 1 million barrels of oil a day as part of a deal between OPEC and its allies after one of the most contentious production meetings in recent years amid concerns over slowing global energy demand.
   
• More than a year after the Federal Reserve began rapidly raising interest rates to tame inflation, the hallmarks of a widely expected recession remain elusive.
   
• Attorneys for both sides in a landmark environmental battle set to begin Monday in federal court are seeking to delay the trial so they can work out the terms of a potential settlement, according to a court motion filed late Sunday.
   
• The Pentagon scrambled two F-16 jet fighters Sunday in response to a private Cessna plane that flew over the nation’s capital, the U.S. Military said.
   
• Businesses are unveiling advertising campaigns and product lines to mark Pride Month, even as some conservatives try to build on recent clashes with Bud Light and Target by calling for boycotts of brands that advertise their support of the LGBT community.

Follow us on Twitter 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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