Good morning. Wall Street firms are facing a problem that is growing more difficult by the day, reports Risk & Compliance Journal’s Mengqi Sun: how to capture staff communications as required by regulators while the ways their employees talk to each other keep changing.

• The issue: On one hand, the Securities and Exchange Commission has been cracking down on so-called off-channel communications, where employees use personal devices and banned apps to send business-related messages that rules say must be recorded. On the other hand, the ways people communicate have changed since the regulations were first enacted, with almost everyone texting about almost everything these days.
   
• Regulators are active: Since December 2021, the SEC has filed charges against 40 firms and imposed more than $1.5 billion in fines for failing to maintain and preserve electronic communications, according to a speech given last week by Gurbir Grewal, the SEC’s enforcement division chief.
   
• New tools are included: The proliferation of new communication tools also complicates financial firms’ efforts to comply. The pandemic ushered in wider adoption of a range of new communication methods by employees working from home, and these tools have remained popular as many employees continue to work remotely, at least part-time.
   
• Advice to keep it broad: “Given this kind of zero-tolerance policy, every component of e-communications, every kind of platform is going to be relevant,” said Marc Gilman, general counsel and vice president of compliance at electronic communications compliance provider Theta Lake.

Biden taps emergency powers to assert oversight of AI systems.

The Biden administration invoked emergency federal powers to assert oversight of powerful new artificial intelligence systems, part of a new executive order aimed at reining in the risks of the disruptive technology.

Keeping appraised of threats. President Biden signed Monday an order invoking the Korean War-era Defense Production Act to compel major AI companies to notify the government when developing any system that poses a “serious risk to national security, national economic security or national public health and safety,” according to a White House fact sheet.

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SEC sues SolarWinds over 2020 hack attributed to Russians.

The Securities and Exchange Commission on Monday sued SolarWinds, the software company victimized by Russian-linked hackers over three years ago, alleging the firm defrauded shareholders by repeatedly misleading them about its cyber vulnerabilities and the ability of attackers to penetrate its systems.

Evolving regulatory policy. The SEC’s lawsuit is a milestone in its evolving attempt to regulate how public companies deal with cybersecurity. A hack that steals business secrets or customer data often pummels the victim company’s stock price, showing why firms with public shareholders have to accurately disclose such threats, the SEC says. The regulator recently imposed stricter cybersecurity reporting rules for public companies.

• Google Chief Executive Sundar Pichai tried to beat back accusations of unfair dealings with fellow tech giant Apple as he testified in his company’s high-stakes antitrust trial.
   
• Meta Platforms will stop showing ads to European teens as part of a plan announced Monday to launch subscription-based versions of its social-media products to comply with the continent’s regulations.
   
• The Education Department will withhold a $7.2 million monthly payment for a major student loan processor because it failed to send out timely billing notices to millions of borrowers.
   
• A federal judge late Sunday reinstated a gag order barring Donald Trump from publicly criticizing prosecutors, potential witnesses and court staff involved in the criminal case charging him with conspiring to overturn the 2020 election.
   
• Americans are increasingly getting paid for not doing work.

Climate risk is becoming uninsurable. Better forecasting can help.

A new generation of mathematical modelers might be able to help defuse a looming insurance crisis.

More places uninsurable. Floods, electrical storms and wildfires, together with raw-material inflation, are pushing up premiums for so-called catastrophe insurance. Some Americans are moving away from riskier places such as Florida, while others are foregoing cover.

Modeling shifts. The fear is that more areas could become uninsurable. Underwriting requires confidence that models somewhat accurately reflect risks, which climate change is amplifying in scary, unknown ways.

Crumbling train bridges are everywhere. Railroads and cities are sparring over when to fix them.

Following a toxic train derailment in East Palestine, Ohio, earlier this year, mayors and municipal leaders are increasing scrutiny of railroad operations and the infrastructure around their communities. There are more than 70,000 railroad bridges in the U.S. and many of the steel, concrete or timber bridges are showing their age. The structures—some of which were built in the 1800s—play a critical role in the movement of freight nationwide.

Some local leaders are pushing for companies to speed up improvements to rail infrastructure to avert accidents. The officials say they often have to wait for rail bridge owners, typically railroad operators, to make fixes if safety concerns are raised outside of inspections.

• Israeli tanks and infantry temporarily seized control of a strategic road linking the Gaza Strip’s north and south.
   
• Israel’s Prime Minister Benjamin Netanyahu issued a rare apology Sunday that inadvertently framed the political crisis that has engulfed him.
   
• Some economists say the rise in bond yields’ term premium is worth two or three Fed rate hikes.
   
• Mike Korchinsky used offset credits to funnel millions of dollars to conservation projects. Now he’s fighting a crisis of confidence in the industry.
   
• The end of a labor strike against against Detroit’s three automakers portends difficult times ahead, with the new pacts expected to push the companies’ labor costs higher than initially expected when talks began.

• For decades, conservatives have tried—and largely failed—to fundamentally reshape the federal government. If Donald Trump retakes the White House, they might succeed.
   
• Stocks posted solid gains Monday ahead of this week’s central-bank meetings, jobs data and a highly anticipated borrowing announcement from the Treasury Department.
   
• Billionaire and former Marvel executive Isaac “Ike” Perlmutter offered moral and logistical support to his friend Nelson Peltz last year when the activist investor campaigned for big changes at Disney. As Peltz prepares a fresh challenge to the company, Perlmutter is proving to be a key financial ally, too.
   
• Chief executives and chief marketing officers often don’t see eye-to-eye on what precisely the role of CMOs entails or even on the effectiveness of corporate strategy. And in some cases, the disconnect is growing.
   
• The Israel-Hamas war has sparked a rise in antisemitic incidents in Europe that has many Jews thinking of leaving.

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.

You can reach us by replying to any newsletter, or email David at david.smagalla@wsj.com.