Good morning. The U.S. is preparing to crack down on evasion of its marquee sanction on the Russian oil industry, an attempt to shore up a novel price-cap regime that has seen its effectiveness wane.

Treasury Secretary Janet Yellen said in an interview that the U.S. would “very likely” take steps to enforce the $60-a-barrel price limit that the U.S. and its partners imposed on Russian oil sales.

• "We mean business": In an interview aboard an Air Force jet, Yellen said “we are looking at enforcement very carefully and we want to make sure that market participants are aware we take this price cap seriously, and, to the extent Western services are used, we mean business about abiding by the cap."
   
• Fraud questions: Russia has succeeded in selling its crude oil above the $60 limit for several weeks, with benchmark prices rising as high as $85 a barrel in late September, raising questions about whether firms are defrauding the cap.
   
• Broad crackdown: The Justice Department, which is conducting a broad effort to crack down on violations of sanctions imposed on Russia’s energy exports, has also homed in on the possible activities of a prominent oil trader.

The WSJ Pro Sustainable Business Forum on Oct. 12 will include a discussion about risk and resilience in corporate sustainability programs with Maryam Golnaraghi, director of climate change and environment at The Geneva Association, and Torolf Hamm, head of physical catastrophe and climate risk management at Willis Towers Watson.

Other sessions will cover reporting to U.S. and European standards, the role of artificial intelligence and what corporate decarbonization measures are proving effective. Register here.

Crypto sector seeks lawyers, compliance officers after reputational hits.

The cryptocurrency industry has been battered by the collapse of crypto exchange FTX and the fraud allegations surrounding it, as well as implosions at other big crypto players. For the firms that remain standing, growing regulatory pressure means there is a stronger need than ever for compliance talent.

Given the reputational and financial hits to the industry in the past year, attracting legal and compliance personnel to work for crypto firms is challenging, say those hiring for positions in the industry. But the expertise that compliance professionals can bring to the job is likely to make a big impact in helping to rebuild the sector’s damaged reputation.

• The Crypto Economy’s Big Hope Is Already in Crisis

Law firms alter diversity programs amid legal challenges.

Two large law firms have changed their fellowship programs meant to recruit underrepresented law students amid lawsuits led by a prominent opponent of affirmative action.

The revisions, by firms Morrison & Foerster and Perkins Coie, come as employers, investors and judges look to sort out the ramifications of the Supreme Court’s blockbuster June ruling that outlawed affirmative action in higher education. Other new cases are brewing, including an escalating battle over a venture-capital firm’s program that makes grants to Black female entrepreneurs.

Israel readies for all-out war in Gaza.

Israel intensified airstrikes on Gaza on Tuesday while the Israeli military prepared for a ground invasion of the Palestinian enclave that Israeli officials warned could be more destructive than any offensive there in recent history.

Israeli airstrikes reduced parts of an exclusive Gaza City neighborhood to rubble as the Israeli government stepped up its reaction to this weekend’s cross-border incursion by Hamas gunmen who killed more than 900 Israelis and took more than 100 hostage. Israeli strikes have killed more than 780 people in Gaza since, according to the enclave’s health ministry.

Israel’s warnings of the coming offensive in Gaza have heightened fears of devastation among more than two million Palestinians trapped there. Israeli officials have urged Palestinians fleeing the bombing to leave the Gaza Strip entirely—an option they don’t have since the strip’s borders are sealed by both Israel and Egypt.

The continuing airstrikes underscore a dilemma facing Israel’s government, which is trying to free the more than 100 Israelis who were taken captive during the Hamas raid over the weekend. Hamas’s military wing on Monday threatened to execute civilian hostages if Israel continued to bomb civilian homes without warning. Israel’s heavy strikes on the strip also risk accidentally killing hostages, who are being held in unknown locations.

• Israel Goes on Offensive Against Hamas as U.S. Warns Hezbollah
• Threat to Israel From Hezbollah and Iran Raises Risk of Wider Conflict
• Oil Prices, Defense Stocks Rise as Israel-Hamas Conflict Rattles Markets
• Why the Israel-Hamas War Matters for Investors
• Israel Orders Chevron to Shut Down Gas Platform Near Gaza
• Schumer Criticizes China’s Response to Israel in Meeting With Xi

U.S., China both try to gain upper hand ahead of Biden-Xi summit.

Even as the U.S. and China are trying to repair ties ahead of an expected summit between President Biden and Chinese leader Xi Jinping, Washington and Beijing are jockeying for the upper hand.

As soon as the coming days, the Biden administration is expected to roll out long-awaited updates to export-control measures that would further restrict China’s access to advanced semiconductors and chip-making tools, according to people briefed on a draft of the updates. Xi is planning to travel to Vietnam, said people close to Beijing, with the aim of showcasing the two neighbors’ close relations after Biden courted Vietnamese leaders in Hanoi last month.

• China’s Economic Gloom Takes Shine Off Its Golden Week
• Evergrande Investors Warn of ‘Uncontrollable Collapse’
• China’s Country Garden Succumbs to Debt Crisis After Sales Plunge

• A Russian court upheld the detention of Wall Street Journal reporter Evan Gershkovich on Tuesday, denying his lawyers’ latest appeal to free him since he was taken into custody during a reporting trip in Russia.
   
• What should board members ask about cybersecurity?
   
• It has been an anemic peak season for ocean freight haulers as container shipping rates have plunged from pandemic highs and Americans and Europeans continue to pull back on purchases of consumer goods.
   
• Canadian auto workers went on strike against General Motors after the carmaker failed to reach a temporary agreement ahead of an 11:59 p.m. E.T. Monday contract deadline.

• Tech companies are touting new AI technology that can spit out business memos or computer code. They are still figuring out how those products will generate a profit.
   
• Rep. Kevin McCarthy’s sudden ouster as House speaker sent a shock wave through Washington but it could also shake up the outlook for 2024, when Republicans are working to hang onto control of the chamber. McCarthy opened the door to a political comeback Monday.
   
• Robert F. Kennedy Jr. ended his long-shot Democratic presidential bid Monday, announcing plans to run as an independent, which could make him a spoiler in the general election.
   
• Organizers of the 2028 Los Angeles Olympics said Monday that they want to include baseball and softball, cricket, flag football, lacrosse and squash in the Games—sports that promise a large number of extra viewers, and also a series of new headaches.
   
• Molson Coors Beverage secured a credit-rating upgrade and unveiled a plan for $2 billion in share buybacks, moves that follow rising volumes and cash flows in part aided by the aftermath of the Bud Light backlash.

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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