Good morning. More companies are choosing to voluntarily alert the Justice Department to instances of potential criminal misconduct after the department upped the rewards for doing so, a senior department official said at a white-collar crime conference hosted by the New York City Bar Association on Wednesday.

Assistant Attorney General Kenneth Polite Jr., who leads the DOJ’s criminal division, said that despite the fact that new incentives for companies to self-report were announced earlier this year, the department has already seen a shift in the number of corporate disclosures.

• Expanded self-disclosure policy announced earlier this year: Under the policy, companies that disclose wrongdoing to the Justice Department, fully cooperate and fix underlying problems are eligible for discounts on financial penalties or even a promise that prosecutors won’t bring a case altogether.
   
• Priorities at the division: Polite said the criminal division is also looking into increasing visibility into its enforcement actions, including in how it selects monitors in settlements and how and when it charges individual executives.
   
• Resources for Compliance Departments: Polite, who once served as chief compliance officer of power company Entergy, said it is also important to empower compliance chiefs and to allocate adequate resources to compliance departments.

Lawsuits by moderators of violent online content pose threat to Big Tech

Musa Abubakar and 183 other content moderators in Kenya are now part of a lawsuit against a contractor for Facebook-owner Meta Platforms, and the social-media giant itself. The moderators accuse the company, California-based Sama, and Meta of worker exploitation and unfair termination. In legal filings, they say that reviewing graphic content like the videos Abubakar says he was regularly asked to watch has led to depression, PTSD and anxiety. It is one of three lawsuits in Kenya that are casting a fresh spotlight on the tech industry’s far-flung, outsourced workforce.

Sama denies the allegations and says it supported workers like Abubakar with benefits such as health insurance and counselors. Meta declined to comment on the litigation. It is appealing decisions that allowed plaintiffs to name it as a co-defendant in two of the cases, including the one Abubakar is part of.

• The Federal Trade Commission is investigating whether baby-formula makers colluded on bids for lucrative state contracts. 
   
• Lawyers for FTX investors said they finally served Shaquille O’Neal—again. Process servers pursued the NBA legend for months as part of a lawsuit targeting the failed cryptocurrency exchange and celebrities who appeared in its ads. The other celebrity defendants didn’t contest their service of process, but O’Neal did.
   
• Threats to the global banking system have ebbed, but the industry might be forced to curtail lending and revamp business models in an era of higher interest rates, industry executives said Wednesday.

U.S. and China see fragile opportunity to repair ties

After months of recrimination, U.S.-China relations are entering a new phase likely to determine whether the two powers are able to restore high-level exchanges derailed by a Chinese balloon earlier this year.

A first barometer of the chance for success is a dinner planned for Thursday in Washington, where Commerce Secretary Gina Raimondo will sit down with her Chinese counterpart, Wang Wentao. It will be the first cabinet-level meeting in Washington between the two countries during the Biden administration.

• Special House Panel Takes Aim at China in Proposed Laws

Wagner chief’s feud with Russian military cracks Putin’s image of control

The escalating conflict between the owner of Wagner and Russia’s top military leadership, a tale of perceived betrayal with roots in the Syrian war, represents the first significant crack in the country’s establishment since the invasion of Ukraine began more than a year ago.

Meanwhile, the head of Wagner said that 20,000 of his troops had been killed in the battle for the eastern Ukrainian city of Bakhmut, a monthslong fight that drained Russia’s military manpower.

• China Draws Russia Closer While Pushing Ukraine Peace Plan
• Russian Indicted in U.S. Lobbies for Freedom Through a Prisoner Swap

• Fresh out of an energy crisis, Europeans are facing a food-price explosion that is changing diets and forcing consumers across the region to tighten their belts—literally.
   
• The Biden administration isn’t working with investors on how to respond to a potential default on the U.S. debt, Treasury Secretary Janet Yellen said, adding that the focus remains on raising the debt ceiling so the government can pay its bills on time.

• Why It’s Getting Harder to Do Business in China
   
• How Can Companies Use Generative AI? Here’s an Early Adopter.
   
• Corporate Compliance: What to Know About Economic Slowdowns, Budget Cuts and ChatGPT
   
• How the Justice Department Says It Is Fighting Corporate Fraud
   
• Companies Are Tracking These Emerging Risks. Here’s How.
   
• How the Commerce Department Views Export Controls and National Security

• Target said Tuesday it would remove some products related to Pride Month from stores after a backlash from customers caused employees to feel unsafe, becoming the latest company to get drawn into the U.S. culture wars.
   
• Elon Musk said more companies should consider running lean like Twitter.
   
• This is the year that bank stocks became meme stocks.
   
• Activist investor Jana Partners plans to launch a proxy battle with Freshpet and nominate four directors to serve on the pet-food company’s board.
   
• Laws designed to prevent the spread of misinformation and disinformation are having an opposite and chilling effect, the president of the Committee to Protect Journalists said Wednesday, warning that some countries are using the rules to silence independent reporting.
   
• Startups that promised to make farming a high-tech business are withering, suffering from rising costs, tight financing, pests and other problems that have troubled traditional agriculture for centuries.

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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