Good morning. A coalition of business groups sued California to overturn a state law that would require thousands of companies to publicly report their greenhouse-gas emissions.

• Details of the suit: The U.S. Chamber of Commerce and American Farm Bureau Federation filed the lawsuit in a Los Angeles federal court Tuesday alongside four California business groups. They argue that the law violates First Amendment protections against compelled speech and that California is attempting to act as a national emissions regulator.
   
• Those opposed to the law: “The days of California setting the standard for the rest of the nation are gone,” said Tom Quaadman, executive vice president of the Chamber’s capital-markets group. If California’s law is allowed to stand, he said, it could usher in a patchwork of state requirements that could theoretically overlap or even contradict one another.
   
• View from the legislature: California State Sen. Scott Wiener, a Democrat who wrote the law, said the groups’ lawsuit is baseless and denied their claims that implementing the measure would be costly.
   
• Background: Signed by Democratic Gov. Gavin Newsom in October, the law directs companies to calculate and disclose a range of emissions from their own operations, as well as those of their suppliers and customers. Thousands of publicly traded and private firms that do business in California and have at least $1 billion in annual revenue are expected to have to comply.

Citigroup sued over handling of online scams.

New York Attorney General Letitia James sued a unit of Citigroup, alleging that the bank had failed to protect its customers from online scams and then illegally denied those account holders reimbursements.

Consumer losses. The suit described the experiences of several unnamed New Yorkers who lost money through scams related to their Citi bank accounts. In one instance, a bank customer lost $40,000 after clicking on a link in a text message that appeared to be from Citi.

HSBC slapped with $73 million U.K. fine over deposit insurance.

U.K regulators dinged global banking giant HSBC Holdings for "serious failures" in identifying which customer holdings were covered by deposit insurance.

The Prudential Regulation Authority levied a fine of £57.4 million, or $73 million, saying the problems at one HSBC unit were so bad they "materially undermined the firm’s readiness for resolution." It was the second-largest penalty in the history of the PRA, a unit of the Bank of England.

• Elon Musk’s controversial multi-billion pay package as chief executive of Tesla was struck down Tuesday by a judge.
   
• Meta Platforms’ Mark Zuckerberg, TikTok’s Shou Zi Chew and other tech CEOs will take heat on Wednesday from senators who say that online risks for children are growing—and going largely ignored by some social-media platforms.
   
• Venezuela’s regime said Tuesday it would stop accepting deportation flights from the U.S. if the Biden administration follows through with a threat made hours earlier to reimpose sanctions on the country’s oil-and-gas industry.
   
• Sotheby’s didn’t help a private dealer dupe Russian fertilizer billionaire Dmitry Rybolovlev into overpaying for art, a New York federal jury found on Tuesday.
   
• Rep. Cori Bush (D., Mo.) said the Justice Department is investigating whether her campaign improperly paid her husband to provide personal security.

Evergrande is finished. China’s property woes aren’t.

The poster child of China’s property crisis is no more. But the mess that triggered the downfall of China Evergrande is far from over.

If anything, the pain from the sector’s slow-motion collapse is likely to be felt just as acutely this year as last year, with China looking for ways to drive growth in a global economy that is poised to slow for the third year in a row.

• China’s Economic Pain Worsens as Real-Estate Sales Plummet
• Negative Takes on China’s Economy Are Disappearing From the Internet

Job quitting fell 12% last year—and that’s bad news for the economy.

Workers called it quits less frequently in 2023, a sign confidence in the labor market is falling as the U.S. economy is expected to slow and Americans are taking longer to find new jobs.

Big slowdown. Americans quit 6.1 million fewer jobs last year than in 2022—a decline of 12%, the Labor Department said Tuesday. In December alone, quits fell to the lowest monthly level in nearly three years, after adjusting for seasonal fluctuations.

• Regional militias such as Hamas have escalated bloodshed, presenting a dilemma for Tehran over how much support to give without drawing retaliation.
   
• An Iraqi militia suspected of involvement in the drone strike that killed three American soldiers said Tuesday it was suspending attacks on U.S. forces in Iraq and Syria.
   
• Ngozi Okonjo-Iweala, the director-general of the World Trade Organization, said the framework for how global trade agreements are reached should be reviewed for possible improvements, while expressing optimism that the business community can adjust to new challenges.
   
• Hong Kong outlined a new national security law that would broaden laws covering sedition and expand the range of material considered state secrets, bringing it more in line with mainland China.
   
• Germany’s economy contracted in the final quarter of 2023, only narrowly missing a recession, hurt by low global demand and high inflation which continued to weigh on the country’s economy.
   
• If there is one thing President Emmanuel Macron has learned during his seven years in office, it is that no French leader can ignore la France profonde.
   
• Falling mortgage rates could help home buyers in two ways this year: Houses might become slightly more affordable, and there might finally be more listings to choose from.

• United Parcel Service said it planned to shed about 12,000 jobs this year and mandated staff work from offices five days a week starting March 4.
   
• House Republicans are moving ahead with the impeachment of Homeland Security Secretary Alejandro Mayorkas.
   
• Republicans generally love tax cuts, but some in the party are objecting to a bipartisan deal for $78 billion in breaks for businesses and low-income families.
   
• The Pentagon wants to develop advanced weapons systems to counter emerging overseas threats. Many defense contractors are avoiding projects that could turn into money-losers.
   
• These are humbling times for Europe. The continent barely escaped recession late last year as the U.S. boomed. It is losing out to the U.S. on artificial intelligence, and to China on electric vehicles. If Europe is going to compete with the U.S. and China, it will need to rethink its balance between regulation and innovation.
   
• Androids of various shapes, sizes and functions are now employed doing everything from autonomously ferrying goods around warehouses to delivering food on college campuses. But far from replacing humans entirely, companies are finding automatons need a little hand-holding to learn how to function in the real world.

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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