Good morning. More big financial institutions are revealing that they are in talks with U.S. regulators to settle investigations into their employees’ use of messaging applications that might have broken record-keeping rules, reports Risk & Compliance Journal's Mengqi Sun. 

Wells Fargo disclosed in its quarterly earnings report filed Tuesday that it is in discussions with the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission to resolve such investigations, but it said there is no guarantee of the outcome. The bank reported the investigations in its previous quarterly and annual reports.

Société Générale and its U.S. investment banking subsidiary, meanwhile, have reached settlements with the SEC and CFTC over its employees’ use of messaging apps and the settlements are pending regulatory approval, SocGen said Thursday in its second-quarter earnings report.

BNP Paribas said last week that it had reached proposed resolutions with the SEC and CFTC to resolve similar probes.

• The issue: U.S. regulators have been probing financial institutions over compliance with record-keeping requirements. Banks and brokerage firms are supposed to preserve and monitor their employees’ written communications, which creates a paper trail for regulators.
   
• Recent legal landscape: These disclosures come after 11 of the world’s largest banks and brokerages in September agreed to collectively pay $1.8 billion in fines to resolve regulatory investigations, admitting that they violated rules that require storage of written communications. Those investigations examined how traders and brokers used encrypted apps such as WhatsApp to discuss investment terms, client meetings and other business.

Tech entrepreneur admits to being hacker in $4.5 billion bitcoin heist.

The mystery hacker behind one of the largest crypto heists ever revealed himself Thursday as a New York tech entrepreneur married to a wannabe rapper named Razzlekhan.

Ilya Lichtenstein admitted to the hack at a hearing in federal court in Washington, D.C., saying that in 2016 he broke into crypto exchange Bitfinex’s network and stole bitcoin that is now worth billions of dollars. He was in court to plead guilty to conspiring to launder money from the heist. What wasn’t expected was the admission he played a critical role in the hack.

His wife, Heather Morgan, also pleaded guilty Thursday at a separate hearing in the same court to conspiring to launder the stolen digital currency and conspiring to defraud the U.S.

Albemarle to pay $218.5 million to settle foreign bribery probe.

Albemarle, the world's most valuable lithium producer, reached an agreement in principle with U.S. authorities to pay a $218.5 million fine to resolve an investigation into potential improper payments by third-party sales representatives.

The agreement, which has yet to be finalized, would resolve possible violations of the U.S. Foreign Corrupt Practices Act, an antibribery law, which Albemarle voluntarily disclosed to the Justice Department and U.S. Securities and Exchange Commission in 2018.

• Fraud doesn’t mean what it used to. A string of high-profile federal prosecutions are falling apart as courts apply a newly narrowed legal definition of the crime.
   
• Sports collectibles company Panini America filed a federal antitrust suit against Fanatics, alleging that its new rival has attempted to monopolize the market for trading cards with its dramatic foray into the sector two years ago.
   
• Around 17,000 investors in private-equity funds managed by GPB Capital Holdings might get some of their roughly $1.7 billion back, after a nearly five-year wait.
   
• Helping drive a surge in the price of the pork belly used to make bacon is an animal-welfare law in California requiring pigs to be given at least 24 square feet of pen space for their meat to be sold in the state, which accounts for roughly 15% of U.S. pork consumption. 
   
• A hot Israeli startup promised to use artificial intelligence to spread the risk of insurance policies. Now, Vesttoo is embroiled in scandal thanks to an old-fashioned problem: an alleged multibillion-dollar fraud involving faked letters of credit.

Economic slowing is in the cards, says Fed’s Tom Barkin.

The impact of Federal Reserve interest-rate hikes that began early last year “should start to really hit around now,” the president of the Richmond Fed said, adding that those who keep predicting a recession will eventually be right.

“No one banished the business cycle,” Tom Barkin said at an event in Blacksburg, Va. “Most recessions come suddenly. Remember the pandemic or the global financial crisis. Unexpected shocks cause consumers and businesses to pull back in unison.”

A recession now could be less severe than what was experienced in the 1980s or during the 2007-09 financial crisis, Barkin said.

China’s latest problem: People don’t want to go there.

Half a year after China lifted Covid-19 restrictions and reopened its borders, few international travelers are coming—another sign of decoupling between China and the West that could have negative repercussions for a long time.

Fewer tourists and businesspeople from overseas means fewer opportunities for foreigners to see China with their own eyes and interact with locals, an important factor in reducing geopolitical tensions, experts say.

• Fitch Ratings chastised Washington policy makers this week for fighting too much, spending too much and cutting taxes too much. Republicans and Democrats are likely to keep doing all three.
   
• Senior officials from up to 30 countries will meet in Jeddah, Saudi Arabia, this weekend to talk about peace in Ukraine—but this won’t be a typical peace conference.
   
• Russia is looking to buy more ammunition from North Korea to replenish its dwindling stockpiles amid Moscow’s ongoing war in Ukraine, the U.S. said Thursday.
   
• Inflation has cooled in many countries, but in most, food inflation remains rampant and there are reasons to fear it may accelerate.
   
• Prices at the pump tend to decline over the course of typical summers. This season has shown anything but. Crude-production cuts have helped raise prices, but weather and Wall Street also played a role.
   
• The Islamic State confirmed on Thursday that its little-known top leader had been killed, the third time in less than two years that the extremist group’s senior leader had met that fate.

Software maker Ivanti discovered second security flaw days after first one was found.

Technology company Ivanti found out about two serious vulnerabilities in the same software within days of each other and took several days to analyze the second bug before issuing a patch for it.

The U.S. Cybersecurity and Infrastructure Security Agency, or CISA, informed Ivanti of the first flaw, which the company made public on July 23, issuing a patch on the same day to fix it. One day earlier, Ivanti informed “limited customers” about the flaw as well as those known to have been affected by the vulnerability, Chief Security Officer Daniel Spicer said.

🎧 Listen to Fahim Siddiqui, the chief information officer of Home Depot, on the home-improvement retailer’s plans to use generative AI and its app to attract DIY and professional customers.

Hecht, who according to LinkedIn joined Binance in January as its global head of corporate compliance, will help the cryptocurrency platform enhance its compliance programs, with a focus on its anti-money-laundering protocols. She previously served as the chief compliance officer at Novi Financial, Meta’s crypto digital asset wallet project, and as the head of financial crime compliance for HSBC China.

Kaiser Permanente has hired Jacqueline Carberry Baratian as its chief compliance officer. In her new role, set to start on Sept. 11, she will oversee the ethics and compliance program for the healthcare provider. Baratian comes to Kaiser from Ascension, a Catholic healthcare system, where she serves as chief compliance officer.

• Former President Donald Trump pleaded not guilty Thursday to charges stemming from his alleged efforts to remain in power after his 2020 election loss, appearing in a federal courtroom just blocks from the U.S. Capitol his supporters stormed on Jan. 6, 2021.
   
• Apple said revenue declined for the third consecutive quarter, the company’s most prolonged sales slump since 2016 as the iPhone-maker continued to deal with declining demand for consumer devices.
   
• Amazon.com posted its strongest quarterly profit in a year and a half on Thursday, driven by recovering health in its core online retail business and the effects of months of cost cutting.
   
• Private-equity firm KKR is in advanced talks to acquire Simon & Schuster for about $1.65 billion, according to people familiar with the situation.
   
• The Pentagon is poised to offer security forces to commercial vessels transiting the Persian Gulf region to deter Iranian forces from attacking the ships, according to U.S. officials.

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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