Good morning. A top U.S. banking regulator is preparing to hand Citigroup a failing grade on its living-will plan, the latest rebuke for the megabank that has struggled to stay in the government’s good graces.

• Looming vote. The Federal Deposit Insurance Corp.’s five-member board intends to vote Thursday to downgrade its rating on Citi’s data-management systems to a “deficiency” from a “shortcoming,” people familiar with the matter said. The FDIC and the Federal Reserve had flagged the shortcoming in 2022 after a review of the resolution plan.
   
• A regulatory backup plan. Big banks are required to file living wills to lay out how they would wind down their operations in the event of a debilitating financial crisis. The reports are due every other year. Citi and its peers filed their latest plans in 2023 and are awaiting feedback.
   
• The upshot. On its own, the FDIC’s action this month wouldn’t bring additional penalties to Citi. But the step does serve as another reminder that Citi’s long journey out of the regulatory doghouse is fraught with occasional setbacks and subject to several government agencies who don’t always move in lockstep.
  
  Note to readers: We will not publish a newsletter Wednesday in observance of the Juneteenth holiday in the U.S. We will be back Thursday.

Trafigura subsidiary settles with CFTC in first-ever action over impeding whistleblowers.

A subsidiary of Swiss commodities trading company Trafigura has agreed to pay $55 million to settle the Commodity Futures Trading Commission’s first-ever penalty against a company for impeding reports by whistleblowers.

The CFTC order released Monday said that between 2017 and 2020, Houston-based Trafigura Trading made current and former employees sign employment and separation agreements with provisions stopping them from disclosing company information. The agreements didn’t include an exception for communicating with law enforcement agencies or regulators, in violation of the law, the CFTC said.

The CFTC also accused Trafigura Trading of other violations. The agency said the Trafigura subsidiary between 2014 and 2019 bought gasoline cargoes and derivatives while it had confidential information that Trafigura had improperly obtained from an employee at an unnamed Mexican trading entity.

U.S. bans exports by Oregon freight-forwarder in warning shot to industry.

An Oregon freight-forwarder was hit with an export ban in what officials said was a warning to companies to heed restrictions on the shipment of sensitive technologies to countries the U.S. considers threats to national security.

The U.S. Commerce Department said on Monday it was imposing a three-year export ban on USGoBuy after the Portland-based company failed to improve its compliance with U.S. export-controls laws following a 2021 settlement. Under that agreement, the department had agreed to forgo any immediate ban—pending compliance improvements at the company.

• Boeing Chief Executive David Calhoun faces a congressional grilling Tuesday that will include surprise allegations from another whistleblower over quality issues.
   
• Adidas said it is investigating potential compliance violations in China after receiving a letter alleging senior executives in the country received millions of dollars in kickbacks from service providers.
   
• The Federal Trade Commission said Monday that it will be taking action against software maker Adobe and two of its executives, Maninder Sawhney and David Wadhwani, for allegedly deceiving consumers.
   
• Philip Morris International said it is suspending sales on Zyn.com after its affiliate Swedish Match North America received a subpoena from the Attorney General of the District of Columbia regarding the sales of banned flavored nicotine pouches.
   
• One of New Jersey’s most powerful Democratic political power brokers was indicted on charges of racketeering conspiracy and running a criminal enterprise.
   
• Richard Reda, an insurance agent for Massachusetts Mutual Life Insurance, sold life insurance worth millions to real-estate mogul Joseph Moinian. Having gotten a fraction of what he believed he was owed, Reda went on an eight-year quest for the big payout. He helped uncover evidence of a potentially illegal side deal involving Moinian’s policies.

Boeing’s CEO search hits some snags.

Several high-profile candidates have turned down the chance to run Boeing, complicating the jet maker’s search for a new leader amid discussions about whether the next CEO needs to be based near its Seattle-area factories.

Boeing Chief Executive David Calhoun said in March he would step down by the end of the year. GE Aerospace CEO Larry Culp, widely considered a natural for the job, declined Boeing’s request to consider taking over, said people familiar with the discussions.

Other potential candidates—Boeing’s operating chief Stephanie Pope and Spirit AeroSystems boss Pat Shanahan—face complications on their path to the top job, while one of the company’s own directors, aerospace veteran David Gitlin, also declined an approach.

• See also: Inside DOJ’s Wrenching Decision on Whether to Prosecute Boeing

• Beijing launched an anti-dumping probe into pork imports from the European Union, in possible retaliation against the EU’s recent tariff moves, as trade tensions mount between China and the 27-member bloc.
   
• The Biden administration is hoisting barriers to Chinese clean-energy imports to protect domestic industries as the presidential election nears. But the trade restrictions also threaten another of Biden’s priorities: building out renewable-energy generation.
   
• Tesla has sued Matthews International, a supplier of electric-vehicle batteries, for allegedly disclosing its confidential trade secrets to other companies, including competitors.
   
• Rising rents complicate the inflation picture and could make it challenging for the Federal Reserve to ease interest rates. 
   
• Central banks around the world expect global reserves of gold to increase over the next year, while pessimism toward the U.S. dollar has grown, according to a new report.

• Fisker, a much-hyped startup that sought to mimic Tesla’s success, has filed for bankruptcy, roughly a year after releasing its first electric-vehicle model.
   
• President Biden is expected to announce a new immigration program that would provide a path to citizenship for immigrants in the country illegally who are married to U.S. citizens.
   
• The 21% U.S. corporate tax rate is the biggest single variable in the sprawling 2025 tax debate, and the two parties are trying to turn that dial in opposite directions with major consequences for companies’ profits and federal revenue.
   
• Israeli Prime Minister Benjamin Netanyahu dismantled the war cabinet set up to bring a unified approach to the fight against Hamas.
   
• A Russian court said judicial proceedings in the case of Evan Gershkovich, the Wall Street Journal reporter detained in Russia for over a year, would be held in secret.

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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