Good morning. Like other aspiring actors, Devin Badoo makes ends meet working on TV commercials, including as dads hawking Loctite glue and Hot Wheels toys. 

What Hollywood producers might not know is that Mr. Badoo is already the star of a hit show—just not one they would ever see. The 35-year-old plays Nelson, one of the most popular characters of “Trust Code,” a series of Microsoft compliance training videos that has made him a celebrity among the company’s 221,000 employees in 190 countries.

For employees at most companies, sitting through training videos every year is about as welcome as a toothache. “Trust Code,” with its recurring characters and end-of-season cliffhangers, is redefining the genre. Since launching in 2017, it has inspired watch parties, viral memes and T-shirts with Mr. Badoo’s image, Risk & Compliance Journal's Dylan Tokar reports.

Facebook parent Meta Platforms is another company that has recast its compliance training videos as a TV show. In a pilot episode that launched last year, Bianca, a newly hired Meta engineer, struggles to finish a fictional game called “Zombies vs. Robots” ahead of the PAX West gaming convention.

“I felt like I was watching a Netflix show,” said Holly Oegema, a real-life Meta software engineer who binge-watched the entire series.

Modern compliance training began in the 1990s, when the Justice Department changed its sentencing guidelines to underscore the importance of training employees about relevant laws and regulations.

Companies quickly learned that if they were caught breaking the law, they might avoid penalties if they could show they had told employees not to do it. Rather than just flooding employee inboxes with reminders to watch compliance videos, Microsoft and Meta hope people will tune in to see what happens in the next episode. 

Icahn, under federal investigation, blasts short seller

Activist investor Carl Icahn disclosed that his investment company is under investigation by federal prosecutors and went on the attack against the short seller that likely spurred the inquiry, accusing it of “wantonly destroying property and harming innocent civilians.”

Icahn Enterprises, the publicly traded firm controlled by Mr. Icahn, was targeted by short seller Hindenburg Research early this month. The next day, the U.S. Attorney’s Office for the Southern District of New York contacted Icahn Enterprises asking for information about the value of its assets, corporate governance, dividends and other topics, the firm said in a securities filing Wednesday.

More Highlights from the WSJ Risk & Compliance Forum

Ethics and generative AI: Discussions around generative artificial intelligence have centered on output accuracy and how to capitalize on the technology for corporate or commercial applications. But Vikram Bhargava, an assistant professor of strategic management and public policy at George Washington University, warned early adopters to be careful when it comes to the bigger ethical questions.

Take the mass shooting at Michigan State University in February, Dr. Bhargava said. When Vanderbilt University used ChatGPT to write an email about the situation, it  left in language noting that the OpenAI chatbot was responsible for the message. Vanderbilt officials later apologized. “It’s not an authentic expression of solidarity unless we are doing it,” he said, adding that it is just one example where human touch trumps a machine.
More common yet equally ethically questionable use cases of AI technology, he said, would be in hiring and firing, where a company would have to explain a robot is responsible for a firing or when candidates have no choice in opting in to AI use when being interviewed.

Compliance culture in China: There has been progress in developing a culture of business compliance in China in recent years, but challenges remain, said Keith Williamson, a managing director in the disputes and investigations practice at Alvarez & Marsal. Larger, more established businesses are getting the message about better governance, but for many businesses based primarily in China, a culture of compliance isn’t yet a priority. He added that for some Chinese companies, compliance is still evolving from a “one-page document” to an approach more akin to how Western companies do business.

Trans-shipments as export-control issue: The Commerce Department’s Matthew Axelrod said in maintaining export controls, it is important to pay attention to “trans-shipments,” which refers to the process of unloading shipped goods in one place and then placing them on another vessel to its final destination. Trans-shipments have been used to help evade sanctions or export-control rules, said Mr. Axelrod, citing the example of the diversion of goods to Russia after the Kremlin's invasion of Ukraine. Mr. Axelrod, assistant secretary for export enforcement at the department's Bureau of Industry and Security, recommends companies look closely at their customer lists for red flags, such as spikes in orders from clients who didn’t order much before the war started.

—With reporting from Anna Mutoh, David Smagalla and Mengqi Sun'

To see videos from Tuesday's WSJ Risk and Compliance Forum, click here (open to WSJ subscribers only).

• The Biden administration is investigating whether Rockwell Automation, one of the world’s largest industrial technology and information companies, is exposing critical U.S. infrastructure, military and other government assets to a potentially serious cyberattack through one of its China-based facilities, according to U.S. officials and documents reviewed by The Wall Street Journal.
   
• The Public Company Accounting Oversight Board found significant auditing deficiencies in its first ever set of inspections in China and Hong Kong, saying that local affiliates of KPMG and PricewaterhouseCoopers missed the mark on auditing U.S.-listed companies in the region.
   
• New executives were appointed to top roles in Italy’s leading energy companies on Wednesday, despite fierce opposition from some foreign investors who had challenged the picks made by the firms’ main shareholder, the Italian government. The most controversial appointment is that of Paolo Scaroni as chairman of Enel, the state-controlled utility company. The nomination of Mr. Scaroni, an energy-industry veteran and ally of former Italian prime minister Silvio Berlusconi, drew sharp criticism because of his history of close business dealings with Russia.
   
• The 2023 market rebound is enabling some crypto companies to explore an option that appeared off the table just six months ago: trying to go public.
   
• Rep. George Santos, accused of fabricating much of his life’s story to secure public office, was indicted Wednesday on federal charges that he embezzled contributions, fraudulently obtained unemployment benefits and filed false federal disclosure forms.

China seeks to pry Europe away from Washington

China’s foreign minister is crisscrossing Europe this week in a bid to peel the continent away from the growing confrontation between Beijing and Washington, warning that European interests would be harmed by toeing the U.S.’s approach.

A three-capital trip by Qin Gang, his first solo trip to the region since becoming China’s foreign minister, comes at a pivotal moment for China’s relationship with the bloc.

Ukraine regains ground around Bakhmut as fighting rages

Ukraine said it has clawed back some ground around Bakhmut, dealing a blow to Russian forces seeking to dislodge the last Ukrainian units holding several blocks in the westernmost part of the eastern city after months of grinding combat.

• Ukraine’s holiest site is battleground in bid to erase Russian influence

• TikTok’s Chinese parent has delayed the rollout of its shopping platform in the U.S. as concerns over the video-sharing app’s future deter merchants from joining, dragging on the company’s plans to earn more money from its prize global asset.
   
• Palestinian militants fired hundreds of rockets from Gaza toward southern and central Israel, and Israeli airstrikes targeted militants in the enclave on Wednesday, as both sides said they were preparing for wider conflict.

David Last, who has served as chief of the Justice Department’s Foreign Corrupt Practices Act unit since 2021, departed the agency on Friday. David Fuhr, formerly an assistant chief in the unit, has been promoted to serve as the unit’s acting chief, a Justice Department spokesman said.

• The Republican-led House of Representatives is considering a resolution calling on Russia to free jailed WSJ reporter Evan Gershkovich.
   
• At least seven people were killed and dozens injured in nationwide protests against the arrest of Imran Khan, as a judge extended the former Pakistani prime minister’s detention by eight days.
   
• The federal government formally ended its crisis response to a pandemic that has killed more than 1.1 million people in the U.S. and infected many millions more.
   
• Donald Trump, appearing in a live CNN town hall a day after a federal jury in New York found him liable for sexual abuse and defamation, blasted the decision, repeated false claims about the 2020 election and defended his behavior during the Jan. 6 Capitol riot by his supporters.

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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