Good morning. Senate Democrats on Tuesday faulted the Supreme Court’s ethics rules following news reports that Justice Clarence Thomas accepted luxury vacations from and sold real estate to a billionaire friend, as Republicans said that scrutiny of the justices was grounded in the court’s conservative supermajority overturning precedents such as Roe v. Wade.

• Hearings proceed without Roberts: The forum was the Senate Judiciary Committee, where Chairman Richard Durbin (D., Ill.) moved ahead with a hearing on Supreme Court ethics even after Chief Justice John Roberts declined an invitation to testify. The chief justice instead sent a statement signed by all nine justices saying that while they have no binding code of conduct or internal compliance office, they nonetheless “follow the same general principles and statutory standards as other federal judges.”
   
• Pro ethics code: Mr. Durbin said he first wrote Chief Justice Roberts in 2012 to urge the court to adopt its own ethics code. “For years, they have refused,” he said. “And because the court will not act, Congress must.”
   
• And con: The committee’s ranking Republican, Sen. Lindsey Graham of South Carolina, said he also wished “for the court to be more transparent, to have rules that the public can relate to.” But he said he had no interest in Congress mandating such rules and suggested bad faith lay behind the Democrats’ current interest in judicial ethics. 

The Risk & Compliance Forum on May 9 will feature speakers including Glenn Leon, chief of the fraud section at the Justice Department, Assistant Secretary for Export Enforcement Matthew Axelrod, Elizabeth Atlee, chief ethics & compliance officer at CBRE and Sidney Majalya, chief risk officer at Binance.US. You can register here.

Merck’s insurers on the hook in $1.4 billion NotPetya attack, court says.

Insurers for Merck & Co. must help cover losses from a $1.4 billion cyberattack that the U.S. blamed on Russia, a court said, rejecting the insurers’ argument that the attack was akin to an act of war normally excluded from coverage.

Findings. “The exclusion of damages caused by hostile or warlike action by a government or sovereign power in times of war or peace requires the involvement of military action,” the judges wrote. “Coverage could only be excluded here if we stretched the meaning of ‘hostile’ to its outer limit.”

Chief compliance officers are under pressure. 

Companies are facing increasing pressure from their boards and regulators to focus on compliance issues, according to a new report from professional services firm KPMG.

The report, published Wednesday, said 73% of chief compliance officers surveyed found that the increasing pace and scale of regulatory activity, including global regulations and enforcement actions from the U.S. Securities and Exchange Commission, have increased compliance risks for firms. And more than half said they are facing pressure from the boards to strengthen their compliance programs.

The findings are based on the results of a survey of 240 chief compliance officers at the largest Fortune 500 companies conducted this February and March.

The survey also finds that shortage and retention of talent are some of the compliance chiefs’ top workforce worries, as the labor market remains solid.

Why is inflation so sticky? It could be corporate profits.

Inflation has proved more stubborn than central banks bargained for when prices started surging two years ago. Now some economists think they know why: Businesses are using a rare opportunity to boost their profit margins.

There have been good reasons for businesses to raise their prices in recent months. The supply-chain disruptions caused by the Covid-19 pandemic and the energy, food and raw-material bottlenecks that followed Russia’s invasion of Ukraine have pushed costs higher. But there are signs that companies are doing more than covering their costs.

D&O insurance prices drop, Aon says.

Directors and officers insurance—which protects key corporate figures if they are sued by investors or others—has gotten substantially cheaper, research from professional services company Aon shows. By one metric—the average price per $1 million in coverage limits—prices in the first quarter of 2023 went down nearly 25% compared with the same quarter of 2022.

An increase in capital available to insurance firms that has outpaced demand for policies is among the factors contributing to the price drop, said Timothy Fletcher, chief executive of the financial services group at Aon. A slowdown in companies going public and a decrease in securities claims against public companies in the past few years are also factors, he said. “The pricing environment is positive from a buyer's perspective and is expected to remain so for the balance of the year,” Mr. Fletcher said.

• Shares of a number of midsize lenders fell sharply Tuesday following the collapse of First Republic Bank, a sign that investors are still worried about the industry’s health in a world of higher interest rates.
   
• House Democrats took a step toward trying to force a vote on a debt-ceiling increase if they can win over some Republicans, as GOP leaders and the White House remained in a standoff with just weeks to go until the U.S. faces a possible default.
   
• Militants in Gaza fired a barrage of rockets at Israel on Tuesday after the death of a Palestinian on hunger strike in Israeli custody, raising fears of an escalation amid a particularly violent period between the two sides.
   
• The maker of Bud Light is working to make amends with its distributors, who say they have taken the brunt of the backlash to a company promotion with a transgender influencer.

Apple, Google partner to address AirTag safety concerns.

Apple and Google are collaborating to address safety concerns and risks with location-tracking devices such as AirTags.

New specs. The companies said on Tuesday they have proposed a new industry specification that would improve the ability to detect and alert unwanted tracking on iOS and Android devices.

• After Federal Reserve officials likely agree to raise interest rates this week, their conversation will shift to a question weighing heavily on investors that they will find difficult to answer: Are they finished?
   
• President Biden is sending 1,500 active-duty troops to the southern border, while cities across the country are declaring states of emergency and asking for federal support as the country prepares for a surge of migration expected to accompany the lifting of Title 42 border restrictions next week.
   
• International authorities have shut down an online marketplace and arrested nearly 300 people who allegedly used it and other parts of the so-called dark web to buy and sell fentanyl and other dangerous opioids.
   
• The White House plans to end the Covid-19 vaccine requirements for federal workers, federal contractors and international air travelers on May 11, as the pandemic public health emergency ends.
   
• Iranian forces seized a Panama-flagged oil tanker on Wednesday in the Strait of Hormuz, the U.S. Navy said, marking the second time in less than a week that Iran has captured a commercial ship in the region.
   
• Lawyers representing Dow Jones, publisher of The Wall Street Journal, asked a United Nations free-speech advocate to make an urgent appeal to Russia for the immediate release of Journal reporter Evan Gershkovich.