Good morning. Meta Platforms has spent months trying to fix child-safety problems on Instagram and Facebook, but it is struggling to prevent its own systems from enabling and even promoting a vast network of pedophile accounts.

• Previous reports: The social-media giant set up a child-safety task force in June after The Wall Street Journal and researchers at Stanford University and the University of Massachusetts Amherst revealed that Instagram’s algorithms connected a web of accounts devoted to the creation, purchasing and trading of underage-sex content.
   
• Questionable content remains: Five months later, tests conducted by the Journal as well as by the Canadian Centre for Child Protection show that Meta’s recommendation systems still promote such content. The company has taken down hashtags related to pedophilia, but its systems sometimes recommend new ones with minor variations. Even when Meta is alerted to problem accounts and user groups, it has been spotty in removing them.
   
• Meta's response: “Child exploitation is a horrific crime and online predators are determined criminals,” a spokesman said, adding that Meta recently announced an effort to collaborate with other platforms seeking to root them out. “We are actively continuing to implement changes identified by the task force we set up earlier this year.”
   
• Ongoing problems at Meta: Meta in recent years has shifted attention and resources to artificial intelligence, virtual reality and the metaverse. Broad cost cuts over the past year have resulted in the layoffs of hundreds of safety staffers focused on “high severity” content problems, including some child-safety specialists, according to current and former employees.

Mallinckrodt avoids $40 million SEC fine in Medicaid overcharge case.

The U.S. Securities and Exchange Commission said Mallinckrodt failed to tell investors it had potentially overcharged Medicaid for its flagship drug, reports Risk & Compliance Journal's David Smagalla, but the regulator waived a $40 million civil penalty partly because the pharmaceutical company agreed to hire a compliance consultant.

The SEC said in an administrative proceeding Thursday that the Centers for Medicare and Medicaid Services informed Mallinckrodt as early as 2016 that the company was using an incorrect rebate rate for its sales of Acthar Gel, which meant it was overcharging state Medicaid programs for the drug.

Binance copped a $4 billion plea but is still fighting the SEC.

When top Biden administration officials gathered last month at the Justice Department to announce a $4.3 billion legal resolution with Binance, one powerful regulator was absent.

Attorney General Merrick Garland was there. So was Treasury Secretary Janet Yellen. But Securities and Exchange Commission Chair Gary Gensler wasn’t, even though he has his own legal beef with Binance. The SEC sued the world’s largest cryptocurrency exchange in June and has been the regulatory scourge of the crypto world.

FDIC faces internal reckoning over toxic-culture allegations.

The Federal Deposit Insurance Corp. is facing an internal reckoning over allegations of widespread harassment and discrimination, with many employees left skeptical about the agency’s commitment to overhaul its culture.

Agency in turmoil. In the weeks since a Wall Street Journal investigation revealed that a toxic culture at the FDIC had prompted many female bank examiners to quit over the years, there have been internal debates over who should oversee an external investigation and blowback from employees on multiple division-wide calls.

• TikTok won a reprieve in Montana after a judge ruled a state law banning the app can’t go into effect in January, saying it “likely violates the First Amendment.”
   
• World leaders gathered for climate talks amid sharp divisions over how quickly governments need to wean their economies off fossil fuels to prevent the planet from blowing past the Paris accord’s temperature targets. More than 190 governments gathered in Dubai beginning Thursday for the United Nations’ annual two-week summit where nations attempt to forge a collective response to the problem of climate change.
   
• Former President Donald Trump’s efforts to claim absolute immunity to ward off criminal and civil legal actions against him were rebuffed twice Friday in separate legal decisions.
   
• The House voted Friday to expel embattled Rep. George Santos over allegations the New York Republican stole money from his own campaign and committed other misdeeds.
   
• A case that could punch holes in the federal tax code heads to the Supreme Court on Tuesday.

Treasury sanctions more shippers for allegedly defying Russia oil-price cap.

Three shipping companies—two based in the United Arab Emirates and one in Liberia—have been sanctioned for allegedly running afoul of the oil-price cap imposed last year to dampen Russian energy revenue, the U.S. Treasury Department said.

U.A.E.-based Streymoy Shipping and Sterling Shipping and Liberia-based HS Atlantica moved Russian crude that was priced above the $70-a-barrel limit imposed by the U.S. and allies, the Treasury said. The companies’ vessels were also sanctioned. The three companies couldn’t be reached for comment.

Elon Musk’s F-bombs make Linda Yaccarino’s job at X even harder.

Elon Musk’s F-bomb-laden tirade at advertisers will make X Chief Executive Linda Yaccarino’s job harder as she tries to rebuild the company’s ad-sales business, industry executives said.

“It’s a line in the sand that can’t be undrawn,” said Craig Atkinson, chief executive officer of Code3. “I have no idea what kind of salesmanship can counteract a sentiment like that.”

• Walmart Stops Ads on X, Joining the Advertising Exit

Outsize profits helped drive inflation. Now consumers are pushing back.

Extraordinary corporate profits were a driving force in last year’s surge in inflation, a pressure that is now easing rapidly as customers push back.

Across industries and regions, there are signs that the price rises that allowed some businesses to make outsize profits during the Covid-19 pandemic—even when they were selling fewer goods—are coming to an end.

• Goods Deflation Is Back. It Could Speed Inflation’s Return to 2%.

• A U.S. destroyer and three commercial ships operating in the Red Sea came under drone and ballistic-missile attacks, the Pentagon said Sunday, marking the most significant escalation of a weekslong military attack on ships operating in those waters.
   
• Israel’s intelligence services are preparing to kill Hamas leaders around the world when the nation’s war in the Gaza Strip winds down, setting the stage for a yearslong campaign to hunt down militants responsible for the Oct. 7 massacres, Israeli officials said.
   
• Members of the oil-producers group known as OPEC+ have tried to push crude prices upward with unexpected supply cuts since last year. Wall Street isn’t yet convinced that will pan out.
   
• Wealthy nations are sending tens of billions of dollars to poorer ones for clean energy, the linchpin of a global strategy to cut greenhouse-gas emissions in the developing world. But two of the most ambitious efforts yet—in South Africa and Indonesia—are now at risk of unraveling.
   
• Goldman Sachs was looking to get out of consumer lending, once a big area of expansion. But Apple dumped it first.

OCC seeks research on bank run risks.

A top U.S. banking regulator wants research on depositor risk, liquidity and bank run risk. The Office of the Comptroller of Currency on Friday put out a request for academics to submit papers on the topics, which have been a focus of regulators’ attention following instability in the global banking system earlier this year. The papers are due Jan. 15 and are scheduled to be discussed at a symposium in June.

• Alaska Air reached a roughly $1 billion deal to buy Hawaiian Airlines.
   
• Talks between Israel and Hamas to hand over hostages held in Gaza in return for a pause in fighting there have stalled, the White House said Sunday.
   
• The Supreme Court hears arguments Monday on a provision opposed by some families—legal protections for owners of the notorious opioid-pill company.
   
• An Islamist radical stabbed a tourist to death on Saturday evening a few hundred yards from the Eiffel Tower, French authorities said.
   
• America’s tiniest employers have the highest share of job openings on record—more than one in five available positions—a sign the labor market might be tilting toward the little guy.

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.

You can reach us by replying to any newsletter, or email David at david.smagalla@wsj.com.