Good morning. Some Wall Street stockbrokers must do more to ensure their services aren’t being used to launder dirty money, the U.S. Securities and Exchange Commission said.

The SEC’s examinations unit this week issued a risk alert saying it had observed broker-dealers that weren’t putting enough resources or staffing into their anti-money-laundering programs, the Risk & Compliance Journal's Dylan Tokar reports. The unit also found that some firms were inconsistent in their implementation of policies and procedures designed to stop financial criminals. No firms were named.

• The requirements: Under U.S. laws, banks and other financial-services firms are required to maintain controls to stop the flow of illicit funds. The SEC for years has policed broker-dealers’ anti-money-laundering programs, occasionally issuing fines to firms that fall short.
   
• Recent examples: The SEC in July fined Merrill Lynch $6 million for failing to file so-called suspicious-activity reports, which are intended to alert authorities to possible instances of money laundering. Merrill Lynch also agreed to pay a $6 million fine to the Financial Industry Regulatory Authority, the brokerage industry’s self-regulator.

Iraq cracks down on dollar smuggling under pressure from U.S.

Iraq is trying again to crack down on money laundering and smuggling as the U.S. steps up pressure to stop dollars flowing to Iran and better isolate it from the rest of the world economy.

The dollar has served as almost a second currency in Iraq after the U.S. invaded in 2003, pumping greenbacks into the country to keep it functioning. Two decades later, Iraq still keeps its foreign reserves at the Federal Reserve Bank in New York, depositing the proceeds from its oil exports in its official accounts there.

Hundreds of millions of dollars a day flow through loosely-regulated Iraqi bank and currency-exchange shops, which U.S. officials say are rife with fraudulent transactions and money laundering. They say there is strong evidence that a portion of these dollars have been going across the border to Iran, providing Tehran with badly needed currency and some relief from stringent American sanctions.

Private equity, hedge funds brace for coming SEC overhaul

Private equity and hedge funds are bracing for what could be the biggest regulatory challenge in years to their business of managing money for deep-pocketed investors.

The Securities and Exchange Commission is preparing to adopt a rule package as soon as this month aiming to bring greater transparency and competition to the multitrillion-dollar private-funds industry, people familiar with the matter said. SEC Chair Gary Gensler has said he hopes to bring down fees and expenses that cost hundreds of billions of dollars a year.

• Crypto is illegal in China. Binance does $90 billion of business there anyway.
   
• Implementation of a law to catch crypto tax cheats is delayed inside the Treasury Department, putting billions of dollars in federal revenue at risk and frustrating members of the president’s own party.
   
• Federal agents executed a search warrant and served a federal grand jury subpoena in July to Vince McMahon, the executive chairman of World Wrestling Entertainment, the company said.
   
• Denver Broncos defensive end Eyioma Uwazurike last week received a low-profile suspension for violating the National Football League’s betting policy. But Uwazurike now also faces criminal investigations in two states after he allegedly engaged in the ultimate sports taboo: wagering on his own team.

The West attacked Russia’s economy. The result is another stalemate.

Weeks after Russia invaded Ukraine last year, a White House official warned Moscow that a raft of U.S.-led sanctions could cut Russia’s economy in half.

Last week the International Monetary Fund gave some upbeat news for the Kremlin, saying it now expects Russia’s economy to grow 1.5% this year, supported by extensive state spending. That follows a shrinkage of 2.1% the year before, when Russia became the most sanctioned major economy in the world.

Economists expect the sanctions to cause Russia to stagnate in the years ahead and the fault lines are already emerging. But the West’s failure to quickly bring the Russian economy to its knees for its invasion of Ukraine mirrors a larger stalemate on the battlefield there, despite a raft of Western aid to Kyiv and economic support for the Ukrainian cause.

• Russian Drone Strikes Target Ukraine Grain Export Ports, Infrastructure

• The State Department ordered the departure of nonemergency U.S. government employees and eligible family members from Niger over concerns that tensions could escalate after the military junta detained the country’s elected president last week.
   
• 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.
   
• What are North Korea’s nuclear-weapon capabilities and is the threat expanding?

• ‘How do I do that?’ The new hires of 2023 are unprepared for work.
   
• The latest federal indictment of former President Donald Trump poses an unprecedented test of the Justice Department’s ability to build a persuasive case not just for 12 jurors but also for the history books.
   
• 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.

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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