Good morning. The Securities and Exchange Commission charged the founder and former chief executive of a now-bankrupt artificial-intelligence recruitment startup with defrauding investors out of at least $21 million, the latest sign the regulator is keeping watch on the bold claims made by AI startups and investors about the technology’s capabilities.

• The technology: Joonko claimed to use AI to help its clients find diverse candidates to fulfill their diversity, equity and inclusion hiring goals, according to the SEC.
   
• What Raz did: Ilit Raz, an Israeli citizen and the former CEO of Joonko, allegedly told investors in her attempt to raise capital for the business that it had more than 100 customers, some from Fortune 500 companies, and provided fake testimonials from several companies about the effectiveness of its technology. Raz didn’t respond to requests for comment.
   
• Financial fibs: The SEC alleged that Raz lied to investors when she told them that Joonko earned more than $1 million in revenue and that it was working with more than 100,000 active job seekers.
   
• Technology misstatements: The SEC also said Raz’s company communicated to investors that it could perform AI functions that it wasn’t actually able to do. For instance, according to the SEC, Raz told investors that Joonko had AI that could automatically connect customers with diverse candidates.
   
• Part of SEC crackdown: AI washing, in which companies make false AI-related claims, has been the target of an SEC crackdown. Agency Chair Gary Gensler in December spoke out against the phenomena, saying that securities laws bar phony claims and require companies to give “full, fair and truthful” disclosures.

U.S. adds three Chinese companies to blacklist over forced labor allegations.

The U.S. Department of Homeland Security said it was banning imports from three Chinese companies, alleging they used forced labor from the Chinese territory of Xinjiang.

Who is being added? The companies added to the U.S. import blacklist Tuesday include a seafood processor, a shoe maker and a company that manufactures aluminum and carbon graphite. The list, established under the Uyghur Forced Labor Prevention Act, requires U.S. Customs and Border Protection to block future imports from the companies on the presumption they were produced with forced labor.

New York legislators pass climate superfund bill.

New York legislators passed a bill last week that would charge fossil-fuel companies a total of $3 billion a year for 25 years to pay for costs associated with climate change.

The Climate Change Superfund Act is now headed to Gov. Kathy Hochul’s desk for her signature. If enacted, New York will become the second U.S. state with a law requiring fossil-fuel companies to bear some of the financial burden of climate change.

• Shareholders at dozens of big companies, from GE Aerospace to UPS, are voting on proposals opposing environmental and social initiatives this year.
   
• U.S. Sen. Elizabeth Warren introduced a new bill to crack down on private-equity misconduct in the healthcare sector, according to WSJ Pro Private Equity (subscription required). 
   
• Elon Musk on Tuesday filed to withdraw a suit against OpenAI and its chief executive, Sam Altman, that had challenged the ChatGPT owner’s relationship with Microsoft.
   
• Consent judgments were filed on Tuesday in Johnson & Johnson’s proposed $700 million settlement related to marketing of its talcum-based baby powder.
   
• The Consumer Financial Protection Bureau has proposed a new rule that would remove medical bills from most credit reports in a move aimed at protecting consumers’ credit scores.
   
• The trial of GPB Capital Holdings founder David Gentile and Jeffry Schneider, who led its marketing efforts, is set to open Wednesday in the biggest fraud case involving a private-equity firm since the collapse of Abraaj Group six years ago, reports WSJ Pro Private Equity (subscription required).

EU secures more than 40 million bird flu vaccines.

The European Union ordered more than 40 million bird flu vaccines from manufacturer CSL Ltd., as governments step up efforts to prevent the potential spread of the virus to people.

What's prompting this? The four-year contract follows the rapid spread of avian influenza at dairy farms in the U.S., after the virus jumped from infecting millions of birds over the past two years to now sickening dairy cattle, prompting fears that the disease could spread further.

Boeing’s urgent mission to train thousands of rookies how to build an airplane.

Boeing’s factory workforce has undergone a dramatic transformation in recent years. Legions of senior machinists retired when the pandemic hit and in the years since. The company, racing to meet demand for new jets as travelers returned to the skies, has been on a hiring spree to replenish its ranks.

The result: factories populated by new employees, many of them younger than their predecessors and with no experience related to building airplanes. 

It’s an environment that Boeing executives say contributed to quality issues that the company is grappling with in the wake of January’s near-catastrophe, when a piece of the fuselage blew off during an Alaska Airlines flight.

• Shares in shipping and logistics providers came under heavy selling pressure Tuesday as investors digested news of a possible cease-fire between Israel and Hamas, which could see containerships return to the Red Sea and send freight rates lower.
   
• The main channel to the Port of Baltimore fully reopened, nearly 11 weeks after a cargo ship lost power and slammed into the Francis Scott Key Bridge, shutting down one of the nation’s busiest waterways.
   
• The European Union plans to impose tariffs on imported Chinese electric vehicles, marking an early victory for officials who view the imports as a threat to the region’s powerful car sector despite deep divisions in Europe over the issue.
   
• The U.K.’s economic recovery sputtered to a halt at the start of the second quarter, underlining the scale of the task facing the next government in lifting the country out of a long period of stagnation.
   
• Australian consumer confidence recorded its biggest weekly fall of the year last week following data showing the economy remained largely lifeless in the first quarter, amid recent warnings from the Reserve Bank of Australia that further interest rate increases may still be required.
   
• China’s consumer prices rose mildly last month while its factory-gate prices continued to fall, suggesting persistently tepid demand as Beijing continues to try to lift lackluster consumption.
   
• The Organization of the Petroleum Exporting Countries maintained its bullish outlook for oil-demand growth after setting out a plan to gradually unwind some of its production cuts, raising concerns on whether the market will be able to absorb the extra barrels.
   
• The International Energy Agency projects global oil markets heading toward a major glut this decade, citing surging supplies and slowing demand growth for crude thanks to lower-emissions energy sources.

• Shari Redstone has ended discussions to sell her controlling stake in Paramount Global to David Ellison’s Skydance Media.
   
• Hunter Biden was found guilty Tuesday of falsely claiming to be drug-free when applying to buy a handgun six years ago.
   
• Israeli Prime Minister Benjamin Netanyahu has repeatedly articulated what he doesn’t want in Gaza: no Hamas, no Palestinian Authority and no permanent cease-fire until the hostages are all home. Now, the Israeli leader faces increasing pressure to say what he does want. 
   
• An armada of old tanker ships has sprung up to move sanctioned Russian and Iranian oil, putting sailors in peril and threatening environmental catastrophes.
   
• Violent crime fell in the first quarter of 2024 by more than 15%, continuing its postpandemic decline nationwide, according to data released by the Federal Bureau of Investigation.

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