Good morning. A former Allianz SE fund manager who was blamed for losses the firm suffered during a market meltdown sparked by the Covid-19 pandemic has accused federal prosecutors of committing ethical breaches by turning his own lawyers against him, Risk & Compliance Journal’s Dylan Tokar reports.

Gregoire Tournant, who was a chief investment officer for one of Allianz’s U.S. investing divisions, said prosecutors encouraged lawyers that were acting both for the firm and for him personally to later switch sides and use his privileged communications to help build a false narrative against him.

The accusations are part of a motion filed by Mr. Tournant on Monday in New York federal court, in what constitutes his first substantive legal challenge to the securities and investment adviser fraud charges brought against him last year. He was arrested in May and pleaded not guilty.

At the time of Mr. Tournant’s arrest, Allianz agreed to pay about $6 billion in penalties and restitution to investors as part of a deal with the government. The firm admitted to having deficient internal controls but said criminal misconduct was limited to a handful of individuals who no longer worked at the company.

The case is one of several in recent years that have called into question policies at the Justice Department that offer rewards such as lenient treatment to companies that voluntarily disclose possible wrongdoing and turn over evidence on employees who may have been involved.

As more companies introduce or expand sustainability programs, they are often unclear on which initiatives deliver the best results. Join us on Feb. 2 for a two-part webinar featuring executives discussing programs that have improved the sustainability standing of their companies. Register here.

FTX’s Sam Bankman-Fried sought leniency from foreign regulators, says DOJ. The FTX founder attempted to stall bankruptcy proceedings in the U.S. in November in order to transfer assets from his crypto exchange to foreign regulators, the Justice Department alleged in a filing Monday.

Hoping for a lighter hand. Mr. Bankman-Fried hoped foreign regulators would treat him leniently and eventually allow him to regain control of FTX, according to federal prosecutors. FTX’s lawyers wanted to secure the assets for bankruptcy at the time he was trying to move the money, the prosecutors said.

• Celebrities Who Endorsed Crypto, NFTs Land in Legal Crosshairs After Investor Losses

Unaoil executive sentenced. One of the top executives behind the Monaco-based Unaoil Group was sentenced to one year in prison on Monday for his role in a bribery scandal that implicated dozens of the world’s top oil-and-gas companies.

Saman Ahsani, who served as the oil service firm’s chief operations officer, was sentenced in federal court in Houston on Monday by District Judge Andrew Hanen. The sentencing took place more than three years after Mr. Ahsani and his brother Cyrus pleaded guilty to foreign bribery conspiracy charges. 

The delay in sentencing was likely the result of the brothers’ cooperation with investigations into some of the companies that were found to have used Unaoil to pay bribes to officials across Africa and the Middle East. A lawyer for Mr. Ahsani acknowledged the sentence, which he said reflected his client’s cooperation in the case. Cyrus Ahsani’s sentencing isn’t scheduled to take place until August.

J&J can’t use bankruptcy to resolve talc-injury lawsuits. A federal appeals court rejected Johnson & Johnson’s plan to use a legal strategy to push roughly 40,000 talc lawsuits into bankruptcy court, hampering the controversial tactic the company and a handful of other profitable businesses have used to move mass personal-injury cases to chapter 11.

• The Justice Department declined Monday to provide Congress with additional information about classified documents found at President Biden’s home in Delaware and a Washington think-tank office he once used, laying the groundwork for expected clashes with House Republicans as they mount a wide-ranging investigation into federal law enforcement.
   
• Pharmaceutical companies shouldn’t have to send federally discounted drugs to an unlimited number of pharmacies, a federal appeals court ruled, in a major win for the drugmakers and a blow to hospitals and clinics that receive the low-price medicines.

Russia boosts China trade to counter Western sanctions. Trade between the two nations boomed last year, providing a lifeline to Russia’s beleaguered economy and showing the limits of Western sanctions, according to a new report.

Tighter links amid global turbulence. Russia and China have spent years forging stronger economic ties, including a $55 billion gas pipeline and Russia’s increased usage of China’s yuan. The economic relationship has deepened even as long-simmering concerns remain among officials in Moscow that Russia could become captive to China’s economic orbit.

• Zelensky Urges Faster Weapons Deliveries Amid Russian Push

The U.S. consumer is starting to freak out. The engine of the U.S. economy—consumer spending—is starting to sputter. It’s a stark turnaround from the second half of 2020, when Americans lifted the economy out of a pandemic downturn, helping the U.S. avoid what many economists worried would be a prolonged slump.

Prices still rising. Now the forces that helped keep spending high are unwinding, while inflation remains elevated. Annual inflation, as measured by the consumer-price index, remained above 5% in December for the 19th straight month, the longest such streak since the early 1980s.

• Federal Reserve officials’ deliberations this week over how much more to raise interest rates will hinge on how much they expect the economy to slow this year.
   
• The Biden administration is considering entirely cutting off Chinese telecommunications giant Huawei Technologies Co. from U.S. suppliers over national-security concerns by tightening export controls targeting the firm, according to people familiar with the matter.
   
• Secretary of State Antony Blinken met with Israeli Prime Minister Benjamin Netanyahu amid rising violence and underscored the two countries’ shared commitment to combating Iran while calling on Israel to avoid taking steps that would complicate a two-state solution with Palestinians.
   
• The U.S. is hoping to reach an agreement this week to open as many as four U.S. military sites in the Philippines in Washington’s latest push to expand its strategic footprint to counter threats from China, U.S. officials said.

Private Medicare plans face tough new audits that could cost billions. Federal health regulators said they would implement a tough new standard for auditing the billings of insurers that offer private Medicare plans, the latest sign of stepped-up scrutiny of the companies. Yet the new rule, set to be issued Monday by Medicare’s parent agency, doesn’t go as far as it could have in applying the standard to earlier years.

Softening the blow. The news is a blow to major Medicare insurers, which include UnitedHealth Group Inc. and Humana Inc., but limiting the impact of prior years’ audits will likely cushion it substantially.

AMC’s two equity securities begin to converge. The movie-theater company’s two classes of equity securities came closer to converging Monday after it disclosed details of the proposals shareholders will vote on at its next shareholder meeting.

Potential lifeline. The proposed transactions could provide a potential lifeline for AMC by giving the company more options to raise cash. AMC has been struggling with weak box-office results affecting the cinema industry, while its shares have sunk close to where they were trading before the company caught fire as a meme stock in early 2021.

• American International Group Inc. said it terminated Mark Lyons from his position as the interim chief financial officer and executive vice president, global chief actuary and head of portfolio management after the company became aware that he violated his confidentiality and nondisclosure obligations.
   
• A giant Indian conglomerate couldn’t stop the freefall in its shares and bonds set off by an American short seller in what has grown into a bitter fight over the empire created by one of India’s richest and most politically connected businesspeople.

Memory-chip makers face prolonged price slump. Memory-chip prices, which dropped steeply over the past year, are expected to keep falling in the first half of 2023, putting more pressure on an industry that has already cut investments and jobs.

Continued weak market. Average prices for the two main types of memory chips used in everyday electronics—from smartphones to personal computers and TV sets—are projected to experience double-digit percentage declines this quarter, industry analysts say. Memory chips are considered a bellwether for the semiconductor industry because they are largely commoditized and sensitive to shifts in supply and demand.

• Samsung Electronics Co.’s fourth-quarter operating profit slumped as the company’s mainstay memory-chip and smartphone businesses grappled with a sharp drop-off in demand and high inventories.
   
• Whirlpool Corp. reported a $1.6 billion quarterly net loss after divesting itself of its European business, as the appliance maker said it was working to reduce costs.
   
• Congress has given the Environmental Protection Agency more than $100 billion to spend on climate-related projects over the next 18 months, but the massive sum is triggering controversies.
   
• Royal Philips NV said it would cut an extra 6,000 jobs by 2025, including 3,000 this year, as part of a reorganization aimed at improving its performance, adding to a wave of corporate layoffs in recent weeks.