Good morning. Federal prosecutors on Friday charged famed short seller Andrew Left with fraud, accusing him of routinely making exaggerated or misleading statements about stocks to quickly profit on price moves caused by his reports.

• Investment “lemons”: The charges mark a major turn of fortune for the bombastic investor, who called his firm Citron Research because it analyzes the “lemons” of the stock market. He scored a major hit a decade ago with well-timed bets against onetime highflier Valeant Pharmaceuticals International but hadn’t matched that success more recently.
   
• What he’s accused of: An indictment returned by a Los Angeles grand jury accused Left of essentially trading on his name and reputation, announcing his bets and naming price targets far from where a stock was trading. Left quickly closed his positions after his statements caused prices to move in the direction he wanted, the indictment says.
   
• His media impact: His appearances on cable news networks and statements on social media magnified the impact of his reports and caused others to follow his bets, according to prosecutors.
   
• Background: Left’s indictment caps a three-year effort by the Los Angeles U.S. Attorney’s Office and fraud-section prosecutors in Washington, D.C., to examine the tactics short sellers use to instigate and then profit from a stock’s decline. Short sellers borrow shares from other investors and then sell them, in hopes that they can buy them back cheaper later and pocket the difference. 

State Street to pay $7.5 million to settle allegations of Russia-related sanctions violations.

Risk & Compliance Journal’s Mengqi Sun reports that State Street has agreed to pay about $7.5 million to settle allegations a subsidiary of the financial-services firm received payments and redacted invoices from two Russian entities that faced U.S. sanctions restrictions.

The conduct in question. The subsidiary, Charles River Development, a financial technology company specializing in software for communicating trading information, allegedly altered the dates and reissued invoices and accepted contractual payments from two clients majority-owned by Russian banks Sberbank or VTB Bank between 2016 and 2020, according to the U.S. Treasury Department’s Office of Foreign Assets Control.

Lawmakers pursue new crackdown on China trade crime.

A bipartisan coalition of House members has introduced legislation targeting trade crimes by China-based companies, saying they see frequent fraud, duty evasion and transshipment. The bill sponsors include Raja Krishnamoorthi (D., Ill.) and John Moolenaar (R., Mich.), the ranking member and chairman, respectively, of the House Select Committee on the Chinese Communist Party.

What’s in the bill? The legislation would require the U.S. Justice Department to establish a new unit in its criminal division dedicated to prosecuting international trade crimes. The bill would also allocate new funding to support the effort. Several trade groups representing U.S. businesses, including the National Council of Textile Organizations and the Alliance for American Manufacturing, hailed the proposed legislation.

• President Biden will unveil plans to overhaul the Supreme Court in remarks Monday at the Lyndon B. Johnson Presidential Library, a White House official said.
   
• Trump, if elected president, said he intends to create a “strategic national bitcoin stockpile” where the government would keep the tokens it holds or acquires. He also promised to appoint a bitcoin and crypto presidential advisory council tasked with designing transparent regulatory guidance.
   
• TikTok collected data about its users’ views on sensitive topics and censored content at the direction of its China-based parent company, the Justice Department said Friday, making its most forceful case to date that the video-sharing app poses a national-security threat.
   
• A jury ordered Abbott Laboratories to pay $495 million in compensation and damages after determining that the company failed to warn that its formula for premature infants increased the risk for a bowel disease.
   
• Warner Bros. Discovery filed a breach of contract suit Friday against the NBA, alleging the league violated a media-rights agreement with its TNT cable network by striking a deal with Amazon.com’s Prime Video.
   
• Kamala Harris’s strong ties to her native Silicon Valley, dating back to the start of her political career, give her a solid base of financial support that she is tapping for her battle with Donald Trump.
   
• Hawaiian Electric is nearing a deal to resolve mass lawsuits over last year’s Maui wildfires that could avoid a bankruptcy filing by the utility, people familiar with the situation said.

For business, Harris’s record fuels both optimism and uncertainty.

Business leaders are hopeful that Kamala Harris can dial back on some of the Biden administration’s regulation-heavy agenda, but they worry about blank spots in her policy record.

The vice president is better known for her stances on social issues than on business policy. But from her time as California attorney general through the Senate, Harris has a track record on many of the central policy debates in American corporations, particularly in the technology sector. There are also major unknowns, particularly her views on tax, trade and antitrust questions.

WSJ Pro spoke with corporate leaders about where Harris stands on the major business-policy questions today.

Israel approves a retaliatory strike on Hezbollah.

Israel’s government authorized a retaliatory strike against Hezbollah in Lebanon, amid an American-led diplomatic push to contain the fallout from a strike that killed 12 young people in the Israel-controlled Golan Heights.

Mounting concern. Israel and the U.S. have accused the Iran-backed militia Hezbollah of carrying out Saturday’s strike. Israel’s security cabinet held an hourslong meeting Sunday and empowered Prime Minister Benjamin Netanyahu, just back from his visit to Washington, and his defense minister to decide on the character and time of retaliation against Hezbollah. The Israeli military already struck several targets deep in Lebanon on Sunday morning in response to the attack.

• Deadly Strike on Soccer Field Raises Risk of Escalation Between Israel and Hezbollah
• On U.S. Trip, Netanyahu Receives Clear Message on Gaza War: Wrap It Up

Brazil sees Elon Musk’s Starlink as a political threat.

Elon Musk is so popular in this farming region that his face is plastered in stores alongside herds of cows, and local magazines depict him as a superhero. The billionaire’s appeal is simple: His satellite company Starlink has connected Brazil’s vast rural and jungle expanses to the internet. After getting regulatory approval two years ago, Starlink eclipsed competitors in May to become the country’s biggest satellite internet provider.

Brazil's government has concerns. But Starlink’s rapid expansion has come as officials in the administration of leftist President Luiz Inácio Lula da Silva have raised concerns about Musk’s growing influence over the country. Brazil’s federal audit court is investigating Starlink’s use by public authorities in the country, threatening to place restrictions on the service

• Smoke from several wildfires ripping through the U.S. and Canada has created air-quality issues in parts of the West, with officials warning of reduced visibility in some places.
   
• Extreme weather is putting power supplies around the U.S. to the test. Energy companies are racing to find answers.
   
• While Federal Reserve officials aren’t likely to change interest rates in the coming week, their meeting will nonetheless be one of the most consequential in a while. Inflation and labor-market developments should allow officials to signal a cut is very possible at their next meeting, in September.
   
• Banks and other lenders are seizing control of distressed commercial properties at the highest rate in nearly a decade, a sign that the sector’s punishing downturn is entering its next phase and approaching a bottom.
   
• The generic drug business has become a hostile environment for American companies. Amid falling prices, one after another, generic-drug makers have gone bankrupt or moved their operations overseas or cut the number of products they offer.
   
• More U.S. manufacturers are rethinking their plans as they brace for an extended slump in demand.
   
• The U.S. will establish a new military command in Japan to bolster security ties here as Washington moves to strengthen its Asia allies in the face of China’s military buildup, top American and Japanese officials said Sunday.
   
• The Bank of Japan’s next meeting comes amid rising expectations that it will raise rates again this year, perhaps as soon as this week.
   
• Strongman Nicolás Maduro claimed an unlikely victory in Venezuela’s presidential election Sunday, securing a third six-year term in a result that opposition leaders contested, saying the regime had likely falsified the vote count.

CrowdStrike says 97% of systems hit by outage are back online.

CrowdStrike said over 97% of Microsoft Windows sensors were back online as of Thursday, nearly a week after a global tech outage snarled businesses, government agencies and air travel worldwide.

CrowdStrike Chief Executive George Kurtz said the company still has more work to do to address the fallout from last Friday’s disruption.

“To our customers still affected, please know we will not rest until we achieve full recovery,” Kurtz said Thursday in a post on LinkedIn.

• CrowdStrike’s CEO Has Known Failure—but Never Like This

• Republicans are sharpening their verbal attacks on Kamala Harris, who has rapidly erased Donald Trump's leads in polling and fundraising.
   
• Elon Musk’s embrace of Donald Trump can be traced in part to a snub by President Biden.
   
• Pro-Palestinian advocates say they are closely watching Vice President Kamala Harris to see if she will distance herself from President Biden's Gaza policy and lay out a vision of her own.
   
• The challenge of both finding and affording workers faces small governments scattered around the U.S., and often leaves those still there to pick up the slack.
   
• The forces of American culture and politics are pushing men and women under age 30 into opposing camps, creating a new fault line in the electorate and adding an unexpected wild card into the 2024 presidential election.

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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