The Morning Risk Report: Florida Accidentally Banned Banks From Doing Business in Sunshine State By Mengqi Sun

Good morning. Florida wanted to make it easier to invest in the state's booming economy. For several weeks, the government accidentally made it illegal for most banks to sell investments there.

Banks for four weeks weren't allowed to sell securities such as corporate bonds or shares of private companies in the state because of a law that went into effect Oct. 1.

The law: It sought to make it easier for startups and other companies to fundraise while ensuring that bad actors with a criminal record couldn't take advantage of Floridians. But it wasn't written as the Florida Legislature had intended. The law appeared to ban any bank that had been punished by the Securities and Exchange Commission or other authorities from selling a range of securities to investors, according to people familiar with the matter.

Affecting banks: The problem is that nearly all of the country's big banks-from JPMorgan Chase to Goldman Sachs-have been in trouble with the law at some point. Big banks flagged the issue to the state and called Republican Gov. Ron DeSantis's office, people familiar with the matter said. Some, such as JPMorgan and Bank of America, paused selling the securities to anyone with a Florida touchpoint, the people said.

The proclamation: On Sunday, Florida's top financial regulator invoked emergency powers tied to recent devastating hurricanes and suspended the part of the law that banned banks from selling securities, according to a proclamation from the state government.

A temporary solution: Banks including JPMorgan and Bank of America have resumed selling securities in Florida since the proclamation was enacted, some of the people said. The Florida Legislature is expected to propose a permanent fix to the problem the next time it convenes. Compliance

Exxon says California wants 'bigger landfills' in state's lawsuit over recycling.

Exxon Mobil says California's lawsuit alleging the oil giant lied about plastics recycling is malarkey .

In a public swing at the state official behind California's recent lawsuit, Exxon says Attorney General Rob Bonta's claims are frivolous, appear politically motivated and risk backfiring on recycling efforts.

Bonta says the world's largest producer of single-use plastic is misleading the public about how much it really recycles. Exxon says that if it doesn't continue to invest in its recycling program, it will have to use more oil and gas to make new plastic to meet society's insatiable appetite for containers, packaging and other products.

A federal appeals court narrowed the tax rule that has let conservative and liberal groups pour billions of dollars into political campaigns without disclosing their donors, and the case could restrict the flow of so-called dark money into politics.

Private equity is becoming a lifeline for accounting firms that are looking for more money to pay for technology and talent, but the resulting ownership shake-ups are pushing unlikely partners closer together, raising concerns from both accountants and regulators.

Australia's competition watchdog has filed proceedings against Singtel's subsidiary, Optus Mobile, alleging what it called "unconscionable" conduct in dealings with some consumers. Risk

How the Houthis went from ragtag rebels to global threat.

Iran's "axis of resistance" has suffered a series of blows delivered by Israel over the past month, including operations targeting the leadership of Hamas in Gaza and Hezbollah, and a strike last week on Iran's missile-making facilities used, in part, to supply the groups.

That hasn't stopped Yemen's Houthis from targeting more ships this week in the Red Sea with drones and missiles, the latest demonstration of how an escalating regional war appears to be boosting a once minor Iran-backed player in the region.

An explosion at a steel plant operated by Grupo Simec in central Mexico left at least 12 workers dead and another injured, authorities in the state of Tlaxcala said.

The Lebanese military has for years fallen short of the West's aspirations , strangled by limited resources and the fragile political reality in Lebanon.

The Bank of Japan's governor struck a less cautious tone about the outlook as the central bank delivered a widely expected rate hold and reaffirmed that it's on track for stable inflation and economic growth.

Just days before the U.S. presidential election, North Korea said it launched an intercontinental ballistic missile that stayed airborne longer than anything the Kim Jong Un regime had ever tested before.

The eurozone's annual rate of inflation was in line with the European Central Bank's target in October, increasing the likelihood that policymakers will lower borrowing costs for a third straight meeting. What Else Matters At least 95 people have died after devastating flash floods in southeastern Spain, as emergency responders and dog teams searched thick mud and landslides for survivors.

The Canadian government has alleged that India's powerful home minister, Amit Shah, orchestrated plots targeting Sikh separatists on Canadian soil, an accusation that could further worsen relations between the two countries.

Estee Lauder will elevate long-time executive Stephane de La Faverie to the role of chief executive, succeeding Fabrizio Freda, who will retire after more than 16 years with the embattled cosmetics maker.

Ernst & Young has resigned as the auditor for Super Micro Computer, saying it can no longer rely on management's representations.

The U.S. economy continued its recent strong stretch this summer, bolstered by hefty consumer and government spending. About Us

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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This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

October 31, 2024 07:05 ET (11:05 GMT)

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