The Morning Risk Report

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• Chip market at stake. CAC’s probe into Micron comes at a time when Beijing is girding for a long-term battle with Washington for control over China’s technology supply chains. It followed a series of escalating U.S. export controls around chips that Washington has implemented, which could hinder Beijing’s technological advancement. Micron said it was in communication with the Chinese regulator, adding that “we stand by the security of our products.”
  
   
• Contradictory impulses. Beijing is making fresh efforts to boost foreign investment as China is trying to revive a sluggish economy wrought by three years of Covid-19 restrictions. Yet in the meantime, Beijing appears to continue pressuring multinationals. Chinese authorities last week raided the Beijing offices of Mintz Group, a New York-based due-diligence firm, detaining five staff members. Earlier this month, authorities suspended the operations of Deloitte’s Beijing office for three months and imposed an unprecedented fine.
  
   
• U.S. measures against China. The U.S. last year said it would add China’s most advanced memory-chip manufacturer to an export blacklist, ratcheting up restrictions aimed at holding back the development of the country’s semiconductor industry.

The WSJ Risk & Compliance Forum on May 9 will feature speakers including Assistant Attorney General Kenneth Polite Jr., Assistant Secretary for Export Enforcement Matthew Axelrod, Elizabeth Atlee, chief ethics & compliance officer at CBRE, and Sidney Majalya, chief risk officer at Binance.US. You can register here.

Google co-founder, other billionaires are issued subpoenas in lawsuit over JPMorgan’s ties to Jeffrey Epstein.

The U.S. Virgin Islands issued subpoenas to Sergey Brin, Thomas Pritzker, Mortimer Zuckerman and Michael Ovitz to gather information for its civil lawsuit against JPMorgan Chase & Co. over the bank’s relationship with Jeffrey Epstein, according to people familiar with the matter.

Case against the bank. The U.S. Virgin Islands sued JPMorgan late last year in a Manhattan federal court, saying the bank facilitated Epstein’s alleged sex trafficking and abuse by allowing the late financier to remain a client and helping him send money to his victims. 

Swiss prosecutors probe Credit Suisse takeover by UBS.

Switzerland’s prosecutors are probing the government-orchestrated takeover of Credit Suisse Group AG by rival UBS Group AG. The federal prosecutor has reached out to national and local authorities and “issued investigation orders” to analyze and identify if any criminal offenses took place under the deal, which also involved the government, the financial regulator, Finma, and Switzerland’s central bank, a spokeswoman said in a statement.

• Attorneys general from California, Maryland, New Jersey and North Carolina on Friday joined an antitrust lawsuit seeking to block JetBlue Airways Corp.’s takeover of Spirit Airlines Inc.
  
   
• Federal prosecutors and environmental regulators on Friday sued Norfolk Southern Corp. over last month’s derailment in East Palestine, Ohio.
  
   
• Japan said it would restrict the export of advanced semiconductor equipment, a measure that could hamper development of China’s industry and marks a further cooling of relations after the detention of a Japanese pharmaceutical-company employee in Beijing.
  
   
• A Delaware judge ruled Friday that a jury should decide the fate of a defamation case against Fox News for airing unsupported claims that a voting-machine company was involved in election fraud during the 2020 presidential election.

World Bank warns of lost decade for global economy.

The World Bank is warning of a “lost decade” ahead for global growth, as the war in Ukraine, the Covid-19 pandemic and high inflation compound existing structural challenges.

Three factors. The Washington, D.C.-based international lender says that “it will take a herculean collective policy effort to restore growth in the next decade to the average of the previous one.” Three main factors are behind the reversal in economic progress: an aging workforce, weakening investment and slowing productivity.

• Core inflation in the eurozone hit a record in March, a setback for central bankers whose rapid interest-rate rises have exacerbated financial sector strains and caused pains in part of the bloc’s economy.
  
   
• Italy’s privacy regulator temporarily banned OpenAI’s ChatGPT, saying the artificial-intelligence chatbot has improperly collected and stored information, accelerating the rush by policy makers to roll out new AI rules.
  
   
• Japan’s foreign minister raised concerns in Beijing about increasing Russian and Chinese joint military activity on a day when Tokyo formally opened its closest missile base to China.

EY fails to reach deal on split.

The unexpected revolt that has upended the planned breakup of accounting firm Ernst & Young is being driven by two longtime U.S. auditors who believe their part of the firm could end up weakened by a deal.

Pushback on breakup. John King and Frank Mahoney, senior U.S. EY executives, have emerged as key opponents to the firm’s plan for a worldwide split of its auditing and consulting arms, according to people familiar with the matter.

A transparency group last month called on Treasury Secretary Janet Yellen to appoint a permanent FinCEN director. The Treasury bureau has faced criticism in recent months around its efforts to create a corporate ownership database.

• A group of large oil producers led by Saudi Arabia said Sunday they would cut more than a million barrels of output a day starting next month.
  
   
• Recent turmoil in the banking industry has made the already-difficult task of selling off tens of billions of risky buyout debt even harder for Wall Street firms.
  
   
• McDonald’s Corp. is temporarily closing its U.S. offices this week as it prepares to inform corporate employees about layoffs undertaken by the burger giant as part of a broader company restructuring.
  
   
• Behind Elon Musk’s gamble to turn Twitter Inc. into a company worth more than $250 billion is a beloved idea he has hung on to for more than two decades: digital banking.
  
   
• New York prosecutors, former President Donald Trump, his political allies and foes are all gearing up for a historic week that will feature his surrender and arraignment in a Manhattan courtroom on hush-money charges.
  
   
• Credit Suisse Group AG’s new-look investment bank, CS First Boston, was supposed to help salvage the lender. Instead, it may have hastened its fall.
  
   
• U.S. Secretary of State Antony Blinken pressed his Russian counterpart for the release of recently detained Wall Street Journal reporter Evan Gershkovich in a phone call Sunday, the State Department said, following his detention last week on espionage charges.