Good morning. U.S. regulators are investigating Massachusetts Mutual Life Insurance, a major U.S. insurer and asset manager, over accounting practices in its investment operations, people familiar with the matter said.

• The probe: The Securities and Exchange Commission has been gathering information, including through subpoenas it issued, about MassMutual’s bookkeeping around income on billions of dollars of loans it holds in its general investment account, the people said. The SEC is investigating whether MassMutual properly reconciled accrued interest as it received payments on loans held in its general investment account, the people familiar with the matter said. The agency is trying to determine whether its accruals are overstated. The investigation isn’t complete and may not result in any formal allegations of wrongdoing.
   
• MassMutual: Founded in 1851, MassMutual today is one of the country’s largest providers of life-insurance policies and annuities. It counts more than four million customers and sold more than $41 billion of insurance and annuities last year. The total volume of MassMutual life-insurance protection in force topped $1 trillion at the end of 2024. MassMutual is owned by its policyholders, and its shares don’t trade publicly. The company is, however, a regular issuer of corporate notes and debt, which are held by a wide universe of investors who depend on the company’s financial statements to make decisions.
   
• The context: MassMutual’s experience highlights the complexity of managing those investments. Among the $285 billion in invested assets it held at the end of 2024 are tens of billions of dollars of mortgage loans and more bespoke financings originated by Barings, its wholly owned asset-management subsidiary.

Lloyds Banking Group warns of extra provision for car-loan redress.

Lloyds Banking Group’s shares were dragged by the lender’s warning that it would probably need to set aside more money to compensate customers as part of a probe into commissions paid on car loans.

“Based on our initial analysis and the characteristics of the proposed scheme, an additional provision is likely to be required which may be material,” the bank said Thursday, without providing figures.

The U.K.’s Financial Conduct Authority earlier this week shared details on a plan to compensate customers for the payment of commissions that it deems were unfairly charged on car loans by dealerships.

EU proposes regulation to support farmers in Mercosur trade deal.

The European Commission proposed a regulation to support European farmers as part of the bloc’s Mercosur trade deal.

The commission said Wednesday that under the regulation, it would monitor market trends on some sensitive agricultural imports, such as beef and poultry, and commit to launching investigations if there is an increase in cheaper goods from the South American bloc or a decrease in domestic prices.

• Some of the advertising industry’s largest players have joined forces to propose new standards for transparency in the digital auctions that increasingly dominate ad sales.
   
• As a final U.S. sanctions waiver expired on Wednesday, Serbian President Aleksandar Vucic said his government’s efforts will focus on negotiations with Moscow to address restrictions on the country’s majority Russia-owned oil company NIS, declaring there is nothing left to be discussed with Washington, Risk Journal reports. 
   
• Former FBI Director James Comey pleaded not guilty Wednesday during his first court appearance in a criminal case that President Trump publicly demanded be brought against one of his prominent critics.
   
• Sen. Ted Cruz (R., Texas) is calling for changes to the legal system to better protect consumers from government censorship, a move that comes weeks after he criticized the Trump administration’s push to have late-night host Jimmy Kimmel taken off the air.
   
• The U.S. should further clamp down on exports to China to try to limit the development of advanced chips there, a bipartisan group of lawmakers said, calling for new controls and establishing a whistleblower program, Risk Journal reports.

How businesses are already feeling shutdown pain.

Just a week into the U.S. government shutdown, businesses nationwide are starting to feel the pain.

An Alameda, Calif., medical-device company postponed a planned spinoff, unable to pursue regulatory approvals. A Florida marketing company laid off five employees after receiving a stop-work order on a federal contract. A Minnesota subcontractor is trying to keep a half-dozen electricians working while it waits for a stalled government contract.

• Shutdown Specials and Unhappy Hours Are Taking Over the D.C. Bar Scene

Israel and Hamas agree to hostage release in step toward peace

Israel and Hamas agreed Wednesday to a deal that would release all Israeli hostages held in the Gaza Strip in the first step toward peace after two years of war in the Palestinian territory.

President Trump said the hostages will be released soon, and that Israel will withdraw its troops in the strip to an agreed-upon area. Hamas confirmed that a broad deal, steered by U.S. envoys, had been reached to end the war, allow more humanitarian aid and facilitate “a prisoner exchange”—a reference to the release of Israeli hostages for Palestinians in Israeli prisons.

• Dutch Supreme Court Orders Government to Reassess Ban on F-35 Parts to Israel

• Security chiefs are emerging as sought-after advisers as companies plunge headlong into artificial intelligence.
   
• Auto-parts supplier First Brands crashed into bankruptcy last month. Now, banks are sifting through their exposure to the company and its chain of customers and suppliers.
   
• Federal Reserve officials were divided over how much farther they should lower interest rates when they approved their first reduction of the year last month, according to a written record of their meeting released Wednesday afternoon.
   
• A host of alternative jobs data from Wall Street are pointing in the same direction: The U.S. labor market is losing steam.

Karczmer most recently served as chief enterprise services officer at PayPal, overseeing the payment company’s risk and compliance operations and regulatory and government relations. Karczmer replaces K2 Integrity’s founding CEO, Jeremy Kroll, who will now serve as a vice chairman on the board.

• President Emmanuel Macron is moving to name a new prime minister rather than calling snap elections, an approach that buys time for the country’s political establishment to pull France out of its fiscal disarray.
   
• The European Union outlined plans to promote European adoption of and research into artificial intelligence tools to boost the bloc’s grasp of the nascent technology.
   
• Federal authorities arrested a man accused of sparking a California blaze on New Year’s Day that eventually became the Palisades fire, which destroyed thousands of homes and killed a dozen people.