DATA SECURITY

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AI is officially everywhere, and maybe you’re tired of hearing about it. Or maybe you chat daily with your best friend, ChatGPT or Claude, and tell them all your deepest, darkest secrets.

You may think those secrets are safe, stored away in an LLM’s beautiful cloud of 1s and 0s. But you should maybe avoid telling it business secrets; AI use poses major data security risks for enterprises, according to Paul Martini, CEO of cloud security provider iboss.

A finance organization, or any division within a company, buys a purchased version of Microsoft Copilot or Claude and says, ‘Well, that’s what we’re using, so we’re secure,’” Martini told CFO Brew.

“What they forget is, any employee can sign up for any personal ChatGPT…I think that there’s a lot of, what I would say shadow AI, and it’s dangerous because it’s personal or financial records that are just leaking to large language models. And once it leaks to those models, anybody can ask the model to tell [them] more about some information. So data loss and leakage is going to happen in a completely different way.”

Is building a proprietary LLM an effective way to protect data?—DL

      

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BANKRUPTCIES

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Bankruptcy filings were up across the board in the first six months of the year, but the rise in small-business filings stood out.

Subchapter V bankruptcies—a special type of Chapter 11 filing for small businesses that the Small Business Reorganization Act created in 2019—were up 50% YoY in the first half, according to the American Bankruptcy Institute (ABI) and bankruptcy-data provider Epiq AACER. Subchapter V filings increased 28% YoY in June alone.

Total bankruptcy filings grew 12% compared to the first half of 2025, to 310,550. Commercial filings increased 13%, to 17,825, and commercial chapter 11 filings increased 28%, to 4,589, according to the data.

“The increase in bankruptcy filings over the past year, particularly among small businesses, reflects ongoing financial pressures facing households and employers,” Amy Quackenboss, executive director of ABI, said in a news release. “Higher borrowing costs, increasing expenses, and geopolitical volatility are leading more debtors to turn to the bankruptcy system to restructure obligations and pursue a financial fresh start.”

Subchapter V eligibility could be expanded under pending legislation.—AZ

      

THE FED

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When Kevin Warsh learned that his first semiannual monetary policy report to Congress would be the same day that June CPI arrived, you just know he groaned in frustration. Chances were high it would be a bad inflation reading, thanks to the disruption of crude oil from the Middle East—and then he’d have to explain what he’s going to do about it to the House of Representatives.

Instead, Warsh got an unexpected win: CPI fell for the first time since 2020, dropping 0.4% from May as gas prices experienced their biggest monthly plunge since 2022, bringing annual headline inflation down to 3.5%. If you exclude volatile food and energy prices, core CPI remained flat at an annual rate of 2.6%.

“The Fed’s number one objective is to get monetary policy right—or as near to it as we possibly can. That is our clear and constant aim, the star we steer by,” Warsh said in a prepared statement on Capitol Hill Tuesday. “And if we get policy right—and we will—the inflation surge of the last five years will be a thing of the past.”

Hike hype. Tuesday’s inflation report was a step in the right direction for Warsh, and for the market. Investors have grown increasingly worried that, in order to curb inflation, the Fed will be forced to hike interest rates as soon as its next meeting on July 29. Some even see multiple rate hikes ahead—Bank of America leads the pack with three expected increases this year.

The probability of a July rate hike fell after the CPI release, Brew Markets reports.—MR

      

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market forces

Francis Scialabba

Today’s top finance reads.

Stat: $148 billion. That’s how much Morgan Stanley’s wealth management business corralled in net new assets in Q2. (Bloomberg)

Quote: “There are encouraging reasons to expect that inflation has peaked and should edge down in coming quarters.”—John Williams, president of the New York Federal Reserve (CNBC)

Read: Wall Street banks and investment firms are testing out the tokenization of stocks and treasuries, a move closer to a “fully digital Wall Street.” (the Wall Street Journal)

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Jobs

Skip the noise and cut to the jobs that matter. CollabWORK curates openings from top employers and shares them directly in trusted spaces like CFO Brew—click here to see the full list for readers like you.

• Government Accounting Controller at Crane Aerospace & Electronics
• Director of Accounting at Arvato Bertelsmann
• Vice President of Finance and Chief Financial Officer at Carnegie Mellon University
• Chief Financial Officer at A COMMUNITY OF FRIENDS
• Chief Financial Officer at Boulder Imaging Inc