First Read

Hits & Takes
JLN Staff

CQG’s Pat Kenny, The Most Interesting Man in the World, just became a little more interesting. He was named the new chairman of the board of directors of the Association of Futures Markets during its 21st Annual Conference organised in Bangkok.~JJL

The latest edition of Inside Advantage, from Advantage Futures, is out with a Q&As with Don Wilson and Blair Hull.~JJL

Nasdaq’s reported its Information Services and Data Products represented a combined 44 percent of net revenues in Q4. ~JK

The WFE’s|FOCUS]] newsletter is out. FOCUS features the following exchange and CCP executives: Gilson Finkelsztain, CEO, B3, Ed Tilly, CEO & Chairman, Cboe Global Markets, Diana Chan, CEO, EuroCCP, Nicky Newton-King, CEO, JSE, Alina Aldambergen, CEO, Kazakhstan Stock Exchange (KASE), Chairman Jan-yau HSU, Taiwan Stock Exchange (TWSE), Ittai Ben-Zeev, CEO, Tel Aviv Stock Exchange (TASE)~JJL

Yesterday’s JLN Options newsletter covered options market structure issues, some timely hedging and the trader “50 Cent” options.

The Winter issue of the Global Commodities Applied Research Digest (GCARD) has been launched. The GCARD is a publication of the J.P. Morgan Center for Commodities at the University of Colorado Denver Business School; the publication is sponsored by the CME Group Foundation.~JJL

The following quote comes from Euronext CEO Stephane Boujnah when asked on Bloomberg if the exchange would get into bitcoin – “No. No, we will not create a market, because the mandate of Euronext is to power pan-European capital markets to finance the real economy and bitcoin has nothing to do with the real economy. Bitcoin has a lot to do with bitcoin … Bitcoin today is just like a piece of art, much like a diamond, just like a Pokemon card.” His whole commentary is a fun watch.~SD

Want to visit Shangri-La? That’s the name of the resort in Muscat, Oman, that is hosting the World Exchange Congress on February 27 and 28. Here is the agenda.~SD

I will be in Washington, DC next week for the rescheduled CFTC Technology Advisory Committee meeting on Wednesday. ~JJL


Sponsored Content



Facebook is banning all ads promoting cryptocurrencies — including bitcoin and ICOs
Kurt Wagner – CNBC
Facebook is banning all ads that promote cryptocurrencies, including bitcoin, in an effort to prevent people from advertising what the company is calling “financial products and services frequently associated with misleading or deceptive promotional practices.”

**Is this the end of the Crypto Genius


Eventus Systems, Inc. Signs ENGIE Marketing NA, Inc.
Eventus Systems
Eventus Systems, Inc., a provider of innovative regtech software solutions for the capital markets, announced today that ENGIE Energy Marketing NA, Inc. has deployed the firm’s Validus surveillance and risk software platform to enhance its compliance program.


Want to Keep Up With Bitcoin Enthusiasts? Learn the Lingo; In the crypto world, fans will HODL and moon and are likely to suffer from OCD
Stephanie Yang – Bloomberg
Virtual currencies have gone from being a topic for fringe enthusiasts to a full-blown cultural wave, discussed at dinner tables and among casual acquaintances with little else to talk about.


Tuesday’s Top Three
Yesterday was spoofing day. Our top read story was the FT’s piece on Navinder Singh, Flash-crash trader helps US in fight against market abuse and his alleged involvement with Jitesh Thakkar, who was charged yesterday. Second went to John Lothian News’ piece on the first big case of self-reporting under new CFTC guidelines, in Turn Yourself In, It’ll Be Easier: Bank Cooperation On Spoofing Charges Saves Millions. Third went to the overall coverage of the cases by the Wall Street Journal in Justice Department Charges Eight Traders With Deceptive Futures Market Trading



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Lead Stories

MarketAxess sees record trading volumes in 2017; Overall trading volume in 2017 reached $1.5 trillion compared to $1.3 trillion the year prior.
Hayley McDowell – The Trade
MarketAxess has reported a record total trading volume for the full year in 2017 of $1.5 trillion, up more than 10% from the year prior.

Facebook and regulators move to halt cryptocurrency scams; Social network says it will ban all bitcoin and initial coin offering advertising
Chloe Cornish in San Francisco – FT
Facebook has banned all advertisements for cryptocurrencies, including bitcoin, after it decided too many of them were being used to mislead or deceive potential customers.

Blackstone bets big on Wall St. information business with Thomson Reuters deal
Pamela Barbaglia and Jessica Toonkel – Reuters
U.S. private equity firm Blackstone Group LP catapulted itself into the major leagues of Wall Street’s financial information industry on Tuesday with the acquisition of a majority stake in the Financial and Risk business of Thomson Reuters Corp.

U.S. SEC halts AriseBank’s initial coin offering, alleges fraud
Gertrude Chavez-Dreyfuss, Susan Heavey – Reuters
The U.S. Securities and Exchange Commission has halted what it alleged was a fraudulent initial coin offering by Dallas-based AriseBank to raise $1 billion for its “AriseCoin” cryptocurrency, the agency said in a statement on Tuesday.

SEC Freezes Crypto Assets of $600 Million Initial Coin Offering
Matt Robinson – Bloomberg
Action is first involving cryptocurrencies by U.S. agency; Evander Holyfield allegedly endorsed sales of AriseCoin. The U.S. Securities and Exchange Commission obtained a court order freezing the assets of an Texas-based initial coin offering that claimed to have raised more than $600 million.

****Evander Holyfield was a celeb endorser adding oomph to the tagline, “Join the biggest fight in history. The people’s bank has arrived.”~SD

Why Crypto Traders Are So Worried About Tether
Andrea Tan , Benjamin Robertson , and Matthew Leising – Bloomberg
It’s one of the most hotly debated questions in the world of virtual currencies: Is Tether telling the truth when it says that each of its digital tokens is backed by one U.S. dollar? News on Jan. 30 that American regulators are scrutinizing the company has given fresh ammunition to the skeptics.

U.S. Regulators Subpoena Crypto Exchange Bitfinex, Tether
Matthew Leising – Bloomberg
Firms say they routinely get ‘legal process’ from regulators; Tether has yet to verify that it holds $2.3 billion in reserve
U.S. regulators are scrutinizing one of the world’s largest cryptocurrency exchanges as questions mount over a digital token linked to its backers.

#MeToo movement puts pressure on U.S. banks to disclose diversity data
Ross Kerber – Reuters
The #MeToo movement has put new momentum behind efforts to have companies, especially in finance, disclose details about their workforce diversity – data that could throw into sharper relief the slow pace of progress for women and minorities in the field.

South Korea says no plans to ban cryptocurrency exchanges, uncovers $600 million illegal trades
Dahee Kim, Cynthia Kim – Reuters
South Korea’s finance minister said the government has no plans to shut down cryptocurrency trading, welcome news for investors worried that authorities might go as far as China’s tough action in blocking virtual coin platforms.

Coincheck falsely explained security to customers – industry group head
Reuters Staff
Japanese Coincheck made false explanations to customers about its security system before suffering one of the world’s biggest cyber heists, the head of a major cryptocurrency industry group said on Wednesday.

Exclusive: Coincheck hackers trying to move stolen cryptocurrency – executive
Jemima Kelly, Tommy Wilkes – Reuters
Hackers who stole around $530 million worth of cryptocurrency from the Coincheck exchange last week — one of the biggest such heists ever — are trying to move the stolen “XEM” coins, the foundation behind the digital currency said on Tuesday.

Treasury Refunding Announcement Is a Rare Nail-Biter for Traders
Elizabeth Stanton – Bloomberg
Auction sizes are expected to rise for the first time in years; Forecast ranges are especially wide for 2- and 3-year notes
The U.S. Treasury’s quarterly refunding announcement on Wednesday is shaping up to be the most interesting in years.

Founder of Chicago firm charged in crackdown on futures ‘spoofing’
Corilyn Shropshire – Chicago Tribune
The founder of a Chicago technology consulting firm was among eight people and three multinational banks charged Monday by federal authorities with committing commodities fraud through so-called spoofing trades.

DTCC processes first US buy-side cleared repo trade; DTCC aims to bring new players into providing liquidity to the repo market.
Joe Parsons – The Trade
Capula Investment Management and State Street have executed the first US buy-side cleared repo trade through the DTCC’s fixed income clearing house, as it looks to boost liquidity in the market via new participants.

Blackstone’s $17 Billion Thomson Reuters Bet May Supersize Deals
Melissa Mittelman – Bloomberg
Blackstone Group LP’s $17 billion deal for a unit of Thomson Reuters Corp., the private equity giant’s biggest bet in a decade, raises the question: Is a deal of this size a one-off, or are buyouts poised to get larger as firms move to deploy record sums of dry powder?

The $12 Trillion Mutual Fund Men’s Club Needs More Women; It’s a disservice to clients that only 2 percent of those assets are managed exclusively by women.
Tara Lachapelle – Bloomberg
By now we know that having more women on leadership teams enhances businesses. We also know that women have qualities that make them good investors, such as their approach to risk. Why then are there still so few women money managers? The figures are even starker than you might imagine.

Wall Street Fraud Watchdog Now Offers to Ensure High Net Worth Victims of Stockbroker Churning or Unauthorized Trading Have Access to Some of the Nation’s Top Securities Attorneys
The Wall Street Fraud Watchdog is launching a new initiative designed to ensure a high net worth investor has access to some of the nation’s most skilled securities attorneys if the investor’s stock broker has been involved in churning the client’s account or has been engaged in unauthorized trading.

Exchanges, OTC and Clearing

Market services business boosts Nasdaq’s quarterly profit
Reuters Staff
Exchange operator Nasdaq Inc (NDAQ.O) posted a fourth-quarter profit, helped by higher revenue at its market services and non-trading related businesses.

Nasdaq Announces Quarterly Dividend of $0.38 Per Share
The Board of Directors of Nasdaq, Inc. (Nasdaq:NDAQ) has declared a regular quarterly dividend of $0.38 per share on the company’s outstanding common stock. The dividend is payable on March 30, 2018 to shareowners of record at the close of business on March 16, 2018. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to approval by the Board of Directors.

Nasdaq Reports Fourth Quarter and Full Year 2017 Results; Delivers Strong Revenue and Income Growth
Nasdaq, Inc. (Nasdaq:NDAQ) today reported financial results for the fourth quarter and full year of 2017.

DTCC Opens New Chapter for Buyside Participation in Repo Clearing
The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, today announced the start of a new era of buyside participation in the cleared repo market as State Street Bank and Trust Company and funds managed by Capula Investment Management LLP, complete the first cleared sponsored repo transactions as a collateral provider.

Hong Kong and New Zealand Exchanges Sign MOU
Hong Kong Exchanges and Clearing Limited (HKEX) and NZX Limited (NZX) today signed a Memorandum of Understanding (MOU) to further promote confidence and co-operation in Asia-Pacific markets.

Hong Kong seen winning mega-IPO from Xiaomi after reforming listing rules
Peggy Sito, Zhang Shidong – South China Morning Post
Chinese smartphone maker Xiaomi is reportedly valued at as much as US$110 billion as it aims for an initial share sale in Hong Kong. The company was reportedly considering New York for its IPO.

Eurex Clearing’s Roadmap for 2018
With this circular, Eurex Clearing provides an overview of planned release introductions for 2018, which should facilitate Members’ resource and time planning. Please note that concrete product introductions and further clearing initiatives are not included in this Roadmap.

Moscow Exchange launches trading in Turkish Lira
On 29 January 2018, Moscow Exchange began trading the Turkish Lira/Russian Rouble (TRY/RUB) currency pair. On its first day, the instrument saw turnover of RUB 1.5 million (TRY 100 thousand).

Moscow Exchange facilitates access to its FX Market for international investors
From 30 January, Moscow Exchange’s FX services will be accessible by international clients through technical solutions offered by MarketFactory.

Japan Exchange Group, Inc. and Consolidated Subsidiaries; Consolidated financial results for the nine months ended December 31, 2017

SGX welcomes LY Corporation Limited to Catalist
Singapore Exchange (SGX) today welcomed LY Corporation Limited to its Catalist under the stock code “1H8”. LY Corporation Limited is one of Malaysia’s leading manufacturers and exporters of wooden bedroom furniture. With strong in-house design and development capabilities and an established subcontractor network, they have a track record of approximately 40 years in the furniture industry and are well recognised for the quality of their furniture products.

SGX proposes updates to rules on mineral, oil and gas companies for greater relevance and alignment
Singapore Exchange (SGX) is proposing changes to the Mainboard and Catalist Listing Rules for mineral, oil and gas (MOG) companies so that they remain aligned with industry developments.

End of Regional commodity exchanges: Hapur awaits Sebi nod for closure; Four other bourses had to shut shop earlier due to thin volumes and stringent Sebi norms
Dilip Kumar Jha – Business Standard
With the Securities and Exchange Board of India (Sebi) having refused to renew the mustard seed contract, Hapur Commodity Exchange Ltd (HCX), the last operational regional commodity exchange of the 22 that were in existence until a decade ago, awaits closure next month.

A major social network is launching its own bitcoin exchange
Daniel Shane – CNN
One of the biggest social networks in Asia wants to cash in on the bitcoin boom.
Popular messaging app Line (LN) said Wednesday it plans to launch an exchange that will allow its more than 170 million users to trade digital currencies via their smartphones.

Bucharest bourse to keep focus on boosting turnover – CEO
The Bucharest Stock Exchange [BSE: BVB] will continue aiming at increasing its turnover so that Romania is promoted to the emerging market status as soon as possible, the new chief executive officer of the bourse, Adrian Tanase, has said.


Paris Is City of Fintech Love for Startups Seeking Hookups
Fabio Benedetti Valentini and Marie Mawad – Bloomberg
Founders want incumbents to extend a hand, as partners or M&A; Payments in focus on how startups defy giants at Fintech Forum
The fintech dating game is on in Paris. Entrepreneurs in Europe’s financial-technology sector are pushing low-cost payments solutions to steal market share from banks, hoping the challenge they pose will spur the lenders to buy them or seek partnerships with them.

TRG and Vela announce exclusive partnership for DART usage analysis
TRG, the leading provider of subscription spend management software solutions, today announced it has agreed exclusive global distribution rights for DART Terminal Usage Analytics with Vela, the leading trading and market access technology provider.

Delivering quick and easy access to EDI reference data services from within the QH Ecosystem
QuantHouse, the independent global provider of end-to-end high performance market data and trading through API based technologies, today announced that Exchange Data International (EDI) is the latest provider to join the QuantHouse API Ecosystem.

****SD: See Jim Kharouf’s piece for more on Quanthouse

Blackstone-Thomson Reuters deal paves way for more; Analysts predict M&A in financial data industry the Thomson family failed to dominate
Save to myFT
Philip Stafford in London and Shannon Bond in New York – FT
For more than a decade, the Thomson family has wrestled, at great expense, with a big problem: how to derive value from the £8.7bn acquisition of Reuters by the family’s company, Thomson Financial, in 2008 and the dozens of other smaller data and trading assets it has subsequently bought.

TNS Expands Hosting Services To New York And Chicago Financial Hubs
Low latency trading firms looking to access key equity, derivatives and FX markets can now choose Transaction Network Services (TNS) as it expands its Managed Hosting, Co-Location and Connectivity Service to New York and Chicago.

Line, Japan’s WhatsApp challenger, is getting into cryptocurrency and fintech
Lynsey Barber – City AM
The bitcoin boom continues…Line, a hugely popular messaging app from Japan which rivals WhatsApp and Facebook Messenger, has revealed plans to launch a its own cryptocurrency exchange

How ‘blockchain’ compares with ‘dotcom’ in the company name game
Kevin Murphy – City AM
One of the first things you learn as a value investor is to dig below the surface of any potential investment – analysing a business’s balance sheet and other data to ensure you really understand its underlying value, its financial strength and how it works.

A Vermont City Tests Blockchain Technology for Property Deals; South Burlington doing a small trial run to test to the technology on recording real estate sales
Peter Grant – FT
The city of South Burlington, Vt., is embarking on a pilot project with a startup blockchain firm in a possible step toward using the technology to replace the city’s system for recording property transactions.

Bitcoin Is the New Gold; Invest in it, perhaps. But don’t try to shop with it.
Noah Smith – Bloomberg
They might have a lot in common. Photographer: Ulrich Baumgarten/Getty Images
I hate to say I told you so, but … well, I told you so. Bitcoin, 1 while still a popular financial asset, is looking less and less like a currency. Online payments company Stripe is ending Bitcoin support. It cites several reasons for doing so:

Why Bitcoin May Not Be Digital Gold After All
Jen Wieczner – Fortune
To explain Bitcoin’s exponential rise over the past year, proponents of the cryptocurrency often come back to the same refrain. Think of Bitcoin, they say, as digital gold—a so-called “store of value” that, like the precious metal itself, doesn’t need to have a lot of practical uses to be worth a lot of money.

Reuters News to get $325 million annually under Blackstone offer: sources
Pamela Barbaglia – Reuters
Blackstone Group LP (BX.N) has agreed that annual payments of $325 million would be made for 30 years to the Reuters News business as part of an offer by the U.S. private equity firm to buy a majority stake in Thomson Reuters’ (TRI.N) (TRI.TO) Financial and Risk unit, two sources familiar with the matter said on Tuesday.

Blackstone to Buy Thomson Reuters Unit in a $20 Billion Deal
Melissa Mittelman – Bloomberg
Canada Pension, GIC to invest in business alongside Blackstone; Blackstone PE head Baratta: ‘This is a landmark transaction’
A group led by Blackstone Group LP agreed to buy a majority stake in Thomson Reuters Corp.’s financial and risk unit in a deal that values the business at $20 billion, sealing plans for the firm’s biggest buyout in a decade.


Leaving Nafta Would Cost $50 Billion a Year; America’s gross domestic product is now 0.2% to 0.3% larger than it would be without the agreement.
Matthew J. Slaughter – WSJ
U.S. Trade Representative Robert Lighthizer met in Montreal Monday with his Mexican and Canadian counterparts for a critical day of negotiations over the future of the North American Free Trade Agreement. Mr. Lighthizer told the press that “some progress was made” at the talks. That’s good. Withdrawing from Nafta would be a $50-billion-a-year mistake for the U.S.

The Man From Sullivan & Cromwell; Under Trump’s SEC, Wall Street Secrecy Expands as Enforcement Shrinks
Susan Antilla, Gary Rivlin – The Intercept
Late last October, several hundred handsomely suited financiers gathered in the ballroom of a luxury Marriott, just two blocks down Pennsylvania Avenue from the Trump International Hotel. Lisa Kidd Hunt, the new chair of the Securities Industry and Financial Markets Association, practically glowed as she addressed the crowd of bankers, brokers, and other money managers.

MEPs and markets split over Mifid II data rules; There is confusion about whether regtechs should have to pay for trade data under the EU’s revised regulatory framework
Lucy McNulty – Financial News
Two MEPs who helped craft the European Union’s vast trading reforms are split on how crucial data price rules should be interpreted — rules that are already causing confusion in the markets.

Second Trump-Russia dossier being assessed by FBI; Exclusive: memo written by former journalist Cody Shearer independently sets out some of the allegations made by ex-spy Christopher Steele
Stephanie Kirchgaessner and Nick Hopkins – The Guardian
The FBI inquiry into alleged Russian collusion in the 2016 US presidential election has been given a second memo that independently set out some of the same allegations made in a dossier by Christopher Steele, the British former spy.

Trump Administration Admits It Cribbed From Forbes Magazine To Create “Oligarch List”; The revelation is likely to invite criticism that a congressionally mandated list designed to punish Russia for interfering in the US election was put together haphazardly.
John Hudson – Buzzfeed
The striking similarity between a newly released Treasury Department report of Russian oligarchs and a 2017 list of wealthy Russians published in Forbes magazine is no coincidence.


SEC Halts Alleged Initial Coin Offering Scam
The Securities and Exchange Commission obtained a court order halting an allegedly fraudulent initial coin offering (ICO) that targeted retail investors to fund what it claimed to be the world’s first “decentralized bank.”
According to the SEC’s complaint, filed in federal district court in Dallas on Jan. 25 and unsealed late yesterday, Dallas-based AriseBank used social media, a celebrity endorsement, and other wide dissemination tactics to raise what it claims to be $600 million of its $1 billion goal in just two months.

SEC’s chief enforcement accountant to leave agency
Reuters Staff
The U.S. Securities and Exchange Commission announced Tuesday its chief accountant for enforcement matters would leave the agency next month.

Carney Says Cryptocurrency Transactions Shouldn’t Be Anonymous
Fergal O’Brien – Bloomberg
Bank of England Governor Mark Carney said cryptocurrency payments are often used for money laundering or other illicit activity and he’s against users having their identities kept secret from authorities.

Michael Maloney, Enforcement’s Chief Accountant, To Leave SEC
The Securities and Exchange Commission today announced that Michael F. Maloney, Chief Accountant of the SEC’s Division of Enforcement, is planning to leave the agency next month.

FCA publishes update on high-cost credit work
The Financial Conduct Authority (FCA) has today published an update on its work in the high-cost credit sector.

Sebi weighs tighter norms to protect market liquidity
India’s market regulator is weighing options to direct stock exchanges to either stop offering securities-related data feed services to entities trading on bourses abroad, such as the Singapore Stock Exchange (SGX), or levy high additional fees on the traders.

EX-JPMorgan Trader Loses London Whale Identity Suit Against FCA
Suzi Ring – Bloomberg
Julien Grout not improperly identified in report, court says; Decision in line with Supreme Court ruling on issue last year
A former JPMorgan Chase & Co. trader wasn’t improperly identified by the U.K. markets regulator in its settlement report over the London Whale scandal, a court ruled, upholding a Supreme Court decision on the wider issue last year.

Investing and Trading

So goes January, so goes the Year?
RCM Alternatives
Don’t look now, but up there near the top of the asset class scoreboard so far in January is none other than Managed Futures, with the SocGen CTA Index up around 6% for the month. That would make it the best monthly performance since it gained +8.85% in December 2000. And all of this while stocks scream higher on the year, proving once again that Managed Futures holds a non-correlation to equities. Of course, an index of the largest CTAs isn’t necessarily indicative of the entire asset class, so how are some of the smaller funds doing?

Wall Street Can’t Hold Back Vanguard’s Low-Fee Ocean
Nir Kaissar – Bloomberg
Investors agree with Jack Bogle that “you get what you don’t pay for.”

It’s Getting Hot Out There: Investors Need to Pay Attention
Joachim Klement – CFA Institute Enterprising Investor
In a previous incarnation, I was a theoretical astrophysicist. In that role, I worked on a team that tried to parse how much of global warming could be attributed to the sun and how much to human causes.

Bitcoin Is Having Its Worst Month in Three Years; Global regulatory clampdown hits cryptocurrencies
By Steven Russolillo in Hong Kong and Eun-Young Jeong in Seoul – FT
Bitcoin gripped the investing world last year like no other asset class in recent memory, minting new millionaires, sparking a pivot to blockchain technology and attracting a new wave of interest from institutional investors.

Digital Coins Tumble in January Amid Facebook, Tether Concerns
Eric Lam – Bloomberg
Bitcoin heads for worst monthly slide in almost four years; CFTC in U.S. said to send subpoenas to Bitfinex, Tether
For cryptocurrency investors, January is turning into a month to rue. Digital coins have mostly slid this week, with Bitcoin heading for its worst monthly decline since February 2014, as U.S. regulators ramp up their scrutiny of one of the world’s largest digital currency exchanges while Facebook Inc. is banning ads tied to the industry.

Jim Chanos: Charity Can Be A Sign Of Fraud
Linette Lopez – CNBC
Legendary short seller Jim Chanos gave an extensive interview to about how to spot fraud and corruption in business.


Jamie Dimon’s longevity at JPMorgan leads to itchy feet below him; Veteran banker is popular with investors and seen as a potential political candidate
Ben McLannahan in New York and Martin Arnold and Laura Noonan in London – FT
Last week at Davos, Jamie Dimon worked the crowds in a black shirt and jeans, fuelling speculation that the chief executive and chairman of the biggest bank in America was getting tired of the old routine.

Star trader Greg Coffey leases Belgravia office ahead of hedge fund return
Tabby Kinder – Financial News
Renowned trader Greg Coffey has leased offices in Belgravia and picked prime brokers as he prepares to launch his first hedge fund since exiting the industry amid much fanfare in 2012.
The lease provides a clear picture that the Australian trader — once known as the Wizard of Oz in fund management circles for his trading prowess — is very close to making a return to hedge fund investing.

RBS restructuring arm did not turn around ‘vast majority’ of businesses
Emma Rumney – Reuters
Royal Bank of Scotland’s (RBS.L) restructuring business did not turn around the “vast majority” of small businesses it worked with, Chief Executive Ross McEwan said on Tuesday in response to lawmakers’ questions.

Julius Baer profits beat estimates, announces Brazil acquisition
Ralph Atkins in Zurich – FT
Julius Baer, the Swiss private bank which last year lost its chief executive to Geneva rival Pictet, has reported a 14 per cent rise in net profits for 2017 and signalled it remains on the acquisition trail by snapping up a wealth manager in Brazil.

Legg Mason appoints chief diversity officer
Jayna Rana – InvestmentWeek
Legg Mason has appointed Regina Curry as chief diversity officer, as part of plans to boost its diversity initiative across the company.

Och-Ziff Names New CEO to Replace Daniel Och; A battle for firm’s future has pitted Mr. Och against his one-time chosen successor
Gregory Zuckerman – WSJ
Hedge fund Och-Ziff Capital Management Group LLC OZM 4.35% named a Wall Street veteran to replace founder Daniel Och as chief executive officer after a high-profile battle for the firm’s future that pitted Mr. Och against his one-time chosen successor.

Cohen Leads Wave of Hedge Fund Startups After Year of Retreats
Saijel Kishan – Bloomberg
Viking alum Dan Sundheim hires ex-White House adviser at D1; Cohen rearms with outside cash as Gelband preps ExodusPoint
After a cohort of hedge fund veterans called it quits last year, a trio of established managers are prepping to fill their shoes in 2018 by starting firms with at least a billion dollars apiece.

Banker Bonuses Jumping While Traders Brace for Smaller Payouts
Hugh Son and Laura J Keller – Bloomberg
Gap set to widen further this year as mergers start strong; Underwriting fees boost Wall Street investment-banking revenue
Wall Street bankers are celebrating this bonus season, while the party in trading divisions is somewhat more subdued.

Ex-HSBC Wealth Manager Accused of $3 Million Drip-Feed Heist
Hugo Miller – Bloomberg
Banker allegedly stole in small increments to avoid detection; Man accused in Geneva of criminal mismanagement and forgery
A former wealth manager with HSBC Holdings Plc’s Swiss private bank in Geneva was accused of stealing about 3 million Swiss francs ($3.2 million) from his rich Turkish clients, drip-feeding money from their accounts over a period of two years.

Goldman Sachs inadvertently bought a stake in a bitcoin trading desk
John Detrixhe – Quartz
Contrary to recent reports, Goldman Sachs CEO Lloyd Blankfein says the investment bank isn’t starting a bitcoin trading desk (paywall). While the company provides services for clients who trade bitcoin derivatives, the executive said in an interview with CNBC that the bank isn’t placing bets on crypto or posting bids and offers on bitcoin with its own money.


Argentina Goes From Market Darling to Dud
Ben Bartenstein and Will Mathis – Bloomberg
Inflation jitters mount as central bank takes dovish stance; Currency is the worst performer in emerging markets this year
Mauricio Macri’s honeymoon is over, at least in the foreign-exchange market.

Bank of Japan Denies Bond-Purchase Signals, But Some Don’t Buy It; Haruhiko Kuroda, governor of the Bank of Japan, at the World Economic Forum, in Davos, Switzerland, Jan. 26.
Suryatapa Bhattacharya and Megumi Fujikawa – FT
Japan’s central bank has ramped up its insistence that there are no signals in its day-to-day buying of government debt, but market players continue to look for them.


Morgan Stanley to decide on Brexit staff moves early this year
Reuters Staff
Morgan Stanley (MS.N) will make decisions on redeploying staff to its chosen locations of Frankfurt, Paris and Dublin as a result of Brexit very early this year, its president said on Wednesday.

Secret Brexit analysis warns of financial hit to Britain; Predicted fall in growth of 2%-8% expected to aid ministers seeking soft deal
George Parker, Jim Pickard and Laura Hughes in London – FT
Britain will be left worse off under all economic scenarios after Brexit, according to a leaked government analysis, with financial services, manufacturing and retailing among the industries worst hit.

U.K.’s May Fighting to Keep Brexit Economic Study Secret
Robert Hutton – Bloomberg
Minister who trashed forecasts tells staff ‘I still love them’; But another says ‘evidence not dogma’ must drive strategy
Theresa May’s government will fight to keep secret an assessment of the likely impact of Brexit on the British economy, even as one of her own ministers called for the numbers to be published.

Morgan Stanley Boosts Dublin, Frankfurt, Paris Offices on Brexit
Peter Flanagan and Gavin Finch – Bloomberg
Firm taking multi-centered approach, Colm Kelleher says; Bank said to move 200 jobs to Frankfurt, 100 to other cities
Morgan Stanley President Colm Kelleher said the bank would boost its offices in three European Union cities as it seeks to relocate London-based roles after Brexit.

EU Is Refusing to Budge on Post-Brexit Financial Services
Ian Wishart – Bloomberg
European Commission sticks with Canada model for U.K. banks; Presentation was made to EU-27 in Brussels in Tuesday
U.K. banks will have limited access to the European Union’s single market after Brexit if the government refuses to weaken its red lines, the European Commission told diplomats, according to two people familiar with private discussions in Brussels.

Britain Has Lost Its Bearings on Brexit; Nearly 600 days after the vote, it can’t or won’t tell the EU what it wants.
Leonid Bershidsky – Bloomberg
The leaked U.K. government forecasts of Brexit’s impact on the economy discusses several scenarios, none of them favorable. But the scariest takeaway was that London still isn’t clear on what kind of deal it’s capable of getting, or what it wants. Almost 600 days have passed since the referendum.

Rich Folks Are Fleeing London and Lagos, Wealth Report Shows
Jeanette Rodrigues – Bloomberg
New taxes, Brexit are factors in first big outflow from London; Cities seeing inflows include Auckland, Dubai, Montreal
Wealthy Londoners are leaving the city as new taxes make it expensive to inherit and invest, and as Brexit prompts rich Europeans living in the U.K. capital to return home.

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