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Trader Who Racked Up $115 Million Losses Had People Trading on His Behalf

Jan 10, 2019

First Read

Hits & Takes
JLN Staff

It has been 16 years since I incorporated John J. Lothian & Company, Inc. and we started charging for the John Lothian Newsletter. We ask you to pay for a yearly subscription if you find the newsletter valuable to you. If you read it regularly, then we think you find it valuable. If you continue to read it year after year, we think you find it valuable. If you have multiple subscribers at your firm, we think you find it valuable. If you forward the newsletter to others, we think you find it valuable. There are many ways this newsletter can be valuable to you. We ask you share some of that value back with us in the form of a paid subscription. You can see the payment options on the John Lothian News website.~JJL

HKEX reports it had an exceptional 2018 and set several records throughout the year, saying it finished first globally in IPO funds raised, with six of its top 10 IPOs coming from the new economy sector. More 2018 market stats~JJL

TriOptima, the trade compression service that is now part of CME Group after the acquisition of NEX Group, has compressed more than $1.21 trillion in gross notional since it began in 2003.~JK

Dan Collins, formerly of Futures Magazine and Modern Trader Magazine, is now a freelance writer and consultant.~JJL

According to a CBOT disciplinary action, Benn Hepworth was fined $50,000 and suspended from all direct or indirect access to CME Group platforms for three years due to wash trading.~SD

The full Fed minutes can be found here. ~SD

For a look at CurveGlobal trading highlights, see this graphic via LinkedIn. Some 1.15 million contracts traded in Q4 2018. ~SD

We’re back to not eating romaine lettuce again…or much of anything else, as the New York Times reports the government shutdown means the FDA has stopped routine food safety inspections of seafood, fruits, vegetables and many other foods “at high risk of contamination.”~SR

On 19 and 20 March, 2019, just 10 days before the UK intends to leave the European Union, ABN AMRO Clearing will be hosting the 8th edition of its Amsterdam Investor Forum, a leading forum for institutional investors and alternative investment managers.~JJL

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All of us will suffer as Brexit dismantles the Square Mile
Garry Jones – London Evening Standard
As a no-deal Brexit becomes increasingly likely, the nuts and bolts of the City’s financial infrastructure are slowly being dismantled. Recently, there has been an alarming increase in the number of companies unveiling plans to shift operations away from the UK. The London Stock Exchange has announced that its bond trading platform, MTS Cash, will move to Milan.
***** Garry Jones with two Rs can only mean one thing, former LME CEO Garry Jones.~JJL

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Nobody Is Moving Our Cheese: American Surplus Reaches Record High
Samantha Raphelson – NPR
It’s a stinky time for the American cheese industry.
While Americans consumed nearly 37 pounds per capita in 2017, it was not enough to reduce the country’s 1.4 billion-pound cheese surplus, according to the U.S. Department of Agriculture. The glut, which at 900,000 cubic yards is the largest in U.S. history, means that there is enough cheese sitting in cold storage to wrap around the U.S. Capitol.
/goo.gl/bvqoUy

***** Don’t worry about anyone moving your cheese, there is lots to go around.~JJL

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Bloomberg has reached $10 billion in annual revenue and some insiders are ecstatic about the special payout they’re about to receive
Dakin Campbell – Business Insider
Bloomberg LP, the financial data and information company, brought in record revenue in 2018, surpassing $10 billion for the first time, according to insiders who were informed by senior management.
/read.bi/2Fn0dtn

*****$10 billion is pretty impressive for any company.~JJL

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Wednesday’s Top Three
Our top read stories from Wednesday were led by Barron’s piece Why Wall Street Wants to Build Its Own Stock Exchange. Second was the FT’s Volatility: how ‘algos’ changed the rhythm of the market. Third was the Bloomberg piece on Greg Palm, Goldman’s $500 Million Lawyer Greg Palm Is Ready to Call It Quits

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Lead Stories

Trader Who Racked Up $115 Million Losses Had People Trading on His Behalf
Lars Paulsson – Bloomberg
Report from Norwegian FSA highlights failures at exchange; Authority demands report on corrective measures by March 1
The Norwegian power trader who last year racked up losses of more than $115 million on Nasdaq Inc.’s power market had other people trading for him even though his membership of the exchange was solely personal.
/bloom.bg/2FkOAnL

Wall Street battles for supremacy in volatility market; Asset managers vie to launch replacement for iconic VXX fund
Richard Henderson and Joe Rennison – FT
A fight for assets has erupted among volatility funds that allow investors to bet on gyrations in the stock market, as the current market-leading exchange traded product enters its final days.
/on.ft.com/2FgrQW1

Tradeweb files for IPO in the US — report; Listing could value the New York-based bond trading venue at more than $4bn
Samuel Agini – Financial News
The bond trading venue Tradeweb has taken a step towards a public listing of shares, just months after the chief executive of its parent group told Financial News such a move was being considered.
bit.ly/2FkKgoe

MEMX turns up the heat on US stock exchanges; Traders join forces to create a challenger aiming to take on the likes of NYSE and Nasdaq
Philip Stafford – FT
US stock exchanges are facing a new yet very familiar threat: some of their biggest users cranking up the pressure to cut the costs of trading shares.
/on.ft.com/2Fo9C43

Banks raise bets on prime broking for struggling hedge funds; Clients have taken a pummelling, but lenders are still jostling to win their business
Lindsay Fortado and Laura Noonan – FT
Big banks are throwing extra resources into prime broking, betting on their embattled hedge fund clients to provide a much-needed revenue boost as other areas falter.
/on.ft.com/2FoOIBC

BlackRock reshuffle sees new heir-apparent emerge; Larry Fink promotes head of index investing to new international role
Robin Wigglesworth – FT
Larry Fink is reshuffling BlackRock’s senior management, promoting Mark Wiedman to a new international role that positions the executive who was head of its index investing empire as a likely heir-apparent to run the world’s biggest asset manager.
/on.ft.com/2FrtT8C

Former NASDAQ Exec Joins Blockchain Startup Concordium
Anna Baydakova – Coindesk
Hans-Ole Jochumsen, who retired the last fall as vice chairman of NASDAQ Europe, has joined the advisory board of Concordium Foundation, the Swiss non-profit developing a cryptocurrency with a built-in compliance function.
bit.ly/2FmQumR

Blockchain’s Occam problem
Matt Higginson, Marie-Claude Nadeau, and Kausik Rajgopal – McKinsey
Blockchain has yet to become the game-changer some expected. A key to finding the value is to apply the technology only when it is the simplest solution available.
/mck.co/2Fn7RE4

Industry Survey Highlights Need For Renegotiation Of Libor-Based Contracts
Mondovisione
A survey conducted by JCRA, an independent financial risk management consultancy, and Travers Smith LLP, a full service City law firm, has found that a large majority of firms with exposure to Libor are yet to start making preparations for its discontinuation. With the benchmark set to be withdrawn in 2021, most of the firms surveyed have not started negotiating replacement language in their contracts that reference Libor.
bit.ly/2Fo9zFb

Biggest Correlation Spike on Record Means More Bad News for Quants
Gregor Stuart Hunter – Bloomberg
Shift in market structure may have taken place: Bernstein; Factor risk may come to dominate portfolios, analysts say
Call it the curious case of correlation? Co-movements between factors, or investments based on a particular style such as growth or momentum, have reached the highest level in at least two decades, according to research from Sanford C Bernstein Ltd.
/bloom.bg/2FjOFIa

Carney Tackles Crypto, Brexit in Marathon Online Q&A Session
David Goodman and Lucy Meakin – Bloomberg
Bank of England Governor Mark Carney experimented with a new form of outreach as he spent more than a hour answering questions on the Internet on Wednesday.
/bloom.bg/2FjOInk

Exchanges, OTC and Clearing

LCH SwapAgent and TriOptima compress first cross-currency swaps; LCH SwapAgent has said that EUR4.5 billion in notional of trades were compressed via TriOptima’s triReduce service.
Hayley McDowell – The Trade
Post-trade derivatives services provider TriOptima has compressed the first batch of cross-currency swap trades registered in LCH’s non-cleared derivatives clearing service, SwapAgent.
bit.ly/2FnQtz1

Members Exchange Set to Open But is it Needed?
John D’Antona Jr. – Traders News
With the New Year upon the equities market, there will also be a new equities marketplace.
Members Exchange, or MEMX, has been announced by a consortium of nine financial services firms, including retail-focused powerhouses Fidelity, Charles Schwab and TD Ameritrade. The U.S.-based MEMX will be owned entirely by its founders: Bank of America Merrill Lynch, Charles Schwab, Citadel Securities, E*TRADE, Fidelity Investments, Morgan Stanley, TD Ameritrade, UBS and Virtu Financial.
/goo.gl/gfDWhz

Nasdaq Dubai launches Saudi futures in bid to diversify investor offering
Natasha Turak – CNBC
The Nasdaq Dubai has launched futures trading on shares of 12 Saudi Arabian companies, its first single stock futures outside of the United Arab Emirates. The move aims to diversify financial offerings to regional and international investors, allowing them to both invest in and trade Saudi companies on the Emirati exchange.
/cnb.cx/2Fob0Uj

Eurex Clearing makes a good start into the new year
Eurex Exchange
Eurex Clearing started the new year with a record high. On 7 January, a notional of EUR 1,457 billion in Forward Rate Agreements (FRAs) was cleared. This gave Eurex a market share of 44 percent for EUR FRAs for the day. The previous high was on 16 October 2018 with a cleared volume of EUR 668 billion.
/goo.gl/LzxNvM

A success message: Eurex’s Partnership Program
Eurex
In an interview, Matthias Graulich, Member of the Executive Board of Eurex Clearing, and Frank Gast, Managing Director at Eurex Repo talk about the success of the program, its expansion to the repo segment and how to reap the benefits.
bit.ly/2VHFk1N

Withdrawal of admission of Single Stock Futures, Single Stock Dividend Futures and equity options; 2. Name change of Single Stock Futures, Single Stock Dividend Futures and equity options; 3. Adjustment of contract size for options on UniCredit S.P.A.
Eurex
Due to previous corporate actions, the Management Board of Eurex Deutschland took the following decisions with effect from 14 January 2019:
bit.ly/2VHxPIj

Fintech

FIS eyes partners as tech providers integrate
Louisa Chender – Global Investor Group (SUBSCRIPTION)
US tech giant is investing in agile platforms that can scale up to sudden spikes in market volumes
bit.ly/2CYNL1x

A threat to the Ion throne?
Luke Clancy – Risk.net
As they search for an electronic trading edge in a rapidly changing fixed income market, banks face a bind. Vendors that provide the must-have gateways to an expanding galaxy of exchanges and trading platforms often bundle the service up with a host of other trading applications – from order routing to traders’ screens and analytics – making it harder for users to design and deploy their own, snazzier alternatives.
/goo.gl/aDhtF8

ION unveils enhanced scripting in latest update of its SaaS-delivered Aspect CTRM Solution
ION
ION, the largest global provider of trading, analytics and risk management solutions for commodities and treasury management, today announced the availability of Aspect 18.3, the next release of its commodity trading and risk management (CTRM) software, with new enhanced scripting customization for better informed, more efficient and customized trading support.
bit.ly/2FjuCth

Charles River expands trading capabilities with Liquidnet; Equity and fixed income traders can now sync their Charles IMS with Liquidnet to seek, match and execute trades.
Hayley McDowell – The Trade
Charles River Development has teamed up with Liquidnet to add fixed income matching and improved equity trade blotter sweep capabilities within its Investment Management Solution (IMS).
bit.ly/2VJs7FB

FinTech Thought Leader Dushyant Shahrawat, CFA, Joins Rosenblatt’s Investment Banking Division
Joe Gawronski – Via LinkedIN
Rosenblatt Securities is pleased to announce it has added another key component to its growing FinTech investment banking platform. Financial-services thought leader Dushyant Shahrawat, CFA, joins Rosenblatt as Director — Strategic Insights & Advisory, FinTech Investment Banking.
bit.ly/2FiAvXY

Cryptocurrencies

The inside story of the Coinbase crypto OG and Wall Street guard power struggle
Frank Chaparro – The Block
For many crypto enthusiasts, mid-2018 feels like a lifetime ago.
In those heady days, crypto’s market capitalization stood at $300 billion; rumors swirled that bulge bracket investment banks such as Goldman Sachs were entering the market; and Intercontinental Exchange excitedly announced plans for Bakkt, lauded to be the New York Stock Exchange of crypto.
/goo.gl/4SdjCG

NYC Will Open Blockchain Center, Doubling Down on Crypto, Bitcoin
Olga Kharif – Bloomberg
New York isn’t giving up on the digital-ledger technology that makes Bitcoin and other tokens work even after last year’s collapse of the cryptocurrency market.
The New York City Economic Development Corporation said its Blockchain Center in Manhattan will open Thursday a part of a partnership with affiliates of venture-capital fund Future\Perfect Ventures and the Global Blockchain Business Council, a trade organization. The city may also start testing the use of blockchain technology in the fall.
/bloom.bg/2M0XQh8

Coinbase is on a Pre IPO Firing Spree; Sometimes when business is good, it’s too good.
Michael K. Spencer – Medium
Coinbase is one of the most recognizable crypto brands with a popular app. You know what that means? It will likely be acquired by Facebook in 2022. To get to that point though Coinbase will go IPO first.
bit.ly/2FlxKnR

Number of daily bitcoin transactions reaches 1-year high
The Block Crypto
The seven-day average for the number of daily bitcoin transactions has reached a 1-year high, recently surpassing 280,000 for the first time since January 2018. Ever since hitting a 2-year low in April 2018, the number of transactions has been trending upwards. The all-time high has been recorded on top of the speculative mania in late December 2017 when confirmed transactions briefly surpassed 400,000.
bit.ly/2FnR3gb

Crypto Mining Malware Has Netted Nearly 5% of all Monero, Says Research
Yogita Khatri – Coindesk
Monero (XMR) is by far the most popular cryptocurrency among criminals deploying mining malware, according to a new study. Two researchers, Sergio Pastrana and Guillermo Suarez-Tangil, from Universidad Carlos III de Madrid and King’s College London, respectively, published their report last week, estimating that hackers have mined at least 4.32 percent of the total monero in circulation.
bit.ly/2FlhIdI

Bitcoin bulls are storming Wall Street’s crypto trading desks
Frank Chaparro – The Block
That’s a sharp reversal from the end of 2018, a number of trading firms told The Block
Wall Street’s trading desks offer a glimmer of hope for the floundering cryptocurrency market.
Buying pressure has increased at many of the so-called over-the-counter trading desks across the crypto world. The bullish sentiment mimics recent price action across the spot exchange market for crypto and is a sharp reversal from the environment at the end of 2018, numerous trading firms said.
/goo.gl/P928dH

Volatility In The Crypto Market Expected To Continue in 2019 Although This Will Be Less Pronounced
Gerald Fenech – Forbes
With the crypto market seemingly in a state of flux over the past few weeks, it is interesting to note that volatility – which was on a high in November and December, is expected to continue into 2019 albeit at a less pronounced level. We spoke to SFOX, a leading prime dealer for institutional cryptocurrency investors, has provided a comprehensive review of cryptocurrency volatility throughout 2018, both at a macro level and zooming in to four of the top coins: BTC, ETH, BCH, and LTC.
bit.ly/2RhHNBv

Europe’s banking watchdog says EU laws on crypto may be needed
Oscar Williams-Grut – Yahoo Finance
Europe’s banking watchdog has raised the possibility of pan-European regulation of crypto assets and tokens, saying it may be needed to “level the playing field.” The European Banking Authority (EBA), the EU’s pan-European banking regulator, published the results of its year-long investigation into crypto assets such as bitcoin and ICO tokens on Wednesday.
/yhoo.it/2RlqLSU

Carney Tackles Crypto, Brexit in Marathon Online Q&A Session
David Goodman and Lucy Meakin – Bloomberg
Bank of England Governor Mark Carney experimented with a new form of outreach as he spent more than a hour answering questions on the Internet on Wednesday. In response to some 30 questions from members of the public, he wrote that the bank is ready for Brexit, downbeat on Bitcoin and a defender of cash.
/bloom.bg/2VGe97D

Venezuela Calls US Sanctions Against Its Petro Cryptocurrency ‘Discriminatory’
Nikhilesh De – Coindesk
Venezuela is pushing back against U.S. sanctions before the World Trade Organization, including ones imposed against its controversial cryptocurrency efforts. The complaint, filed late last month and published this week, addresses a number of actions taken by the U.S. in recent years, claims that the country is infringing on Venezuela’s rights under the General Agreement on Tariffs and Trade (GATT) signed in 1994 and the General Agreement on Trade in Services (GATS). Notably, the complaint notes certain restrictions placed upon “Venezuelan digital currency” transactions.
bit.ly/2SHlcLk

Stories from Alternative Crypto Sources

Hackers Turn Twitter of Belgian Non-Profit Into Fake Coinbase Promo Account
Ana Alexandre – Cointelegraph
bit.ly/2SKzACE

Bitcoin Lightning Network Showing Accelerated Growth
Jeremy Wall – Invest in Blockchain
bit.ly/2FkfmLY

Politics

Manafort Accused of Sharing Trump Polling Data With Russian Associate
Sharon LaFraniere, Kenneth P. Vogel and Maggie Haberman – NY Times
As a top official in President Trump’s campaign, Paul Manafort shared political polling data with a business associate tied to Russian intelligence, according to a court filing unsealed on Tuesday. The document provided the clearest evidence to date that the Trump campaign may have tried to coordinate with Russians during the 2016 presidential race.
/nyti.ms/2FjuGt1

President Trump’s truthiness makes history as betting site pays out bigly
Shawn Langlois – MarketWatch
Donald Trump’s loose grip on the truth just cost one gambling site dearly. Before the president’s address on border security Tuesday night, Bookmaker.eu put the over/under on the number of lies he’d spew at 3.5. For bettors, it was a no-brainer, as hundreds of thousands of dollars loaded up on the over.
/on.mktw.net/2FmBA0O

Chamber of Commerce Wants Trump and Congress to Quit ‘Governing by Crisis’
Mark Niquette – Bloomberg
The U.S. Chamber of Commerce is calling on President Donald Trump and Congress to resolve their dispute that has kept the federal government partly shut down for almost three weeks and stop “governing by crisis.”
/bloom.bg/2Fozjl6

Former U.K. Prime Minister Gordon Brown to Advise Private-Equity Firm; Ex-Treasury chief will counsel Switzerland’s Partners Group on so-called impact investments
Simon Clark – WSJ
Former British Prime Minister Gordon Brown is following the well-trodden path from politics to private equity.
/on.wsj.com/2Fs21l9

Donald Trump has become entrapped by his phantom wall; The re-election battle is creeping up while the president’s power to honour his pledge slips away
Edward Luce – FT
Americans are embarking on the longest year of their lives, which will last until the presidential elections in November 2020. It is anybody’s guess at what point Donald Trump will agree to reopen the US federal government. But it is a sure bet Congress will not give him serious money to build a Mexico border wall. This presents Mr Trump with a dilemma, which will intensify as his re-election bid looms. It is doubtful his political career would have taken off had he not vowed to build a wall, yet he will be increasingly powerless to honour that promise.
/on.ft.com/2FfF2du

Regulation

ESMA report finds investment product performance highly impacted by charges
ESMA
The European Securities and Markets Authority (ESMA) today publishes its first Annual Statistical Report (Report) on the cost and performance of retail investment products. The Report covers Undertakings for Collective Investment in Transferable Securities (UCITS), Alternative Investment Funds sold to retail investors (retail AIFs) and Structured Retail Products (SRPs).
bit.ly/2Fjoxx0

Regulators say new EU cryptoasset rules may be needed
Huw Jones – Reuters
New European Union rules may be needed to better protect consumers from cryptoasset risks, prevent money laundering and stop diverging national regulations from creating unfair competition, EU regulators said on Wednesday.
/goo.gl/P1SZ1K

U.S. Treasury Security Auction Awards
FINRA
FINRA is issuing this Notice to remind members of the transaction reporting requirements related to auction transactions and highlight the publication of further clarifying frequently asked questions (FAQs) on this issue. Specifically, members should not report auction transactions in U.S. Treasury securities to TRACE; these transactions are excluded from the TRACE reporting requirements under Rule 6730(e)(8). Members that erroneously report (or previously have erroneously reported) auction transactions must promptly cancel or reverse those auction transactions.
bit.ly/2Fkr5Lx

FCA warns firms of ‘misleading’ unregulated product marketing; Dear CEO letter
Mike Sheen – InvestmentWeek
The Financial Conduct Authority (FCA) has warned that some firms are engaging in “unlawful” and “misleading” marketing practices with regard to the promotion of unregulated financial products.
bit.ly/2FjJrfB

Investing and Trading

Should You Fear the Yield Curve?
Greg Ip – WSJ
There’s a new horror show coming to your screens: Set on Wall Street, it’s called “Inversion of the Yield Curve” and features a chilling, disembodied force that seeps into the minds of the public, triggering panic in markets and hand-wringing on cable news.
/on.wsj.com/2Fm049A

Bezos divorce: Possible impact on Amazon shareholders
Lauren Feiner – CNBC
Amazon CEO Jeff Bezos and his wife, MacKenzie, announced Wednesday their plan to divorce. What this will mean for his businesses?
/cnb.cx/2D0o5l2

****From the article – “The experts who CNBC interviewed could not think of another situation where a founder of such an influential company divorced a spouse who had been with them since the company’s founding.”

S&P 500 Close to a Record Stretch Without a Stock Hitting a High
Brandon Kochkodin – Bloomberg
The S&P 500 Index is up almost 10 percent in the two weeks since the Christmas Eve massacre. What it hasn’t seen in that time span is a breakout star.
/bloom.bg/2FkoEbR

Recent IPOs Seeking Cash Find Themselves Frozen Out by Shutdown
Drew Singer – Bloomberg
The 2018 IPO class looks especially vulnerable to the impact of an extended government shutdown, thanks to an arcane rule requiring recent listings to wait for regulatory approval before raising cash in a follow-on offering.
/bloom.bg/2FnSdIz

The Folly of Investment Platforms; When Britain’s biggest broker recommends a fund, savers should ask: why?
Mark Gilbert – Bloomberg
Hargreaves Lansdown Plc, Britain’s equivalent of Charles Schwab Corp., is embroiled in a dispute with Terry Smith, one of the country’s best-known fund managers. The spat illustrates the difficulty – the folly, even – of trying to choose a winning stockpicker to swell your retirement savings.
/bloom.bg/2FpvAn1

Stock Market’s Correction Gets Rudely Interrupted
Not all of the sell-off can be attributed to some botched communications by a rookie central-bank chairman. Also, Fed vacancies and Ebola.
John Authers – Bloomberg
What just happened? I last wrote one of these newsletters on Dec. 20, the day after the last Federal Reserve monetary meeting. (More on my disappearance later in this commentary.) Since that date, stocks have staged a spectacular decline worldwide, accompanied by an equally spectacular rally in government bonds that has pushed yields lower. However, there has been an emphatic bounce in stocks, bond yields and the price of oil that was only briefly interrupted by Apple Inc.’s disappointing announcement that iPhone sales had fallen below projections.
/bloom.bg/2Fli9om

A Junk-Bond Drought Is Making Investors Nervous; Companies with lower credit ratings haven’t sold bonds for weeks amid broader market gyrations
Daniel Kruger and Sam Goldfarb – WSJ
No U.S. company rated below investment grade has issued bonds since November—the longest stretch without a high-yield sale in more than two decades—reflecting investors’ concerns about market volatility and the durability of the long-running expansion.
/on.wsj.com/2FlZHvO

Institutions

No Bank Failures in 2018; First Time since 2006
Bill McBride – Calculated Risk Blog
In 2018, no FDIC insured banks failed. This was down from 8 in 2017. This is only the third time since the FDIC was founded in 1933 that there were no bank failures in a calendar year.
/goo.gl/V8Gvvg

Goldman Sachs Bankers Could Actually Get a Bonus Boost From the 1MDB Scandal
Nell Mackenzie, Financial News
The scandal surrounding Malaysian investment fund 1MDB may yet prove to be an unexpected boon for Goldman Sachs bankers in the upcoming bonus season.
bit.ly/2Fk2Ay8

Stockpicker Jeffrey Vinik Plots His Third Comeback; He will relaunch his hedge fund with former executives of Vinik Asset Management
Juliet Chung and Rachael Levy – WSJ
Prominent stock picker Jeffrey Vinik is planning to relaunch his hedge-fund firm out of Tampa, Fla., in what would mark his third return to investing clients’ money.
/on.wsj.com/2Fo7DwE

BlackRock Elevates Potential Successor to CEO Laurence Fink; Mark Wiedman will head the company’s international operations and corporate strategy
Dawn Lim – WSJ
A potential successor to BlackRock BLK 0.57% Chief Executive Laurence Fink has been elevated to a new job that gives him more power inside the world’s biggest asset manager.
/on.wsj.com/2FkTIHs

Warburg Sues to Make Deutsche Bank Pay Bill in Cum-Ex Scandal
Karin Matussek – Bloomberg
Private lender wants Deutsche Bank to pick up Cum-Ex tax bill; Lawsuit is latest legal front in expanding scandal over Cum-Ex
M.M. Warburg & Co., a private bank under investigation in Germany over a series of controversial tax deals, has opened a new legal front by suing Deutsche Bank AG to pick up the bill.
/bloom.bg/2Fgr5fD

Space ETFs Invest in Mostly Earthbound Stocks; Portfolios are filled with familiar defense, aerospace, and consumer names.
Rachel Evans – Bloomberg
NASA landed a probe on Mars, and billionaires Elon Musk and Jeff Bezos are shooting rockets across American skies. Not to be left out, asset managers are offering their own more prosaic ride into space, using exchange-traded funds. They invest in such things as shuttle parts and astronauts’ food packages, as well as aeronautics and satellite-based technologies.
/bloom.bg/2FfEyEc

Regions

Banks back Saudi bond issue after Khashoggi death; Kingdom makes first foreign debt issuance since killing of journalist
Simeon Kerr and Katie Martin – FT
Saudi Arabia has tapped international investors for $7.5bn of new bonds, with several heavy-hitting western banks stepping forward to manage the deal despite international outrage over the killing of journalist Jamal Khashoggi and deep concern over the Kingdom’s war in Yemen.
/on.ft.com/2FoEqBN

Norway Cuts 2019 Oil Output Forecast to Lowest in 30 Years
Mikael Holter – Bloomberg
Norway’s oil regulator reduced its forecast for production this year, predicting crude output could drop to the lowest in three decades before recovering in 2020.
/bloom.bg/2FiuzOA

India’s SBI Selects Banks for $1.4 Billion Share Sale
Crystal Tse and Anto Antony – Bloomberg
Government-run lender picks BofA, CLSA, HSBC to arrange deal; State Bank of India bolstering capital amid faster loan growth
State Bank of India, the country’s largest lender, has selected underwriters for an institutional share sale that could raise at least 100 billion rupees ($1.4 billion), people with knowledge of the matter said.
/bloom.bg/2FkIm77

TPG launches investment platform with China’s state-owned CICC; International partnerships will make purchases using both US dollars and renminbi
Don Weinland – FT
US private equity group TPG and state-backed Chinese investment bank CICC will set up a joint platform for investing overseas and in China, adding to a growing number of tie-ups between global financial groups and powerful, government-controlled investors.
/on.ft.com/2Fjnjlo

Brexit

Tesco Finally Says It’s in Talks to Stockpile Goods for Brexit
Ellen Milligan – Bloomberg
Tesco Plc has remained quiet on Brexit since the referendum result nearly three years ago, but the U.K.’s biggest retailer has now disclosed it is planning to stockpile in the run-up to the March deadline.
/bloom.bg/2FoacyM

Brexit is the certain route to a divided Britain; MPs should not bow to claims that a second referendum would lead to trouble
Philip Stephens – FT
The most often-heard argument against a second vote on British membership of the EU is also the least plausible. By this account, revisiting the issue would be “divisive”. Old wounds would never close. Deal or no deal with Brussels, the sooner the barricades are thrown up across the Channel the sooner a spirit of national unity can be restored.
/on.ft.com/2FmCs4J

Clark Says Parliament Must Have Say on Plan B: Brexit Update
Robert Hutton , Thomas Penny , and Alex Morales – Bloomberg
Theresa May is looking at a Brexit “Plan B” amid clear signs Parliament will reject her Brexit deal; opposition Labour Party leader Jeremy Corbyn is calling for a general election to end the impasse.
/bloom.bg/2FoNhmI

AXA moves international risk to Ireland from UK ahead of Brexit
Inti Landauro – Reuters
French insurer AXA (AXAF.PA) said it will handle its international risk and reinsurance trough an Irish unit in light of Britain’s plans to leave the European Union.
/reut.rs/2Fl5cvA

Miscellaneous

People older than 65 share the most fake news, a new study finds – And the finding holds true across party lines
Casey Newton – The Verge
Older Americans are disproportionately more likely to share fake news on Facebook, according to a new analysis by researchers at New York and Princeton Universities. Older users shared more fake news than younger ones regardless of education, sex, race, income, or how many links they shared. In fact, age predicted their behavior better than any other characteristic — including party affiliation.
bit.ly/2D1Swrb

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Past Newsletters

Facebook Token Runs Into Instant Political Opposition in Europe

[the_ad_group id="5822"] Get a FREE 90 day trial of John Lothian Newsletter First ReadHits & TakesJLN StaffJustin Llewellyn-Jones, chief operating officer and global head of derivatives at Fidessa/ION, announced he is leaving at the end of the month. Justin is one...

Facebook Plans Global Financial System Based on Cryptocurrency

[the_ad_group id="5822"] Get a FREE 90 day trial of John Lothian Newsletter First ReadHits & TakesJLN StaffThe FT has an entire series of articles on "Libra: Facebook's digital currency."~JJLI will not be heading to Asia this fall after all. I declined the...

10 EU Countries OK Financial Transaction Tax Revenue-Sharing Plan

[the_ad_group id="5822"] Get a FREE 90 day trial of John Lothian Newsletter First ReadHits & TakesJLN StaffSidley partner David R. Sawyier passed away on June 10 after a battle with cancer. He founded the firm's private investment funds practice in their Chicago...

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