Two identities, one man: the story of $800 million hedge fund fraudster Boaz Manor

Dec 11, 2018

First Read

Hits & Takes
JLN Staff

The U.K.’s Competition & Markets Authority (CME) now has until February 7, 2019 to determine whether to escalate its investigation into Nasdaq’s acquisition of Cinnober.~SD

Lynn Martin, President and COO of ICE Data Services, is the latest interview on Inside the ICE House about “how data is fueling the modern economy.”~JJL

FINRA has a number of tips – six, to be precise – for consumers to stay safe online this holiday season. ~SR

A look through CME’s Disciplinary Notices yielded three trips to the principal’s office. Hana Financial was fined $425k for lacking proper supervisory capabilities and for failing to respond accurately to the CME’s investigatory requests. Second, Jimmy Ng Kian Bin was fined $30k and suspended for three months for some shady order entry/deletion in Nikkei and yen futures markets. Lastly, JoErik Financial Pte. Ltd. was fined $30k for failure to supervise its agents and ordered to disgorge ~$20k in profits.~SD

Big Brother is definitely watching you – through your smartphone, The New York Times reports. ~SR

Rates Evolved will be held on January 24th, 2019 in New York.~JJL

The Securities Traders Association is hosting an Open Call today at 4:30 pm to 5 pm EST on SEC rules 605 and 606, under Reg NMS for broker dealers, featuring several speakers including John Roeser, associated director from the SEC. You can register HERE.~JK

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White House to Nominate Treasury Official to Run CFTC in 2019
Heath Tarbert, currently assistant secretary for international markets, expected to succeed J. Christopher Giancarlo
Gabriel T. Rubin – The Wall Street Journal
The White House plans to nominate Heath Tarbert, a senior Treasury Department official, to serve as chairman of the Commodity Futures Trading Commission when the current agency head’s term ends in 2019, according to people familiar with the matter. Mr. Tarbert currently serves as assistant secretary for international markets at Treasury, where his portfolio includes representing the U.S. at the Financial Stability Board and other international regulatory bodies. He also serves as Treasury’s point person on the secretive national-security committee that reviews overseas investments in the U.S.
/goo.gl/oGgtge

***** Chris will be a tough act to follow.~JJL

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‘Fearless Girl’ Statue Gets New Permanent Home
Karen Matthews – Bloomberg
The “Fearless Girl” statue that inspired millions with a message of female empowerment was installed Monday at her new home in front of the New York Stock Exchange. “Welcome to the neighborhood, ‘Fearless Girl,'” said Betty Liu, executive vice chairman of the stock exchange. “You’re among friends here at the New York Stock Exchange.”
/bloom.bg/2EpAuku

***** Fearless Girl is home.~JJL

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Harvard Quietly Amasses California Vineyards—and the Water Underneath; Making a bet on climate change, the university’s $39 billion endowment has been snapping up farmland and the related water rights
Russell Gold – WSJ
Steve Sinton, a rancher, was baffled when a company he’d never heard of began buying large tracts of agricultural land near his pastures at above-market prices. The firm, Brodiaea Inc., over a few months in 2012 acquired more than three square miles of a flat-bottomed valley. “It was surprising, the prices they were willing to pay,” says Mr. Sinton, a partner in a family-owned ranch that raises cattle and grows grapes. A conventional agricultural business’ returns couldn’t have justified those prices. “It didn’t make sense to me.”
/goo.gl/WQAw77

****My first interest in Californian water supplies came from watching a 1974 documentary about a shamus in the ’30s named J.J. Gittes who discovered some shadiness surrounding L.A. dam dealings.~SD

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Why Chicago is Fast Becoming the Crypto Trading Capital of the World
David Carmen – CryptoGlobe.com
Beginning with the founding of the Chicago Board of Trade (CBOT) in 1848, Chicago has a long and illustrious history as a trading town. The CBOT introduced standardized futures contracts, and more than a century later spun off the CBOE which pioneered standardized option contracts. The Chicago Mercantile Exchange launched in 1898 as an egg & butter exchange and in 1972 spun off the International Monetary Market, the first exchange to trade financial futures. For the past 45 years, the CBOT, CBOE, & CME have established Chicago as the derivatives capital of the world trading both options and futures on grains, meats, stocks, bonds, foreign currencies, and other financial products.
bit.ly/2Gb8faW

****** David Carmen making the hometown call.~JJL

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Monday’s Top Three
Our top read stories of the day on Monday were led by an old name with new news, with Bloomberg’s Madoff’s Victims Are Close to Getting Their $19 Billion Back. Second and third were all about women in the workplace. The follow-up piece by Bloomberg, What Wall Street Really Thinks About Avoiding Women in the #MeToo, was second. Third, a top three piece from Forbes, was 11 Women Who Are Changing The Face Of Finance.~JK

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Lead Stories

Two identities, one man: the story of $800 million hedge fund fraudster Boaz Manor who led the alleged $31 million Blockchain Terminal ICO
Frank Chaparro – The Block Crypto
Blockchain Terminal, the ICO project aiming to build a crypto twist on the Bloomberg Terminal, was led by a man named Shaun MacDonald, according to several interviews The Block conducted over the last two months; The investigation uncovered that Shaun MacDonald was in fact a former hedge funder named Boaz Manor, who in 2012 was sentenced to prison for fraudulently running a $800 million hedge fund; The CEO-in-name Bob Bonomo, the former chief information officer of AllianceBernstein, quietly left the project over the summer. Several people close to the situation said Bonomo had no real power.
BCT looked good on paper. It had an all-star team, a product that promised to give Bloomberg a run for its money – the aptly-named Blockchain Terminal, and funding to run a massive ICO campaign. The founder, a mysteriously well-capitalized investor, was zealously dedicated and he had gathered a community of investors that were champing at the bit to grab a piece of future riches.
bit.ly/2Gb7Ntg

***** Terrific work by Frank Chaparro and the Block Crypto team on this scoop.~JJL

The Death of Fed Funds? As Market Dries Up, FOMC Asks What Next
Alex Harris and Liz McCormick – Bloomberg
Officials debated possible target alternatives at last meeting; New benchmark could be unveiled as soon as 2019, analysts say
The debate to replace the Federal Reserve’s key interest rate has begun.Spurred by declining volumes and the dominance of a few participants in the market for fed funds, the central bank has started discussing potential alternative policy benchmarks as it seeks firmer control over the nation’s short-term interest rates.
/bloom.bg/2G9PCEf

Donald Trump Owns This Stock Market; It wasn’t smart to dump a dovish Fed chief, run up the deficit, and start a trade war. Trump did all three.
Barry Ritholtz – Bloomberg
For those looking for an explanation of why the stock market suddenly became tumultuous in the fourth quarter of 2018, you can stop searching: The answer is President Donald Trump.
/bloom.bg/2G8Kkc9

Market Volatility Leads to Fresh Focus on Machinery Beneath Trading; Investors struggle to pivot from calm, rising markets to a period of lurches in asset prices
Gunjan Banerji and Telis Demos – WSJ
Wild trading is straining the plumbing that powers global markets. In November, natural-gas futures surged 18% in one day, the biggest jump in more than a decade, only to plunge nearly 17% the following day. That caused some contracts tied to the fuel to breach central clearinghouse margin limits.
/on.wsj.com/2Gbd6su

The Battle Over Monopoly Power Is Just Beginning; Old legal definitions of antitrust seem inadequate in an economy ruled by dominant companies.
Noah Smith – Bloomberg
The outcry over monopoly power has gone mainstream. A few years ago, concerns over increasing market concentration began to appear in the economics profession, and a few scattered activists began to make the issue a central priority. But while academics and think tanks continue to speak out about antitrust and monopolies, more and more economics writers are now also sounding the alarm. Law professor Tim Wu went so far as to warn that widespread monopoly could lead to the death of democracy itself. The Economist has an entire special report covering many aspects of the issue. Author and private-sector economist Jonathan Tepper has a new book entitled “The Myth of Capitalism: Monopolies and the Death of Competition” that could bring the problem into the public eye.
/bloom.bg/2GafmAh

Are You Ready for the Financial Crisis of 2019?; Here are five ways things could get bad for everyone.
Alex Williams – NY Times
For moneyed Americans, most of the past year has felt like 1929 all over again — the fun, bathtub-gin-quaffing, rich-white-people-doing-the-Charleston early part of 1929, not the grim couple of months after the stock market crashed.
/nyti.ms/2GdxBos

Deutsche Bank needs a bold and swift restructuring; Germany’s old national champion is looking systemically dangerous
The editorial board – FT
Deutsche Bank’s chief executive insisted in a recent interview with the German tabloid Bild that Germany’s biggest bank was “not at risk of a takeover”. He was probably right. No prudent buyer would take on Deutsche Bank in its current state. Over the past three years this once towering global bank was found to be built on sand — with insufficient capital, excessively high-risk assets and a rotten culture.
/on.ft.com/2GbPbtc

The stories of Madoff’s victims vary widely, as the fraud continues to unwind 10 years later;
Victims say the Madoff scandal offers some important lessons for all investors.
Scott Cohn – CNBC
It has been 10 years, but Bernard Madoff’s investors vividly recall the shock of learning in December 2008 that they were victims of the biggest con man of all time.
/cnb.cx/2Gb9G9p

Citadel Securities, Natixis & MUFG fined $6 million for blue sheet data failures; Broker-dealers have been fined a combined $6 million for submitting inaccurate blue sheet data to the Securities and Exchange Commission.
Hayley McDowell – The Trade
Broker-dealers Citadel Securities, Natixis Securities and MUFG Securities have been fined a combined $6 million by the US financial regulator for submitting incomplete and inaccurate blue sheet data.
bit.ly/2Gbdt6m

Exchanges, OTC and Clearing

Plans for Scottish stock exchange move forward with Euronext partnership
Tomás Carruthers – Scottish Financial News
Plans to launch a Scottish stock exchange next year have moved forward after the company behind the project, Bourse Scot Ltd, agreed a partnership with an established European stock market operator.
bit.ly/2Gl8Qqm

Flow Traders enters Eurex FX derivatives as new liquidity provider
Eurex Exchange
Flow Traders has joined the panel of quality FX liquidity providers for the Eurex FX Futures products, further deepening liquidity to investors. As of now, Flow Traders will provide liquidity throughout the whole range of monthly and quarterly deliverable FX Futures as well as in the non-deliverable Rolling Spot Futures.
bit.ly/2RPCtBu

MOEX terminates interdealer repo rate indicators
MOEX
Moscow Exchange introduced interdealer repo rate indicators individually for its equity repo market and bond repo market in 2009. In 2014, MOEX complemented its index offering with CCP repo rate indicators to provide market participants with a benchmark for on-exchange repo with the central counterparty, the most significant and dynamically developing segment of the Russian money market.
bit.ly/2Gel44b

Miami International Holdings Reports November 2018 Trading Activity for MIAX Exchange Group
PRNewswire
Miami International Holdings, Inc. (MIH) today reported the November 2018 trading activity for its two fully electronic options exchanges – MIAX Options® and MIAX PEARL™ (together, the MIAX Exchange Group™). The MIAX Exchange Group collectively executed over 35.5 million contracts in November 2018 for a combined average daily volume (ADV) of 1,691,311 contracts, representing a total U.S. equity options market share of 9.25%.
bit.ly/2Gkejhw

Meet the 24-year-old who’s the youngest female broker in the New York Stock Exchange
Abby Narishkin and Catalina Gonella – Business Insider
Lauren Simmons: I don’t want to be just an anomaly. I don’t want to be, you know, the only one breaking ceilings. I want there to be other women, minority, anybody.
/read.bi/2Gbfi3t

Fintech

If they get big enough, we will buy them
Chris Skinner – The Finanser
I remember years ago hearing the story of a start-up that wanted to be acquired by the big incumbent institutions. The founder was struggling to succeed, and felt that an easy exit through acquisition was the best way to go.
The young CEO went to the big old incumbent company and said: “Hi there. Look at my company. We have designed the next generation of you. Why don’t you buy us?”
bit.ly/2RMl4tt

The billion-dollar agritech start-ups disrupting farming; Investors such as Google and Temasek pile into another sector looking for help from technology
Emiko Terazono – FT
Hauling corn from field to silo on a truck, South Dakota farmer Chet Edinger is having a good harvest. The mood of the 53-year-old, who also farms soyabeans and wheat on more than 5,000ha of farmland, has been boosted this year by a corn seed recommended by Farmers Business Network, a digital platform dubbed as a “Google for farmers”.
/on.ft.com/2GehTJN

BNY Mellon revamps ETF order taking; BNY Mellon has integrated Bloomberg BSKT and introduced a global standard for transmitting orders via its electronic messaging service.
Hayley McDowell – The Trade
US investment bank BNY Mellon has expanded its real-time electronic messaging function for exchange-traded fund (ETF) order taking to improve transactional practices for trading participants and market makers.
bit.ly/2G8taLG

Mary Meeker’s First Post-Kleiner Deal: Fintech Startup Plaid, Now Valued At $2.65 Billion
Alex Konrad – Forbes
Plaid helps some of the highest-valued apps in financial technology connect their users, its connections to banks providing virtual piping for the likes Coinbase and Venmo. Now, after a $250 million fundraise, fintech’s plumbers are worth more than many of their better-known customers.
bit.ly/2zTASnj

The Fintech Ecosystem Report from Business Insider Intelligence
Lea Nonninger and Mekebeb Tesfaye – Business Insider
In recent years, we’ve seen a ballooning of activity in fintech — an expansive term applied to technology-driven disruptions in financial services. And 2018 has been no different, with fintechs’ staggering influence on the market evidenced by record funding levels for the industry — by Q3 2018, overall funding was already up 82% from 2017’s total figure, according to CB Insights.
/read.bi/2zS75LE

Fintech is the future – along with traditional advice
Jason Baran – FT Adviser
There may be some readers who have been around long enough to remember the ‘tech bubble’ of the late 1990s.
Tech company valuations and stock markets went stratospheric, while whizzy tech companies promised an ultra-efficient future, with increased productivity and no more economic boom and bust.
bit.ly/2zRAohw

Cryptocurrencies

How Bakkt Could Reveal Natural Demand in the Bitcoin Market
Andrew Gillick, Brave New Coin – TABB Forum
Bakkt believes it will ‘add to the utility of bitcoin beyond simply trading.’ But will it create the natural demand needed to lift the price of bitcoin or just create another opportunity for speculators to short it?
/goo.gl/B7hcKc

G7’s Financial Action Task Force Tells UK to Regulate Cryptocurrency
Simon Golstein – Finance Magnates
The Financial Action Task Force, an international research organisation focused on money laundering and terrorism financing, has reviewed the defences of the United Kingdom. It finds that the cryptocurrency sector is a gaping hole in the UK’s defence mechanisms.
bit.ly/2G5ZOgW

Layoffs Become the Latest Thing in Cryptocurrency
Paul Vigna – The Wall Street Journal
Cryptocurrency companies are laying off employees in an effort to survive the nascent market’s biggest selloff to date. Blockchain venture firm ConsenSys said Thursday it would cut 13% of its staff, days after announcing an overhaul of its business model. Steemit, a firm that runs a blockchain-based social network, last week laid off 70% of it staff, citing the crypto selloff.
/on.wsj.com/2EatxTv

Blockchain, Bitcoin Or Bust? The ‘Digital Opportunity’ Of Brexit – Blockchain Economy In Britain
Roger Aitken – Forbes
The economic impact of Brexit has been much explored and debated. The OECD and HM Treasury have put forward analysis suggesting that Brexit could negatively impact the country’s GDP by 3% until 2020, while the Bank of England has made occasional statements about other dire scenarios, prognostications some might dub “Project Fear 2.0.”
bit.ly/2SA9jq2

Cryptocurrency Prices Rise as Gemini Supports Bitcoin Cash
Investing.com via Yahoo Finance
The prices of major cryptocurrencies rose on Monday morning in Asia, as a Winklevoss-backed crypto exchange in New York is set to start trading Bitcoin Cash, and Venezuela announced It would trade oil via Its cryptocurrency.
/yhoo.it/2zQ82EA

Why We Shouldn’t Fear A FedCoin — Even One Made By Goldman Sachs
Joel Comm – Forbes
Cryptocurrency enthusiasts have a secret fear. It’s not that people won’t use digital coins, causing values to collapse and wiping out their investments; crypto fans believe that there will always be a demand for a digital currency that can be transferred immediately around the world and for negligible cost. Their worry is that everyone will use just one digital coin, causing values to collapse and wiping out investments in all their other coins.
bit.ly/2GdHLFF

Mike Novogratz Explains Why He’s Still All-In on Crypto; The former Goldman Sachs partner and hedge fund manager made and lost a fortune on Bitcoin. He’s undeterred by its drop.
Erik Schatzker – Bloomberg
No one on Wall Street embraced cryptocurrencies with as much gusto as legendary trader Mike Novogratz. After Jamie Dimon called Bitcoin a “fraud” in September 2017, Novo, as he’s known, predicted, correctly, it would hit $10,000 and keep climbing. The former hedge fund manager and Goldman Sachs Group Inc. partner became an unlikely hero of the crypto movement and a billionaire on paper. Emboldened, Novogratz announced he was starting a cryptocurrency merchant bank, Galaxy Digital Holdings Ltd. But as he was raising money for the firm in January, Bitcoin began its historic plunge. Galaxy has since reported $136 million in trading losses. Novogratz is undeterred.
/bloom.bg/2G8K38U

BitMEX lets you bet big on bitcoin — for a price
Amy Castor – The Block
Crypto derivatives are essentially bets on whether the price of bitcoin or another cryptocurrency, is going to go up or down. And for retail investors who dream of winning big, the most popular platform for placing those bets is BitMEX, a largely unregulated Hong Kong-based exchange that has been sneaking into the news of late.
bit.ly/2RMevXS

UK Crypto Exchanges Pose Low Money Laundering Risk, Says Global Watchdog
Yogita Khatri – Coindesk
Cryptocurrency exchanges in the U.K. present a “low risk” for money laundering and terrorist financing activities, according to a report published last week by the Financial Action Task Force (FATF), a global anti-money laundering policymaker.
bit.ly/2Gb8XVJ

Crypto Trading Platform ErisX Hires Serial Exchange Founder Matt Trudeau
Ian Allison – Coindesk
ErisX is beefing up its leadership ahead of the launch of cryptocurrency spot and futures trading early next year.
bit.ly/2Gbhlo8

Introducing the Gemini Mobile App?—?Crypto on the Go!
Tyler Winklevoss
We began our mission to build the future of money by creating a licensed cryptocurrency exchange and custodian that allows our customers to buy, sell, and store cryptocurrency in a safe, secure, and compliant manner. A trusted and regulated platform, however, is just the beginning. The future of money is both digital and mobile, and now Gemini is too with the launch of the Gemini Mobile App!
bit.ly/2rymlZP

Gemini’s Mobile App Now Available for Android and iOS; Gemini Mobile App Offers an Easy and Safe Way to Buy, Sell, and Store Cryptocurrency
Business Wire
Gemini Trust Company, LLC (Gemini), a New York trust company that is a licensed cryptocurrency exchange and custodian, launched the Gemini Mobile App today, which is now available in the Apple App Store and Google Play Store for all users.
bit.ly/2ryuMUI

Politics

Impeachment Is Getting More Likely; There are still plenty of unknowns. But the president’s attempts to conceal his conduct are ominous.
Jonathan Bernstein – Bloomberg
I’m no lawyer, so I’ll leave it to others to analyze the legal trouble that President Donald Trump and his associates appear to be in, based on what prosecutors have revealed recently. See summaries at Lawfare and Just Security, as well as my Bloomberg Opinion colleague Timothy L. O’Brien, who is always a must-read on Trump details.
/bloom.bg/2G9gZyj

Trump Expected to Nominate Fannie, Freddie Critic to Oversee Mortgage-Finance Giants; Vice president’s chief economist Mark Calabria would lead Federal Housing Finance Agency
If confirmed, Mark Calabria would replace Mel Watt, an Obama-appointed official whose term is up in January.
Andrew Ackerman and Kate Davidson – WSJ
The White House is preparing to pick a vice presidential aide and critic of Fannie Mae and Freddie Mac to the post responsible for overseeing the housing-finance companies.
/on.wsj.com/2Gb8uTo

U.S. Investigating Fake Comments on ‘Net Neutrality’; Criminal probe looks at comments posted to FCC from people who say their names were used without permission
James V. Grimaldi – WSJ
The U.S. has launched a criminal investigation into millions of fake comments filed to the Federal Communications Commission last year on rules governing the internet, according to an organization that has received a federal subpoena in the probe.
/on.wsj.com/2Gl4fo6

44 ex-senators warn U.S. is ‘entering a dangerous period’
Quint Forgey – Politico
A bipartisan group of nearly four dozen former senators warned current and future members of the Senate on Monday that the United States is “entering a dangerous period,” and urged them to defend America’s democracy by serving national interests rather than political ideologies.
/politi.co/2Gc8r9X

The global turmoil Trump fueled is poised to haunt him as markets fluctuate
Stephen Collinson, CNN
US President Donald Trump unleashed a wave of global disruption on the way to the White House in 2016 — and now there are signs the anti-elite tide he surfed to the presidency could come back to hurt him.
/cnn.it/2Gbboay

Regulation

White House may nominate Mark Calabria, economist to Pence, as Fannie-Freddie regulator
Kate Davidson, Andrew Ackerman – MarketWatch
The Trump administration is expected to soon announce that it plans to nominate Mark Calabria to become the director of the Federal Housing Finance Agency, the regulator for the two companies, according to people familiar with the matter. Calabria currently serves as chief economist to Vice President Mike Pence.
/goo.gl/RKYX7L

ISDA Publishes 2018 Benchmarks Supplement Protocol
International Swaps and Derivatives Association
ISDA has today published the ISDA 2018 Benchmarks Supplement Protocol, intended to help market participants incorporate the ISDA Benchmarks Supplement into their interest rate, FX, equity and commodity derivatives transactions.
/goo.gl/fKHMPh

Former Bloomberg Executives to Be Charged in Construction Fraud Scheme
Charles V. Bagli – Bloomberg
More than 18 months ago, the Manhattan district attorney’s office opened yet another investigation into fraud in the city’s $62 billion construction industry, this one involving Bloomberg L.P., the financial information and media company owned by former Mayor Michael Bloomberg, who is considering running for president in 2020.
/nyti.ms/2RUQLkE

CFTC: Federal Court Orders Defendants To Pay More Than $11 Million In Connection With Commodity Pool Fraud
CFTC
The Commodity Futures Trading Commission (CFTC) today announced an Order of default judgment and permanent injunction has been issued against defendants Scott Allensworth (d/b/a Capital Growth Group Associates and Cobra Development Group LLP), of Newhall, California, and his California company E-Slate, Inc. (d/b/a Cobra Development Group LLP), Robert J. Fusco, of Henderson, Nevada, and David Weddle of Prospect, Kentucky, in connection with two separate fraudulent commodity pool trading schemes.
/goo.gl/R87hCJ

SEC: Three Broker-Dealers To Pay More Than $6 Million In Penalties For Providing Deficient Blue Sheet Data
SEC
The Securities and Exchange Commission today announced that three broker-dealers have agreed to pay more than $6 million to settle charges for providing the SEC with incomplete and inaccurate securities trading information in required SEC productions known as “blue sheet data,” which the SEC uses to carry out its enforcement and regulatory obligations, including the investigation of insider trading and other fraudulent activity.
According to the SEC’s orders, over a period of several years, Citadel Securities LLC, Natixis Securities Americas LLC, and MUFG Securities Americas Inc. each made numerous deficient blue sheet submissions
/goo.gl/67W6Yw

SEC Approves Amendments to the Codes of Arbitration Procedure to Establish a $200 Honorarium for Contested Subpoenas or Orders
SEC
The Securities and Exchange Commission (SEC) approved amendments to FINRA’s customer and industry arbitration rules to pay each arbitrator a $200 honorarium to decide without a hearing session a contested subpoena request or a contested order for production or appearance.
bit.ly/2G92g6A

Upcoming Board Meeting
FINRA
This week in New York, the FINRA Board of Governors will have its final meeting of the year. As is customary for each year’s December meeting, the Board’s discussions will include a review of FINRA’s accomplishments, as well as the organization’s budget for the year ahead. Highlighted below are some of the key items the Board committees will consider during the meeting.
bit.ly/2GbJnQk

Update – OTCE Daily List Data
FINRA
Please be advised that OTCE Daily List data messages are now being published to the FINRA.org website (http://otce.finra.org/). Daily List data is posted to this site as well as being available via the FINRA TRAQS website and the FINRA ORF API Reference data downloads.
bit.ly/2Ga8Edv

NFA Members: Will You Need to Update Your Cybersecurity Policy?
Joshua B. Sterling, Michael M. Philipp – Morgan Lewis
If proposed amendments to existing cybersecurity interpretive guidance become final, National Futures Association members may need to bring their cybersecurity policies up to date. Changes include a new notification requirement for cybersecurity incidents, inclusion of training topics in the cybersecurity policy, and clarification on who must approve cybersecurity policies.
bit.ly/2rvjmRK

Investing and Trading

Almost half of S&P 500 stocks in a bear market
Noel Randewich – Reuters
The S&P 500 is not yet in a bear market, but nearly half of its components are.
/reut.rs/2RMZYLx

The Market’s Latest Problem: Hesitation to Buy the Dip
Akane Otani – WSJ
An investor trend that has helped buoy stocks over most of the past decade is showing signs of breaking down.
For the first time since the dot-com era, investors are cautious about buying shares after selloffs, raising signals that the longest bull market in U.S. history is in its late stages.
/on.wsj.com/2RK5ezr

When Shareholders Have to Pay for Past Mistakes; Interserve’s shareholders shouldn’t expect to be left with much after the British outsourcing giant’s restructuring.
Chris Hughes – Bloomberg
Investors had been bracing for bad news from Interserve Plc. Monday’s announcement that the U.K. government contractor is considering a debt-for-equity swap was worse than they had feared. The scale of deleveraging required is so great that even assuming the company is repaired, existing shareholders are unlikely to enjoy much of the upside.
/bloom.bg/2Gl4I9Q

Markets’ Manic Monday Leaves a Lot to Be Desired; It’s hard to get excited by a big rebound when bank stocks don’t participate.
John Authers – Bloomberg
Volatility reigns. The S&P 500 Index had tumbled 1.89 percent by mid-morning Monday, only to recover and close up 0.18 percent for the day. Virtually every other stock market in the world sold off severely, closing too early to benefit from the rebound in the United States. Rather than attempt to impose a narrative about why this happened, let me guide you through a tour of data points that may or may not be significant.
/bloom.bg/2G8Xl5C

Paul Tudor Jones Says 2019 Is Better to Trade Than Buy and Hold
John Gittelsohn – Bloomberg
High market volatility in 2019 may benefit traders more than investors who hold long-term positions, according to hedge fund pioneer Paul Tudor Jones.
/bloom.bg/2GbP2pE

Institutions

Barclays Is Making Bigger Bets in Marijuana Stocks
Ed Lin – Barron’s
One of the biggest banks in the world is bulking up on its bets on marijuana stock. Barclays disclosed last month that it initiated a position in Tilray (ticker: TLRY), the Canadian marijuana company, in the third quarter. It owned 26,319 shares of Tilray stock as of Sept. 30, according to a filing Barclays made with the Securities and Exchange Commission. The company went public in July; Tilray stock is listed both in Canada and the U.S.
bit.ly/2Gcata5

Wells Fargo won’t be allowed to grow unless problems fixed: Fed’s Powell
Patrick Rucker, Imani Moise – Reuters
Wells Fargo & Co (WFC.N) must keep a lid on its growth until the bank has hardened its risk management policies to prevent any further abuse of its customers, said Jerome Powell, chairman of the Federal Reserve.
/reut.rs/2G8L7K9

BMO Harris inks deal for namesake Union Station tower; The bank will consolidate its Chicago offices in 2022 at a new 50-story tower next to Union Station.
Danny Ecker – Crain’s Chicago Business
BMO Harris Bank will consolidate its Chicago offices in 2022 at a new 50-story tower next to Union Station, the bank announced today. In a deal that will bring 3,600 Chicago BMO employees into a single location, the Toronto-based bank has signed a lease for 14 floors at the skyscraper, which will be dubbed BMO Tower, the bank said in a statement.
bit.ly/2G8L15f

UBS Shuffles U.S. Wealth Unit to Capture More Billionaires
Sonali Basak and Lananh Nguyen – Bloomberg
UBS Group AG is promoting a long-time executive in the U.S. as it seeks to expand in the region and offer ultra-rich clients more bespoke investments.
/bloom.bg/2Gl47F8

Credit Suisse capital return plans risk disappointing investors; Bank will commit to ‘significant’ buyback but amount ‘nowhere near’ analysts’ estimate for next year
Stephen Morris – FT
Credit Suisse will unveil a fresh share buyback programme and boost its dividend this week, but the Swiss lender risks disappointing investors who are expecting more capital to be returned after a sharp fall in its share price this year.
/on.ft.com/2Gd3BsW

Regions

China to Announce Resumption in U.S. Soy Purchases Soon
Bloomberg News
Volume could be 5m or 8m tons for state reserves: officials; Whether to lift 25% tariff still being decided, officials say
China intends to announce this month the first batch of U.S. soybean purchases where most, if not all, will be destined for state reserves, according to government officials.
/bloom.bg/2Gc9B5j

Brexit

Brexit turmoil sees foreign investors steer clear of pound; Even hedge funds wary of choosing currency’s direction given the political uncertainty
Eva Szalay and Laurence Fletcher – FT
The baffling complexity of Brexit has put many foreign investors off either buying or selling sterling of late. The latest twist — UK Prime Minister Theresa May’s decision to postpone the parliamentary vote on her EU divorce deal — vindicates those who have opted to stay away.
/on.ft.com/2Geh6Zl

May Should Admit That Brexit Has Failed; Persisting with this hopeless endeavor is irresponsible.
Editorial Board – Bloomberg
Facing a historic defeat for her Brexit deal in Parliament, British Prime Minister Theresa May has, almost unbelievably, managed to make things worse.
/bloom.bg/2Gnroqn

Juncker rules out renegotiation of Theresa May’s Brexit deal; UK says crunch Commons vote on withdrawal agreement will be held by January 21
Mehreen Khan in Strasbourg and Laura Hughes and George Parker- FT
Jean-Claude Juncker has told Theresa May that Brussels will not renegotiate a 585-page Brexit treaty to appease UK MPs, warning there is “no room whatsoever” to tweak the agreement.
/on.ft.com/2G9j2lZ

Brexit is a test like no other for currency traders; Range of outcomes and permutations makes EU exit a unique challenge
Simon Derrick – FT
This is hardly the first time in the past 30 years that the foreign exchange market has had to deal with potential shocks — both positive and negative — for the pound. Unlike the present situation, however, those past periods of uncertainty have tended to emerge around events that presented fairly simple sets of alternative outcomes.
/on.ft.com/2RJgcoR

No-deal Brexit to trigger EUR12bn daily trade exodus; Back-up plans of big venues show exchanges would shift stock trades to EU hubs
Samuel Agini – Financial News
Almost EUR12bn worth of trades per day would immediately vanish from London if no Brexit deal is agreed with the European Union, according to a Financial News analysis of the contingency plans of stock exchanges.
bit.ly/2GdcUcl

Brexit taking ‘considerable bite’ out of banking jobs
Scottish Financial News
A recruitment firm has warned that Brexit uncertainty is taking a “considerable bite” out of banking jobs in the UK, The Scotsman reports.
bit.ly/2Gl9qEy

Miscellaneous

What the Rise in Whisky Insurance Tells Us About the Super Rich; AIG’s head of global collections sees younger generations eschewing the collectibles of their forebears.
Colin Bertram – Bloomberg
With prices of rare whisky soaring into the six and seven digits, ensuring that precious spirit is protected is not only recommended but essential, says Ron Fiamma, head of global collections at American International Group Inc.’s private client group. The insurance giant has seen such an uptick in whisky collecting that it has expanded its coverage of specialty collections to include those owners whose tastes run to a 1926 Macallan.
/bloom.bg/2Gd2fym

Giving Back as a Startup: The Seed CX Transit Pilot Project
Edward Woodford – Medium
Last summer, I was enjoying a poke bowl at the French Market for lunch when a gentleman approached me and asked if I could give him money for a transit ticket. He told me that he had a job interview that afternoon, but didn’t have the fare to get there. I had just spent a rather absurd amount of money on my lunch and felt a wave of being incredibly fortunate, so I agreed. I went to the ATM by the Union Station ticket office, withdrew some cash, and handed it over to allow him to purchase a monthly pass.
bit.ly/2Gl9EeS

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