Hits & Takes
By John Lothian & JLN Staff
On Friday I attempted to apply for a Payroll Protection Plan loan, which is part of the CARES Act to help small businesses. However, it turns out the bank I do commercial business with is not part of the program (yet?) and two other banks I have relationships with have rules which will prevent me from participating.
I could not open a commercial account for John J. Lothian & Company, Inc. where my main personal checking account is as they say they don’t accept these types of accounts online (anymore?). I have to go to the branch to open the account. And, you have to have had a commercial account since February anyway to use the program, they say. Another bank where I have a savings account never returned my call to open an account.
The program would help us weather the storm that has disrupted our business. But the prospects for participating look long. And when and if I can finally apply, the money may have run out. Using the banks for the loans sounds like a good idea, but they were not ready, and easily overwhelmed with demand. I also applied for the emergency $10K grant, which only involved applying online directly to the government.
Today, we have an interview for the Open Outcry Traders History Project, sponsored by Advantage Futures, of Jeff Carter. Jeff is a former CME trader who found his way into the venture capital sector. This is one of the best interviews of the project so far, as he is used to being in front of the camera, very forthcoming and tells a great story.
We also have an interview with Chris Hehmeyer, which was the last one we shot in our offices before scattering in mid-March to work at home because of the virus outbreak. Chris is also a great interviewee, easy in front of the camera and forthcoming about how his business is developing, or not, as he closed his crypto fund.
And, I want to give a shout out to Matt Raebel, host of The Spread, sponsored by the OCC. Matt’s latest Spread video, shot in his living room, is one of his strongest performances. He is clearly getting comfortable in front of the camera. Nice work, Matt.
The only reason I go out in public these days is to shoot the video worship service for my church on Thursdays. Robby Lothian helps me with the shoot. My editing is nothing close to that of my JLN team, but it is getting better. Here is the latest web worship service for St. Peter’s United Church of Christ, in Elmhurst IL.~JJL
The DTCC released this statement on Friday about the uncleared margin rules (see the stories in Leads): “DTCC supports the decision by the Basel Committee on Banking Supervision (BCBS) and International Organization of Securities Commissions (IOSCO) to delay the implementation of the final two phases of the uncleared margin rules (UMR) for non-centrally cleared derivatives by one year as a result of the COVID-19 pandemic. COVID-19 is an industry-wide challenge and the additional time provided by the UMR delay will be welcomed by industry participants as they focus resources on managing risks associated with current market volatility in conjunction with future regulatory requirements.”~SR
The news has been dire the past few weeks, so, to make sheltering at home fun(ish), the Getty Museum in Los Angeles has issued a challenge to people to recreate famous paintings (Washington Post article). The challenge is not to paint the art but imitate the art as best you can with what you have available to you at home, including your pets. The results are pretty great. Bored people seem to have a lot of creativity (read: too much time on their hands). This is not finance related, of course, just trying to lighten the gloomy mood a bit. ~JB
Jeff Carter – Open Outcry Traders History Project
Jeff Carter is a Chicago-based trader and venture capital executive and long time member of the Chicago Mercantile Exchange, where he formerly served on their board of directors. He is currently a manager with West Loop Ventures, an early stage venture capital fund.
He sat for an interview with John Lothian News for the Open Outcry Traders History Project and has encouraged other current and former traders to do the same.
Carter is a co-founder of HydeParkAngels.com, an angel investor network in the U.S. Midwest.
He was a member of the Chicago Mercantile Exchange (CME) and traded his own account for 24 years. He is the author of the Points and Figures blog, which he calls “An irreverent Look at Economics, Finance, Trading and Politics.
The Spread: Make Way for the SA-CCR
This week on The Spread, the OCC shatters its own records (again), Senator Loeffler sells put options, the SA-CCR is adopted early, and more.
Produced by Mike Forrester.
Doing Our Part to Safeguard Economic Resilience
Loh Boon Chye, CEO, Singapore Exchange
We are barely four months into 2020 but life before COVID-19 seems like it was years ago. As the epicentre of the disease shifts from Asia to Europe and the U.S., the human cost is growing. Governments around the world have been forced to adopt extreme measures such as locking down entire nations and enforcing strict limits on the movement of people. Yet the situation continues to evolve, bringing new challenges to everyone. Without a doubt, we are facing the biggest crisis in a generation.
*****We have some great leaders at exchanges around the world, whose leadership burns brighter due to the situation we are in. Loh Boon Chye, CEO, Singapore Exchange, is one of those leaders.
Wall Street banks explore option of ‘virtual internships’; Coronavirus pandemic disrupts traditional immersive experience
Laura Noonan – FT
Investment banks including JPMorgan Chase, Goldman Sachs, UBS and Citigroup are exploring “virtual internships” for students due to join them this summer, as the coronavirus pandemic forces banks to come up with a Plan B for one of Wall Street’s oldest rites of passage.
*****Good to know they are not leaving interns high and dry. Students today are used to working collaboratively online, and can probably teach the banks a thing or two about online learning and hard work.~JJL
Tiger at NYC’s Bronx Zoo Tests Positive for Coronavirus
A tiger at the Bronx Zoo has tested positive for the new coronavirus, in what is believed to be the first known infection in an animal in the U.S. or a tiger anywhere, federal officials and the zoo said Sunday.
******How does a tiger get tested?~JJL
Covid 19 coronavirus: Easter Bunny and Tooth Fairy deemed ‘essential services’
Jacinda Ardern – NZ Herald
News that will delight children in lockdown: The Easter Bunny will be on duty this Easter, Prime Minister Jacinda Ardern has confirmed.
In today’s press conference, the Prime Minister clarified that the Easter Bunny and the Tooth Fairy are essential workers delivering essential services and, as such, continue to operate throughout the alert level 4 lockdown.
***** You can’t have one without the other.~JJL
Unregistered Digital Securities Offering; Risk Management Breakdown; COVID-19
Gary DeWaal – Bridging the Week
Last week a federal district court ruled that a social media company’s initial fundraising to build a blockchain application as well as its later, proposed distribution of digital tokens to serve as virtual currency and for other legitimate purposes on the blockchain constituted an integrated unlawful offering of securities without a registration statement and granted a preliminary injunction banning the distribution as requested by the Securities and Exchange Commission. Separately, a futures commission merchant was sanctioned by the Chicago Mercantile Exchange as a result of a purported operational breakdown that enabled it to accept trades “far beyond” risk limits that should have been in place for the relevant account.
Friday’s Top Three
Our top story Friday was Business Insider’s ‘We are in an unprecedented moment of global distress’: Read the full memo billionaire Ken Griffin sent to Citadel employees on the coronavirus crisis. Second was the WSJ column by Peggy Noonan, New York Is the Epicenter of the World. (It’s true – which is pretty much why I left.) Third was entirely understandable, given our current stay-at-home circumstances – Variety’s HBO Will Stream 500 Hours of Free Programming, Including Full Seasons of ‘Veep,’ ‘The Sopranos,’ ‘Silicon Valley’.
175,167,720 pages viewed; 24,085 pages; 223,747 edits
|CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.Recently Updated Pages
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Banks must show they really can do ‘God’s work’; Lenders need to put public before private interest or remain a pariah industry
Philip Augar – FT
Just as they did during and after the global financial crisis, banks run the risk of appearing tone-deaf in their response to Covid-19. Back then, exaggerated claims to be doing God’s work, premature exhortations to move beyond remorse, and cynical gouging of customers sat badly with taxpayer-backed rescue packages. The jarring sound of bankers behaving badly was amplified by their determination to cling on to bonuses while the rest of the world endured the decade of austerity that their actions had caused.
Basel regulators loosen bank capital rules to keep credit flowing; Customers seeking temporary relief need not be treated as higher risk
Matthew Vincent – FT
Global banks have been told they do not need to stick to strict capital requirements for loans that carry government guarantees or allow payment holidays, to ensure they keep lending amid the coronavirus disruption.
Uncleared margin rules delayed for one year; Asset managers receive respite from authorities in implementing the final phase of the uncleared margin rules as coronavirus continues to impact regulation.
Hayley McDowell – The Trade
Regulatory authorities have moved to delay the final two final implementation phases for the uncleared margin rules (UMR) by one year due to disruptions caused by the coronavirus pandemic.
A Wealth Fund Pioneer Targets Credit Markets to Save the Planet; The founding CEO of Norway’s massive sovereign wealth pool says the way to punish big polluters is to attack them in the fixed-income market.
Charles Daly – Bloomberg
Knut Kjaer rummages through kitchen cabinets to find some water glasses. The founding chief executive officer of Norway’s oil fund now chairs Sector Asset Management, a firm focused on actively managed funds that he says can help create a greener planet by altering investor behavior. Right now, though, his challenge is to find some matching tableware in Sector’s offices, which are still under construction in Oslo. It’s a gray January afternoon. He looks out the windows and gestures toward the hills that surround the Norwegian capital. “They should be covered in snow at this time of year,” he says. “But it’s too warm.”
Crisis of Leadership Over Virus Grips Britain
Tim Ross – Bloomberg
Britain is facing a new leadership crisis at its most vulnerable moment in decades. With the worst of the coronavirus outbreak expected to hit the country in the next 7-10 days, Prime Minister Boris Johnson has been hospitalized for what Downing Street has characterized as precautionary tests.
How Nasdaq’s CEO Is Keeping Markets Running and Why She Says Short Selling Remains Important
By Carleton English – Barron’s
It has been a difficult time for investors who have watched their portfolios shrink during the coronavirus pandemic. But while asset prices have been volatile, the markets themselves have functioned with little disruption. With many of New York’s financial professionals working from home, coronavirus has been a major test for increasingly electronic stock exchanges. So far, they’ve gotten an excellent grade.
Japan’s Abe Moves to Declare Emergency, Pass Record Stimulus
Isabel Reynolds and Emi Nobuhiro – Bloomberg
Emergency empowers prefectures to urge people to stay home; Abe unveils bigger-than-expected stimulus of 108 trillion yen
Japanese Prime Minister Shinzo Abe moved to declare a state of emergency in seven prefectures including Tokyo and Osaka, and announced a record economic stimulus package as the country braces for a surge in coronavirus infections. Abe said the official announcement of a month-long emergency could come as soon as Tuesday and also announced a much larger-than-expected stimulus package of 108 trillion yen ($988 billion) to support struggling households and businesses
SEC Signs Off on Delay of Credit-Loss Accounting Rule for Lenders; The coronavirus stimulus package includes a provision allowing lenders to defer implementation of a new standard
Mark Maurer – WSJ
The Securities and Exchange Commission said Friday it would not object to a provision in the $2 trillion stimulus package allowing lenders to delay implementing a new accounting standard on expected credit losses.
Global regulators delay derivatives rules due to market volatility; Watchdogs put 12-month extension on new margin requirements, citing coronavirus threat
Kadhim Shubber and Philip Stafford – FT
Global markets regulators have delayed by a year new rules that require thousands of asset managers to set aside cash to cover their bespoke derivatives deals, as a result of the disruption from the coronavirus pandemic.
The best bad idea ever; Stock links and connects are highly contrived and usually unnecessary, but Richard Meyer finds out that when they are needed, they tend to work well.
Richard Meyer – The Trade
Market linkages have been all the rage in East Asia for a number of years, with no shortage of announcements, memoranda of understanding and high-level discussions on trading connections between exchanges. Despite all the excitement and noise, very little has actually been accomplished. Few of the connections have succeeded in getting even beyond the drawing board. Only a couple actually work. The region is littered with dead projects and dashed hopes. Even the success stories are qualified successes, existing only because the conditions are right and viable only as long as those conditions remain.
Europe prepares to ease coronavirus lockdowns; Countries including France and Spain plan their exit strategies while seeking to avoid a second wave of infections
Ben Hall and Guy Chazan – FT
Governments across Europe have begun preparations to ease the lockdowns imposed across much of the continent to contain the coronavirus pandemic, even if restrictions that have paralysed the economy are expected to remain in force for several more weeks.
When the Federal Reserve Buys ETFs, Thank the Bank of Japan; Japan’s central bank has been a pioneer in the monetary experiments the U.S. is trying now.
Chris Anstey, Toru Fujioka – Bloomberg
The biggest economic crisis since the Great Depression has seen the U.S. Federal Reserve do a lot of surprising things. Among them: It’s said it will buy shares of some bond exchange-traded funds, to help make sure there’s enough demand for corporate bonds. It’s odd to think of the Fed snapping up shares of funds right alongside ordinary investors. But the idea of a central bank buying ETFs isn’t completely unprecedented—the Bank of Japan got there a long time ago.
Risk to Jobs Now ‘Unprecedented Since the Great Depression’
Simon Kennedy – Bloomberg
World job losses could reach total of 25 million, ILO warns; Unprecedented since Great Depression, Deutsche’s Hooper says
The world’s workers are reeling from the initial shock of the coronavirus recession, with job losses and welfare claims around the globe already running into the millions this week.
Chairman Of CFTC Calls For U.S. To Be Digital Asset Leader, Issues New Guidance
Jason Brett – Forbes
Last week, the CFTC issued guidance on ‘delivery’ of digital assets. The guidance focuses on the actual delivery of a virtual asset in retail commodity transactions and is a continuation of the leadership of Chairman Heath Tarbert with his call for the U.S. to be a leader in digital assets. ‘Providing clarity to market participants is one of the CFTC’s core values,’ said CFTC Chairman Heath P. Tarbert. ‘This interpretive guidance not only fulfills that commitment, but it reflects my belief that the U.S. must be a leader in the digital asset space. These efforts are also especially critical when the hard-earned income of everyday Americans is at stake. Under my leadership, the CFTC will continue to do its part to encourage responsible fintech innovation through sound regulation.’
Four Citadel Portfolio Managers Leave After Market Dives
By Katherine Burton – Bloomberg
All four managers were in the firm’s Global Equities unit; Citadel lost money earlier in March, but ended the month up
Four equity portfolio managers at Ken Griffin’s Citadel hedge fund left the firm last week, after one of the most volatile months for stocks on record.
Exchanges, OTC and Clearing
SGX’s securities and derivatives markets remain open
International and retail investors will continue to have access to SGX securities and derivatives markets; CDP services will continue to be available; CDP Customer Service Centre will operate on an appointment-only basis
Singapore Exchange (SGX) would like to confirm that its securities and derivatives markets will remain open and accessible. This follows the affirmation by the Monetary Authority of Singapore (MAS) that financial services is one of the essential services exempted from the suspension of activities at workplace premises under the elevated safe distancing measures announced by the Ministry of Health (MOH) today.
LCH EquityClear successfully goes live with new LSEG Technology post trade platform
London Stock Exchange Group
EquityClear can now process trades on a real time basis with high throughput and low latency with LSEG Technology’s Millennium Clearing & Risk technology; Platform successfully processed all-time record equity clearing volumes in March
EquityClear connects to 16 trading platforms and 19 Central Securities Depositories (CSDs) across Europe, settling in 18 currencies
LSEG Technology, London Stock Exchange Group’s technology solutions provider, today announces that it has successfully implemented a new clearing platform for LCH’s EquityClear service. The risk management and trade processing platform offers a highly efficient, resilient and scalable solution for a variety of clearing, operations and risk management processes.
ASX Monthly Activity Report – March 2020
Euronext announces volumes for March 2020
Euronext, the leading pan-European exchange in the Eurozone, today announced trading volumes for March 2020. Monthly and historical volumes table are available at this address:.
Eventus Systems rapidly expands market coverage, now actively surveilling 100+ venues globally
Adding 10 new venues in Q1 with 8 in Europe, firm continues to scale platform for growing client base
AUSTIN, Texas, April 6, 2020 – Eventus Systems, Inc., a multi-award winning global trade surveillance and risk management software platform provider, today announced that its Validus platform is now actively surveilling activity for clients on more than 100 exchanges and trading venues around the world. The global coverage spans a diverse range of asset classes, with 10 new markets – eight of them European – added in the first quarter alone.
Steem Witnesses Freeze $3.2M in Latest Tit-for-Tat With Hard Fork Insurgents
Brady Dale – Coindesk
Witnesses on Steem have frozen eight accounts, putting a total of 17.6 million steem (worth approximately $3.2 million) in limbo. The accounts can be seen listed on GitHub. Steem recently underwent a contentious split into two blockchains, launching a new version of the software called Hive on March 20. Hive’s token has held parity or better with Steem’s since launch. A tit-for-tat between Steem’s old and new leadership has been ongoing for almost two months now, creating a case study on the dangers inherent to delegated proof-of-stake (DPoS), the consensus model underlying a number of blockchains, including Steem.
Crypto Freeze Continued Last Year as Deals Plunged, PwC Says
Eric Lam – Bloomberg
The cryptocurrency industry’s struggles to attract mainstream investment continued last year as global fund raising and deals both dried up, according to a new report from PricewaterhouseCoopers LLP.
South Korea’s central bank begins pilot program for testing digital currency
Yogita Khatri – The Block
The Bank of Korea, the country’s central bank, has launched a pilot program for testing digital won. Announcing the news on Monday, the central bank said the program was launched last month and would run until December 2021. The 22-month program is aimed at identifying technical and legal provisions required to create and issue a digital currency.
Poloniex launches token sale platform, with Tron’s decentralized stablecoin system as first project
Yogita Khatri – The Block
Crypto exchange Poloniex has rolled out a new token issuance platform called “LaunchBase.” Announced on Sunday, the platform’s first supported project is Tron’s decentralized stablecoin system called “JUST.” JUST was initially named “Djed” when it was announced last week. It is the Tron Foundation’s MakerDAO-like stablecoin system.
Major Crypto Firms Including Binance, Civic, Tron Targeted in Flood of Lawsuits
Daniel Palmer – Coindesk
A flood of class-action lawsuits were filed in New York Friday, taking aim at a number of major cryptocurrency projects. First reported by Offshore Alert, at least 10 complaints were filed in the Southern District of New York on April 3, alleging that the firms had sold crypto tokens to U.S. investors that were in fact unregistered securities. Among those targeted in the suits are cryptocurrency exchanges Binance (see complaint) and BitMEX operator HDR Global Trading, as well as notable blockchain projects like Tron (see complaint), Civic, Block.One, Kyber Network and Status. Bibox, Quantstamp and Kucoin are also named in individual complaints.
SEC Moves Against Water-Backed ICO Dupping Minority Community
Arnab Shome – Finance Magnates
The Securities and Exchange Commission (SEC) has charged a Texas couple for defrauding investors for $500,000 with a water-backed token sale. Announced on Friday, Larry Donnell and Shuwana Leonard duped over 500 investors by selling bogus stock certificates and also digital tokens linked to their alkaline water-backed company and a non-existent Bitcoin mining operation.
Coinbase Custody is the biggest Tezos staking service, despite charging higher fees
Yogita Khatri – The Block
Coinbase Custody is the largest operator of a Tezos staking validator, despite charging higher fees. The firm is staking over 65 million XTZ as of March 30, according to research conducted by The Block’s John Dantoni. Coinbase Custody launched its staking service in April 2019. That equates to more than $110 million at today’s XTZ price of roughly $1.67. Coinbase is followed by Kraken and Binance in terms of staking service providers. Together, they constitute the “Big 3” staking exchanges and account for 19% of all XTZ that is currently being staked.
Revolut Expands Crypto Offering – But Not in the US
Paddy Baker – Coindesk
U.K. challenger bank Revolut said Thursday that all standard users will now be able to buy and sell cryptocurrencies supported in its banking app, though this won’t include U.S. residents for now. Revolut had already planned to expand its crypto offering later this year. But in an email to users, the bank’s head of crypto, Edward Cooper, said growing concerns about the potential economic impacts of central bank quantitative easing and currency devaluation had hastened the move to Friday.
The Price Of Gold And The Price Of Bitcoin
John Navin – Forbes
Which of the 2 investment vehicles might work better as a “store of value?” Would it be the classic precious metal of the old school or the more recently created technology accessed electronically? If you excluded stocks and bonds from the concept and had to choose gold or bitcoin. One’s been around forever, the other is as new as it gets.
Bitcoin trading volume on exchanges grew 61 percent in Q1 compared to previous quarter
Yogita Khatri – The Block
Bitcoin trading volumes across The Block 22 exchanges saw a significant uptick during the first quarter of 2020. The volumes reached over $154 billion in the quarter – a 61% increase over the previous quarter figure of $96 billion, according to research conducted by The Block’s Steven Zheng. The quarterly average price of bitcoin, however, increased only about 4% on a quarter-on-quarter basis.
Crypto fundraising and M&A deals shifting outside of the US, says PwC
Yogita Khatri – The Block
The majority of global crypto fundraising and M&A (mergers and acquisitions) deals in 2019 took place outside of the U.S., according to the “Big Four” consulting firm PwC. In a report published Monday, PwC said both APAC (Asia-Pacific) and EMEA (Europe, Middle-East and Africa) regions accounted for a total of 51% of crypto fundraising and M&A deals last year – APAC (29%) and EMEA (22%).
Trump Is Gutting Our Democracy While We’re Dealing with Coronavirus;
The president’s firing of the intelligence watchdog who validated the Ukraine whistle-blower complaint is his latest threat to the rule of law.
Noah Bookbinder – NY Times
When President Trump announced late Friday that he would fire the government watchdog who told Congress about the Ukraine whistle-blower complaint, which ultimately led to his impeachment, it touched off one of the most acute threats yet to our democracy. But it didn’t eve
Watchdog Says Trump Fired Him for Fulfilling Legal Obligations; Intelligence community inspector general said he followed a pledge to uphold U.S. whistleblower laws
Dustin Volz – WSJ
The inspector general for the U.S. intelligence community, who played a pivotal role in allowing last year’s Ukraine whistleblower complaint to be shared with Congress, said that President Trump fired him because of his commitment to being an independent watchdog.
U.K. Prime Minister Boris Johnson Hospitalized for Coronavirus Tests
Johnson tested positive 10 days ago for Covid-19
Stephen Fidler – WSJ
British Prime Minister Boris Johnson was hospitalized for tests on Sunday after suffering persistent symptoms of the new coronavirus 10 days after he tested positive for the illness, his office said. It said his admission to a hospital, under his doctor’s advice, was a precautionary step.
5G-Virus Conspiracy Theory Fuels Mast Damage Amid U.K. Rollout
Thomas Seal – Bloomberg
Fires were reported in Belfast, Liverpool, Birmingham: reports; 5G is being deployed by all four U.K. mobile carriers;
elecom masts that enable the next generation of wireless communication were set on fire in the U.K. in recent days, apparently by people motivated by a theory that the tech helps spread the coronavirus. Investors are taking note.
The worst president. Ever.
Max Boot – Washington Post
Until now, I have generally been reluctant to label Donald Trump the worst president in U.S. history. As a historian, I know how important it is to allow the passage of time to gain a sense of perspective. Some presidents who seemed awful to contemporaries (Harry S. Truman) or simply lackluster (Dwight D. Eisenhower, George H.W. Bush) look much better in retrospect. Others, such as Thomas Jefferson and Woodrow Wilson, don’t look as good as they once did.
To Beat the Global Pandemic, Empower Local Leaders; Mayors know what’s working and what’s not in the battle against coronavirus.
Michael R. Bloomberg – Bloomberg
While many Americans are watching the daily news conferences by President Donald Trump and some governors, the action behind the scenes is being led by the elected officials who are closest to the public, and who are directly managing the crisis in their communities: mayors.
Billions in Stimulus Cash: Who Gets it and How to Get Access
Steven T. Dennis, Laura Davison, and Mike Dorning – Bloomberg
Small businesses can get up to $10 million to cover payrolls; Treasury, Fed working on plans for airlines, debt purchases
This is normally the time of year when the federal government is collecting taxes due, but the devastating coronavirus now has the U.S. trying to rapidly dole out hundreds of billions of dollars in aid and tax breaks to businesses large and small.
The U.S. was beset by denial and dysfunction as the coronavirus raged; From the Oval Office to the CDC, political and institutional failures cascaded through the system and opportunities to mitigate the pandemic were lost.
Yasmeen Abutaleb, Josh Dawsey, Ellen Nakashima and Greg Miller – Washington Post
By the time Donald Trump proclaimed himself a wartime president — and the coronavirus the enemy — the United States was already on course to see more of its people die than in the wars of Korea, Vietnam, Afghanistan and Iraq combined.
Trump Org Reportedly Seeking Debt Help From Deutsche As Bank Is Probed By DOJ; Former White House ethics chief Walter Shaub called it the “absolute nightmare” he has warned against.
Mary Papenfuss – Huffington Post
In another tangled ethics situation for Donald Trump, the president’s Trump Organization is reportedly asking to postpone its loan payments to Deutsche Bank — which is being investigated by the Department of Justice to determine if it complied with anti-money laundering regulations.
SEC Awards Approximately $2 Million to Whistleblower
The Securities and Exchange Commission today announced an award of approximately $2 million to a whistleblower who provided vital information and assistance that substantially contributed to an ongoing investigation. The whistleblower’s information would have been difficult for the agency to obtain absent the tip.
Proposed Rule Change to Address Brokers with a Significant History of Misconduct
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to: (1) amend the FINRA Rule 9200 Series (Disciplinary Proceedings) and the 9300 Series (Review of Disciplinary Proceeding by National Adjudicatory Council and FINRA Board; Application for SEC Review) to allow a Hearing Officer to impose conditions or restrictions on the activities of a respondent member firm or respondent broker, and require a respondent broker’s member firm to adopt heightened supervisory procedures for such broker, when a disciplinary matter is appealed to the National Adjudicatory Council (“NAC”) or called for NAC review; (2) amend the FINRA Rule 9520 Series (Eligibility Proceedings) to require member firms to adopt heightened supervisory procedures for statutorily disqualified brokers during the period a statutory disqualification eligibility request is under review by FINRA; (3) amend FINRA Rule 8312 (FINRA BrokerCheck Disclosure) to allow the disclosure through FINRA BrokerCheck of the status of a member firm as a “taping firm” under FINRA Rule 3170 (Tape Recording of Registered Persons by Certain Firms); and (4) amend the FINRA Rule 1000 Series (Member Application and Associated Person Registration) to require a member firm to submit a written request to FINRA’s Department of Member Regulation (“Member Regulation”), through the Membership Application Group (“MAP Group”), seeking a materiality consultation and approval of a continuing membership application, if required, when a natural person that has, in the prior five years, one or more “final criminal matters” or two or more “specified risk events” seeks to become an owner, control person, principal or registered person of the member firm.
Small Firm Conference Call: Updates and Implications of COVID-19 – Audio Recordings
FINRA President and CEO Robert Cook and Senior Vice President of Member Relations and Education Chip Jones were joined by FINRA senior staff to discuss updates and implications of COVID-19.
Holiday Reminder Regarding TRF Market Data
In observance of Good Friday, the FINRA/Exchange Trade Reporting Facilities (TRFs) will be closed on Friday, April 10, 2020. Thank you for your attention to this matter. Please contact FINRA Market Operations at (866) 776-0800 if you have any questions.
Charterhill director George Nowak sentenced to ten years’ imprisonment for deception
On 2 April 2020, Mr George Nowak was sentenced in the District Court of South Australia to ten years of imprisonment with a non-parole period of six years and three months.
ASIC commences proceedings against Mayfair 101 and Mayfair Platinum for misleading or deceptive advertising
ASIC has commenced proceedings in the Federal Court of Australia against companies in the Mayfair 101 group, alleging that its advertisements, promoted on Mayfair’s websites and in online media, are misleading or deceptive.
Regulators free up $500bn capital for lenders to fight virus storm; Moves by central banks around the world designed to add $5tn in extra credit for the real economy
Martin Arnold – FT
Financial regulators have freed up about $500bn of capital for lenders around the world to help them absorb the impact of the Covid-19 pandemic, according to calculations by the Financial Times. By relaxing capital requirements in the past few weeks, central bankers have aimed to keep credit flowing to businesses and households and mitigate the economic turmoil caused by mass quarantines put in place to slow the spread of the virus.
Mnuchin’s Unfilled Jobs Leave Treasury Stretched in Virus Crisis
Saleha Mohsin and Robert Schmidt – Bloomberg
Treasury secretary lacks key domestic finance unit leaders; Mnuchin plays key role in virus response as joblessness rises
Stock prices were tanking, the Federal Reserve was pouring unprecedented relief into the markets and Wall Street firms were in panic mode. Steven Mnuchin was due to gather the central bank chairman and other top financial regulators to assess the damage from the coronavirus outbreak. But the Treasury secretary was stuck on Capitol Hill.
A Lame-Duck Regulator Who Became the Face of Shale in Oil Wars
Rachel Adams-Heard – Bloomberg
Texas Railroad Commissioner put himself at center of oil wars; Ryan Sitton in talks with Russian and Saudi energy chiefs
In just a matter of weeks, Ryan Sitton went from being a lame-duck commissioner of an obscure Texas agency to one of the key figures in a global effort to save the oil market from plummeting prices.
Capital One says it won’t use CFTC waiver related to oil lending
U.S. lender Capital One Financial Corp (COF.N) said on Saturday it would not use a U.S. Commodity Futures Trading Commission (CFTC) waiver after commodity price volatility lifted the bank’s derivatives exposure toward a key regulatory threshold.
Investing and Trading
Here’s Why Some Investors Panic. And Here’s How to Make Sure You Don’t. Are you likely to buy high and sell low in a market panic? There’s a pretty simple way to figure that out.
Shlomo Benartzi – WSJ
Investors are reeling from the selloff in global markets. But here’s the bigger risk right now for investors: that those losses will lead them to act in a way that will result in even bigger losses. It doesn’t have to be that way.
If Companies Aren’t Buying Their Own Stock, Who Is?; Many companies have suspended share repurchase plans, removing a crucial pillar of support for the stock market during the coronavirus pandemic
Paul Vigna – WSJ
Hilton Worldwide Holdings Inc. added $2 billion to its stock buyback program on March 3, a vote of confidence among executives as the stock market began to slide. Just over three weeks later, the hotel company would strip the business down to its core, furloughing employees, cutting expenses, mothballing capital expenditures and suspending its dividend and buyback plan.
Why the oil price shock is nothing to celebrate; Lower revenues exacerbate the damage for poorer producer nations
The editorial board – FT
US president Donald Trump has been struggling to make his mind up about falling oil prices. Last month he described the prospect of lower petrol prices as “the greatest tax cut”. On Thursday, he said that a possible agreement between Russia and Saudi Arabia to cut production — and lift prices — was “GREAT for the oil and gas industry”. His conflicting messages reveal a truth: the price collapse, possibly the biggest in history, has the power to force a rethink on even the biggest advocates of cheap oil.
Oil majors raise $32bn of debt to weather crisis; ExxonMobil, Royal Dutch Shell, BP and Total among those to tap markets
Anjli Raval and Robert Smith – FT
The world’s biggest oil companies have raised debt worth more than $32bn in recent weeks to build up war chests to manage the financial fallout of the coronavirus outbreak while preserving shareholder payouts.
Andrew Bailey: Bank of England is not doing ‘monetary financing’; We will protect independence of inflation targeting
Andrew Bailey – FT
This is a time of great uncertainty. The Bank of England is doing all it can in this difficult environment to reduce the disruptive consequences for businesses and households and minimise longer-term damage to the economy.
The liquidity ‘collapse’ is a modern-day cobra effect; Crash in trading conditions reflects shift of risks from banks into financial markets
Robin Wigglesworth – FT
Back in the days of British rule in India, Delhi was overrun with cobras. Frustrated colonial officials put a bounty on them, paying out for every snake head the locals could deliver. But the scheme quickly backfired.
US shareholders brace for nine-year squeeze on dividends; Recovery in payouts expected to take longer than after 2008 crisis
Richard Henderson – FT
Dividends paid to investors by big US companies will take nine years to recover from the downturn caused by coronavirus, according to bets in the futures market, marking the biggest hit to corporate payouts since the second world war.
Jamie Dimon Sees ‘Bad Recession’ and Echoes of 2008 Crisis Ahead
Michelle F Davis – Bloomberg
JPMorgan ‘cannot be immune’ from fallout of pandemic, CEO says; His abbreviated annual letter focuses on response to crisis
Jamie Dimon said the coronavirus pandemic will lead to a major economic downturn and stress mirroring the meltdown that nearly brought down the U.S. financial system in 2008.
The Recession Bread Lines Are Forming in Mar-a-Lago’s Shadow; In Palm Beach a diner races to feed laid off workers. Food banks and pantries see surge in demand and long-term need.
Shawn Donnan and Reade Pickert – Bloomberg
Though it’s just a four-minute drive across the lagoon from Mar-a-Lago, President Donald Trump’s private club, and ten minutes from the Palm Beach outposts of Chanel and Louis Vuitton, Howley’s diner has become an emblem of America’s stark new economic reality.
The Most Profitable Trade: ‘Oil All Over the Oceans Right Now’
Javier Blas and Alex Longley – Bloomberg
Crude oil tankers booked in droves for floating storage; Donald Trump: “Every ship is now loaded to the gills.”
To outsiders, the oil trade of the day is so astonishing that even President Donald Trump sounded flabbergasted when he described it. “There’s oil all over the oceans right now. That’s where they are storing oil; we have never seen anything like that,” Trump said this week from the podium of the White House. “Every ship is now loaded to the gills.”
European Banks Prepared for a Crisis. But Not This One; The financial impact of the coronavirus surpasses the old worst-case scenarios, threatening a credit crunch or even a new financial crisis.
Jack Ewing – NY Times
It was supposed to be a drill. Government overseers would test whether European banks could survive a hypothetical perfect storm that included a steep economic downturn, plunging stock prices and a collapse in consumer spending.
Fed taps Pimco and State Street for funding programme; Appointment of managers for commercial paper facility comes after BlackRock was hired to run bond purchases
Eric Platt – FT
The Federal Reserve said on Friday that it had hired Pimco and State Street to manage its purchases of commercial paper, one of the major programmes in its effort to keep money flowing to corporate America during the coronavirus pandemic.
US banks defend dividend payments during pandemic; Europe’s regulators want lenders to drop shareholder payouts but American counterparts hold firm
Laura Noonan – FT
America’s biggest banks will defend their plans to continue paying dividends in submissions to regulators on Monday, just days after Europe’s regulators urged lenders to abandon shareholder payouts while they dealt with the coronavirus pandemic.
Invesco sacks fund manager Mark Barnett from investment trust; Former protégé of disgraced stock picker Neil Woodford has haemorrhaged assets over the past year
Siobhan Riding – FT
Invesco’s Mark Barnett has been sacked as the manager of a £400m investment trust because of poor performance, the latest blow for the former protégé of disgraced stock picker Neil Woodford.
Banks should be cautious with use of AI in cybersecurity
Cybersecurity technology is rapidly evolving and adapting to changing threats thanks to machine learning. However, AI is just one part of handling cyber threats, and financial institutions should be cautious about placing full reliance on it.
Hedge fund Glenview off 30% as coronavirus weighs on portfolio
Svea Herbst-Bayliss – Reuters
Glenview Capital Management, the hedge fund run by Larry Robbins, has lost roughly 30% in the first three months of 2020 as the spread of the new coronavirus hurt the healthcare facilities and hospital operators the firm has invested in.
PointState Hedge Fund Has $2 Billion Estimated Withdrawals
Suzy Waite and Katherine Burton – Bloomberg
Further $640 million of outflows are forecast in coming months; Fund had blocked investors from getting cash back in full
Zach Schreiber’s PointState Capital has suffered an estimated $2.1 billion of redemptions so far this year amid lackluster performance and as the coronavirus pandemic tears through markets.
Texas Gets Double Punch From Coronavirus and Oil Shock. ‘There’s No Avoiding This One.’; Lone Star State’s economy, which outpaced most of the U.S. after the 2008 financial crisis, looks set to suffer an outsize contraction this time
Collin Eaton and Jon Hilsenrath – WSJ
Texas had one of the best economic records of any U.S. state after the 2008 financial crisis. In this crisis, it faces the prospect of a deep and prolonged downturn.
Countries follow consumers in stockpiling food; Fears grow despite plentiful supplies as some governments launch export restrictions
Emiko Terazono, Heba Saleh and John Reed -FT
Reda Hachelaf has had a hectic few weeks. The chief executive of SOPI, an Algerian couscous and pasta maker, has been running flat out to meet increased demand from retailers who have seen their shelves stripped bare by panic-stricken shoppers. The quantities he supplied in one month are now being sold in two weeks.
City of London hiring grinds to a halt over coronavirus; Recruiters scrambling to adapt as companies put expansion plans on ice
Antonia Cundy – FT
A hiring freeze has settled over the City of London as companies put expansion plans on hold or scrap them altogether while the coronavirus outbreak continues, although searches for top executive roles continue.
Sweden Girds for Thousands of Deaths Amid Laxer Virus Policy
Niclas Rolander and Charles Daly – Bloomberg
There are signs that the death rate in Sweden is growing faster than elsewhere in Scandinavia, raising pressure on the government to abandon its controversial hands-off approach in tackling Covid-19.
Keir Starmer names Labour’s shadow front bench team
Jim Pickard – FT
Keir Starmer appointed Anneliese Dodds to the crucial role of shadow chancellor on Sunday as the newly elected Labour leader sacked several prominent allies of his predecessor Jeremy Corbyn and started to build a team in his own image. Ms Dodds, a former MEP and academic who entered parliament only in 2017, is among half a dozen new appointments to top jobs drawn from the “soft left” of the party.
U.K. Confidence Drops Most on Record as Lockdown Bites
David Goodman – Bloomberg
U.K. consumer confidence saw the sharpest plunge on record as Britons adjusted to the reality of the coronavirus lockdown. GfK said its measure of sentiment dropped 25 points to -34 between the middle of March and the end of the month, close to the nadir seen during the financial crisis more than a decade ago.
UK turns to EU support for repatriation flights
Jim Brunsden and Michael Peel – FT
Britain has quietly obtained EU support to help cover the costs of repatriation flights from Japan, the US and Peru during the coronavirus crisis, taking advantage of a Brussels programme that subsidises efforts to bring back stranded nationals. The UK has run a total of at least six such jointly funded emergency flights as part of an EU scheme that has helped more than 14,000 people get home since the start of the pandemic, according to the latest European Commission data.
As Coronavirus Halts Masses, Conservative Catholics Push Back; A vocal minority of conservative Catholics are criticizing the suspension of Masses, arguing that believers need the church now more than ever
Francis X. Rocca – WSJ
A vocal minority of conservative Catholics are criticizing the suspension of Masses in response to the coronavirus pandemic, arguing that such a crisis is precisely when believers need the church most.
Stop Using Toilet Paper; Why are we hoarding it when experts agree that rinsing with water is more sanitary and environmentally sound?
Kate Murphy – NY Times
While the coronavirus pandemic is affecting us all differently depending on where we live, our financial situation and our basic health, one universal is the difficulty finding toilet paper.
Coronavirus Pushes Higher Education to the Brink; Long-simmering troubles at America’s colleges and universities are about to boil over, consuming debt-ridden schools and redefining the campus experience.
Stephen Mihm – Bloomberg
The coronavirus has already dealt a vicious blow to key sectors of the U.S. economy. If the pandemic drags on into the fall, though, it’s likely to devastate yet another area that has so far escaped with minimal damage: higher education.