Biden nominates Christy Goldsmith Romero to lead FDIC at pivotal time for the banking regulator

Jun 14, 2024

First Read

Hits & Takes
John Lothian & JLN Staff

I leave tomorrow to travel to London for FIA’s IDX and I am very excited to go overseas again on my first trip since the COVID pandemic, other than to Bermuda last fall. My trip to London will include a lunch at the National Liberal Club, a reciprocal club of the Union League Club of Chicago. I am also attending a cricket match with my cousin Stuart Lothian while I am in London.

A week from Sunday, I will travel from London to Amsterdam via train and stay there until Wednesday. My agenda for Amsterdam is to talk to various parties about collaborating on a video project with John Lothian Productions to capture the history of the modern era of trading in Amsterdam, starting in 1978. Just like Chicago and its financial futures markets, some of the pioneers of the Amsterdam market are retired, retiring or passed away. I want to see what we can do to try to capture this history on video before it is lost.

If you see me in London and were involved in trading in Amsterdam, introduce yourself. Let’s talk about including you in the project.

I learned something new yesterday, mostly because I am not Catholic and did not take Latin and learn this in school. The White House announced the not that long awaited news that Christy Goldsmith Romero would be joining the board of directors of the Federal Deposit Insurance Corporation and become its new chairperson. However, the exact wording of the announcement included the word “vice” before the name of the person she is replacing, Martin J. Gruenberg

In this case, the word “vice” is from the Latin word “vice,” which means “in place of” or “instead of.” And there was my lesson of the day. Now, if you are wondering about other meanings of the word vice, like those applicable to many stories in this newsletter way too often, the Latin root is different.

Vice, as in moral failing, comes from the Latin word “vitium,” which means “fault” or “defect.” This sense of the word refers to immoral or wicked behavior and is commonly used to describe bad habits or sinful behavior.

And if you are wondering where you have seen the word “vitium” before, you might be a Cicero fan. In the writings of Cicero, the Roman statesman and philosopher, such as De Officiis (On Duties), Cicero discusses moral philosophy, virtues, and vices, often using the term “vitium” to describe the ethical failings that individuals should avoid.

OK, back to the Goldsmith Romero news. She is getting the FDIC job because of previous vice that led to a toxic work environment at the federal agency. Not only will Goldsmith Romero be leaving the CFTC, but the White House is really breaking up the band. Commissioner Kristin N. Johnson has been nominated by President Biden to be an “Assistant Secretary of the Treasury, vice Graham Scott Steele.” See, there is that vice again.

And without any vice, Caroline A. Crenshaw has been renominated to be a member of the Securities and Exchange Commission for a term expiring June 5, 2029.

Former U.S. House of Representatives Speaker Paul Ryan wrote a commentary in The Wall Street Journal about stablecoins titled “Crypto Could Stave Off a U.S. Debt Crisis; Stablecoins backed by dollars provide demand for U.S. public debt and a way to keep up with China.”

Forget fat finger errors costing you your job, the latest thing in the banking world to send you packing is “mouse mover” technology that simulates a person working at their desk at home. Bloomberg reported that “Wells Fargo fired more than a dozen employees last month after investigating claims that they were faking work” using a simulation of keyboard activity creating impression of active work. Devices called “mouse movers” or “mouse jigglers” can be bought on Amazon for less than $20.

Cboe reported yesterday that the largest FLEX options trade in history was executed: 643,500 ProShares Bitcoin Strategy ETF (BITO) call spreads traded via Cboe Silexx on Cboe’s C1 exchange. Cboe said FLEX options volumes have continued to grow year over year with 2024 average daily volume of 600k+ contracts.

Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL

*****

A special series by The Wall Street Journal, “The Future of Everything,” looks at the innovation transforming “the way we live, work and play, covering artificial intelligence, longevity, the workplace and more.” This month, The WSJ series explores what’s ahead for energy and climate and includes articles on what’s next in the world of autos, ways to make steel and power greener, and the rise of solar planes and more. Access the report HERE. ~SAED

Our most read stories from our previous edition of JLN Options were:
Roaring Kitty may have cut GameStop options position, strategists say from Reuters via Yahoo Finance.
Fintech Banker Sees Pockets of Progress Amid Uneven Recovery from John Lothian News.
The role of the FCM: Futures Discovery EP 10 from John Lothian News. ~JB

Subscribe to the JLN Options Newsletter HERE (it’s free).

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A Milestone in Indexing: FTSE Russell Celebrates 40 Years with Russell Reconstitution
JohnLothianNews.com

In a recent roundtable, we spoke with Catherine Yoshimoto, director of product management at FTSE Russell; Paul Woolman, Managing Director – Global Head of Equity Index Products from CME Group; and Rick Rosenthal, Managing Director – Global Head of Equity Index Products at Cboe Global Markets. They shared insights on the significance of this year’s Russell Reconstitution and its implications for market participants.

Watch the video »

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Connamara CEO Prioritizes Regulatory Compliance for Exchange Clients
JohnLothianNews.com

Jim Downs, CEO of Connamara Technologies, a provider of exchange infrastructure technology, emphasizes the importance of regulatory compliance for clients during an interview at the FIA’s International Futures Industry Conference in Boca Raton, FL.

Watch the video »

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Coase-Sandor Institute for Law and Economics Celebrates Ten-Year Milestone; Impactful Institute has fostered decade of data-driven innovation at the intersection of law and economics
The University of Chicago
How does regulatory structure affect economic growth? What legal and economic programs can best lift low-income communities out of poverty? How will AI change the study of law and economics? For the last ten years, the Coase-Sandor Institute for Law and Economics at the University of Chicago Law School has empowered researchers delving into complex issues like these with training and support for rigorous data-based analysis. The Coase-Sandor Institute for Law and Economics celebrated its ten-year anniversary in April 2024. The event marked a decade since Richard and Ellen Sandor’s $10 million gift in honor of Richard Sandor’s mentor, Nobel Laureate Ronald Coase. Professor Coase was best known for his inquiries into the real-world impact of economics on society and culture, a key focus of the institute that bears his name.
(NOLINK)

***** Inquiring minds want to know how AI will change the study of law and economics.~JJL

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A Killer Golf Swing Is a Hot Job Skill Now; Companies are eager to hire strong players who use hybrid work schedules to schmooze clients on the course
Callum Borchers – The Wall Street Journal
Standout golfers who aren’t quite PGA Tour material now have somewhere else to play professionally: Corporate America. People who can smash 300-yard drives and sink birdie putts are sought-after hires in finance, consulting, sales and other industries, recruiters say. In the hybrid work era, the business golf outing is back in a big way.
/jlne.ws/3yY7HAZ

***** This story is brought to you by the PGA and the Golf Course Association of America.~JJL

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What It’s Really Like to Just Trade Crypto All Day; How to make and lose a fortune with digital money.
Tracy Alloway, Joe Weisenthal, and Mohsis Andam – Bloomberg
A few lucky people have made generational wealth trading the ups and downs of the crypto market. And some finance professionals have shifted gears to focus primarily on the space. But what is it like to actually trade these coins day-to-day? How do people pick which ones to buy? How do they analyze the coins themselves? How do they get reliable information? And what is it like, emotionally, to trade such an infamously volatile asset? On this episode of the Odd Lots podcast, we speak with Julian Malinak. In his day job, Julian works in healthcare tech. But the rest of the time, he’s looking on message boards for the next 100-bagger. At one point he had made enough to retire on. And then it all went poof. But he keeps grinding and trying to improve his craft. Julian – who we found on the Odd Lots Discord server – explains what he does all day, and how the market really works from a trading perspective. This transcript has been lightly edited for clarity.
/jlne.ws/3Vr2yJm

***** It either involves lots of coffee, Mountain Dew or Red Bull or Monster.~JJL

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Thursday’s Top Three
Our most read item on Thursday was the Tradeweb press release Tradeweb Launches Enhanced RFQ Functionality for Credit Markets. Second was Commissioner Johnson to Host Fireside Chat with PCAOB Chair Williams for Juneteenth, from the CFTC. Third was U.S. Travelers Can Now Renew Their Passports Online, from The Wall Street Journal.

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Lead Stories

Biden nominates Christy Goldsmith Romero to lead FDIC at pivotal time for the banking regulator
Elisabeth Buchwald – CNN
President Joe Biden has nominated Christy Goldsmith Romero as chair of the Federal Deposit Insurance Corporation. The announcement comes after current FDIC Chair Martin Gruenberg said he intended to resign once a successor is confirmed by the Senate following a scathing independent investigation detailing pervasive sexual harassment, discrimination and bullying at the agency charged with regulating the banking sector.
/jlne.ws/3zbP5xl

The Hottest Investment for Hedge Funds Is Other Hedge Funds; Big firms like Millennium are so flush with cash they’re outsourcing it to other firms
Peter Rudegeair – The Wall Street Journal
Veteran investor Jonathan Heller recently launched his own hedge-fund firm after amassing about $1 billion. All of the initial money came from another hedge fund. Izzy Englander’s Millennium Management staked Heller with an option to commit more money over time, people familiar with the matter said. Heller’s firm, Helix Partners Management, trades securities and derivatives tied to companies that are under financial strain or bankrupt, including the former parent company of Silicon Valley Bank.
/jlne.ws/45wvgNt

Why South Korea Banned Short Selling and When Could Ban Be Lifted?
Youkyung Lee – Bloomberg
Short sellers are facing the heat in South Korea after regulators extended a ban on the practice of selling borrowed shares. Their goal is to stop big investment banks engaging in illicit trading practices that could erode public trust in markets. While South Korean shares rallied after the ban was imposed in November, the gains soon faded. Critics said it makes the market less transparent, and less attractive to global investors.
/jlne.ws/3XjOnZb

Biden taps bank bailout cop to lead troubled regulator; If confirmed by the Senate, Christy Goldsmith Romero would replace Martin Gruenberg, the longtime leader of the FDIC
Michael Stratford – Politico
President Joe Biden plans to nominate Wall Street regulator Christy Goldsmith Romero to chair the Federal Deposit Insurance Corp., the White House said Thursday, picking a new leader for an agency marred by revelations of pervasive sexual harassment and years of mistreatment of employees. Goldsmith Romero, who has served on the Commodity Futures Trading Commission for the past two years, previously was the top government watchdog overseeing the 2008 bank bailout and a senior staffer at the Securities and Exchange Commission.
/jlne.ws/45rqHnz

Better Markets Applauds Nominations for FDIC Chair and Treasury Assistant Secretary
Better Markets
Dennis Kelleher, Co-founder, President, and CEO, issued the following statement in connection with the nominations of Commodity Futures Trading Commission (CFTC) Commissioner Christy Goldsmith Romero to be Chair of the Federal Deposit Insurance Corporation (FDIC) and CFTC Commissioner Kristin Johnson to be Assistant Secretary for Financial Institutions at the Treasury Department: “The nominations of CFTC Commissioner Christy Goldsmith Romero to be Chair of the FDIC and CFTC Commissioner Kristin Johnson to be Assistant Secretary for Financial Institutions at the Treasury Department are both outstanding and well qualified candidates.
/jlne.ws/45qsjhB

PCAOB Expands Liability for Auditors Involved in Firm Violations; The U.S. audit regulator also clarified auditor duties when using tech-assisted analysis and proposed stiffer rules on analytical procedures
Mark Maurer – The Wall Street Journal
The Public Company Accounting Oversight Board expanded liability for individuals involved in firm violations and proposed tighter rules around one of the ways auditors gather evidence to detect financial misstatements. The U.S. audit watchdog on Wednesday voted, 5-0, to change the threshold for liability for contributors to accounting firms’ violations of auditing standards, lowering it to negligence from recklessness. The contributors are usually partners in charge of an audit or another firm that assisted in the work.
/jlne.ws/3VGkPn6

Proposed CFTC Events Contract Rule Creates Uncertainty, Could Stifle Markets with Consequential Commercial Value
Steptoe
The Commodity Futures Trading Commission (CFTC or Commission) initiated its highly anticipated event contracts rulemaking process, voting 3-2 along party lines to approve a notice of proposed rulemaking that would revamp the agency’s event contract review process. The proposal (Event Contract Proposal or Proposal) would prohibit an event contract “involving” certain activities from being listed on a derivatives exchange. Categories of contracts found to involve those activities – such as broadly-defined “gaming” contracts – would be deemed “contrary to the public interest” and prohibited from trading (or clearing) on a CFTC-registered derivatives exchange (or clearing organization). If adopted, the Proposal would arguably deter and prevent a broad swath of event contracts from trading in U.S. markets. Current exchange registrants and market participants, and platforms or markets offering event contracts, should strongly consider submitting a comment letter by the July 9 deadline.
/jlne.ws/4bZx6cc

UBS closes in on sale of Credit Suisse’s China unit to Beijing state-backed fund; Ken Griffin’s Citadel Securities also bid for securities business
Kaye Wiggins – Financial Times
UBS is in advanced talks to sell Credit Suisse’s China securities unit to a Beijing state-backed fund, in a blow to Ken Griffin’s Citadel Securities which had also bid for the company as it seeks to expand in China. The Swiss bank is in discussions with Beijing State-Owned Assets Management, its mainland securities joint venture partner, according to two people with knowledge of the matter.
/jlne.ws/3Rrop1W

Lloyd’s John Neal: ‘You’ll never find an insurer saying, “I don’t believe in climate change”‘; The chief executive on the nature of risk, Trump vs Biden – and what keeps him awake at night
Rana Foroohar – Financial Times
Lloyd’s of London is one of those British corporate brands known the world over by people who might not even know what it does. Lloyd’s is, of course, the world’s largest insurance marketplace, where thousands of companies, underwriters and brokers come together to price and sell billions of dollars of risk premiums every year. It’s a business that is booming in an ever riskier world; last year was Lloyd’s most profitable since 2007.
/jlne.ws/3xhmMgs

Fireside Friday with… T. Rowe Price’s Matt Howell; Head of derivatives and multi-asset trading solutions at T. Rowe Price, Matt Howell, sits down with The TRADE to unpack some of the key themes when it comes to equity options, swaps and index futures, including industry talking points for the year ahead, methods for leveraging transaction cost analysis (TCA), and how to achieve best execution.
Annabel Smith – The Trade
How do equity options, swaps and index futures differ when it comes to achieving best execution? When thinking about best execution in the derivative space it is critical to consider all the inputs that go into measuring the outcome for the portfolio. Unlike cash instruments, there are significantly more variables beyond the prevailing market price and in the OTC world there may not even be a readily available transparent market price to base execution off.
/jlne.ws/3RrGyN3

Alasdair Haynes latest to join FCA panel aimed at fortifying the City; The panel will focus on the major macroeconomic and geopolitical landscape, the future regulatory regime, FCA transformation, crypto assets, ESG, diversity and inclusion and private markets.
Annabel Smith – The Trade
Aquis Exchange chief executive officer and founder Alasdair Haynes has become the latest industry participant to be appointed to the UK Financial Conduct Authority’s (FCA) Markets Practitioner Panel. The panel is aimed at being a “critical friend” to the FCA in a bid to ensure the watchdog’s policies “maintain and advance” London’s position as an international financial centre.
/jlne.ws/3yZYJmJ

Broadridge’s LTX launches GenAI-powered list trading functionality; New capability addresses the need to streamline workflows as clients seek to integrate GenAI into their pre-trade and trade execution processes.
Wesley Bray – The Trade
Broadridge Financial Solutions’ AI-powered corporate bond trading platform, LTX, has introduced GenAI-powered list trading functionality. The new functionality will enable users of GPT technology to generate and execute multi-asset class, multi-directional trade lists via RFQ+.
/jlne.ws/3VkNq05

Ukraine Invasion

Putin offers truce if Ukraine exits Moscow-occupied areas and drops NATO bid – a nonstarter for Kyiv
Dasha Litvinova – Associated Press
Russian President Vladimir Putin promised Friday to “immediately” order a cease-fire in Ukraine and begin negotiations if Kyiv started withdrawing troops from the four regions annexed by Moscow in 2022 and renounced plans to join NATO. Such a deal appears a nonstarter for Kyiv, which wants to join the military alliance and has demanded that Russia withdraw its troops from all of its territory.
/jlne.ws/4en9EXJ

Ukraine’s Zelenskiy says China’s Xi told him he will not sell any weapons to Russia
Reuters
Chinese President Xi Jinping told Ukrainian President Volodymyr Zelenskiy that China would not sell weapons to Russia during a phone conversation between the two men, Zelenskiy said on Thursday. Zelenskiy was speaking at a joint press conference with U.S. President Joe Biden at the G7 summit in Italy. He did not specify when the conversation with Xi took place.
/jlne.ws/3KIGsx2

Russia’s Devastating Attacks on Ukraine’s Grid Spark Fears of Brutal Winter; Kyiv is fighting to keep the lights on as Russian attacks on energy infrastructure seek to sap Ukrainians’ will to resist
Jane Lytvynenko – The Wall Street Journal
Ukraine is imposing blackouts, launching hasty repairs and hunting for spare parts after a Russian bombing campaign targeting power infrastructure in recent months slashed the country’s electricity production by half. The Russian attacks, using waves of missiles and explosive drones, have sparked fears of a painful winter should the power outages severely hamper the economy and lead to an exodus from cities. Ukraine has long pleaded with the West for more air-defense systems, and Ukrainian officials say deliveries have been insufficient to protect both cities and the front lines.
/jlne.ws/3VmlQ2A

Why Ukraine Isn’t Ready for Peace Talks; From historians to CEOs, the answer’s the same: Only on our terms.
Marc Champion – Bloomberg
With three major Ukraine-focused summits this week – in Germany, Italy and Switzerland – I thought I’d ask a few people who know what they’re talking about whether it’s time to wind down support for the war and encourage Ukraine to strike the best deal with Russia it can. The conversations didn’t go quite as expected.
/jlne.ws/3xjQtNX

Ukraine pleads with developing nations at Swiss peace summit; Kyiv seeks to broaden alliance of predominantly western backers for its plan on how to end war
Isobel Koshiw – Financial Times
Ukraine is set to hold a first global summit aimed at broadening support for Kyiv’s peace plan and dialling up pressure on Moscow to end the war. Some 80 world leaders are expected at the Swiss resort of Bürgenstock on Saturday and Sunday, where President Volodymyr Zelenskyy is set to appeal to nations that have been indifferent to his nation’s plight, more than two years after Russia’s full-scale invasion. He will home in on three of the 10 points in his peace plan: nuclear safety, food security and return of Ukrainians, including children, being held by Russia.
/jlne.ws/4b30qgF

Israel/Palestine Conflict

Hamas official says ‘no one has any idea’ how many Israeli hostages are still alive
Ben Wedeman, Muhammad Darwish and Ivana Kottasova – CNN
The fate of the 120 remaining hostages in Gaza is crucial to any deal to end the protracted and bloody conflict between Israel and Hamas. But a senior Hamas official has told CNN that “no one has an idea” how many of them are alive, and that any deal to release them must include guarantees of a permanent ceasefire and the complete withdrawal of Israeli forces from Gaza.
/jlne.ws/3z9QpAQ

Israel Adds a Medieval Weapon to Its Arsenal in Fight Against Hezbollah; Lebanese militants launch rockets across the border for a third day
Omar Abdel-Baqui and Anat Peled – The Wall Street Journal
Tensions on the Israel-Lebanon border remain high, as Hezbollah launched rockets at northern Israel for a third day, while the Israeli military has turned to a medieval device to launch fireballs into southern Lebanon to clear brush where it says militants are hiding. Verified footage shows Israeli troops using a trebuchet-a type of catapult that uses a heavy weight-to hurl flaming projectiles over a large concrete wall as one soldier shouts “come on, another one!”
/jlne.ws/45m2v69

Exchanges, OTC and Clearing

National Stock Exchange of India (NSE) Hosts Second Major Event on Social Stock Exchange (SSE) at Bharat Mandapam, New Delhi
National Stock Exchange of India
The National Stock Exchange of India (NSE) successfully hosted its second major event on the Social Stock Exchange (SSE) today at Bharat Mandapam, New Delhi. The event witnessed participation from a diverse audience including senior government officials, SEBI and NSE representatives, social enterprises, impact investors, and various Non-Profit Organizations (NPOs). Eminent dignitaries Shri Tarun Kapoor, Advisor to the Hon’ble Prime Minister; Dr. R Balasubramaniam, Chairperson of the Advisory Committee, Social Stock Exchange, SEBI; Shri Kamlesh Chandra Varshney, Whole Time Member, SEBI; Shri Ved Mani Tiwari, CEO, NSDC; Shri Ajay Yadav, IAS, Joint Secretary, Ministry of New and Renewable Energy, GoI; Sushri Leena Kumar, Ministry of Fina
/jlne.ws/3FOrfHc

Expansion Of Eligible ETFs On Stock Connect To Take Effect On 22 July
Hong Kong Exchanges and Clearing Limited
Hong Kong Exchanges and Clearing Limited (HKEX) is pleased to announce today (Friday) that the expansion of eligible exchange-traded funds (ETFs) under Stock Connect will take effect on 22 July 2024. This follows the announcement of the new eligibility criteria by HKEX, Shanghai Stock Exchange and Shenzhen Stock Exchange on 19 April 2024. This expansion will further enhance the investment choices for Stock Connect investors, enabling them to diversify their assets across both Hong Kong and Mainland China markets in an efficient and cost-effective manner.
/jlne.ws/3VJzyxT

Product modification Summary: Amendment to the Russian Ruble/U.S. Dollar (RUB/USD) Contracts – Effective June 13, 2024
CME Group
Amendment to the Russian Ruble/U.S. Dollar (RUB/USD) Contracts
/jlne.ws/4cld6R6

Performance Bond Requirements: Energy, Equity, FX, Interest Rate and Metal Margins – Effective June 14, 2024
CME Group
As per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile Exchange Inc., Clearing House Risk Management staff approved the performance bond requirements for the following products listed in the advisory at the link below. The rates will be effective after the close of business on June 14, 2024.
/jlne.ws/4cmmyUq

Performance Bond Requirements: Interest Rate Margins – Effective June 14, 2024
CME Group
As per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile Exchange Inc., Clearing House Risk Management staff approved the performance bond requirements for the following products listed in the advisory at the link below. The rates will be effective after the close of business on June 14, 2024.
/jlne.ws/4ejZ2ch

Arm Holdings plc to Join the Nasdaq-100 Index Beginning June 24, 2024
Nasdaq
Nasdaq (Nasdaq: NDAQ) today announced that Arm Holdings plc (Nasdaq: ARM), will become a component of the Nasdaq-100 Index (Nasdaq: NDX), the Nasdaq-100 Equal Weighted Index (Nasdaq: NDXE), the Nasdaq-100 Tech Sector Index (Nasdaq: NDXT), the Nasdaq-100 Technology Sector Market-Cap Weighted Index (Nasdaq: NDXTMC), and the Nasdaq-100 Technology Sector Adjusted Market-Cap Weighted Index (Nasdaq: NDXT10) prior to market open on Monday, June 24, 2024. Arm Holdings plc will replace Sirius XM Holdings Inc. (Nasdaq: SIRI) in the Nasdaq-100 Index® and the Nasdaq-100 Equal Weighted Index. Sirius XM will also be removed from the Nasdaq-100 Ex-Tech Sector Index (Nasdaq: NDXX), the Nasdaq-100 ESG Index (Nasdaq: NDXESG), the Nasdaq-100 Sustainable ESG Select Index (Nasdaq: NDXSES), and the Nasdaq-100 Target 25 Index® (Nasdaq: NDXT25) on the same date.
/jlne.ws/3VoQXKT

Fintech

Atos Gets EUR700 Million Bid from France for Strategic Unit; Government had to step in to rescue key defense businesses; Atos is also in talks for a financial restructuring by July
Benoit Berthelot – Bloomberg
The French government has offered to buy some of Atos SE’s operations in its big data and security unit for an enterprise value of EUR700 million ($751 million) as part of discussions to restructure the embattled IT company. The non-binding bid, part of talks previously disclosed in April, is for the company’s supercomputers, “mission-critical” systems and cybersecurity activities in the Atos unit known as BDS, the company said in a statement on Friday. No final deal has been reached and discussions are continuing.
/jlne.ws/3XiB4bn

Jupiter becomes latest institution to join Saphyre; Saphyre’s platform will be leveraged by Jupiter for the onboarding and maintenance of its trading relationships with brokers and custodians.
Wesley Bray – The Trade
Jupiter has become the latest firm to join Saphyre’s network of financial institutions utilising the fintech’s platform. As part of the move, Jupiter will leverage Saphyre’s platform for the onboarding and maintenance of its trading relationships with brokers and custodians.
/jlne.ws/4bZCkoi

Microsoft to delay release of Recall AI feature on security concerns
Reuters
Microsoft will not roll out “Recall”, an AI-powered feature that tracks computer usage, with its new computers next week and will instead preview it with a smaller group later, the tech giant said on Thursday, amid concerns of privacy risks. The Recall feature tracks web browsing to voice chats, creating a history stored on the computer that the user can search when they need to remember something they did, even months later. Recall will now be available only for a preview on its Windows Insider Program (WIP) in the coming weeks instead of being broadly available for Copilot+ PC users on June 18, Microsoft said in a blog post.
/jlne.ws/3Vn7HSG

The AI Revolution Comes for Farmers Growing a Third of Our Food; In its first test in Malawi, AI is helping smallholder farmers treat pigs and kill weevils that are destroying their crops
Frank Jomo and Antony Sguazzin – Bloomberg
In the village of Ndodo, 25 miles south of the Malawian capital Lilongwe, farmers gather in the shade of an acacia tree as a voice over a smartphone tells them how to get rid of a weevil that’s destroying their sweet potato crops. The tips offered by the app in the local language Chichewa is one of the first examples of how Artificial Intelligence is being used to aid subsistence farmers in some of the poorest parts of the world. Piloted by a Chicago-based nonprofit organization Opportunity International, the app called Ulangizi – which translates as “Advice” – works on WhatsApp and uses data from ChatGPT and the Malawian government’s English-language agricultural manual to answer questions or diagnose crop and farm animal diseases.
/jlne.ws/45qTAA9

How AI may become the new offshoring; Companies must find a way to make the most of the new technology
John Thornhill – Financial Times
It took 72 years for the number of US households with a telephone to rise from 10 per cent to 90 per cent. It took 19 years for adoption of the television to follow the same arc. But the speed of take-up for our latest technologies, such as generative AI, is stunning. Within 15 months of launch, 23 per cent of American adults had used OpenAI’s ChatGPT chatbot.
/jlne.ws/4cl6DFD

Pope Francis will be the first pontiff to address a G7 summit. He’s raising the alarm about AI
Nicole Winfield and Kelvin Chan – AP via Yahoo!
Pope Francis is no stranger to artificial intelligence: a deepfake photo of him in a white puffer jacket went viral last year. But his concerns about AI go far beyond an unflattering shot and are now taking center stage at the Group of Seven summit. Francis will address G7 leaders on Friday at their annual gathering in southern Italy – a first for a pope. He intends to use the occasion to join the chorus of countries and global bodies pushing for stronger guardrails on AI following the boom in generative artificial intelligence kickstarted by OpenAI’s ChatGPT chatbot.
/jlne.ws/3yUeoUz

Cybersecurity

Microsoft president grilled by Congress over cybersecurity failures: Here’s what to know
CNBC
Chris Krebs, SentinelOne chief public policy officer and former Cybersecurity and Infrastructure Security Agency director, joins ‘Squawk Box’ to discuss Microsoft president Brad Smith’s testimony on Capitol Hill yesterday over the company’s security practices following cyberattacks on the tech giant over the past year.
/jlne.ws/45t7LVI

Microsoft employees’ cybersecurity contributions will factor into their pay
Jordan Novet – CNBC
Microsoft will evaluate its employees’ cybersecurity contributions in reviews that will factor into their compensation, Brad Smith, the company’s vice chair and president, said ahead of a Thursday U.S. House committee hearing on the software maker’s security practices. The changes represent part of Microsoft’s efforts to address concerns about how much it’s doing to protect its clients’ data. In April, the Department of Homeland Security issued a report based on an independent review of China’s breach of U.S. government officials’ email accounts, an incident that Microsoft disclosed last year. Microsoft committed to changing some practices in response to shortcomings identified in the report.
/jlne.ws/3z14D7n

CISA leads first tabletop exercise for AI cybersecurity; The Biden administration-led exercise featured 15 companies and several international cyber agencies.
Christian Vasquez – Cyberscoop
Looking to build its incident response muscles before artificial intelligence becomes an even greater threat, the federal government on Thursday held its first tabletop for the burgeoning technology, bringing in partners from across the country and abroad for the exercise.
/jlne.ws/4chXYnu

Four key highlights from the Microsoft cybersecurity hearing; Microsoft President Brad Smith made a number of key commitments, but faced no harsh criticism for his company’s document cybersecurity shortcomings.
Justin Doubleday – Federal News Network
Despite the scathing Cyber Safety Review Board report on his company’s cybersecurity practices, Microsoft President Brad Smith didn’t experience much venom when he testified before the House Homeland Security Committee today.
/jlne.ws/3VHZJVF

Cryptocurrencies

Binance Says Nigeria Drops Some Charges Against Jailed Executive; Binance says Nigeria dropped tax charge, other charges remain; US lawmakers have urged President Joe Biden to intervene
Emily Nicolle – Bloomberg
Binance Holdings Ltd. said Nigerian authorities have dropped some criminal charges against an executive at the world’s biggest crypto exchange who has been imprisoned in the country since April. Nigeria’s Federal Inland Revenue Service served and filed amended charges on Friday which resulted in accusations of tax fraud against being dropped, a Binance spokesperson said in a statement. Gambaryan, head of financial compliance at Binance, also faces charges of money laundering and currency speculation from a different agency.
/jlne.ws/3XorUtL

Binance CEO Teng Sees ‘Landmark’ Year as Crypto Goes Mainstream; Monitorship of Binance after US settlement has begun, CEO says; Customers have ‘very little assets’ with bankrupt FlowBank
Emily Nicolle and Muyao Shen – Bloomberg
This is turning out to be a “landmark year” for the crypto industry, Binance Holdings Ltd. Chief Executive Officer Richard Teng said, thanks to growing regulatory clarity, more mainstream adoption and the launch of exchange-traded funds tied to Bitcoin. Customer assets on Binance’s cryptocurrency exchange have grown by $42 billion in 2024 as crypto prices rebounded, Teng said in an interview on Thursday. Binance has reached 200 million registered users this month, though Teng declined to say how many of those were actively trading on the platform. A spokesperson for the company added that monthly active users increased by 12.5% from February to May.
/jlne.ws/3z2cvoY

Biden’s Nonsensical Proposed 30% Tax Would Kill Bitcoin Mining in the U.S.
Taras Kulyk – CoinDesk
The Biden administration recently re-introduced a proposed that would place a 30% tax on all “cryptocurrency miners” – a move that represents an ideological witch hunt against a rapidly growing industry (see my previous comments). The move, part of the government’s budget proposal for the upcoming fiscal year introduced in March, is in stark contrast to recent, pro-crypto statements from former President Donald Trump, who just this week called for the U.S. to dominate the bitcoin mining sector. It remains to be seen whether the crypto mining excise tax will come into effect (or whether Trump will deliver on his aggressive crypto policies if elected), though in recent weeks many have begun to argue that President Biden may be softening on the industry.
/jlne.ws/4cbe9my

Ether ETF Could Get Approved This Summer, SEC’s Gensler Says
Lydia Beyoud – Bloomberg
Final approval of exchange-traded funds linked to Ether, the world’s second-most popular digital asset, could come during the summer, Securities and Exchange Commission Chair Gary Gensler told lawmakers. “Individual issuers are still working through the registration process that’s working smoothly,” Gensler said during a Thursday hearing before a Senate Appropriations subcommittee.
/jlne.ws/3KIBDUn

Crypto Could Stave Off a U.S. Debt Crisis; Stablecoins backed by dollars provide demand for U.S. public debt and a way to keep up with China.
Paul D. Ryan – The Wall Street Journal
The American experiment is being tested. Nowhere is this more evident than in the trajectory of the national debt. The U.S. is headed toward a predictable yet avoidable debt crisis. If nothing is done, the economy will stall while government promises of healthcare and retirement security will be broken. Cuts to national defense will put the country at risk. With no fiscal solution in sight, the crisis is likely to start with a failed Treasury auction forcing an ugly surgery on the budget. As the economy contracts, the dollar will suffer a major confidence shock, further imperiling prospects for growth. The obvious answer is to deal with the root causes of the problem. Entitlement programs are driving the debt and require reform, but politicians can’t find the courage to do what needs to be done. The country thus proceeds down this perilous path. What can be done?
/jlne.ws/3z5whQE

Paradigm raises $850M for third crypto fund; Paradigm has been discussing its new crypto fund for the past few months as markets rebounded.
Ana Paula Pereira – Cointelegraph
/jlne.ws/3z26Uir

Politics

White House Expected to Nominate CFTC Commissioners to FDIC, Treasury Roles: Reports; CFTC Commissioners Christy Goldsmith Romero and Kristin Johnson are reportedly set to be nominated to key roles.
Camomile Shumba – CoinDesk
The White House is expected to nominate U.S. Commodity Futures Trading Commission Commissioner Christy Goldsmith Romero as the next Federal Deposit Insurance Corporation (FDIC) chair and Kristin Johnson to a senior Treasury post, media outlets have reported. Goldsmith Romero, one of the CFTC’s three Democratic commissioners is expected to have her first hearing on July 8, Reuters said on Thursday.
/jlne.ws/3yXI2Z3

Trump to Pitch Dimon, Fraser as Verdict Fails to Scare Off CEOs; Trump to meet GOP lawmakers, address CEOs in Washington; Audience includes members who denounced Trump after Jan. 6
Nancy Cook – Bloomberg
Donald Trump’s brand on Wall Street, once tarnished by the US Capitol attack and his bombastic political rhetoric, has made a near-full recovery, evidenced by the lineup of bank industry chieftains attending an event with the former president. JPMorgan Chase & Co.’s Jamie Dimon, Citigroup Inc.’s Jane Fraser, Bank of America Corp.’s Brian Moynihan and Tim Cook of Apple Inc. are among those expected to attend a Washington meeting with Trump on Thursday, according to people familiar with the event, which will be hosted by the Business Roundtable, a group that promotes corporate-friendly policies.
/jlne.ws/4cmWybw

Biden long avoided touting stock market gains. Now he can’t resist.
Ben Werschkul – Yahoo Finance
President Joe Biden spent his first few years in office trying to reverse a hallmark of the Trump era: Touting (and taking credit) whenever the stock market hit a new milestone. But new market highs in recent months and the opportunity to bait Donald Trump in an election year have proven simply too tempting to resist.
/jlne.ws/3Viz3cy

Biden campaign in talks to accept crypto donations through Coinbase Commerce: sources
Elizabeth Napolitano – The Block
President Biden’s re-election team is in talks about accepting crypto donations, sources told The Block. This comes a few weeks after Donald Trump began accepting crypto donations to his campaign through Coinbase Commerce. U.S. President Joe Biden’s campaign is in discussions with cryptocurrency industry players about accepting crypto donations through Coinbase Commerce, sources familiar with the matter told The Block. Coinbase Commerce, a payments service that allows merchants to accept dozens of cryptocurrencies, already powers crypto donations to presumptive Republican candidate Donald Trump’s campaign, which began accepting digital currency contributions last month.
/jlne.ws/3yWLkf8

Why Bond Markets Are So Spooked by the French Election; France’s deteriorating finances are at risk if voters choose populists who pledge even more government spending
James Mackintosh – The Wall Street Journal
France isn’t Greece. And that’s increasingly a problem. Unlike Greece, France has had little-to-no pressure to keep its finances under control, running giant budget deficits even as concern about its debt load built. Now, it faces a reckoning in the form of a snap election that polls suggest could be won by the populist far right with a high-spending anti-EU agenda. Investors didn’t like it one bit. They haven’t concluded that France is Greece-but increasingly treat the country on a par with Spain or Portugal, once derided as members of the troubled “PIGS” alongside Ireland and Greece.
/jlne.ws/4cjZnKh

Regulation

CFTC Permanently Revokes Registrations of Mississippi-based Commodity Trading Advisor and Associated Person
CFTC
The Commodity Futures Trading Commission today issued an opinion and order revoking the registrations of Ted Brent Alexander of Jackson, Mississippi. The CFTC filed a Notice of Intent to Revoke Registration Pursuant to Section 8a(2) of the Commodity Exchange Act (CEA) against Alexander on March 13, 2024. [See CFTC Press Release No. 8876-24]. The CFTC action is based on Alexander’s guilty plea to conspiracy to commit wire fraud in a federal criminal case.
/jlne.ws/45qzaaQ

Testimony of Chairman Rostin Behnam Before the Subcommittee on Financial Services and General Government, Committee on Appropriations, U.S. Senate
CFTC
Thank you, Chairman Van Hollen, Ranking Member Hagerty, and members of the Subcommittee. I appreciate the opportunity to testify before you today on the President’s fiscal year 2025 budget request for the Commodity Futures Trading Commission (CFTC or Commission). For over a century, derivatives markets have played a key role in the U.S. economy, promoting economic growth and contributing to financial stability and the predictability of prices that impact the daily lives of all Americans. This October, the CFTC will commemorate its 50th anniversary as an independent agency with exclusive jurisdiction over futures trading in all commodities. This milestone provides a natural inflection point as we consider how the past 50 years will impact the next.
/jlne.ws/3KMyhQ0

CFTC Permanently Revokes Registrations of Mississippi-based Commodity Trading Advisor and Associated Person
CFTC
The Commodity Futures Trading Commission today issued an opinion and order revoking the registrations of Ted Brent Alexander of Jackson, Mississippi. The CFTC filed a Notice of Intent to Revoke Registration Pursuant to Section 8a(2) of the Commodity Exchange Act (CEA) against Alexander on March 13, 2024. [See CFTC Press Release No. 8876-24]. The CFTC action is based on Alexander’s guilty plea to conspiracy to commit wire fraud in a federal criminal case.
/jlne.ws/3XuYkCS

Testimony of Chairman Rostin Behnam Before the Subcommittee on Financial Services and General Government, Committee on Appropriations, U.S. Senate
CFTC
For over a century, derivatives markets have played a key role in the U.S. economy, promoting economic growth and contributing to financial stability and the predictability of prices that impact the daily lives of all Americans. This October, the CFTC will commemorate its 50th anniversary as an independent agency with exclusive jurisdiction over futures trading in all commodities. This milestone provides a natural inflection point as we consider how the past 50 years will impact the next.
/jlne.ws/4eocrjx

Terraform and Kwon to Pay $4.5 Billion Following Fraud Verdict; Kwon to contribute more than $200 million, Terraform to wind down, and assets to be distributed to investor victims and creditors in bankruptcy
SEC
The Securities and Exchange Commission today announced that Terraform Labs PTE, Ltd. and Do Kwon agreed to pay more than $4.5 billion following a unanimous jury verdict holding them liable for orchestrating a years-long fraud involving crypto asset securities that led to massive investor losses when the scheme unraveled.
/jlne.ws/3XhDKpI

Oral Testimony before the Subcommittee on Financial Services and General Government
Chair Gary Gensler – SEC
At the SEC, we had our 90th birthday just one week ago. After the 1929 market crash, President Franklin Roosevelt signed the first of the federal securities laws in 1933. He followed a year later with the passage of the Securities Exchange Act-making June 6, 1934, our birthday at the SEC. The SEC was created to ensure that the markets worked free of fraud and manipulation-and that investment advisers carried their duties to the clients they advised.
/jlne.ws/3XtyKOZ

SEC Obtains Final Judgments Against Former Chief Information Security Officer and Two Friends for Insider Trading
SEC
On June 13, 2024, the Securities and Exchange Commission obtained final consent judgments against former Chief Information Security Officer Amit Bhardwaj, and his two friends, Srinivasa Kakkera and Abbas Saeedi, whom the SEC previously charged with insider trading that collectively generated more than $3.6 million.
/jlne.ws/45tsQ23

SEC Obtains Over $10 Million Judgment in Microcap Fraud Litigation
SEC
On June 11, 2024, the United States District Court for the Southern District of California granted the Securities and Exchange Commission’s request for monetary remedies against Gannon Giguiere.
/jlne.ws/3VJ4c9t

SEC Obtains Final Judgment Against Bellatorum Resources, LLC and its CEO Christopher Bentley
SEC
On May 30, 2024, the U.S. District Court for the Southern District of Texas, Houston Division, entered a final judgment against Bellatorum Resources, LLC and its CEO, Christopher R. Bentley of Tomball, Texas.
/jlne.ws/3yUeknN

SEC Obtains Final Judgment Against Defendant for Role in Alleged Offering Fraud
SEC
On June 13, 2024, the U.S. District Court for the Eastern District of New York entered a final judgment against Brian C. Jensen, enjoining him from violating certain provisions of the federal securities laws.
/jlne.ws/45ny5jI

ASIC cancels AFS licence of Sug Ou Jeung
ASIC
ASIC has cancelled the Australian financial services (AFS) licence of Sydney-based financial services provider Sug Ou Jeung. The licence cancellation took effect on 3 June 2024.
/jlne.ws/3zacaAt

Parliamentary Joint Committee Opening Statement, 14 June 2024
ASIC
Opening statement by ASIC Chair Joe Longo at the Parliamentary Joint Committee on Corporations and Financial Services, Oversight of ASIC, the Takeovers Panel and the Corporations Legislation, 14 June 2024.
/jlne.ws/4bXRXg5

ASIC grants class no-action position to second party opinion providers
ASIC
ASIC has issued a class no-action position in response to approaches by industry participants about whether second party opinion (SPO) providers may be providing financial product advice that requires them to hold an Australian financial services (AFS) licence. This no-action position has been issued in relation to offers made only to wholesale clients for the following reasons:
/jlne.ws/4cfNsNm

ESMA in 2023 – Focus on investor protection, risk monitoring and supervision – Press Release
ESMA
/jlne.ws/3Xqumjw

FMA provides additional support to smaller firms for CoFI licensing
FMA
The Financial Markets Authority (FMA) – Te Mana Tātai Hokohoko – has today published an information sheet specifically for smaller firms to assist in establishing and maintaining a Fair Conduct Programme (FCP) and applying for a Financial Institution (CoFI) licence. The sheet provides information and examples to help smaller firms establish, implement and maintain their FCP. Financial institutions are required to have an FCP that is designed to ensure their compliance with the fair conduct principle, as set out in the Financial Markets (Conduct of Institutions) Amendment Act 2022.
/jlne.ws/3Xmh47C

Publication of the finalized “Comprehensive Guidelines for Supervision of Financial Instruments Business Operators, etc.” after public consultation
FSA
The FSA finalized the amendments to the “Comprehensive Guidelines for Supervision of Financial Instruments Business Operators, etc.” after public consultation.
/jlne.ws/3XpeiyG

SFC welcomes progress on implementation of Mainland-Hong Kong Mutual Recognition of Funds enhancements
SFC
The Securities and Futures Commission (SFC) welcomes the public consultation paper published today by the China Securities Regulatory Commission (CSRC) on proposed rule amendments for implementing the enhancements of the Mainland-Hong Kong mutual recognition of funds (MRF) scheme.
/jlne.ws/4cmYfWq

Investing and Trading

‘Roaring Kitty’ Appears to Have Exited GameStop Call Options
Carly Wanna and Bailey Lipschultz – Bloomberg
Keith Gill – the meme-stock investor known online as “Roaring Kitty” – appears to have exited his entire options position in GameStop Corp. while adding to his heap of shares. A screenshot on Gill’s Reddit account on Thursday showed his portfolio no longer included the 120,000 GameStop call options that were set to expire next week and had a strike price of $20. Instead, his portfolio showed a position of more than nine million common shares, up from five million earlier this week.
/jlne.ws/3VH6x5J

Tesla Investors Get Behind Musk’s Fight for $56 Billion Pay Deal
Dana Hull and Kara Carlson – Bloomberg
Tesla Inc. investors re-approved Elon Musk’s compensation and cleared the company moving its legal home to Texas, offering votes of confidence in the chief executive despite a sales slump and falling stock price. The proposal to ratify an award of stock options worth up to $55.8 billion passed with around 72% of votes cast in favor, Tesla said in a regulatory filing Friday. That’s roughly one percentage point shy of the support Musk received when the company first proposed the pay package in 2018.
/jlne.ws/4eje1mJ

Retirees’ Life Savings Can Vanish in Continuing Care Bankruptcies; When continuing care retirement communities go bankrupt, residents or their heirs can lose deposits they were told would be refundable
Akiko Matsuda – The Wall Street Journal
Robert Lange and his wife moved into a retirement community outside of Detroit more than a decade ago. The couple, in their 80s at the time, thought they were set for life. Then in 2020, Henry Ford Village filed for bankruptcy. Lange, a World War II veteran and retired Ford Motor engineer, soon learned his $145,000 entrance fee-billed as a fully refundable deposit-was at risk in the community’s financial restructuring because it would be among the last liabilities to be paid. Lange died in the following year and his family has recently learned they could recoup roughly $18,000.
/jlne.ws/4cg9EXM

A Surging IRS Penalty Is Costing Americans Billions. Here’s How to Avoid It; Estimated-tax penalties can catch taxpayers by surprise. Even the government’s ‘safe harbors’ aren’t entirely safe.
Laura Saunders – The Wall Street Journal
Here’s a wake-up call for millions of Americans who pay some or all their income taxes quarterly rather than through paycheck withholding: Penalties on underpayments of these taxes have surged recently. Second-quarter amounts are due June 17, so affected taxpayers need to act right away. This group includes many investors, retirees, business owners and gig workers who aren’t employees, and some others who are. For example, two-earner couples or staffers with stock options could also owe penalties if they aren’t withholding enough.
/jlne.ws/3XmYUCD

Could AI make you a better investor? The technology is there, now regulators need to play their part
Claer Barrett
“Isn’t that cheating?” asked Uncle Trevor as I triumphantly identified a willow warbler using an app on my phone on a recent family trip to the Isle of Arran. He has a point. The artificial intelligence-powered Merlin app has revolutionised the way I bird watch. You hold your phone up, and within seconds, it will pick up and identify the song of pretty much any bird you can hear with staggering accuracy.
/jlne.ws/4b5AgJY

Silicon Valley’s Lightspeed Ventures shifts focus to secondary markets; Move is a sign of how traditional investment models are under threat by a challenging VC environment
Tabby Kinder – Financial Times
/jlne.ws/3Xn18lu

GPT4 Brings Moneyball Logic to Picking Stocks; Large language models could do for investing and economics what sports analytics did for basketball, baseball and football.
Aaron Brown – Bloomberg
/jlne.ws/45w9SYQ

Municipal CUSIP Request Volumes Rise in May; Corporate Volumes Steady
CUSIP Global Services
/jlne.ws/3zcHTkw

Environmental, Social and Corporate Governance

G7 leaders commit to faster transition from fossil fuels – draft statement
Reuters
Leaders of the Group of Seven (G7) developed democracies will commit to accelerating their transition away from fossil fuels during this decade, according to a draft of a statement to be issued at the end of their ongoing summit in Italy. “We will transition away from fossil fuels in energy systems in a just, orderly, and equitable manner, accelerating actions in this critical decade, to achieve net-zero by 2050 in keeping with the best available science,” said the draft seen by Reuters.
/jlne.ws/4eoS6uE

G7 focus on climate after UN talks end in division over who will pay; Saudi Arabia counters pressure to contribute funds by suggesting richer countries impose new taxes
Attracta Mooney and Aime Williams – Financial Times
G7 leaders are set to call for the richer developing countries such as China and Saudi Arabia to pay up for climate change, after UN climate negotiations over two weeks in Bonn ended with scant progress on how to deal with the consequences of global warming. The UN discussions in Bonn, attended by hundreds of national delegates, were marked by divisions and entrenched positions over funding to help poorer nations deal with the effects of climate change.
/jlne.ws/3VlRRaV

Swiss Re says industry failed to estimate impact of extreme weather; Global insured losses from natural catastrophes exceeded $100bn for fourth consecutive year in 2023
Kenza Bryan – Financial Times
Swiss Re, one of the world’s biggest reinsurers, has said the industry significantly underestimated the fallout from recent natural disasters across Europe and warned that some areas have become “uninsurable”. “Whether it’s the Turkey quake…or the floods in Germany or the hailstorms in Italy, models were off by factors as opposed to 10 or 20 per cent,” said Gianfranco Lot, the group’s chief underwriting officer for property and casualty reinsurance.
/jlne.ws/4bZwkfg

On a Warming Planet, Outdoor Concerts Need a New Safety Playbook; As climate change supercharges extreme weather around the world, many concert venues, organizers and fans are ill-prepared for rising risks.
Kendra Pierre-Louis – Bloomberg
Just before Ana Clara Benevides lost consciousness, she likely found it hard to breathe. Packed with 60,000 people in Rio de Janeiro’s Nilton Santos Stadium for a Nov. 17 Taylor Swift concert – amidst a heat wave with a “real feel” of 138F (59C) – the 23-year-old would have been unbearably thirsty, her heart beating fast, her skin hot. Benevides fainted as Swift sang “Cruel Summer,” the second song of the set. Four hours later, she would be dead from heat exhaustion.
/jlne.ws/3z2qjQo

Missing a Global Climate Target Could Spell Disaster for These Polar Bears; One group in Hudson Bay might have roughly a decade left because sea ice is becoming too thin to support them as they hunt, according to new research.
Austyn Gaffney – The New York Times
Polar bears in the southern Hudson Bay could go extinct as early as the 2030s because the sea ice that helps them hunt for food is thinning, a new study suggests. “We’ve known that the loss of Arctic sea ice would spell disaster for polar bears, so this might be the first subpopulation that disappears,” said Julienne Stroeve, the lead author of the study, which was published Thursday in the journal Communications Earth & Environment.
/jlne.ws/3XtttHb

Protester jailed for 10 months for cracking windows at JPMorgan’s London office; Climate campaigners targeted bank over fossil fuel funding
Attracta Mooney – Financial Times
/jlne.ws/3KINGB1

In Catan: New Energies, the Goal Is Avoiding Climate Catastrophe; Growth isn’t always good in a new version of Catan, which asks players to balance development and fossil fuel production against climate disaster.
Olivia Rudgard – Bloomberg
/jlne.ws/4b1ZPLZ

We’ll soon live in a world with a ‘staggering’ excess of oil that we can’t fully use, global energy watchdog IEA warns
Prarthana Prakash – Fortune
/jlne.ws/4b1Unca

Institutions

Ex-Merrill Broker Barred for Allegedly Naming Wife as Beneficiary on Client Accounts
Kenneth Corbin – Barron’s
Regulators have barred a former Merrill Lynch advisor from the brokerage industry for a series of alleged violations, including adding his wife as a beneficiary to an elderly client’s accounts and falsifying the forms to do so. Finra, the brokerage industry’s self-regulator, began investigating Imdadur Rahman after Merrill Lynch, a unit of Bank of America, fired him in October 2023.
/jlne.ws/45nqZM6

Wells Fargo fires workers for ‘simulating’ being at their keyboards; Accusation that bank staff tried to fool managers is latest sign of crackdown on hybrid work
Stephen Gandel – Financial Times
Wells Fargo has fired several employees for allegedly trying to fool their bosses into thinking they were working when they were not, in the latest example of a crackdown on non-compliant staff in the era of hybrid work. The bank said the workers were discharged last month after it determined they had sought to “create the impression of active work” through “simulation of keyboard activity”, according to regulatory filings with Finra, one of the top US securities industry regulators.
/jlne.ws/3xhlEJK

Deutsche Bank Braces for Fine Over Spanish Derivative Sales; Lender estimates maximum penalty of euro 10 million, sources said; Matter has been weighing on Deutsche Bank’s reputation
Jorge Zuloaga and Arno Schuetze – Bloomberg
Deutsche Bank AG is bracing for a fine of as much as Euro 10 million ($10.7 million) in Spain after it sold derivatives to clients who later said they didn’t understand the products and suffered steep losses as a result. The amount is the maximum seen by the German lender in an internal estimate of a fine it expects the Spanish securities regulator CNMV to levy in the matter, people familiar with the matter said. CNMV will probably make a final decision after the summer, one person said, and Deutsche Bank is trying to lower or even prevent the fine, said another. All asked not to be named discussing private information.
/jlne.ws/3z1q0W1

Citadel Hires Three Economists for Expanding Macro Business; Bank of England, Bank of Japan economists among new hires; Hedge fund firm has been expanding in macro trading recently
William Shaw – Bloomberg
Citadel has hired three economists, including former Bank of Japan and Bank of England staffers, as the hedge fund seeks to expand its macro operation. Saugata Sen, who was at the BOE until last year, joined Ken Griffin’s hedge fund this month to lead UK coverage, according to a person familiar with the matter who isn’t authorized to discuss personnel. Kenya Amano, who spent more than a decade at the Japanese central bank, joined in May to lead Japan coverage. Next month, Gabriel Tenorio will join from Wellington Management Company LLP to cover Latin America.
/jlne.ws/4ep8ElU

MacKay Shields Launches ETF Aimed at Structured Finance Sector; Investment management firm is owned by insurer New York Life; The new ETF will buy investment-grade securitized debt
Scott Carpenter – Bloomberg
Investment manager MacKay Shields has launched an exchange-traded fund that will buy asset backed securities, mortgage bonds, and other investment-grade products in the structured finance market. MacKay, which is owned by insurer New York Life, inaugurated the IQ MacKay Securitized Income ETF on May 31. As of Wednesday, the actively managed fund had assets of $86 million, according to data compiled by Bloomberg.
/jlne.ws/4b1PEHA

Archegos Trial Dredges Up $2 Trillion Family Office Dispute; Fund’s collapse led to billions of dollars in bank losses; Two big attempts to limit single family office risks failed
Annie Massa and Lydia Beyoud – Bloomberg
Ralph Hamers, the former chief executive officer of UBS Group AG, looked sullen as he explained how the bank lost hundreds of millions of dollars after the implosion of investment firm Archegos Capital Management. “Clearly what we will do going forward is demand even more transparency with our clients,” Hamers told a CNBC interviewer in April 2021, when he still headed the Swiss bank. “Is there more regulation that we can get, in order to ensure we have complete oversight over the positions our clients have?”
/jlne.ws/4cor2K9

AXS files to launch weekly, monthly and quarterly leveraged ETFs; The funds would offer a solution for investors who risk losing out if they hold existing leveraged funds for more than a day
Steve Johnson – Financial Times
A US manager has filed to launch the first leveraged and inverse exchange traded funds designed to reset over longer periods, offering a solution for investors who risk losing out if they intend to hold for more than a day. New York-based AXS Investments’ proposed suite of 50 ETFs would offer weekly, monthly and quarterly resetting on 2x long exposure to a dozen ETFs managed by rival issuers, which track underlying exposures such as the S&P 500, Nasdaq 100, bitcoin, Nvidia and Tesla. Similar tenor short exposure would also be available on some of these ETFs.
/jlne.ws/4egxDbn

Work & Management

I’m a CEO and 12 of my employees are in ‘flextirement.’ With boomers opting not to retire, the arrangement will become more common
Fortune
For as long as I’ve been a business owner, the narrative surrounding the baby-boomer generation was all about the coming retirement wave. We were promised a mass exodus from the workforce, a seismic shift that would leave companies scrambling to fill the void. At Optima Office, an outsourced accounting and HR company I founded almost six years ago, we began preparing for the shift in the workforce by focusing on high retention. We felt that listening to the needs of our employees was one way to do that.
/jlne.ws/4cka7rQ

“Simulation of keyboard activity” leads to firing of Wells Fargo employees; With worker surveillance on the rise, vendors sell devices to fake keyboard and mouse movement.
Benj Edwards – Ars Technica
Last month, Wells Fargo terminated over a dozen bank employees following an investigation into claims of faking work activity on their computers, according to a Bloomberg report. A Financial Industry Regulatory Authority (FINRA) search conducted by Ars confirmed that the fired members of the firm’s wealth and investment management division were “discharged after review of allegations involving simulation of keyboard activity creating impression of active work.”
/jlne.ws/4chk2P2

Employers should do more than just talk about mental health; Workers still fear discrimination despite years of raising awareness – do companies need to go further?
Bethan Staton – Financial Times
Spring has been a particularly busy time for mental health awareness at work. Companies have taken every opportunity to trumpet their approach to mental health problems – from highlighting burnout to the impact of global government elections. Many were responding to April’s stress awareness month, which was quickly followed by Mental Health Awareness Week in May.
/jlne.ws/3Rqqc7z

Wellness Exchange

Lilly’s Weight-Loss Drug Is a Huge Hit. Its CEO Wants to Replace It ASAP; Dave Ricks is pushing his scientists to find an even more potent anti-obesity treatment. ‘Lilly’s got a lead, and we plan to exploit that lead.’
Jessica Mendoza, Matt Kwong and Peter Loftus – The Wall Street Journal
In early 2018, Dave Ricks, the chief executive of the pharmaceutical giant Eli Lilly, was on a West Coast college tour with his daughter when his phone rang. A deputy was calling with good news: The company’s new, experimental drug tirzepatide not only cut blood-sugar levels in people with diabetes in a small clinical trial, it also helped them lose much more weight than prior weight-loss drugs could achieve. The next step was a larger, expensive clinical study.
/jlne.ws/3XizrKN

You Don’t Have to Worry About Bird Flu, for Now. Here’s What to Know; The risk of getting H5N1 is currently very low unless you work on a farm, but there are several changes you should still make to stay healthy
Sumathi Reddy – The Wall Street Journal
Avoid raw milk. Lay off cheeses made with unpasteurized milk. And cook your beef to medium- or well-done temperatures. These are the precautions that public health officials and doctors recommend as they track the H5N1 bird flu outbreak in U.S. cattle. Ten states have H5N1 outbreaks in cows, according to the Centers for Disease Control and Prevention, and at least three U.S. dairy farmworkers have been diagnosed with bird flu.
/jlne.ws/3xjHDQm

Regions

Chinese companies rush to tap US convertible bond market; Issuers encouraged by ready pool of specialist hedge fund buyers for hybrid debt
Nicholas Megaw and Harriet Clarfelt – Financial Times
Big Chinese companies are turning to the convertible bond market as a way of raising cheap cash from US hedge funds while circumventing investor concerns about political tensions between the two countries. Traditional US equity fundraising routes such as initial public offerings and follow-on share sales have been almost completely shut to Chinese companies since the disastrous listing of rideshare group DiDi in 2021, which delisted the following year after regulatory scrutiny.
/jlne.ws/3RuAfIS

Banks Said to Urge Hong Kong to Be More Flexible on Convertible Bonds and Stock Buybacks; EGM approval means deals like Alibaba’s would be impossible; Alibaba, JD.com repurchased ADRs after convertible bond issues
Pei Li and Julia Fioretti – Bloomberg
Major investment banks are asking Hong Kong’s stock exchange to allow companies with a primary listing in the city to do share buybacks and convertible bond sales simultaneously, people familiar with the matter said. The request follows a flurry of high-profile issuances by Chinese technology companies including Alibaba Group Holding Ltd., JD.com and Trip.com, which raised billions of dollars in convertible bond sales and used some of the proceeds to repurchase their American depositary receipts. They could do that as their main listings are in the US. In Hong Kong it wouldn’t be possible.
/jlne.ws/3xl6G5B

Bank of Japan to scale down huge bond-buying programme
Kyoko Hasegawa – Yahoo!Finance
The Bank of Japan on Friday said it would trim its vast hoard of government bonds as it cautiously steps away from its long-running ultra-loose monetary policy. The central bank kept interest rates unchanged after a two-day meeting but announced plans to “reduce its purchase amount of JGBs (Japanese Government Bonds) thereafter to ensure that long-term interest rates would be formed more freely”. “A detailed plan” for the reduction “during the next one to two years or so” will be decided at the next policy meeting in July, it said. While the move had been widely expected, observers said the decision to defer action until next month weighed on the yen, pushing it above 158 per dollar, from around 157.20.
/jlne.ws/3VFU2r9

Illegal short selling trades in South Korea could now get you life in prison
Youkyung Lee and Bloomberg – Fortune
South Korea is extending a ban on stock short selling through March 30 next year and planning harsher penalties for illegal trades.
/jlne.ws/3KFVROu

China Sells 50-Year Bonds at Record-Low Yield as Demand Swells
Bloomberg News
The frenzy for Chinese bonds is showing no signs of fading, with the nation’s longest-dated special government notes receiving stronger-than-expected demand at an auction. China sold 35 billion yuan ($4.8 billion) of 50-year special government bonds at a yield of 2.53%, according to traders. That compares with an estimate of 2.58% in a Bloomberg survey. The debt received more than five times the demand than what was on offer, said the traders who asked not to be identified as the information is private.
/jlne.ws/3KKcVmy

Philippines to Freeze Processing of New Green Energy Projects; Energy department says five-month pause to start June 25; Nation has more than enough contracts to hit clean energy goal
Cliff Harvey Venzon – Bloomberg
The Philippines will temporarily halt processing of new applications for renewable energy projects after it revamps rules amid a flood of contracts as the government pushes green power. The Department of Energy will not review applications for five months from June 25 while it enhances a one-stop shop system with the implementation of the new guidelines from that date, it said in a statement on Friday.
/jlne.ws/3yZenii

Japan could be energy-independent by 2060 thanks to renewables, Rystad Energy CEO says
Katya Golubkova – Reuters
Japan, a major coal and liquefied natural gas (LNG) buyer, could be energy-independent by 2060 thanks to expansion of solar and wind power together with storage batteries, said Jarand Rystad, chief executive of the Rystad Energy consultancy. Japan imports most of its energy resources, with the Middle East, Australia and the United States being its top suppliers. The government’s strategy calls for a reduction in LNG and coal to under 40% of the power generation mix by 2030 from more than 60% now. But analysts say Japan is moving slower it needs to.
/jlne.ws/4ck3khZ

Climate Change Is Putting Swelling Cities at Risk; A warming world is putting Bangladesh, Niger, Pakistan and other countries more at risk for extreme weather.
Dorothy Gambrell and Brian Kahn – Bloomberg
Weather events exacerbated by climate change will threaten many places in the coming years, and many of these locations are also projected to gain a lot of new inhabitants. In the world’s largest cities, governments will have to do more to protect the millions of people in danger from a hot planet.
/jlne.ws/3z3mzhB

Ghana Sees Cocoa Crop Recovering Next Season on Good Weather; Harvest expected to reach 700,000 tons in the next season; Regulator sets up security task force to combat bean smuggling
Ekow Dontoh – Bloomberg
Ghana expects its cocoa crop to recover next season as favorable weather and timely supplies of pesticide and fertilizer help farmers claw back from a potential two-decade low that’s pushed prices to record highs. The world’s second-largest grower expects its harvest to reach 700,000 metric tons in the 2024-25 season that starts in October, according to two people with knowledge of the matter, who cited on-the-ground crop surveys. That would follow a third bad harvest in the current season, driven by bad weather and crop disease. Ghana can expect to harvest about 425,000 metric tons this season, the people said. That’s well below an already scaled-back official production estimate of 650,000 to 700,000 tons and would be the lowest since 2001-2002, according to data from the Ghana Cocoa Board.
/jlne.ws/45t2L3o

Colombian Peso Slumps as Traders Eye Revised Fiscal Plans; Currency falls more than 3% to lowest level since October; Petro’s administration prepares an updated fiscal framework
Nicolle Yapur – Bloomberg
The Colombian peso plunged as much as 3.2%, extending weekly losses as traders fret over a widening fiscal deficit and an increase in the debt ceiling. The peso was the worst performing currency in the world on Thursday, hitting the lowest level since October before trimming losses. It has far outstripped the decline in its Mexican counterpart this week, which had grabbed all the headlines after the surprise election results.
/jlne.ws/3RrlxlG

Argentina loses appeal over $1.5bn payment to hedge funds; Ruling is setback for Javier Milei’s cash-strapped government as it faces cases brought by former foreign investors
Ciara Nugent – Financial Times
A London court has rejected Argentina’s appeal on a ruling that left it facing a $1.5bn payment to four hedge funds which bought its GDP-linked securities, in a blow to the cash-strapped government of libertarian President Javier Milei. In 2013, Argentina changed the way it calculates GDP, which it argued meant it did not need to pay interest on the euro-denominated securities – issued between 2005 and 2010 as part of a debt restructuring – which were tied to GDP growth.
/jlne.ws/4chsXQz

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