CFTC Charges Gemini Trust Company for Making Material False or Misleading Statements and Omissions to the Commission

Jun 3, 2022

First Read

Hits & Takes
John Lothian & JLN Staff

There are several big stories of the day, but we decided to make the lead story the news that the CFTC charged Gemini for making false statements in the self-certification process running up to the launch of bitcoin futures at Cboe in 2017. Gemini is going to need a whole constellation of star lawyers to help them with this. Here are some of the headlines from that story, though there are more below from Bloomberg and the press release from the CFTC, which is the lead story.

– CFTC sues Gemini Trust over statements ahead of bitcoin futures launch; Complaint comes as Winklevosses’ digital asset exchange announces plan to lay off 10% of staff – FT
– Gemini Crypto Exchange Operator Sued on Role in Bitcoin Futures Product – WSJ
– CFTC sues Gemini claiming crypto exchange lied in futures contract evaluation – Cointelegraph
– Commodity regulator sues crypto exchange owned by Winklevoss twins over ‘false or misleading statements’ – Fortune
– Winklevoss-owned Bitcoin Exchange Gemini Being Sued By Regulators; Gemini, a cryptocurrency exchange, is being sued by the CFTC on allegations of false statements made to obtain certification for bitcoin futures contracts. – Bitcoin Magazine

Also making waves this morning is news Citigroup may “record losses of at least $50 million following a London staffer’s fat-finger trade that caused a flash crash in European stocks last month, according to people familiar with the matter,” Bloomberg reported. That is a drop in the bucket compared to the market impact the fat finger error appeared to cause.

And in news from Down Under, ASX has named Helen Lofthouse as its new managing director and CEO, making her the exchange’s first female CEO. She is replacing Dominic Stevens and being promoted from group executive for markets. She has been with the exchange for seven years, Business News Australia reported.

The World Federation of Exchanges came out with the 62nd edition of its Focus magazine, the June 2022 edition. The stories included are:

Jos Dijsselhof, CEO, Six Group: Exchanges Can Create Transparency in ESG; Jos Dijsselhof, CEO of SIX Group AG, shares his views on the role exchanges can play in ESG, raising capital, DeFI and building an infrastructure for digital assets. Dijsselhof also is chairman of the WFE Working Committee.
Daniela Peterhoff – Clearing the Way for Nasdaq in Europe; We are looking at how to implement sustainable thinking from every angle of the business, from trading to market data and clearing – always with the ambition to support both growth and Nasdaq´s purpose to foster inclusive growth and prosperity
SPACs: International Practices, Governance Aspects and Their Implementation in Brazil; B3’s Flavia Mouta Fernandes, Fernando de Andrade Mota, Raphael Giovanini and Danilo Castanha Mariotti take an in-depth look at the implementation of SPACs in Brazil.
Regulatory Flexibility in the Brazilian Capital Markets During the Pandemic; B3’s Flavia Mouta Fernandes, Fernando de Andrade Mota, Raphael Giovanini and Yasmin Fernandes Reis examine the regulatory flexibility exercised in Brazil during the pandemic.
The Future of Clearing; The ESMA’s Klaus Martin Löber looks at the future of clearing and the challenges that lie ahead as the world enters a time of increased risks and heightened volatility.
The World Federation of Exchanges New Research Finds Circuit Breakers Effective as Tools to Manage Volatility; The World Federation of Exchanges (“The WFE”), the global industry group for exchanges and CCPs, today published a new research paper titled “Circuit breakers and market quality,” which studies their effectiveness during times of volatility and market stress. In March 2020, the U.S. security market experienced heightened volatility induced by the COVID-19 pandemic, and market-wide circuit breakers were triggered on four occasions. Using high-frequency intraday trade and quote data, WFE Research investigated the market conditions around these trading halts, seeking to shed light on the effectiveness of circuit breakers.
Investment flows; In this article, we analyse the trends in capital raised in 2021 compared to 2020. The capital raised is the sum of the capital raised through IPOs and the capital raised through already listed companies. The data is available on the WFE Statistics Portal, while the indicators are defined in our Definitions Manual. For questions or feedback about this article, please contact the WFE Statistics Team on statistics@world-exchanges.org

FIA President & CEO Walt Lukken was interviewed by Vince Molinari on an episode of SSE TV to talk about “How He Champions Sustainability and the Environment In The World Of Finance.”

Here is a copy of the CME Group’s 2021 Annual Report on ESG from the CME Group ESG Working Group.

Every day seems to have a special industry associated with it, but today is National Donut Day, which means many stores are giving you a FREE donut. It might be worth a stop in your local donut shop to find out what they are offering for free.

As I get ready to head to London for IDX and the AFM Annual meeting tomorrow, I am trying to bone up on what I need to know about how things are in London. FIA tells me there is a tube strike expected, so expect longer travel times. Also, the FT reports that travelers are told not to show up at the airport more than three hours early, it just increases the disruption. I also learned today from the FT something even more important; the price of a pint of beer in the UK is up 70% since the financial crisis, and London pubs are charging up to £8 for a pint. Thank goodness there is always someone who wants to buy me a pint, I hope. BTW, is there anything big happening in the UK right now? Do I need to bring my morning suit with the striped pants and top hat?

Pat Kenny’s Kilt Challenge fundraising jumped 7% to 68% of his goal yesterday with the help of some of the readers of this newsletter, so thank you. Please support Pat’s efforts to raise money for Futures for Kids as part of the gala fundraiser connected with IDX next week. Time is running out.

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

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Tradeweb Announces First Fully Electronic SOFR Swaption Trade; Successful completion of trade marks another “first” for TW SEF
Tradeweb
Tradeweb Markets Inc. (Nasdaq: TW), a leading, global operator of electronic marketplaces for rates, credit, equities and money markets, today announced it has completed the first-ever fully electronic institutional Secured Overnight Financing Rate (SOFR) swaption trade. Goldman Sachs and Caisse de dépôt et de placement du Québec (CDPQ) were counterparties on the trade, which was executed recently on the Tradeweb Swap Execution Facility (TW SEF). Since the completion of the inaugural trade, 15 dealers are now providing swaptions pricing on TW SEF.
/jlne.ws/3PXP981

***** Nice work by Tradeweb. ~JJL

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College Degrees Lose Luster as Inflation Surges and Student Debt Balloons; Nearly half of parents said they would prefer not to send their children to a four-year university after high school.
Paulina Cachero – Bloomberg
Sam Wren didn’t even consider going to college. The 18-year-old from Utah said the decision was a no-brainer when he compared the nearly $90,000 cost of a four-year degree at Utah State University — his mother’s alma mater— against a two-year trade school program for under $10,000. “It’s such an expensive commitment to make,” said Wren, who will enroll in a trade school in the fall. “I don’t want to be somebody who’s in debt right out of the gates just trying to start a career.”
/jlne.ws/3NjOjAS

****** I will sell you two bachelor degrees? I can give you a good price? ~JJL

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Australian Stock Exchange Names Lofthouse as First Female CEO
Jackie Edwards – Bloomberg
ASX Ltd. appointed Helen Lofthouse as its chief executive officer, the first woman to lead Australia’s main stock exchange. Lofthouse, who has served as the company’s group executive for markets since July, will become CEO Aug. 1, according to a statement Thursday. She will replace Dominic Stevens, who announced his retirement in February.
/jlne.ws/3MeroFF

***** Helen Lofthouse has some big challenges ahead of her, but she knows it and I am sure she has a plan. ~JJL

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Bored Ape Is Going Hollywood; It’s already the world’s most coveted NFT collection, but the Bored Ape Yacht Club is becoming something else: highly lucrative I.P. With buyers racing to make their apes the stars of movies and books and albums and shows, GQ goes inside the quest to cash in on a decentralized version of Disney.
Will Stephenson – GQ
Sonny Q, who would prefer I not use his last name, was telling me about the exorcism he had received as a younger man in Boston, in which he lay in a bathtub while a priest covered him with eggs. “I had a weird spirit on me,” he said. “I was struggling, doing bad things and having constant failures. Bad things happening in my life over and over and over again.” Stoutly built and bearded, he shook his head somberly as he recalled the demon possession that had nearly ruined him.
/jlne.ws/3NiIwLB

****** Can we get back to superhero movies please? ~JJL

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Thursday’s Top Three
Our top story Thursday was the “meme stocks” game show video that was part of the “Investomania” public service campaign from the SEC. Second was Bloomberg’s BNP Paribas Plans to Lure NYC Workers Back With Redesigned Offices. Third was FIA’s “Give a Penny to Kenny – IDX Gala Kilt Challenge” fundraising announcement for Futures for Kids, with Pat Kenny taking on the challenge.

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MarketsWiki Stats
26,846 pages; 238,685 edits
MarketsWiki Statistics

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Lead Stories

CFTC Charges Gemini Trust Company for Making Material False or Misleading Statements and Omissions to the Commission
CFTC
The Commodity Futures Trading Commission today announced it has filed a complaint in the U.S. District Court for the Southern District of New York against Gemini Trust Company, LLC (Gemini), based in New York, N.Y., for making false or misleading statements of material facts or omitting to state material facts to the CFTC in connection with the self-certification of a bitcoin futures product. The CFTC seeks disgorgement of ill-gotten gains, civil monetary penalties, injunctions relating to registration and trading, and an injunction against further violations of the Commodity Exchange Act (CEA), as charged.
/jlne.ws/3PZdNoH

Winklevoss Twins’ Gemini Sued by CFTC Over Bitcoin Futures; Regulator claims company misled staff in seeking go-ahead; Futures contract listed on Cboe in 2017 was first of its kind
Bob Van Voris and Lydia Beyoud – Bloomberg
The Winklevoss twins’ Gemini Trust Co. is being sued by the Commodity Futures Trading Commission for allegedly misleading the derivatives regulator in a bid to launch the first US-regulated Bitcoin futures contract. The CFTC said Thursday that Gemini “made false and misleading statements” from July to December 2017 about how it would prevent manipulation in Bitcoin prices that were to serve as a reference for the derivatives based on the cryptocurrency. In a lawsuit filed in federal court in Manhattan, the agency sought trading and registration bans, as well as fines.
/jlne.ws/3xcM5xi

Coinbase to Rescind Employment Offers, Extend Hiring Freeze; Market conditions, business ‘prioritization efforts’ cited; Gemini Trust announced 10% staff reduction earlier Thursday
Yueqi Yang – Bloomberg
Coinbase Global Inc. said it will extend a hiring freeze for both new and existing positions for the “foreseeable future” and rescind a number of accepted offers. The largest US cryptocurrency exchange cited market conditions and ongoing business “prioritization efforts” for the decision in a blog post Thursday. Bitcoin has tumbled more than 55% from its record high in November, while other so-called altcoins have fallen even more as investors reevaluate the sector while central banks pull back on Covid-era stimulus.
/jlne.ws/3NOTWGX

Citigroup’s Fat-Finger Trade Seen Costing Bank More Than $50 Million
Sridhar Natarajan, Jenny Surane and Swetha Gopinath – Bloomberg
Citigroup Inc. may record losses of at least $50 million following a London staffer’s fat-finger trade that caused a flash crash in European stocks last month, according to people familiar with the matter. The bank is still tallying losses from the mistaken trade and the final figure could balloon higher, one of the people said, asking not to be identified discussing a private matter. A trader in the firm’s Delta One trading unit in London was working from home during a bank holiday on May 2 when the person incorrectly added an extra zero to a trade early in European market hours, said the people.
/jlne.ws/3Ng60Bc

CBOE Completes Acquisition Of Canadian Securities Exchange NEO; NEO Exchange is a Toronto-based Canadian stock exchange operator that is fully operational since 2015.
Finance Feeds
Cboe Global Markets has completed the acquisition of NEO Exchange, a fully registered Canadian securities exchange with a diverse product and services set ranging from corporate listings to cash equities trading and a non-listed securities distribution platform (NEO Connect).
/jlne.ws/3GLXZS0

LUNA blowup underscores need for ‘clear and holistic’ regulation: CFTC commissioner
Brian Cheung – Yahoo! Finance
Regulators are telling Congress the collapse of Terra’s stablecoin project illustrates the need for more clarity from Capitol Hill. In May, billions of dollars evaporated from TerraUSD (UST), an “algorithmic stablecoin” that sought to peg its value to the U.S. dollar using the reserves of a sister token known as LUNA. Caroline Pham, who joined the Commodity Futures Trading Commission as commissioner in April, told Yahoo Finance regulators “failed” to protect the retail public due to a lack of clarity over the jurisdiction of the various federal financial regulators.
/jlne.ws/3GIIHh3

‘Some will be purged’: Here’s where the next big round of Wall Street layoffs is coming
Reed Alexander and Britney Nguyen – Business Insider
Less than six months ago, investment bankers were celebrating their record bonus year by splurging on yachts, wagyu-steak dinners, and matching Porsches. Now, some are just hoping they can hang on to their jobs. “Right now, everybody’s worried about a recession,” Brennan Hawken, an equity-research analyst at UBS who covers large-cap banks, told Insider in a recent interview. “If you end up in a deteriorating macro environment, then they won’t just use attrition — there will be explicit layoffs,” he added, referring to big banks.
/jlne.ws/3GMcBkz

8 Wall Street quants who quit lucrative trading careers at Citadel, Jump Trading, and Renaissance Technologies to build startups instead; Like Jeff Bezos did in 1994, these ‘quantreprenuers’ ditched Wall Street to apply their skills to real-life problems — from reducing greenhouse gases to developing safer eye surgery.
Alex Morrell – Business Insider
The year was 1994, and D.E. Shaw, one of the earliest hedge funds to specialize in computerized, algorithmic trading, was about to lose a key employee. A headhunter had placed him at the fund only four years prior, but he’d made a quick impression on founder David Shaw and risen to senior vice president. Walking through Central Park, Shaw tried to convince him to stay — he’d be giving up millions in compensation and a significant role at the firm.
/jlne.ws/3NO53jt

Crypto firms say thousands of digital currencies will collapse, compare market to early dotcom days
Arjun Kharpal – CNBC
Several cryptocurrency industry players have told CNBC that thousands of digital tokens are likely to collapse while the number of blockchains in existence will also fall over the coming years. There are more than 19,000 cryptocurrencies in existence and dozens of blockchain platforms that exist. A blockchain platform, such as Ethereum, is the underlying technology that many of these different cryptocurrencies are built upon.
/jlne.ws/3zgeUuu

‘Apocalyptic skies’: the dust storms devastating Gulf states and Syria; Rising frequency of storms due to climate crisis is causing more loss of life and more destruction, say experts
Richa Syal – The Guardian
Blankets of thick gritty haze and ominous orange skies since early April have sent thousands to hospitals and resulted in at least four deaths in Iraq and in Syria. The apocalyptic scenes have affected everyone. Hospitals in Syria have been on standby for residents unable to breathe. Iraq forced schools and offices to close in some provinces, and on 16 May declared a state of emergency. In the Gulf states, flights were halted in Kuwait, and both Saudi Arabia and the United Arab Emirates issued dust storm alerts.
/jlne.ws/3GLNlut

A changing mindset: The new normal for blockchain use cases; As arguably the authoritative voice on DLT in our industry, Yuval Rooz, chief executive officer and co-founder, Digital Asset, shares implementation best practices for a sector which grasps the concept and benefits of blockchain, but still needs to understand how to best put it to use.
Jon Watkins – Global Custodian
For all the talk of the transformative possibilities of distributed ledger technology (DLT), there has been relatively little discussion of leading practices for implementing it. To put it another way, more stakeholders in financial services get the why of blockchain, but fewer people know how to best put it to use.
/jlne.ws/3NiF1Vw

ESG Is Alive and Well. Just Call It Protectionism; Even as a market backlash against socially responsible investing grows, it has let the genie out of the bottle — giving government a potentially dangerous blueprint to unpick globalization.
John Authers – Bloomberg
ESG is in trouble. For proof, look no further than the Bloomberg Opinion headline “The Virtue Bubble Is About to Burst. Good Riddance.” that appeared earlier this week over an excellent piece by Allison Schrager; or to the comments in an interview with David Westin on Bloomberg TV by Larry Fink, CEO of BlackRock Inc. and the world’s chief ESG-vangelist, that he doesn’t want the private sector to be “environmental police”; or the news that the head of Deutsche Bank AG’s DWS fund management unit had been toppled after a police raid looking into alleged “greenwashing”; or the suspension of the head of responsible investing at HSBC Asset Management, my old colleague Stuart Kirk, after he spoke not wisely but too well about how “climate risk is not a risk we need to worry about”; or the furious reaction of Elon Musk to the news that S&P Global no longer rated his Tesla Inc. as an ESG stock.
/jlne.ws/3Q2DjJF

CBDCs now hold wholesale appeal for central bankers; The slow nature of current cross-border payments systems creates an opportunity for blockchain technology
Gillian Tett – FT
Elites rarely welcome upstarts. So when financiers and policymakers recently gathered in Davos for the World Economic Forum meeting, crypto schadenfreude was in the mountain air. Earlier this year, when crypto was booming, numerous digital assets companies booked space on the Davos promenade to advertise their power and brands. But just beforehand, the terra and luna stablecoins collapsed, and the price of tokens such as bitcoin tumbled.
/jlne.ws/3xdS9Wk

We need new financial pipes; Slowing collateral velocity hints that bank balance sheet are constrained
Manmohan Singh – FT
Every year around April I go through the annual reports of the big banks. It’s a fascinating exercise. But the real gold nuggets are often found in the footnotes, which most analysts never read.
/jlne.ws/3xdj30v

Chinese ex-securities regulator handed suspended death sentence; Tong Daochi is the latest high-ranking official ensnared in Xi Jinping’s anti-corruption drive
Edward White – FT
Tong Daochi, a former senior Chinese official who has worked at the World Bank, has been given a suspended death sentence for bribery, becoming the latest high-ranking Communist party member punished under President Xi Jinping’s anti-corruption campaign.
/jlne.ws/3Q0XlEo

Greenwashing is tempting for CEOs who tell stories; Meeting financial targets is tedious but promising to save the world sounds heroic
John Gapper – FT
Chief executives have many responsibilities, but one of the most valuable is persuading investors and others that their companies are performing well financially and doing good for the world. If cracks appear in these stories, trouble follows.
/jlne.ws/3GKNJcG

H1 2022: The TRADE’s most read stories in Europe; The TRADE highlights the top five most read stories across Europe in H1 2022, including news from DTCC, Euroclear and Clearstream, LSEG, Virtu and BNP Paribas.
Wesley Bray – The Trade
DTCC names new CEO as Michael Bodson announces retirement
In April, The Depository Trust & Clearing Corporation (DTCC) named Francis (Frank) La Salla as its new president and CEO with its current chief Michael Bodson set to retire. La Salla was chief executive officer of BNY Mellon’s Issuer Services business and a member of the BNY Mellon Executive Committee.
/jlne.ws/3NkSbS0

Are periodics set to overtake dark venues in market share? Speaking to The TRADE, Liquidnet’s head of execution and quantitative services for EMEA, Gareth Exton, said regulatory changes are only set to speed up adoption of periodic auctions.
Annabel Smith – The Trade
Periodic auctions have continued to gain market share in Europe over the last few years and now account for 4% of market share, research by Liquidnet has found. Since the implementation of the double volume caps under Mifid II in 2018, periodic auctions volumes have continued to rise and with new proposed changes to the DVCs and the reference price waiver (RPW) likely to be implemented this year it leaves the door open for these to grow further still.
/jlne.ws/3916HzB

Ukraine Invasion

Global Food Prices Stay Near Record as Ukraine War Upends Trade; Record fertilizer, energy costs are keeping food prices high; UN gauge of global food costs edged down 0.6% in May
Aine Quinn – Bloomberg
Global food prices stayed near a record as Russia’s invasion of Ukraine disrupted trade, fueling hunger and worsening a cost-of-living crisis. Russia’s invasion has sharply reduced exports from Ukraine, one of the world’s biggest grain and vegetable oil shippers. The blockade of key Black Sea ports has exacerbated supply-chain turmoil, sending prices soaring and prompting the United Nations to warn that food shortages may spur millions of people to migrate.
/jlne.ws/3GJHm9L

‘Most Clever Oligarch’ Severed His $37 Billion Fortune From Russian Roots; The Ukraine-born British-American quietly diversified his wealth in areas far removed from where his billions were minted.
Devon Pendleton – Bloomberg
Len Blavatnik calls himself foremost a self-made billionaire. The Ukraine-born British-American, by his own telling, is also a media mogul, a tech titan, a pioneering real estate investor and an industrialist. But above all, what Blavatnik has always strived to make clear: He has no connections to Vladimir Putin or Russian politics, and he absolutely should not be described as an oligarch. He’s not even Russian.
/jlne.ws/3PYnwvo

Exchanges, OTC and Clearing

ASX names Helen Lofthouse as new managing director and CEO
Business News Australia
ASX names Helen Lofthouse as new managing director and CEO; Newly appointed ASX CEO and managing director Helen Lofthouse.
Share to EmailShare to FacebookShare to TwitterShare to LinkedIn
Nearly four months after the retirement of ASX (ASX: ASX) CEO Dominic Stevens was announced, the stock exchange has named its new CEO, promoting Helen Lofthouse into the top job. Lofthouse – the exchange’s first female CEO – is currently the company’s group executive for markets and has been working at the ASX for almost seven years.
/jlne.ws/3xdo3SU

ASX Names Helen Lofthouse as New CEO
Alice Uribe – MarketsWatch
ASX Ltd. has appointed Helen Lofthouse as its next chief executive, replacing Dominic Stevens, who intends to retire. Australia’s dominant securities exchange said Ms. Lofthouse would be promoted from her current role as Group Executive, Markets. She joined the company in 2015. “Given the high caliber of experienced candidates attracted to the position, we are delighted that the outstanding choice to lead ASX as its new CEO comes from within the organization,” said Chairman Damian Roche. “It is testament to Helen’s qualities and highlights the strength within ASX’s executive ranks. It also reflects the board’s confidence in the strategy and performance of the company in recent years.”
/jlne.ws/3NUbvoS

May 2022 figures at Eurex
Eurex
Interest rate derivatives showing strongest growth among listed derivatives (up 21 percent); Repo volumes increasing by 68 percent y-o-y; Notional outstanding in long-dated OTC interest rate swaps up 25 percent
/bit.ly/3x4OWY2

Intercontinental Exchange Reports May 2022 Statistics
Intercontinental Exchange
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of data, technology and market infrastructure, today reported May 2022 trading volume and related revenue statistics, which can be viewed on the company’s investor relations website at https://ir.theice.com/ir-resources/supplemental-information in the Monthly Statistics Tracking spreadsheet.
/jlne.ws/3zgelAS

Statistics on Annual General Shareholders Meeting Dates for Companies with Fiscal Years Ended March 2022
JPX
Based on “scheduled dates for annual general shareholders meetings” indicated in earnings reports and the timely disclosure related to schedules for annual general shareholders meetings, TSE has compiled results of “Annual General Shareholders Meeting Scheduled Dates” gathered from companies with their fiscal years ended March 2022 (*1), as noted in the attachment.
/bit.ly/3mh2jiA

Daily Price Limits to be Broadened : 1 issue
JPX
The following issue has fallen under the following (1) or (2) for two consecutive business days. As such, TSE wishes to bring to your attention that it will broaden only the upper (or lower) daily price limit on the next business day (June 6) as follows.
/bit.ly/3tdg7Pi

Regular Constituent Changes in Strategy and Thematic Indices
KRX
There will be regular constituent changes in indices, effective from June 10, 2022.
/bit.ly/3zghKPT

Regular Adjustment of CAP Factor in June, 2022
KRX
Regular Adjustment of CAP Factor will be effective in June 10th, 2022.
/bit.ly/3NQLoiL

Moscow Exchange summed up trading results in May 2022
MOEX
The total trading volume on the markets of the Moscow Exchange in May 2022 increased by 5.2% and amounted to 78.2 trillion rubles (74.3 trillion rubles in May 2021).
/bit.ly/3x8aQtk

Nasdaq May 2022 Volumes
Nasdaq
Nasdaq (Nasdaq: NDAQ) today reported monthly volumes for May 2022 on its investor relations website. A data sheet showing the monthly volumes and quarterly capture rates can be found at: http://ir.nasdaq.com/financials/volume-statistics.
/bit.ly/3PSquSl

Big Month for Capital Raises & Dairy
NZX
Air New Zealand raises $1.2 billion in equity; Vital Healthcare equity raise of $200 million; Mercury issues $250 million of subordinated capital bonds; Channel Infrastructure issues $100 million of senior bonds; Another standout month for Dairy
/bit.ly/3xdRynw

Infographic: Market update: May 2022
NZX
/bit.ly/3xcu5TM

NYSE Pillar Options: June 11th Testing Opportunity Reminder
NYSE
On Saturday, June 11, 2022, NYSE Arca Options will offer the next end-to-end weekend Production test opportunity in preparation for its migration to NYSE Pillar, which begins on July 11th. In addition to June 11th, one final end-to-end testing opportunity will also be offered on June 25th.
/bit.ly/3xgSVlH

Toronto Stock Exchange Announces Launch of S&P/TSX Battery Metals Index
TSX to host market open ceremony on June 7 to celebrate the launch
TMX
Toronto Stock Exchange (TSX) announced today the launch of the S&P/TSX Battery Metals Index. The new index measures the performance of TSX and TSX Venture Exchange listed companies that are focused on the production and exploration of select metals, which are significant inputs in the decarbonization of the transportation sector.
/bit.ly/3zd4yeL

Fintech

Ex-Merrill Banker’s Broker App Boosts Valuation to $5.4 Billion; Trade Republic raised about 250 million euros in latest round; New funding was led by Ontario Teachers’ Pension Plan Board
Stephan Kahl and Ivan Levingston – Bloomberg
Berlin-based broker app Trade Republic Bank GmbH, co-founded by former Merrill Lynch banker Christian Hecker, raised about 250 million euros ($268 million) in its latest funding round, boosting its valuation despite difficult market conditions. The round, led by Ontario Teachers’ Pension Plan Board, was an extension of an earlier one and raised the company’s valuation to 5 billion euros from 4.4 billion euros, Hecker told Bloomberg in an interview.
/jlne.ws/3xeq9lD

Cybersecurity

Russian Hacking Gang Evil Corp Shifts Its Extortion Strategy After Sanctions; Alleged mastermind has ties to Russia intelligence, US says; Cybercrime victims that pay ransom fees may violate sanctions
Margi Murphy – Bloomberg
A notorious Russian cybercrime group has updated its attack methods in response to sanctions that prohibit US companies from paying it a ransom, according to cybersecurity researchers. The security firm Mandiant said Thursday it believes that the Evil Corp gang is now using a well-known ransomware tool named Lockbit. Evil Corp has shifted to using Lockbit, a form of ransomware used by numerous cybercrime groups, rather than its own brand of malicious software to hide evidence of the gang’s involvement so that compromised organizations are more likely to pay an extortion fee, researchers said.
/jlne.ws/3tcMgXe

Cybersecurity And Branding: Building Brand Trust In A World Of Cyber Threats
Dhiraj Kumar – Forbes
If you type “key elements of a brand” into a search engine, the first page of results will have a dozen different answers. One trait that rarely shows up is “security,” but it probably should be among the top results for marketers who consider their brand to be an integral asset to their company.
/jlne.ws/3M9ICnH

China’s draft cybersecurity rules pose risks for financial firms, lobby group warns
Selena Li – Reuters
China’s proposed cybersecurity rules for financial firms could pose risks to operations of western companies by making their data vulnerable to hacking, among other things, a leading lobby group has said in a letter seen by Reuters.
The latest regulatory proposal comes at a time when a string of western investment banks and asset managers are expanding their presence in China, either by setting up wholly-owned units or by taking a bigger share in existing joint ventures.
/jlne.ws/3an1hio

Overcoming the Talent Shortage Within Cybersecurity
Jonathan Halstuch – InformationWeek
The talent shortage across cybersecurity is no secret. Among the myriad of challenges faced by IT departments today, hiring and retaining qualified cyber professionals remains a critical issue. The number of unfilled positions globally grew by 350% over the past eight years, reaching 3.5 million in 2021 according to data from CybersecurityVentures. That’s enough empty seats to fill 50 NFL stadiums.
/jlne.ws/38KsxqH

Cryptocurrencies

Japan Passes Stablecoin Bill That Enshrines Investor Protection
Taiga Uranaka and Yuki Hagiwara – Bloomberg
Japan became one of the first major economies to introduce a legal framework around stablecoins, the cryptocurrencies thrust into the global spotlight by last month’s collapse of the TerraUSD token. Japan’s parliament passed a bill on Friday that clarified the legal status of stablecoins, defining them essentially as digital money. Stablecoins must be linked to the yen or another legal tender and guarantee holders the right to redeem them at face value, according to the new law.
/jlne.ws/3mbgNko

Jump Report Shows Big Investors Exited Terra While Retail Bought; Large investors exit drove outflows, firm’s report finds; Terra’s backer publishes an account of stablecoin’s collapse
Muyao Shen – Bloomberg
Jump Crypto, a firm heavily involved in the defunct Terra blockchain, said that some large investors exited Terra-related positions as the TerraUSD (UST) stablecoin began to lose its peg, while small investors continued buying during the collapse. That detail was part of a report on Terra’s meltdown in early May that Jump Crypto, the crypto unit of Chicago-based Jump Trading, published on Thursday.
/jlne.ws/3tdSKoI

Luna crash sends a chill through decentralised finance market; Ether has lost a third of its value over the past month as confidence in DeFi hits ‘historically low levels’
Joshua Oliver, Scott Chipolina and Eva Szalay – FT
Traders are shifting away from investments linked to decentralised finance, in the latest sign of how the $40bn collapse of cryptocurrency luna has sent shockwaves through a key portion of the digital asset market. Ether, the world’s second-biggest crypto token and a proxy for sentiment on the $100bn DeFi market, has shed more than a third of its value over the past month. Its fall is significantly more severe than the 23 per cent decline for bitcoin, the oldest and most valuable digital token by market value.
/jlne.ws/3x92wJO

The UST mystery of Wallet A; Jump Trading points the finger at one big account as the main terra-luna culprit
Robin Wigglesworth – FT
Jump Trading’s crypto arm has not covered itself in glory in the terra-luna implosion. But the trading firm has now published an interesting postmortem into the debacle. If it is to be believed, the owner of the Ethereum address 0x8d47F08EBc5554504742f547eb721a43d4947D0A and Terra address terra1yl8l5dzz4jhnzzh6jxq6pdezd2z4qgmgrdt82k (‘Wallet A’) has some questions to answer. The whole report is interesting, but especially what it considers the first fatal blow, on May 7.
/jlne.ws/38M7eoJ

Politics

Crypto Bosses Flex Political Muscle With 5,200% Surge in US Giving; $26 million in donations in election cycle beats other sectors; Industry faces increased scrutiny from lawmakers, regulators
Allyson Versprille and Bill Allison – Bloomberg
Crypto executives are now pouring more money into US politics than many of America’s industrial stalwarts. Political donations from the sector surged to more than $26 million during 2021 and the first three months of this year. That influx of cash is outpacing spending by internet giants, drug makers and the defense industry — providing a fresh pool of financing for candidates heading into November’s congressional elections. The issue of regulating virtual tokens is not nearly as divisive as gun control or abortion rights. But the upcoming election will be highly consequential for crypto: Congress may weigh in with new laws for the asset class next year, and efforts by federal agencies to study consumer protections as well as a possible Federal Reserve-backed token are coming to a head.
/jlne.ws/3GM3uQz

Disputed Ballots in Pennsylvania Senate Race to Be Counted; Judge orders count pending a final resolution over ballots; Oz and McCormick have been locked in too-close-to-call contest
Mark Niquette – Bloomberg
A Pennsylvania judge ruled that counties must count mail-in and absentee ballots with no handwritten date on a return envelope and report the results, a victory for former Bridgewater Associates Chief Executive David McCormick in his too-close-to-call Republican US Senate race with celebrity physician Mehmet Oz. Commonwealth Court President Judge Renée Cohn Jubelirer directed the counties to count the disputed ballots and report one vote tally to the secretary of state that includes those ballots and another that does not, until a final decision is made about whether the ballots must be included in the final result.
/jlne.ws/3PVZktD

House Panel Examining Jared Kushner Over Saudi Investment in New Firm; The House Oversight Committee is seeking documents related to the $2 billion investment by a Saudi fund in the private equity firm started by Mr. Kushner, Donald Trump’s son-in-law and former adviser.
Kate Kelly and David D. Kirkpatrick – NY Times
A House committee said on Thursday that it was investigating whether Jared Kushner, former President Donald J. Trump’s son-in-law and former adviser, traded on his government position to land a $2 billion investment in his new private equity firm from a prominent Saudi Arabian wealth fund.
/jlne.ws/3NO2E8k

Who Owns Crypto in Congress? A look at the players in the US Congress who both own and potentially have oversight of crypto
Victoria Vergolina – Bloomberg
Today on Bloomberg Crypto: Cryptocurrencies are increasingly popular as investments – everyone from retail traders on Reddit to big institutional shops like Fidelity seems to have a crypto strategy. But what happens when the people investing in this asset class are also the ones in charge of regulating it?
/jlne.ws/3wYtwvq

Regulation

U.S. CFTC sues crypto exchange Gemini over 2017 statements
Hannah Lang – Reuters
The U.S. CFTC filed a federal lawsuit in New York on Tuesday accusing Gemini Trust Co of making false and misleading statements concerning a bitcoin futures contract the firm was pursuing in 2017.
/jlne.ws/3xdJD9M

Concurring Statement of Commissioner Caroline D. Pham Regarding the CFTC Request for Information on Climate-Related Financial Risk
CFTC
I respectfully concur with the publication of the Request for Information (RFI) on Climate-Related Financial Risk in the Federal Register because it is imperative that the public has an opportunity to provide input and share expertise.
/jlne.ws/3t9wrQY

Statement of Commissioner Kristin N. Johnson In Support of the CFTC’s Request for Information on Climate-Related Financial Risk
CFTC
According to data gathered by the National Oceanic and Atmospheric Administration’s (NOAA’s) National Centers for Environmental Information, since 1980, the United States has sustained more than three hundred weather and climate disasters, including droughts, floods, severe storms, cyclones, wildfires, and winter storm events that, in the aggregate, led to costs or damage exceeding more than $1 billion.[1] Notwithstanding our long history of navigating severe-weather related events, the increasing frequency, severity, and intensity as well as the rising costs of these events raise important questions and remarkable concerns.
/jlne.ws/3NQCr95

CFTC Releases Request for Information on Climate-Related Financial Risk
CFTC
The Commodity Futures Trading Commission today unanimously voted to release a Request for Information (RFI) to seek public comment on climate-related financial risk to better inform its understanding and oversight of climate-related financial risk as pertinent to the derivatives markets and underlying commodities markets.
/jlne.ws/3mdQ5Y4

Statement of CFTC Commissioner Christy Goldsmith Romero In Support of the Commission’s Request for Information on Climate-Related Financial Risk
CFTC
As expressed in President Biden’s Executive Order on Climate-Related Financial Risk, a whole-of-government approach will lead to greater understanding of the financial risks that climate change poses, and to the development of effective strategies to mitigate those risks. The CFTC should be at the forefront of financial regulatory efforts to understand, and identify actions to mitigate, climate-related financial risks that impact CFTC-regulated markets. This Request for Information reflects the Financial Stability Oversight Council’s recommendations for U.S. financial regulators, seeks climate-related data, and asks questions about the appropriate role of the CFTC in this emerging space.[1]
/jlne.ws/3Q1vT9u

Concurring Statement of Commissioner Summer K. Mersinger Regarding Request for Information on Climate-Related Financial Risk
CFTC
For the purpose of engaging the public through this Request for Information (RFI), I concur because I will always support efforts to engage market participants, industry, and the general public in the policy-making process at the Commodity Futures Trading Commission (CFTC or Commission). While other agencies may take liberties with process in order to impose a “government-knows-best” approach, traditionally, the CFTC has not been that agency.
/jlne.ws/390T4Ar

Opening Statement of Chairman Rostin Behnam at the CFTC Voluntary Carbon Markets Convening, Washington, DC
CFTC
Good morning and welcome to the Voluntary Carbon Markets Convening. I want to thank Commissioners Johnson, Goldsmith Romero, Mersinger, and Pham for joining today’s meeting. I also want to thank and acknowledge the members of the Climate Risk Unit (CRU), our distinguished keynote speakers, moderators, and panelists. Finally, I want to extend my gratitude to David Gillers, the CFTC’s Chief of Staff and CRU Director, Abigail Knauff, a Special Counsel in my office and CRU Deputy, and all of the CRU staff for their work in initiating this Convening.
/jlne.ws/3m84eGj

TRACE Depository Institution Reporting Port Requests
FINRA
As announced by the Board of the Federal Reserve System in the Federal Register on October 28, 2021, FINRA will collect detailed data on depository institutions’ daily transactions of marketable U.S. Treasury securities and of the debt and MBS issued by U.S. federal government agencies including government-sponsored enterprises (agencies) via its Trade Reporting and Compliance Engine (TRACE).
/jlne.ws/3M58pgI

FINRA Appoints Michael Solomon Senior Vice President of Examinations
FINRA
FINRA announced today that it has appointed Michael Solomon as Senior Vice President of Examinations. Solomon will assume this role on June 6 and report to Greg Ruppert, Executive Vice President and Head of Member Supervision.
/jlne.ws/38KMQ7y

??FINRA Orders Merrill Lynch, Pierce, Fenner & Smith, Inc. to Pay $15.2 Million in Restitution
FINRA
FINRA announced today that it has ordered Merrill Lynch, Pierce, Fenner & Smith, Inc. to pay more than $15.2 million in restitution and interest to thousands of customers who purchased Class C mutual fund shares when Class A shares were available at substantially lower costs.
/jlne.ws/3x88dYu

SEC Charges Global Steel Pipe Manufacturer with Violating Foreign Corrupt Practices Act; Tenaris to pay $78 million to settle charges related to Brazilian bribery scheme
SEC
The Securities and Exchange Commission today announced that Tenaris, a Luxembourg-based global manufacturer and supplier of steel pipe products, will pay more than $78 million to resolve charges that it violated the Foreign Corrupt Practices Act (FCPA) in connection with a bribery scheme involving its Brazilian subsidiary.
/jlne.ws/38ZNChb

SEC Charges Louisiana Town and Former Mayor with Fraud in Two Municipal Bond Deals
Town’s Municipal Advisor and its Owner also charged
SEC
The Securities and Exchange Commission today charged the town of Sterlington, Louisiana and its former mayor, Vern A. Breland, as well as the town’s unregistered municipal advisor, Twin Spires Financial LLC, and its owner, Aaron B. Fletcher, with misleading investors in the sale of $5.8 million in municipal bonds across two offerings in 2017 and 2018.
/jlne.ws/3teFoZd

SEC Charges Former Cco of Investment Adviser Who Misappropriated Funds
SEC
The Securities and Exchange Commission today announced charges against Jennifer Campbell, the former Chief Compliance Officer of a previously registered investment adviser, in connection with Campbell’s misappropriation of client funds between February 2019 and May 2021.
/jlne.ws/3NU8PHQ

SEC Obtains Final Judgments Against Crowdfunding Issuer and Its CEO
SEC
The Securities and Exchange Commission announced today that, on June 2, 2022, the Court in SEC v. Shumake, et. al, entered final judgments against crowdfunding issuer, 420 Real Estate, LLC, and its CEO, Willard Jackson.
/jlne.ws/3xdjw2Q

SEC Charges Former Executive of Network Infrastructure Company with Accounting Fraud
SEC
The Securities and Exchange Commission today charged Anthony Sirotka, the former Chief Administrative Officer and President of FTE Networks, Inc., a network infrastructure company formerly based in Naples, Florida, for his role in a multi-year accounting fraud. The alleged scheme conducted by Sirotka, along with two other senior executives previously charged by the Commission in July 2021, inflated the company’s revenues for certain periods by as much as 108 percent.
/jlne.ws/3MbGUlz

ASIC succeeds in application to appoint provisional liquidators to Ascent Investment and Coaching Pty Ltd
ASIC
Following an application by ASIC, the Federal Court has ordered the appointment of provisional liquidators to Ascent Investment and Coaching Pty Ltd (Ascent).
/jlne.ws/3aE4KJL

ASIC announces financial reporting changes for AFS licensees
ASIC
ASIC has today announced new financial reporting requirements for Australian financial services (AFS) licensees, following changes to the accounting standards. Under the new reporting requirements, AFS licensees’ financial reports must contain disclosures consistent with the financial reports of other for-profit entities, prepared under standards set by the Australian Accounting Standards Board (AASB).
/jlne.ws/3x4uV3U

ESMA Publishes Technical Standards To Suspend The Csdr Buy-in Regime
ESMA
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, today published a Final Report on amending the regulatory technical standards (RTS) on settlement discipline to postpone the application of the CSDR mandatory buy-in regime for three years.
/jlne.ws/3MbHkZb

ESAS Provide Clarifications On Key Areas Of The RTS Under SFDR
ESMA
The three European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) today published a statement providing clarifications on the draft regulatory technical standards (RTS) issued under the Sustainable Finance Disclosure Regulation (SFDR), which include the financial product disclosures under the Taxonomy Regulation.
/jlne.ws/3NQK1R9

Overview of the Japanese regional banks’ financial results for the fiscal year ended March 31, 2022
FSA Japan
The FSA has compiled the regional banks’ financial results for fiscal year ended March 31 , 2022, as attached below.
/jlne.ws/3Q1xcVW

Surrender of certificate of registration of Principal Mutual Fund (PMF)
SEBI
Principal Asset Management Private Limited (Principal AMC) had informed SEBI that they want to surrender the registration granted to Principal Mutual Fund by SEBI. PMF will continue to be liable for all liabilities/obligations (including monetary penalties, if any, for violations, if any, of the provisions of SEBI act and SEBI (Mutual Fund) Regulations, 1996 that have taken place before its surrender of certificate of registration.
/jlne.ws/3xdkWdG

Investing and Trading

Sheryl Sandberg’s Exit From Facebook Parent Meta Isn’t Spooking Wall Street; Tech giant’s longtime chief operating officer set to depart business that analysts say remains on firm footing
Dean Seal – WSJ
Sheryl Sandberg’s departure leaves a big hole at Facebook FB 5.42%? parent Meta Platforms Inc. but analysts say her work setting up the platform as a revenue-generating juggernaut provides a solid base for her successor. The longtime chief operating officer of the social media giant on Wednesday said she would step down later this year after 14 profitable and sometimes controversial years with the company. She will continue to serve on Meta’s board, while current chief growth officer Javier Olivan was named the next COO.
/jlne.ws/3td65NQ

Is ‘Greedflation’ Rewriting Economics, or Do Old Rules Still Apply? Economists and politicians are debating whether monopolistic companies are fueling inflation in ways that confound longstanding theory.
Lydia DePillis – NY Times
There are few good things about living through a period with the highest inflation in four decades, but here’s one: It’s a chance to re-examine what happens in an economy that’s gone haywire. Since prices started to escalate a year ago, politicians and economists have seized on inflation to tell their preferred story about what went wrong, and what policies would bring it back into line. Some say it’s very straightforward: Supply and demand, Economics 101. “There’s simply a lot of cash out there,” said Joe Brusuelas, chief economist for the accounting firm RSM US, referring to the several trillion dollars in pandemic stimulus that’s filtered into the economy since early 2020. “The competition for those goods is up and that’s sending prices up, whether we’re talking about getting a Nissan Sentra or a seat on an American Airlines flight.”
/jlne.ws/3zcns5v

Amundi warns that parts of private equity market resemble ‘Ponzi schemes’; PE funds are selling assets to each other in ‘circular’ fashion, asset manager’s investment chief says
Katie Martin – FT
Europe’s largest asset manager has likened parts of the private equity industry to a “Ponzi scheme” that will face a reckoning in the coming years. “Some parts of privae equity look like a pyramid scheme in a way,” Amundi Asset Management’s chief investment officer Vincent Mortier said in a presentation on Wednesday. “You know you can sell [assets] to another private equity firm for 20 or 30 times earnings. That’s why you can talk about a Ponzi. It’s a circular thing.”
/jlne.ws/3PYqeRA

Soaring costs squeeze farmers’ returns in North American grain belt; Fertiliser, diesel, herbicides and other inputs offset revenue from higher food prices
Myles McCormick and Derek Brower – FT
Bryan Perkins, whose family has farmed a patch of the Canadian prairie for more than a century, has never seen his costs rise like they have in recent months. The day-to-day cost of running his operation was already escalating quickly coming into 2022 amid rampant inflation and supply chain bottlenecks: fertiliser, diesel, electricity and freight were all marching higher.
/jlne.ws/3xbvOsD

Gas traders rush to secure LNG tankers; Ship rates soar as sanctions on Russia prompt reshaping of global energy flows
Harry Dempsey – FT
The world’s largest gas traders are scrambling to secure liquefied natural gas tankers ahead of winter after sanctions on Russia following its invasion of Ukraine triggered a reshaping of global energy flows. LNG shipowners and brokers say an unusually early annual rush is under way for the likes of the UK’s Shell, France’s TotalEnergies and China’s Unipec to secure enough shipping capacity to transport the superchilled fuel during the peak winter demand season.
/jlne.ws/3x7VmWo

Trouble ahead as the world food crisis starts to bite; Instead of focusing on domestic yields, too many governments have sought to placate restless populations with imports
David Pilling – FT
Once again, it is the world’s poor who risk becoming collateral damage. As war thunders on in Ukraine, the most deprived people in the Middle East, central Asia and much of Africa will get caught in the crossfire as the price of food escalates and its availability dwindles.
/jlne.ws/3NVeBsL

Environmental, Social and Corporate Governance

Morningstar Cuts Ties to Human Rights Radar Due to Bias Concerns; Decision follows pressure from organizations including JLens; Law firm finds instances of ‘inflammatory language’ being used
Tim Quinson – Bloomberg
Morningstar Inc. has cut its ties to a research product that provides information on issuers involved in regions where human rights violations allegedly occur. The decision was made because Human Rights Radar, which Morningstar picked up in its acquisition of Sustainalytics, exhibited “bias in its outcomes by overrepresenting firms linked to the Israeli-Palestinian conflict,” according to a letter from Executive Chairman Joe Mansueto and Chief Executive Officer Kunal Kapoor.
/jlne.ws/3NhwPEW

ESG exposed in a world of changing priorities; Investors ask hard questions of the market trend, but responsible investing will survive
Gillian Tett – FT
Until recently Anne Simpson was considered an evangelical advocate for the cause of environmental, social and governance investing (ESG). This spring, however, the former head of sustainability at the Calpers pension fund, who now runs responsible investing at Franklin Templeton, made a surprising declaration. “I think it’s time for RIP ESG,” she told a conference in New York.
/jlne.ws/3m9T7fV

BlackRock, Vanguard, State Street Forced Into the Abortion Debate; Activist investors in Walmart, Lowe’s and the TJ Maxx owner are putting pressure on asset managers to confront the issue
Angel Au-Yeung – WSJ
Shareholders have placed abortion-rights proposals on the proxies at three big retailers this spring: Walmart Inc. WMT 1.64% ; Lowe’s Cos.; and TJX Cos., the owner of off-price chains including TJ Maxx. Many more could follow next year. That development is pressuring asset managers such as BlackRock Inc., Vanguard Group and State Street Global Advisors to confront the issue because they hold significant stakes in those and other companies on behalf of millions of other investors.
/jlne.ws/3NOD1V1

A call to action for the financial sector (00:35:09)
Al Gore – Green Swan 2022
In this special address, Nobel laureate Al Gore delivers a stark call for the financial sector to act ethically and forcefully to transition away from carbon, and provides direction on how to achieve this.
/jlne.ws/3x2kCgJ

Blackstone Veteran Gives Loyola $100 Million for Diversity; Alumnus John Schreiber helped run PE giant’s real estate arm; Will fund scholarships, support for underrepresented students
Alex Wittenberg – Bloomberg
Former Blackstone Inc. real estate executive John Schreiber and his wife, Kathleen, are giving a record $100 million to Loyola University Chicago to help fund scholarships for ethnically and racially diverse students. The donation is the largest individual gift in the school’s history, Loyola said in a statement Thursday. It will help pay for tuition, room and board, and support services for minority, first-generation and other students who face challenges completing four-year degrees.
/jlne.ws/3xe3dTk

Frank Loughlin: Starting the sustainability conversation; Global co-head of equity trading at AllianceBernstein, Frank Loughlin, talks to The TRADE about the challenges of translating sustainable trading practices onto the desk, and about the importance of a truly holistic approach to enable high level performance.
Laurie McAughtry – The Trade
How does ESG relate to the trading desk?
The industry is currently in the early stages of what will, no doubt, be an iterative process to answer that very question – how does ESG relate to trading and the execution ecosystem? Topics such as the climate impact of trading technology and infrastructure, the use of AI in trading strategies, the sustainability of our trading partners and technology vendors, the diversity of our own teams and the teams we partner with, along with many other significant topics, will form the basis for this important and ongoing conversation.
/jlne.ws/3NTk0AC

Institutions

Bank of America’s Merrill Lynch to pay $15.2 mln to overcharged mutual fund customers
Jonathan Stempel – Reuters
Bank of America Corp’s Merrill Lynch unit will pay more than $15.2 million to thousands of customers who it steered automatically into buying costlier mutual fund shares than they were eligible for, a U.S. regulator said on Thursday. The Financial Industry Regulatory Authority said Merrill did not admit or deny wrongdoing in agreeing to the payout, which includes restitution and interest. No fine was imposed. FINRA said Merrill had maintained an automated system designed to limit customers’ purchases of Class C mutual fund shares when cheaper Class A shares were available.
/jlne.ws/3xamHsb

Tiger Global’s Hedge Fund Lost 52% for the Year Through May; Firm cuts management fee in public funds by 0.5% as losses mount
Juliet Chung – WSJ
Tiger Global Management’s brutal year is getting even tougher, with losses at the firm’s high-profile hedge fund ballooning to 52% through May. Tiger reported the drop, which extends a 44% loss recorded through April, in a note to its investors Thursday. The firm’s long-only fund lost 20.6% in May, bringing its losses for the year to 61.7%. The losses prompted Tiger to cut its management fee by 0.5% through December 2023 in both its hedge fund and long-only fund.
/jlne.ws/394n6Df

FTSE SET Index Series June 2022 semi-annual review
FTSE Russell
FTSE Russell announces that there will be one change to the constituents of the FTSE SET Large-Cap Index, following the June 2022 semi-annual review. Jasmine Technology Solution has been added to the FTSE SET Large-Cap Index and BTS Group Holdings will be removed from the index. The index series is reviewed semi-annually in accordance with the index ground rules.
/jlne.ws/3mdNTjA

Allianz Takes $430 Million Profit Hit in Retreat from Russia; Insurer sells majority in Russian operations to Interholding; Company earlier stopped insuring new business in the country
Stephan Kahl – Bloomberg
Allianz SE will take a hit of about 400 million euros ($430 million) to profit from the sale of a majority in its Russian operations, part of a retreat from the country in the wake of the war in Ukraine. Allianz, which is selling the stake to Interholding LLC, will own 49.9% in the combined company after the transaction, the Munich-based company said in a statement on Friday. The deal won’t impact it’s solvency capitalization and cash position.
/jlne.ws/3ma0xzN

What Jamie Dimon Learned From Alan Greenspan; Sometimes a little hyperbole is appropriate. The JPMorgan chief is right to hoist the warning flag as the global picture darkens.
Daniel Moss – Bloomberg
Look past the fracas about Jamie Dimon’s shifting prognosis for the US economy — from cautious optimism a week ago to warning of an imminent “hurricane.” What matters is that a titan of American finance is prepared to say what too few have over recent decades: Domestic conditions can look pretty good, until they’re quickly undercut by adverse events abroad. (And this isn’t the first time Russia has been a major player.)
/jlne.ws/3Mapgi1

Tradeweb Sets New ADV Records in Certain Asset Classes as it Reports Total Volume for May of $25.0 Trillion and ADV of $1.19 Trillion
Tradeweb
Total trading volume for May 2022 was $25.0 trillion (tn) and average daily volume (ADV) for the month was $1.19tn, an increase of 21.4 percent (%) year-over-year (YoY). Average daily trades for the month totaled 100,901.
In May, Tradeweb set new ADV records in fully electronic U.S. High Grade credit, Repurchase Agreements and municipal bond trading.
/jlne.ws/2TwpBEI

Daniel Leon: Collaboration is key; The TRADE speaks to Daniel Leon, global head of trading, treasury management and global solutions at HSBC Asset Management, to learn how collaboration and communication steered the firm through the unique challenges of the Covid-19 crisis.
Laurie McAughtry – The Trade
How has HSBC fostered team collaboration in the hybrid working environment?
My experience is that the collaboration came very naturally when the Covid crisis happened. The move into remote working happened so fast that we all felt we had to go the extra mile to share, collaborate and adapt to the new environment.
/jlne.ws/3anpQMr

Wellness Exchange

How fast omicron’s BA.2 variant is spreading around the world; BA.2 has overtaken the original omicron version of the coronavirus that quickly dominated the world this winter
Dan Keating, Madison Dong and Youjin Shin – The Washington Post
In a pattern the world has seen twice over the past year, a new version of the coronavirus is sweeping across the globe. Omicron’s BA.2 subvariant is already by far the world’s dominant form of the coronavirus, as recorded in the GISAID international repository of coronavirus genetic sequences analyzed by The Washington Post. The worldwide chart of coronavirus variants below shows omicron’s dark red BA.2 subvariant as a small share during December and January, when the original version of omicron overtook the delta variant. BA.2 began squeezing out the original omicron in February and March as overall case counts were declining.
/jlne.ws/3aj4kIv

India Reports Biggest Jump in Covid Cases in Three Months; It was the highest one-day rise in infections since March 11; Mumbai saw 231% surge in hospitalizations in May over April
Archana Chaudhary – Bloomberg
India reported 4,041 new Covid-19 infections on Friday — the highest single-day jump since March 11 — stoking fears of another wave building up in some parts of the densely-populated country that has eased almost all restrictions.
/jlne.ws/3ma46WL

America still needs more COVID treatments
Caitlin Owens – Axios
America’s COVID treatment arsenal is still dangerously understocked, experts warn, and more government funding may be required to bring new drugs to market quickly enough. Between the lines: Having one reliable antiviral and one effective monoclonal antibody is far from ideal heading into the fall, but the federal government says it doesn’t have enough money to buy more of the existing therapeutics, let alone invest in new ones.
/jlne.ws/3xfTfRJ

Regions

Sri Lanka Can’t Use $1.5 Billion China Swap on IMF Concerns
Anusha Ondaatjie – Bloomberg
Bankrupt Sri Lanka can’t tap a $1.5 billion credit line from China as the Chinese are concerned the International Monetary Fund may force delays in repayment. “There is a condition in relation to the months of import cover that we need to have in order to be able to draw on that money,” Indrajit Coomaraswamy, who is advising the Sri Lankan government, said at an event organized by the central bank Thursday. It’s difficult for the Chinese to waive off the condition “because this is a three-year swap, it might be termed a loan and there may be pressure from IMF and others to include it in the stock of debt that we reschedule and therefore clearly that would be a disadvantage to the Chinese,” he said.
/jlne.ws/3mbS5Ag

Germany plans 5 bln-euro aid package for energy-intensive firms
Reuters
The German government is planning to support energy-intensive companies with a 5 billion-euro aid package, a German Economy Ministry spokesperson said on Friday.
/jlne.ws/3axefKx

Turkey Targets Lira Short Selling by Focusing on Niche Bonds
Beril Akman and Kerim Karakaya – Bloomberg
Turkey is planning to restrict purchases by domestic investors of new lira bonds sold by multinational lenders, the latest effort to curb short selling of the local currency by limiting the supply of liquidity in the offshore market.
/jlne.ws/3M9DLCZ

Egypt Says It’s in Talks With India on a Wheat-for-Goods Deal
Abdel Latif Wahba – Bloomberg
Egypt is in discussions to import wheat from India in a deal that may include the export of products such as fertilizers in return, according to Egypt’s Supply Minister, Aly El-Moselhy. In an interview in Sharm El-Sheikh on Thursday, Moselhy said he met with the Indian ambassador to Egypt in Cairo on Wednesday to discuss the potential swap agreement to secure 500,000 tons of wheat, through various shipments.
/jlne.ws/3xcELSm

Bird Flu Will Hit Turkey Supplies for Jennie-O Turkey This Summer; Sales volumes will decline about 30% in the second half: CFO; Parent Hormel narrowed its earnings forecast for the full year
Eleanor Song – Bloomberg
Bird flu is slamming the US turkey market just in time for burger season. Starting in the third quarter, there will be “large supply gaps” for Jennie-O branded turkey products, parent company Hormel Foods Corp. warned Thursday as it reported second-quarter results. The shortages anticipated in the coming months come as one of the worst-ever avian influenza outbreaks wipes out flocks across the US Midwest. “Our Jennie-O Turkey Store team is facing an uncertain period ahead,” James Snee, Hormel’s chief executive officer, said in a statement. Shares fell as much as 6.5%, hitting the lowest intraday price since December.
/jlne.ws/3NhxhD8

Miscellaneous

Brrr! Air-Conditioned Offices Give Chilly Reception to Returning Workers; Employers beware: People who once put up with thermostats set to deep freeze now want the kind of climate control they had working from home
Julie Wernau – WSJ
Public-health nurse Becky Graham brought a suitcase of winter clothes from Minnesota to a springtime conference in Atlanta where it was 80 degrees. It wasn’t a crazy idea. Ms. Graham was trying to prepare for one of the worst excesses of modern life—meeting rooms air-conditioned to Arctic levels. “I have a tank top, a long-sleeved shirt and a sweatshirt on and jeans, and I’m still cold,” Ms. Graham said as she exited shivering from one session. She lent what layers she could spare to those who arrived ill-suited for the deep chill of conference rooms in Atlanta’s convention center. For two years, people who worked from home could fine-tune thermostats to their liking. As they head back to offices, many are lamenting the loss of control over their workday environment. Some, like Ms. Graham, especially dread summer’s usual meat-locker temperature settings.
/jlne.ws/3awJvJD

Price of UK pint up more than 70% since financial crisis; London pubs charging up to £8 with more rises to come as cost of beer ingredient barley jumps due to war in Ukraine
Alice Hancock – FT
The price of a pint in the UK has increased more than 70 per cent since the 2008 financial crash, hitting £8 for the first time in London as pubs struggle with spiralling inflation. The average price of a pint of beer has risen from £2.30 in 2008 to £3.95 this year, according to data from the industry tracker CGA, with pub companies threatening further price rises as the cost of barley to make beer spirals due to pressures resulting from the war in Ukraine.
/jlne.ws/38LtuiH

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