Hits & Takes
John Lothian & JLN Staff
This morning we have a video from The History of Financial Futures, an interview with William Knottenbelt about his career, which started in commodities and shifted to financial futures in the mid-1980s. Knottenbelt, who just left the CME Group, started at Czarnikow, a commodities firm, as an accountant, but quickly switched to the trading side. He eventually switched to NatWest and helped grow its financial futures business during a period of dynamic growth in futures. When the Royal Bank of Scotland bought NatWest, he became the global head of futures for RBS. It was from there, after RBS was saved by the government after the financial crisis of 2007-08, that he joined the CME Group.
We also have a podcast interview with TMX Chief Operating Officer Jay Rajarathinam, who spoke to JLN about TMX’s recent investment in VettaFi, which it describes as “a US-based, privately owned data, analytics, indexing, digital distribution, and thought leadership company.”
It is not surprising that with all the news of trouble Barry Silbert and Digital Currency Group (or DCG) are having that some outside parties would be interested in buying DCG’s CoinDesk subsidiary. The Wall Street Journal reports CoinDesk has received several inbound expressions of interest and offers for the DCG media arm for north of $200 million. That would be a handsome return for a company Silbert bought for $500,000 in 2016.
Also in the crypto world, the U.S. Department of the Treasury has made a bust that reinforces my original negative crypto worldview that crypto was created primarily as a more economical and efficient means to launder money. Hong Kong-based cryptocurrency exchange Bitzlato was designated under a section of the Patriot Act for allegedly laundering illicit funds for ransomware actors based in Russia, The Wall Street Journal Reported. In something that sounds like it is from a Marvel movie, Bitzlato allegedly exchanged $700 million with a darknet marketplace named Hydra Market, the U.S. Justice Department said. Hydra Market was shut down in April of 2022. I believe Captain America had something to do with shutting down Hydra.
Here is a quote from the remarks by Deputy Secretary of the Treasury Wally Adeyemo on Action Against Russian Illicit Finance:
“Because of its significant operations in, and connection to, Russia and Russian illicit finance, Bitzlato threatens U.S. national security, the integrity of the U.S. and international financial sectors, and businesses and institutions worldwide.”
The Federal Reserve has reported that “Chair Powell tested positive for COVID-19, is vaccinated, has mild symptoms, and is working remotely.”
Vikas Shah, a former managing director at Rosenblatt Securities, has joined 7Ridge as a managing director.
Gary DeWaal wants you to know that Katten Muchin Rosenman LLP will present its “Annual Financial Markets and Regulation Crystal Ball Event” at 3:30 p.m. (ET) on Thursday, January 19. For more information, go HERE.
Ray Salvatore has accepted a new position as the Director of Trading & Operations for Adalpha Asset Management.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
William Knottenbelt – The History of Financial Futures – Part One
William Knottenbelt said he likes to call himself a third generation commodity trader. Both his father and grandfather were commodities traders and had their own firms in Indonesia. Despite that background, Knottenbelt said he thought he wanted to be an accountant.
Investment in VettaFi Sets Up TMX to Grow Information Business in Canada and Globally
TMX Group recently invested in VettaFi, which it described as “a US-based, privately owned data, analytics, indexing, digital distribution, and thought leadership company,” and TMX Chief Operating Officer Jay Rajarathinam spoke with JLN about the investment and other happenings at the exchange group.
Crypto Media Outlet CoinDesk Taps Bankers for Potential Sale; Company has ‘received numerous inbound indications of interest,’ CEO Kevin Worth says
Lauren Thomas and Vicky Ge Huang – The Wall Street Journal
CoinDesk Inc., a cryptocurrency-focused media company, has retained investment bankers at Lazard Ltd. LAZ -0.03%decrease; red down pointing triangle to help it explore options including a partial or full sale, according to its chief executive officer. “Over the last few months, we have received numerous inbound indications of interest in CoinDesk,” CoinDesk CEO Kevin Worth said.
****** A bargain for something just north of $200 million.~JJL
How to Invest as a Debt Ceiling Crisis Looms; The risk of a federal debt ceiling breach later this year has increased. Steel yourself for trouble, our columnist writes. But remember: This, too, shall pass.
Jeff Sommer – The New York Times
Crises are always lurking in financial markets. I’m worrying about a possible recession, rising interest rates, rampant inflation and the continuing economic effects of the war in Ukraine and the Covid-19 pandemic, but I have been for months. Now, it’s time to add to that list the threat of a catastrophic breach of the federal debt ceiling, which could conceivably come to pass sometime this summer. Even now, with the odds of an eventual crisis clearly rising, it is difficult to accept that it might really happen.
****** I will be on Joan Esposito’s radio program this afternoon at 3:30 PM to talk about just this.~JJL
French Champagne Sales Rise to Record Euro 6 Billion as Exports Surge; Bottles shipped abroad in 2022 surpass sales on French market; Covid lockdowns dented industry by shutting down travel
Tara Patel – Bloomberg
Champagne sales topped Euro 6 billion ($6.5 billion) for the first time last year as exports outside France surged. Total shipments increased 1.6% to 326 million bottles, according to a statement Wednesday from the Comite Champagne business organization. Exports of the sparkling wine produced in the region east of Paris increased, while sales on the domestic market fell.
****** Champagne sales up as Party City goes bankrupt? What is wrong with this picture?~JJL
Bringing cake to office as harmful as passive smoking, says chair of Food Standards Agency
Niamh Lynch – Sky News
Professor Susan Jebb, the Food Standards Agency chairwoman, said workers should think twice before bringing unhealthy treats into the workplace which might tempt colleagues. She told The Times: “We all like to think we’re rational, intelligent, educated people who make informed choices the whole time, and we undervalue the impact of the environment.”
******* I don’t bring donuts to the office anymore mostly because I don’t have an office to go to anymore.~JJL
Supreme Court Poised to Reconsider Key Tenets of Online Speech; The cases could significantly affect the power and responsibilities of social media platforms.
David McCabe – The New York Times
For years, giant social networks like Facebook, Twitter and Instagram have operated under two crucial tenets. The first is that the platforms have the power to decide what content to keep online and what to take down, free from government oversight. The second is that the websites cannot be held legally responsible for most of what their users post online, shielding the companies from lawsuits over libelous speech, extremist content and real-world harm linked to their platforms.
****** Are you ready for things to get crazier on social media platforms?~JJL
The clowns of cryptoland haven’t given up; Making money out of failure is morally bankrupt
Jemima Kelly – Financial Times
You would be forgiven for thinking that, with Sam Bankman-Fried awaiting trial over the allegedly “epic” fraud at FTX, the collapse of a raft of crypto platforms and US regulators suing two major crypto firms for selling unregistered securities, the clowns of cryptoland might try to stay below the parapet for a while. But, sadly, you would be wrong.
******* This wins as the headline of the day.~JJL
Wednesday’s Top Three
Our top story Wednesday was The Wall Street Journal’s A Crypto Magnate Saw the Risks and Still Was Hammered. Second was Fortune’s A millennial founder who sold her company to JP Morgan for $175 million allegedly paid a college professor $18K to fabricate 4 million accounts. Their email exchange is a doozy, its second time as number two in the top three. Third was NPR’s 3 events that will determine the fate of cryptocurrencies.
27,134 pages; 242,364 edits
Crypto Platform Bitzlato Charged With Laundering More Than $700 Million of Illicit Money; Treasury Department also designates platform as a primary money-laundering concern, a rarely used sanction used mostly against banks
Mengqi Sun and Alexander Osipovich – The Wall Street Journal
U.S. authorities designated cryptocurrency exchange Bitzlato Ltd. as a primary money-laundering concern and charged its founder for allegedly facilitating money laundering for criminals. The Treasury Department designated Bitzlato under a section of the USA Patriot Act, a law used to combat money laundering and terrorist financing, for allegedly laundering illicit funds for ransomware actors based in Russia. This type of action, a rarely used so-called death-knell sanction that cuts off the entity from the U.S. financial system, has been used mainly in the past against banks and other financial institutions and in most cases has forced the institution to close.
The Era of Markets ended in 2019. What comes next? Davos decision makers are at a crossroads over which way the world is headed
Gillian Tett – Financial Times
Earlier this week at the Davos World Economic Forum, I dined with fellow attendees at the Hotel Schatzalp, a former sanatorium that featured in Thomas Mann’s novel The Magic Mountain. It felt oddly appropriate. In Mann’s 1924 work, life in a tuberculosis sanatorium reflects a profound sense of an outside world in flux. The political and economic structures that had dominated Europe in the 19th century had recently been decimated by the first world war. Nobody quite knew how to articulate the new era. Phrases such as The Roaring Twenties had yet to emerge and the Great Depression was still a few years away.
FTX Founder Gamed Markets, Crypto Rivals Say; Sam Bankman-Fried found ways to control the prices of digital coins to benefit his companies, FTX and Alameda, according to cryptocurrency investors.
Emily Flitter and David Yaffe-Bellany – The New York Times
In Sam Bankman-Fried’s quest to keep his cryptocurrency empire looking profitable, the disgraced founder of FTX often promoted newfangled digital currencies that crypto aficionados came to call “Samcoins.” Mr. Bankman-Fried wooed the developers of these new coins with names like Serum and Maps, insisting that they make their trading debuts on the FTX exchange. Then his hedge fund, Alameda Research, would buy some of these newly listed Samcoins to prop up their value, while Mr. Bankman-Fried used FTX’s influence in the crypto industry to drum up interest in those coins and persuade other investors to also buy significant amounts.
Binance Named Counterparty of Platform in Illegal Funds Case
Suvashree Ghosh and Olga Kharif – Bloomberg
Binance Holdings Ltd., the world’s largest crypto exchange, was named among the key counterparties to digital-asset platform Bitzlato, which has been accused of processing millions of dollars in illegal funds. Bitzlato’s Russian founder Anatoly Legkodymov was arrested Tuesday in Miami on charges alleging the masking of proceeds from illegal gambling and drug deals valued at more than $700 million.
Founder and Majority Owner of Cryptocurrency Exchange Charged with Processing Over $700 Million of Illicit Funds
Department of Justice
The founder and majority owner of a cryptocurrency exchange, Bitzlato Ltd. (Bitzlato), was arrested last night in Miami for his alleged operation of a money transmitting business that transported and transmitted illicit funds and that failed to meet U.S. regulatory safeguards, including anti-money laundering requirements. Anatoly Legkodymov, 40, a Russian national who resides in Shenzhen, People’s Republic of China, is scheduled to be arraigned this afternoon in the U.S. District Court for the Southern District of Florida. French authorities and the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) are taking concurrent enforcement actions.
Remarks by Deputy Secretary of the Treasury Wally Adeyemo on Action Against Russian Illicit Finance
U.S. Department of the Treasury
Today, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued an order identifying the virtual currency exchange Bitzlato Limited (Bitzlato) as a “primary money laundering concern” in connection with Russian illicit finance pursuant to section 9714(a) of the Combatting Russian Money Laundering Act, as amended.
What happens when the US hits the debt ceiling? Treasury to take ‘extraordinary measures’ to avoid default once $31.4tn borrowing limit is reached
Lauren Fedor and Colby Smith – Financial Times
The US Treasury will take “extraordinary measures” to meet its debt obligations as the US government is expected to hit its $31.4tn borrowing limit on Thursday. But economists say the reprieve can only last for a few months, setting the stage for a dramatic showdown between the Biden administration and lawmakers on Capitol Hill that risks plunging the US government into default.
Crypto broker Genesis prepares to file for bankruptcy as soon as this week
Nikou Asgari and Joshua Oliver – Financial Times
Crypto broker Genesis is preparing to file for bankruptcy as soon as this week, according to people familiar with the matter, as the company works towards a deal with creditors after months of wrangling. A filing would make Genesis the latest crypto casualty to follow the implosion of Sam Bankman-Fried’s FTX exchange, which has sent shockwaves through the digital asset industry.
Russian Citizen Accused of Running Cryptocurrency Exchange Used by Criminals; The charges were part of an intensifying effort by federal law enforcement agencies, in conjunction with European partners, to combat international cryptocurrency schemes and illegal transactions.
Glenn Thrush – The New York Times
A Russian citizen who ran a cryptocurrency exchange that federal prosecutors say transmitted at least $700 million in illicit funds has been arrested in Miami and charged with evading U.S. money-laundering safeguards, according to an indictment unsealed on Wednesday. The Russian citizen, Anatoly Legkodymov, 40, oversaw the exchange based in Hong Kong, Bitzlato, which knowingly enabled criminals “to profit from their wrongdoing, including ransomware and drug trafficking,” Kenneth A. Polite Jr., the assistant attorney general of the Justice Department’s criminal division, said during a news conference on Wednesday.
CoinDesk is looking at putting itself up for sale, as its owner suffers the fallout from the site’s own FTX bombshell scoop
George Glover – Business Insider
CoinDesk is exploring a potential sale after its owner Digital Currency Group was rocked by the turmoil in crypto markets in the wake of crypto exchange FTX’s implosion, according to media reports. The crypto-focused news site has hired $274 billion asset manager Lazard to advise it on a sale that would carve it out from CEO Barry Silbert’s under-fire DCG, the Wall Street Journal first reported Wednesday.
Illegal wash trading accounts for up to 70% of crypto volumes, finds study; A report from the US’ National Bureau of Economic Research finds that fabricated wash trading on unregulated crypto exchanges accounts for the lion’s share of reported volumes.
Laurie McAughtry – The Trade
Wash trading – the practice of creating artificially inflated trading volumes -gained traction (and headlines) with the rapid rise of electronic trading in the early 2010s, as algos and electronic trading programs became able to churn trades at unprecedented speeds. But cryptocurrency has opened up a whole new world of opportunity, which is having serious consequences on price transparency.
China’s Xi Jinping warns of Covid spread as millions travel for lunar new year; President says country entering ‘new phase’ of pandemic with focus turning to rural areas
Kai Waluszewski and Edward White – Financial Times
Xi Jinping has expressed concern about the spread of Covid-19 to rural China on the eve of the lunar new year, in the Chinese president’s most direct acknowledgment of the worsening health crisis since suddenly abandoning his zero-Covid strategy in early December. China’s lunar new year holiday marks the world’s biggest annual human migration. Officials have forecast that the country’s 1.4bn people will take 2bn trips to see family in the coming weeks – about two-thirds of pre-pandemic levels.
‘The Crocodile of Wall Street’ gets new tech job despite being accused of crypto laundering and under 24-hour house arrest
Orianna Rosa Royle – Fortune
Every January, LinkedIn is flooded with “New Year, new job” boasts. And it turns out, even an accused cryptocurrency thief on 24-hour house arrest can bag a new gig – giving hope to anyone still on the job hunt in the current recession. Take Heather Morgan. She has many credentials to her name including economist, tech entrepreneur, columnist, CEO, rapper-and accused launderer of stolen cryptocurrency.
Russian arrested in Miami on charges of illegally transmitting millions in cryptocurrency
Jay Weaver – Miami Herald
A Russian operator of a China-based cryptocurrency exchange with links to South Florida and other parts of the world appeared in federal court in Miami Wednesday on charges of running an unlicensed money transmitting business that is suspected of laundering hundreds of millions of dollars in drug trafficking and other criminal proceeds, federal authorities said.
NC man arrested in Ponzi scheme defrauded people in the Indian community, FBI says
The News & Observer
A former Chapel Hill transportation engineer was arrested Tuesday on 23 charges related to an investment scam otherwise known as a “Ponzi scheme,” according to the U.S. Department of Justice. Kumar Arun Neppalli, 56, of Cary, is charged with 17 counts of wire fraud and six counts of conducting transactions in criminally derived property, according to a news release. He is expected to go to trial later this year and could face up to 20 years in prison if convicted.
China tells the world that the Maoist madness is over – we can all make money again
Ambrose Evans-Pritchard – The Telegraph
China has extended the olive branch to Western democracies and global capitalists alike, promising a new era of detente after the coercive “wolf warrior” diplomacy of the last five years. Vice-premier Liu He, the economic plenipotentiary of Xi Jinping’s China, told a gathering of business leaders and ministers in Davos that China is back inside the tent and eager to restore the money-making bonhomie of the golden years. We must let the market play the fundamental role in the allocation of resources, and let the government play a better role. Some people say China will go for the planned economy. That’s by no means possible,” he said.
Davos 2023: Cowed crypto crowd feel winter freeze at WEF
Paritosh Bansal and Divya Chowdhury – Reuters
In the snow and ice on the main drag in Davos, the impact of the crypto winter is plain for WEF attendees to see. Last May, the dressed-up shop fronts that line both sides of the Promenade street running through the Swiss ski resort were dominated by crypto firms, rolling in bitcoin.
Coming Soon to Carbon-Credit Markets: New Principles Aiming to Enhance Quality; The Integrity Council for the Voluntary Carbon Market plans to publish in March a set of standards that would award offset registries a seal of approval
Dieter Holger – The Wall Street Journal
A group seeking to improve carbon-credit standards will publish labeling rules in March that are intended to ease corporate buyers’ concerns and help improve the nascent market, but companies will still face a patchwork of standards applied by the various registries offering the offsets. The Integrity Council for the Voluntary Carbon Market said it would publish a set of Core Carbon Principles that will test the verification processes used by carbon-credit registries such as Verra and Gold Standard.
Fugitive in $100 Million NJ Deli-Value Case Nabbed in Thailand; US prosecutors charged Peter Coker with fraud in September; David Einhorn cited deli as a sign of irrational exuberance
Chris Dolmetsch – Bloomberg
A fugitive charged with securities fraud over a New Jersey deli once valued at more than $100 million was arrested in Thailand at the request of US authorities. Peter Coker Jr. was taken into custody on Jan. 11, according to Matthew Reilly, a spokesperson for the New Jersey US Attorney’s office. The Bangkok Post, which previously reported the arrest, said Coker was staying in a hotel room in the Thalang district of Thailand’s Phuket province.
FTX: Bankman-Fried Attacks Those Who Have to Clean Up His Mess; The disgraced founder of the cryptocurrency exchange continues to claim that the American subsidiary was solvent at the time of the bankruptcy filing.
Luc Olinga – The Street
He becomes with each passing day one of the biggest problems for John Ray, the liquidator of his crypto empire. Sam Bankman-Fried, the former king of crypto, seems to have decided not to make it easy for those in charge of bankruptcy proceedings at the FTX exchange and its sister company Alameda Research, a hedge fund that was also a trading platform.
One of FTX’s Biggest Victims Could Be the Bahamas’ Finance Reputation; The island nation created a one-stop regulatory shop that gave crypto companies wide latitude.
Katanga Johnson and Jim Wyss – Bloomberg
Years before Sam Bankman-Fried became a household name by building and blowing a billion-dollar cryptocurrency empire, he was on the hunt for a new corporate home in the Caribbean. In April 2019, his company, FTX Trading Ltd., registered in Antigua and Barbuda, a nation of tiny, idyllic islands 1,400 miles southwest of Florida.
German Decision to Send Tanks to Ukraine Would Be Made With US
Kamil Kowalcze and Craig Stirling – Bloomberg
A decision on sending Germany’s Leopard battle tank to Ukraine will be easier if the US sends equivalent vehicles to the war zone too, according to Vice Chancellor Robert Habeck. The Green Party politician suggested to Francine Lacqua on Bloomberg Television that he is in favor of authorizing the supply of such equipment, and also some owned by Poland and Finland.
Berlin Won’t Allow Exports of German Tanks to Ukraine Unless U.S. Sends Its Own; North Atlantic Treaty Organization allies have over 2,000 German-made Leopard tanks
Bojan Pancevski and Elena Cherney – The Wall Street Journal
Germany won’t allow allies to ship German-made tanks to Ukraine to help its defense against Russia nor send its own systems unless the U.S. agrees to send American-made battle tanks, senior German officials said on Wednesday.
Poland Suggests Sending German-Made Tanks to Ukraine Without Berlin’s OK; Germany says it won’t allow allies to give its Leopard tanks to Ukraine until the U.S. sends American-made main battle tanks
Drew Hinshaw – The Wall Street Journal
Poland would supply Ukraine with German-made Leopard battle tanks if Germany doesn’t grant approval for the transfer soon, Polish Prime Minister Mateusz Morawiecki said, increasing pressure on Berlin to back down from its stance that the U.S. must send American-made tanks to Kyiv before allies donate the most-widely used tank in Europe.
Kremlin: The sooner Ukraine accepts our demands, sooner conflict can end
The Kremlin said on Thursday that the sooner Ukraine accepted Russia’s demands, the sooner the conflict there could end. Spokesman Dmitry Peskov said Russia would achieve its goals “one way or another” and Kyiv would be better off accepting Russia’s position and settling at the negotiating table.
US finalising plans to send nearly 100 Stryker combat vehicles to Ukraine; German defence minister meets American counterpart to discuss support for Kyiv ahead of Nato talks
Felicia Schwartz, Guy Chazan and Laura Pitel – Financial Times
The US is finalising plans to send nearly 100 Stryker combat vehicles to Kyiv, with an announcement expected at a meeting of Ukraine’s allies in Germany on Friday, according to officials. In addition to sending Strykers for the first time, Washington is also expected to announce it will send at least 50 more Bradley infantry fighting vehicles. Officials cautioned the plans were not final.
Oil price cap and falling cost of crude worry Kremlin; Country’s oil and gas revenues surged last year but Putin warns of risk of ‘budget problems’ in 2023
Anastasia Stognei – Financial Times
Russia last year weathered the impact of energy sanctions and gas export cuts to Europe. But 2023 will be a lot tougher, with lower energy prices and bigger discounts on Russian crude – underpinned by the $60-a-barrel G7 price cap – starting to worry Kremlin economists.
UK to Send 600 Brimstone Missiles to Ukraine
Kitty Donaldson – Bloomberg
Defense Secretary Ben Wallace said the UK will send a further 600 Brimstone missiles to Ukraine to help defend the nation against Russia’s invasion. Brimstone is a ground or air-launched attack missile. The UK has already announced this week it’s sending 14 Challenger 2 main battle tanks, long-range artillery and more armored vehicles. Wallace made the announcement about the missiles at a news conference in Estonia.
Exchanges, OTC and Clearing
DTCC Identifies How Enhanced Data Exchange And Management Can Propel New Insights Across Firms And Markets
The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, today issued a whitepaper, “Data Strategy & Management in Financial Markets”, that identifies data management challenges, highlights themes to drive an evolution in financial market data exchange and data management over the next decade and outlines the foundation needed to support change.
BRM, The Romanian Commodities Exchange, Joins Europex; The Romanian Commodities Exchange (Bursa Romana de Marfuri – BRM) has joined Europex as a Full Member as of today. With the inclusion of BRM, Europex now counts 32 members.
BRM was founded on 20 November 1992 and operates wholesale spot and forward gas and electricity markets as well as other energy and non-energy commodity markets in Romania. Christian Baer, Secretary General of Europex, commented: “It is a real pleasure to start off the New Year by welcoming a new member to the Europex family. BRM has been a key figure in the Romanian and South-eastern European energy system for many years and is about to further expand its services and markets. We look forward to working with their CEO, Purice Gabriel, and his team to bring their knowledge and experience to the European level”.
CCP12 response to DMIST’s Consultation Paper: Standard Regarding Timeliness of Trade Give-Up and Allocation
Global Association of Central Counterparties
The Global Association of Central Counterparties (“CCP12”) appreciates the opportunity to comment on the Derivatives Market Institute for Standards’ (“DMIST”) Consultation Paper: Standard Regarding Timeliness of Trade Give-Up and Allocation (“Consultation Paper”).1 CCP12 is the international association for central counterparties (“CCPs”), representing 40 members who operate over 60 CCPs across the Americas, EMEA, and the Asia-Pacific region. CCP12 recognizes the importance to improve and strengthen the post-trade processes across all participants for exchange traded derivatives. We therefore appreciate DMIST’s initiative on this important topic and support the proposed 30/30/30 standard. We furthermore concur that the standard is both ambitious and achievable.
EEX and q-bility establish strategic partnership for GHG quota trading
European Energy Exchange
The European Energy Exchange (EEX) and q-bility GmbH enter into a strategic partnership for trading in greenhouse gas reduction quotas (GHG quotas). Within the framework of this partnership, EEX will acquire 20% of shares in q-bility GmbH and expands its previous engagement as a technology provider for q-bility. The company q-bility was founded together with Enpulse, the venture builder for energy transition and sustainable infrastructure. In addition to EEX, Enpulse also has a stake in q-bility. The GHG quota system aims to reduce climate-damaging emissions from the transport sector. Distributors of petrol and diesel fuels are legally obliged to reduce greenhouse gases to avoid penalty levies. For 2023, this reduction requirement is 8%, and will increase to 25% by 2030. The required reductions can be achieved by increasingly using fuels with lower emission values, such as electricity or bio-LNG.
Dividend Derivatives: Recap of 2022
2022 has been a record year in dividend derivatives, with more than 20 million contracts traded (+20% vs. 2021), surpassing the exceptional year for dividend derivatives in 2020. During the volatile year of 2022, the focus and growth were mainly in index dividend derivatives (EURO STOXX 50Â® Index Dividend Futures, EURO STOXX 50Â® Index Dividend Options and EURO STOXXÂ® Banks Index Dividend Futures), after a more subdued 2021. The index dividend futures were up 64% vs. 2021 and the dividend options were up 38% vs. 2021.
Euronext Corporate Services opens its eighth studio in Germany
Euronext Corporate Services, part of the Euronext Group, today announced the opening of its newest Company Webcast professional, broadcast-quality studio in Frankfurt, with the full deployment of its solutions in Germany. Company Webcast, a market leader in professional webcast and webinar solutions, enables firms, organisations, and local authorities to successfully communicate and engage with their stakeholders, from employees to investors and customers worldwide. With this opening, Company Webcast now operates eight studios in five countries and offers its online, hybrid and virtual experiences across Europe.
ICE Launches ICE Digital Trade Documents to Digitize Paper-Based Post-Trade and Shipping Processes for the Energy Industry
Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of data, technology, and market infrastructure, today announced the launch of ICE Digital Trade Documents (ICE DTD) for the energy industry, a highly configurable solution digitizing post-trade and shipping processes for physically delivered commodities including oil, gas and petrochemicals. The launch follows a series of successful trials conducted for shipments of refined products within Asia Pacific. ICE DTD offers terminal and refinery operators in the energy industry a way to digitize the communication and documentation transmitted between stakeholders at the point of delivery or receipt of the cargo.
Japan Exchange Group, Inc. Signs MOU with Japan Electric Power Exchange
Japan Exchange Group
Japan Electric Power Exchange (Chairman of Board of Directors: Kanemoto Yoshitsugu)(“JEPX”) and Japan Exchange Group, Inc. (Director & Representative Executive Officer, Group CEO: Kiyota Akira) (“JPX”) have decided to enhance their cooperation in the development and efficient operation of both markets and to achieve their shared goal of realizing fair and well-organized markets by signing a memorandum of understanding (MOU) today to work together and share information to increase the convenience and competitiveness of the Japanese electricity market.
Special Changes in KOSPI 200, KRX 300, etc.
KRX will change the constituents of KOSPI 200, KRX 300, KRX 100, etc since the stock exchange between Meritz Financial(138040) & Meritz Insurance(000060)
LME Member Notice
With great regret, this notice informs the membership and the broader London Metal Exchange (“LME”) community of the death of Ivor Foster, former Chairman of The Committee of The Metal Market and Exchange Company Limited (now the LME).
Self-Certification; Amendments To The Rules Of Bourse De Montreal Inc. To Modify The Final Settlement Price Of The One-Month Corra Futures (Coa)
Bourse de Montreal
The Rules and Policies Committee of Bourse de Montreal Inc. (the “Bourse”) approved amendments to the Rules of the Bourse in order to adjust the final settlement price calculation of the One-Month CORRA Futures (“COA”) from an arithmetic average of the realized CORRA values to a geometric average.
Kiatnakin Phatra Securities Advances Surveillance & Market Integrity Efforts in Thailand with Nasdaq Trade Surveillance
Nasdaq (Nasdaq: NDAQ) and Kiatnakin Phatra Securities (KKPS), a leading securities company in Thailand, announced today that KKPS will leverage Nasdaq Trade Surveillance technology to advance its surveillance and market integrity efforts. The first local broker in Thailand to leverage Nasdaq Trade Surveillance, KKPS will benefit from rich functionality to effectively monitor for market abuse.
How Tech Firms are Resisting the ‘Right to Repair’
Clara Hernanz Lizarraga – Bloomberg
Some of us are old enough to remember the days when you could easily swap out a dud battery in your flip phone. Nowadays, repairing virtually any electronic device – from a smartphone to a gaming console, microwave oven or fan – can cost more than buying a new one. Companies make it hard for technicians to get inside their products, source parts, or update software. So devices are just thrown away, generating potentially hazardous waste and forcing consumers to buy new items whose production further taxes the environment. After long resisting calls from campaign groups for a “right to repair” gadgets, some big manufacturers are starting to change their tune.
Musk Has ‘More to Lose’ If He Tries to Skip Twitter Debt Payment
Paula Seligson – Bloomberg
By all accounts – including Elon Musk’s – Twitter has more than enough money to make its first interest payments, expected to total about $300 million. But with the payment date fast approaching, there’s nevertheless some anxiety over what the impulsive billionaire might do to ease the social-media company’s $12.5 billion debt burden.
Former Citi and Barclays executive joins Baton Systems as global head of product; New head brings considerable experience in payments and cash management to the firm, having served at banks including Citi, ABN AMRO, RBS and Barclays.
Wesley Bray – The Trade
Post-trade and blockchain technology provider Baton Systems has appointed Ravindra Madduri as its new global head of product. Madduri joins Baton Systems from fintech Paysend, where he served as head of enterprise B2B products. He brings considerable experience in payments and cash management to the firm, having spent most of his career in product functions at banks such as Citi, ABN AMRO, RBS and Barclays.
Usain Bolt Lost $12 Million in Savings to a Scam; Account was part of Bolt’s retirement, lifetime savings; Regulators take control of SSL after alleged fraud reports
Jim Wyss – Bloomberg
Jamaican Olympic sprinter Usain Bolt was shocked to discover $12 million missing from an account he had with Kingston-based investment firm Stocks and Securities Ltd., according to his lawyer. Bolt was recently told there was only about $12,000 remaining in the account, his lawyer Linton P. Gordon said in a phone interview. The account was part of Bolt’s retirement and lifetime savings.
Newsletter Service Mailchimp Says It Was Hacked-Again
Lucy Papachristou – Bloomberg
Email marketing and newsletter service Mailchimp said it was hacked and that customer accounts were accessed, in the second such attack in less than a year. Intruders compromised a tool used by the company’s customer support and account administration teams on Jan. 11, the company wrote in a blog post updated Tuesday evening.
2022 SMB ransomware report reveals increased cybersecurity investments
A 2022 State of Ransomware report was released by Datto on January 17. The report surveyed nearly 3,000 IT professionals in small to medium-sized businesses across eight countries: the United States, Canada, the United Kingdom, Germany, the Netherlands, Australia, New Zealand and Singapore. The report shows that SMBs are aware of increasing cyber threats and allocating resources and investing in areas such as network and cloud security.
Cyber-attacks have tripled in past year, says Ukraine’s cybersecurity agency
Dan Sabbagh – The Guardian
Ukraine has suffered a threefold growth in cyber-attacks over the past year, with Russian hacking at times deployed in combination with missile strikes, according to a senior figure in the country’s cybersecurity agency. The attacks from Russia have often taken the form of destructive, disk-erasing wiper malware, said Viktor Zhora, a leading figure in the country’s SSSCIP agency, with “in some cases, cyber-attacks supportive to kinetic effects”.
A Federal Cyber Insurance Backstop Is Premature
Daniel Woods – Law Fare
Political conflict makes private insurers uncomfortable and has for a very long time. For example, as tension grew in the lead-up to World War I, the insurance industry considered excluding war-related losses from maritime policies-the consequences of which ultimately threatened to halt sea trade. In response, the British government committed to taking financial responsibility for merchant ships sunk by enemy action, concluding that public insurance was necessary to continue commerce in the presence of international conflict.
Experts at Davos 2023 sound the alarm on cybersecurity
Spencer Feingold – World Economic Forum
As economic and geopolitical instability spills into the new year, experts predict that 2023 will be a consequential year for cybersecurity. The developments, they say, will include an expanded threat landscape and increasingly sophisticated cyberattacks. “There’s a gathering cyber storm,” Sadie Creese, a Professor of Cyber Security at the University of Oxford, said during an interview at the World Economic Forum’s Annual Meeting 2023 in Davos, Switzerland. “This storm is brewing, and it’s really hard to anticipate just how bad that will be.”
Confidence In Cybersecurity Regulation For Critical Infrastructure
Stewart Room – Forbes
Significant outages in critical infrastructure services caused by cyberattacks are thankfully very rare. That’s why incidents such as Colonial Pipeline achieve significant press and media attention and top-level political engagement: they have rarity value. As these outages are rare, it seems a reasonable proposition to say that critical infrastructure and services are strongly protected against cyber threats that can cause significant service outages. As such, the vulnerabilities that were exposed in the Colonial Pipeline case are not typical of other critical infrastructure elements.
Fewer Companies Are Paying Ransoms to Hackers, Researchers Say; Insurance policies and sanctions deterrents to pay ransom; Ransomware hackers ‘just repainting their get-away cars’
Margi Murphy – Bloomberg
Fewer companies that are infected with ransomware are coughing up extortion payments demanded by hackers, according to new research from Chainalysis Inc. In findings published on Thursday, the blockchain forensics firm estimated that ransom payments – which are almost always paid in cryptocurrency – fell to $456.8 million in 2022 from $765.6 million in 2021, a 40% drop.
Crypto Firm Genesis Is Preparing to File for Bankruptcy; The crypto lending unit of DCG could file as soon as this week; Turmoil left Barry Silbert in a public battle with Winklevoss
Rachel Butt and Olga Kharif – Bloomberg
Genesis Global Capital is laying the groundwork for a bankruptcy filing as soon as this week, according to people with knowledge of the situation. The cryptocurrency lending unit of Digital Currency Group has been in confidential negotiations with various creditor groups amid a liquidity crunch. It has warned that it may need to file for bankruptcy if it fails to raise cash, Bloomberg previously reported.
Fidelity-Backed Exchange OSL Cuts Workers Amid Crypto Winter: Bloomberg
Nelson Wang – CoinDesk
Fidelity Investments-backed crypto exchange OSL is cutting staff and reducing its overall costs by about a third in another example of a major crypto firm retrenching, according to a report from Bloomberg on Tuesday. The exchange, which was Hong Kong’s first licensed cryptocurrency exchange, declined to say how many positions were cut. The move to reduce costs was due to “current market conditions” and “included headcount reduction,” Hugh Madden, CEO of OSL’s parent company, BC Technology Group, said in a statement to Bloomberg.
Peter Thiel’s fund wound down 8-year bitcoin bet before market crash
Tabby Kinder and Richard Waters – Financial Times
Founders Fund, the venture capital firm co-founded by billionaire Peter Thiel, closed almost all of its eight-year bet on cryptocurrencies shortly before the market began to crash last year, generating about $1.8bn in returns. The San Francisco-based fund made its first investment in bitcoin in early 2014 and went on to invest large sums in crypto. About two-thirds of its overall investment was used to buy bitcoin, said people close to the fund.
Ryan Salame Invested Big In A Small Town, Now It’s Tangled Up In FTX’s Fallout (Podcast)
Stacy-Marie Ishmael – Bloomberg
Western Massachusetts is a very different place from the Bahamas, where the FTX crypto exchange had its headquarters. But the small town of Lenox there is feeling the effects of the FTX bankruptcy nonetheless. The reason is Ryan Salame, the former co-CEO of FTX Digital Markets who was also a major player in the economy of Lenox.
OKX Publishes Proof-of-Reserves Report Showing $7.5B in ‘Clean Assets’
Sam Reynolds – CoinDesk
OKX has $7.5 billion in reserves, and these reserves do not contain its native token, according to a proof of reserves published by the exchange on Thursday. This is the third proof of reserves OKX has published, but the first to show the exact breakdown of assets.
Crypto Technology’s Impact Goes Beyond Crypto Technology
Noelle Acheson – CoinDesk
After the drama punctuated by doldrums (or is it the other way around?) of 2022, many of us glass-half-full types have been welcoming the opportunity to focus less on market moves and more on the impact that the continued development of crypto technology can have on the world. And it’s potentially a pretty big impact, nothing less than the spreading of economic opportunity and individual empowerment while rewiring finance and culture, so it certainly deserves more attention.
NFT Collection NimTeens Explores Just How Fast the NFT Space Moves
Cam Thompson – CoinDesk
At first glance, NimTeens, a new non-fungible token (NFT) collection by generative artist Bryan Brinkman, looks like a tribute to adolescence. A followup to his January 2021 project NimBuds, the new 400-edition project shows his signature cloud characters aging up in awkward fashion to take their school photos.
Congress’ FTX Problem: 1 in 3 Members Got Cash From Crypto Exchange’s Bosses
Jesse Hamilton, Cheyenne Ligon, Elizabeth Napolitano – CoinDesk
More than one in three of the 535 senators and representatives in the U.S. Congress showed up to the new session with FTX baggage, having received campaign support from one of the senior executives of the fraud-ridden crypto giant.
DeSantis pushes to permanently ban Covid-19 mandates in Florida
Chris Boyette – CNN
Florida Republican Gov. Ron DeSantis called on state lawmakers to make permanent existing penalties for companies that require all employees get the Covid-19 vaccination, his latest move to curtail pandemic mitigation efforts. The proposal would extend indefinitely measures DeSantis signed in 2021 that made Florida the first state in the country to threaten businesses with fines if they required workers to get the Covid-19 vaccine. Those measures pitted DeSantis and Florida against the federal government over President Joe Biden’s efforts to get the country’s workforce inoculated – a standoff that helped boost the Republican governor’s popularity among conservatives.
Treasury to Begin Extraordinary Measures to Pay Bills Amid Debt-Ceiling Debate; Maneuvers give Congress five months to pass legislation raising or suspending the debt limit
Andrew Duehren – The Wall Street Journal
The Treasury Department is set to begin taking special measures to keep paying the government’s bills on Thursday as the divided Congress braces for a potentially lengthy and difficult debate over raising the debt ceiling.
Republican state officials question proxy advisers ISS, Glass Lewis over ESG
Aishwarya Nair and Ross Kerber – Reuters
Republican attorneys general from 21 U.S. states on Tuesday wrote to proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis, asking whether the companies’ voting recommendations on such issues as climate and boardroom diversity violated duties to clients. “Evidence regarding climate change advocacy and goals suggests potential violations of your contractual obligations and legal duties,” the attorneys from states including Texas and Utah said in their letter. They asked both firms by the end of January to answer questions such as how they determined “appropriate” emissions targets.
Financial Institutions Require More Oversight of Cybersecurity Risk under NYDFS
Trisha Sircar – Katten via The National Review
The New York Department of Financial Services (NYDFS) in November 2022 published a proposal to amend its cybersecurity rules, which will require regulated companies to notify the NYDFS of a third-party cybersecurity incident within 72 hours.
U.S. to announce international cryptocurrency action -statement
The U.S. Justice Department will “announce a major, international cryptocurrency enforcement action” on Wednesday, it said in a statement, adding the U.S. Treasury Department will also make an announcement. “The U.S. Department of the Treasury will also announce an action in this space,” the statement said.
Commissioner Pham to Speak at the Institute for Law and Finance Conference on the Future of the Financial Sector
Commissioner Caroline D. Pham will speak on non-bank financial intermediaries at the 11th Annual Institute for Law and Finance Conference on the Future of the Financial Sector – The Next Systemic Financial Crisis: Where Might It Come From?
Commissioner Pham Announces CFTC Global Markets Advisory Committee Meeting and Leadership
CFTC Commissioner Caroline D. Pham, sponsor of the Global Markets Advisory Committee (GMAC), today announced that the GMAC will hold a public meeting on Monday, February 13, from 9:30 a.m. (EST) to 3:00 p.m. (EST) at the CFTC’s Washington, D.C. headquarters. Commissioner Pham also announced Tom Wipf, Vice Chairman, Morgan Stanley, will serve as the GMAC Chair, and Darcy Bradbury, Managing Director and Head of Public Policy, D. E. Shaw & Co., will serve as Vice Chair.
FTX Debacle Shows Risks in Current CFTC Rulebook, Commissioner Says; Christy Goldsmith Romero concerned about self-certification; Commissioner wants Congress to weigh tighter regulations
Lydia Beyoud – Bloomberg
Digital-asset exchange FTX’s implosion shows that US platforms should face heightened scrutiny from the Commodity Futures Trading Commission before being able to list crypto assets, according to one top official at the regulator. CFTC Commissioner Christy Goldsmith Romero said Wednesday that risks associated with virtual currencies mean that a fast-track process exchanges typically use to list futures isn’t sufficient for the asset class. Current rules let exchanges registered with the regulator “self-certify” their products are safe and list them, unless the agency moves to block the plans within 24 hours.
SEC Comes for Gemini Too Late; Also GTX claims trading, Goldman golfing and Razzlekhan.
Matt Levine – Bloomberg
US regulators sued crypto brokerages Genesis Global Capital and Gemini Trust Co. for breaking securities rules. The Securities and Exchange Commission said on Thursday that the firms illegally raised billions of dollars from hundreds of thousands of investors through the so-called Gemini Earn program. That product, which let customers loan out their assets in exchange for interest payments, amounted to the offering of unregistered securities, the SEC said.
Statement on Jury’s Verdict in Trial of Bernard Findley and Halitron Inc
Gurbir S. Grewal – SEC
After a seven-day trial, a jury in the United States District Court for the District of Connecticut found Bernard Findley and Halitron Inc, liable for securities fraud in connection with their false and misleading statements in press releases as part of a scheme to defraud investors.
Midway Limited pays $33,000 infringement notice penalty for alleged continuous disclosure breach
Australian wood-fibre processor and exporter Midway Limited has paid a $33,000 infringement notice over ASIC concerns that it failed to comply with its continuous disclosure obligations. ASIC issued the infringement notice following an investigation into announcements made by Midway on the Australian Securities Exchange (ASX).
Thematic review of retirement income advice
We are undertaking a thematic review assessing the advice consumers are receiving on meeting their income needs in retirement. This review is a piece of discovery work to explore how financial adviser firms are delivering retirement income advice and assess the quality of outcomes consumers are getting.
With millions needing financial advice, watchdog should mind the gap; Making it simpler and cheaper to get guidance should be a priority for regulator
Emma Dunkley – Financial Times
The gap in Britain’s financial advice market might be likened to the often disturbingly wide space between London’s Tube trains and station platforms. The only difference between the two is the advice gap is growing wider. The issue appeared a decade ago, when the regulator, then called the Financial Services Authority, devised the Retail Distribution Review.
ESMA’s latest shot at ‘pre-hedging’ must now bring a clear set of rules; John Keogh, managing director at Susquehanna International Securities (SIG), makes the case for banning the controversial practice, in the wake of ESMA’s latest request for industry input.
John Keogh – The Trade
On 30 September 2022, the European Securities and Markets Authority (ESMA) closed a Call for Evidence on pre-hedging (the results of which were not yet published at the time of going to press), which requested insights from market participants as to the current practice, and their perspective on what appropriate guidance should look like. The request for input was a follow-up to the Market Abuse Regulation (MAR) review carried out by the regulator in 2019, with ESMA acknowledging the diversity of opinion on pre-hedging in its post-review report and highlighting the urgent need for clarification around the rules of the practice.
Investing and Trading
Big Hedge Funds Are Top Performers, for a Change; Funds including those using quant, macro and arbitrage strategies beat more-focused offerings
Gregory Zuckerman – The Wall Street Journal
Lately, bigger is better for hedge funds. For the first time since 2018, larger hedge funds outperformed smaller hedge funds. The evidence: HFRI Fund Weighted Composite Index, which gives equal weight to funds of all sizes, fell -4.25% in 2022, while the HFRI Asset Weighted Composite Index, which gives more weighting to the larger funds, rose: 0.97%. The performance by the bigger funds is a shift. In 2021, for example, the composite index rose 10.16% compared with a 7.39% gain for the asset-weighted index. In 2020, the composite index gained 11.83% versus a gain of just 2.19% for the asset-weighted index.
America Set to Hit Its Borrowing Limit Today, Raising Economic Fears; The milestone will not immediately affect markets or growth, but it sets the stage for months of entrenched partisan warfare.
Jim Tankersley, Alan Rappeport – The New York Times
The United States is expected to hit a congressionally imposed borrowing limit on Thursday, requiring the Treasury Department to engage in accounting maneuvers to ensure the federal government can keep paying its bills.
Here’s why orange juice prices are soaring across the US
Lisa Fickenscher – NY Post
Orange juice prices are headed for the roof after Florida growers were slammed by a heavy hurricane season last year, an early freeze and a fast-spreading disease that’s strangling the life out of orange groves. Retail prices recently hit a record $6.27 a gallon for reconstituted juice and $10 a gallon for squeezed, or not from concentrate, according to a Wall Street Journal report.
Meme Stock Mullen Is Drowning Its Investors in Shares; The electric vehicle company has issued a ton of stock as its value collapsed.
Chris Bryant – Bloomberg
Meme stock and retail investor darling Mullen Automotive Inc. is ostensibly in the business of making electric cars. For now, its most plentiful product is its own shares. There are now are almost 1.7 billion Mullen shares outstanding, compared with fewer than 25 million a year ago, and soon the authorized total could increase to as many as 5 billion, according to recent financial filings. Several hundred million of these shares change hands on a typical day, making it one of the most active of all US stocks in volume terms. Mullen is case study for the dangers of creeping shareholder dilution and how as the tech bubble bursts, retail investors can find themselves taken for a ride.
Environmental, Social and Corporate Governance
EU to counter US climate plan with new green industry law, clean tech funding
Alex Blackburne – S&P Global Commodity Insights
The European Union is to propose a suite of regulatory interventions and funding mechanisms to boost clean technologies and combat potential market distortions created by the US Inflation Reduction Act, European Commission President Ursula von der Leyen said Jan. 17. The commission’s Green Deal Industrial Plan includes a Net-Zero Industry Act to help expedite permitting for wind, solar, heat pumps, hydrogen and other green industries, as well as tax breaks and subsidies for European production facilities operating across the clean-tech value chain. The strategy will make Europe “the home of clean tech and industrial innovation” and help fend off “aggressive attempts” by countries to lure production capacity away from the EU, von der Leyen said in a speech at the World Economic Forum in Davos, Switzerland.
Biden’s Climate Plan Is ‘Dangerous’ Says UK Business Secretary; UK’s Shapps says US law could push others into protectionism; US Inflation Reduction Act includes tax credits, mandates
Ellen Milligan – Bloomberg
President Joe Biden’s plan to subsidize clean energy is “dangerous” and risks pushing the world toward protectionism, Britain’s Business Secretary Grant Shapps said, in the UK’s bluntest criticism to date of the US Inflation Reduction Act. European Union leaders say the US legislation will unfairly benefit American firms and violate World Trade Organization rules. To date, Prime Minister Rishi Sunak’s administration has stayed relatively quiet on the issue, despite recent warnings from inside his own Conservative Party that the UK risks missing out on the economic opportunities of the green energy transition. But at the World Economic Forum in Davos, Switzerland, Shapps on Thursday indicated Britain shares the EU’s concerns while appearing reluctant to respond with its own protectionist measures.
Bank of America CEO Says ESG Movement Is Here to Stay
Josh Mitchell – The Wall Street Journal
ESG is here to stay. That was the message of Bank of America Chief Executive Brian Moynihan as he responded to criticism of the movement pushing companies and investors to consider environmental, social and governance goals. Speaking on a panel in Davos on Wednesday morning, Mr. Moynihan was asked whether businesses like his would abandon ESG goals in the face of criticism from Republican leaders in the U.S., who recently gained control of the House. Critics have said companies should be more focused on profits and that ESG uses loosely defined, PR-friendly terms.
Bank of America CEO says new ESG rules are needed to reboot capitalism
Bank of America Chief Executive Brian Moynihan told the World Economic Forum in Davos that official global standards on sustainability and climate were needed to “align capitalism with what society wants from it.” Moynihan supports the work of a new International Sustainability Standards Board. “An investment manager, a consumer, society, others can sit there and say, here’s a line that is acceptable and you’re either above it or below it,” Moynihan said. “If you’re below it we shouldn’t do business with you.” Bank of America CEO says new rules to reboot capitalism must be straightforward for businesses. Bank of America Chief Executive Brian Moynihan said Wednesday that current efforts to produce a set of official global standards on ESG issues were vital to “align capitalism with what society wants from it.”
Companies parachute accountants in to fix flawed ESG data; Emissions information lags behind financial statements of groups facing new reporting mandates
Stephen Foley and Patrick Temple-West – Financial Times
Accountants and auditors are muscling in on the preparation of climate data amid concern that companies are still far from ready for disclosure rules being drawn up by regulators around the world. The US Securities and Exchange Commission is finalising a rule to require audited emissions data be included in corporate financial reports, while accounting standards setters in Europe are close to publishing new climate reporting guidelines. The developments raise the stakes for companies that until now have been reporting environmental, social and governance data on a largely voluntary basis.
Norway’s oil fund sends a warning shot to ESG laggards; Plus, a new push on ‘responsible remuneration’
Simon Mundy, Katie Martin, Andrew Hill and Tamami Shimizuishi – Financial Times
Fresh from her brief detention by German police at a protest against a coal mine expansion, Greta Thunberg makes a return to Davos today. But unlike in 2019 and 2020, when she warned that “our house is on fire”, Thunberg is not addressing the World Economic Forum itself. Instead, she and other activists are holding a discussion with Fatih Birol, executive director of the International Energy Agency, to build pressure on governments and businesses for more ambitious climate action. The meeting is a conspicuous sign of the emphasis that the IEA – long a conservative, oil-focused body – is placing on these issues. Another notable event here today is the official launch of the Coalition of Trade Ministers on Climate, a new body spearheaded by the EU, Ecuador, Kenya and New Zealand.
Chesapeake Energy offloads Texas oil acreage in pivot to natural gas
Myles McCormick – Financial Times
Chesapeake Energy, a prime mover in the US shale energy revolution, has struck a $1.4bn deal to offload the bulk of its Texas oil assets as it ditches crude production in favour of drilling for natural gas. The company said on Wednesday it had agreed to sell roughly 60 per cent of its land in the Eagle Ford basin of south Texas to Wildfire Energy. The sale marks Chesapeake’s first concrete deal in a strategic pivot out of oil. Future production will be concentrated in the gas-rich shale regions of the Haynesville basin in Louisiana and the Marcellus in Appalachia.
How Boards Can Leverage ESG To Navigate Economic Uncertainty And Inflation
Joan Michelson – Forbes
Corporate boards are under pressure from all sides. They are being held responsible for a range of challenges that their respective organizations are dealing with – from inflation to new disclosure requirements, to transformative technological changes, to stakeholder shifts and demands, to climate change – but without all the information and insight they need to best navigate them. Without operational roles, boards have a lot of responsibility and liability with limited ability for direct action. Businesses have a unique responsibility in this moment, because 61% of the population says that business “is the most trusted institution,” according to the Edelman 2022 Trust Barometer of 36,000 people in 28 countries.
Mexico Bans California Climate Startup’s Experiments to Cool Atmosphere; Make Sunsets’ solar-geoengineering project planned to release sulfur dioxide into the air with balloons and sell carbon offset ‘cooling credits’
Eric Niiler – The Wall Street Journal
The Mexican government is shutting down a plan by a California startup to inject sunlight-reflecting particles into the atmosphere with high-altitude balloons in an attempt to cool the Earth’s atmosphere. Make Sunsets, a firm led by tech entrepreneur Luke Iseman, had raised $750,000 in venture capital and other funds with the idea of selling “cooling credits” to U.S. firms, according to Mr. Iseman. He said the money would be used to release sulfur dioxide into the stratosphere, with the idea that the particles-if spread across a wide area-would reflect sunlight away from the Earth and cool the atmosphere. The company promised that a “cooling credit” would offset the equivalent of a ton of carbon dioxide for a year.
Biodiversity Insight 2023 published
Environmental Finance has published Biodiversity Insight 2023, featuring articles about how investors are incorporating biodiversity concerns into their decisions in light of the Global Biodiversity Framework agreed at COP15. What the COP15 biodiversity framework means for investors; Finding the investment case for action on biodiversity; Shareholder engagement on the topic; The role of investors in reversing deforestation; and Measuring the biodiversity footprint of a portfolio. Contributors include the Taskforce on Nature-related Financial Disclosures, Climate Asset Management, Norges Bank Investment Management, Impax, Holcim, Verra, Federated Hermes, Church Commissioners of England, Quantifying Nature, Iceberg Data Lab and MS&AD.
Reversing the Tide of Global Inequality; Speakers: Thorold Barker, JosÃ© Antonio Ocampo, Gabriela Bucher, Allison Schrager, Joaquin Castro
World Economic Forum (video)
Amid food and energy crises, geopolitical turmoil and trade disruption, global economic convergence appears to have stalled. What can leaders do differently to realize growth and prosperity both in advanced and emerging economies?
ESG and Disability Data White Paper Launched By The Valuable 500 At World Economic Forum
The Valuable 500
At the World Economic Forum, the Valuable 500 launches white paper entitled ‘ESG and disability data: a call for inclusive reporting’. Their work on inclusive reporting has been co-funded and developed with 2 of the Iconic members of the Valuable 500, Allianz, and London Stock Exchange Group, in partnership with Tortoise Media.
Could Air Someday Power Your Flight? Airlines Are Betting on It; New technologies, including one fuel extracted from the atmosphere itself, could make flying more sustainable. But the challenges are many and the timeline is uncertain.
Paige McClanahan – The New York Times
By the middle of this century, most cars and buses should be powered by renewable energy, while bikes, electric trains and your own two feet will continue to have little impact on the climate. And if global aviation achieves the goal it adopted last year, then your 2050 flight from New York to Hong Kong will result in “net zero” carbon dioxide in the atmosphere.
Chesapeake Energy offloads Texas oil acreage in pivot to natural gas; US shale pioneer will sell assets acquired in 2018 to Wildfire Energy for $1.4bn
Myles McCormick – Financial Times
Chesapeake Energy, a prime mover in the US shale energy revolution, has struck a $1.4bn deal to offload the bulk of its Texas oil assets as it ditches crude production in favour of drilling for natural gas.
How ESG Influence Profitability and Transparency in FT 500; Companies Presented in New Research From CSE; Discover why ‘doing business as usual’ is no longer a valid option and the shift to ‘doing business in a sustainable way’ is the only way that will secure companies’ trust and access to financing.
Global Newswire via Yahoo
For the sixth consecutive year, the Center for Sustainability and Excellence is proud to announce the unique findings from its Research in ESG Ratings and Reporting Trends, focusing on ESG best practices and standards used in 2022. CSE’s research examined the ESG practices and commitments of more than 400 FT 500 companies in North America and Europe from 31 sectors, with a high percentage of profitability within the last years. https://jlne.ws/3Xl9XJL
BMO wins regulator go-ahead for Bank of the West purchase
Steve Daniels – Crain’s Chicago Business
The parent of BMO Harris Bank is set to complete its acquisition of Bank of the West on Feb. 1, more than 13 months after the $16.3 billion deal was announced. Toronto-based BMO Financial Group won approval from the Federal Reserve and the U.S. Office of the Comptroller of the Currency yesterday. The deal will make Chicago-based BMO Harris the 15th-largest bank in the U.S. BMO’s U.S. parent will have $287 billion in assets.
Credit Suisse to Pay Upfront Cash Bonuses to Senior Staff; Managing directors, directors get some variable pay up front; Staff must repay pro rata if they leave within 3 years
Chanyaporn Chanjaroen, Cathy Chan, Myriam Balezou and Marion Halftermeyer – Bloomberg
Credit Suisse Group AG will pay its senior bankers an upfront cash award again this year, as executives attempt to incentivize staff to stick with the troubled lender as it undergoes a broad restructuring. Managing directors and directors in most locations will be paid the cash component of their variable 2022 compensation straight away, according to an internal memo obtained by Bloomberg. Recipients would need to repay the funds proportionally should they leave the bank within three years, according to the memo. The deadline to sign up for the upfront payment is Jan. 30.
Macro Hedge Funds Had a Banner Year. Can They Stage an Encore?
Shuli Ren – Bloomberg
Macro hedge funds, which look at economic trends and take advantage of dislocations across asset classes, had a banner year in 2022. On average, they notched a 12.2% return versus -0.7% for the broader industry. It was all the more remarkable because nothing else worked. The classic 60/40 model – a portfolio with 60% in stocks and 40% in bonds – had its worst year since 2008. Meanwhile, the performance of crossover hedge funds, which had branched into the venture capital world to buy the hottest tech startups, was disastrous. Tiger Global Management, the most prominent in that category, lost 56%.
No, Banks Aren’t Stronger Than They Need to Be; Capital standards have proven their worth. They should be restored, not weakened.
The 2020s have so far served as something of an advertisement for financial regulation. The litany of travails and transgressions in the realms of crypto, fintech, pension funds and more amounts to a resounding endorsement of the safety and soundness standards that traditional banks must meet. It’s thus strange that some want to weaken one of the financial system’s most fundamental safeguards: capital requirements designed to ensure that banks can weather crises.
Bruno Crastes battles on at H2O following investment ban
Robert Smith – Financial Times
Bruno Crastes, the star fund manager who recently earned a five-year investment ban from French regulators, held a conference call with H2O Asset Management’s clients on Wednesday in which he made clear that he will continue to play an active role at the EUR11.6bn asset manager. Earlier this month, France’s AutoritÃ© des MarchÃ©s Financiers banned the 57-year-old Frenchman from managing funds or an investment company for five years as punishment for “serious” rule breaches related to H2O’s extensive illiquid investments linked to the controversial financier Lars Windhorst.
Bank of America Freezes Most Hiring to Control Costs, Guard Against Downturn; Vital roles will still be filled, including some in trading; Bank shows no sign it’s contemplating widespread job cuts
Katherine Doherty and Marion Halftermeyer – Bloomberg
Bank of America Corp. started telling executives to pause hiring except for the most vital positions, as it tries to keep a lid on costs and prepare for a possible economic downturn. The move is an escalation of the company’s decision late last year to slow hiring after fewer employees decided to leave of their own accord, according to people with knowledge of the matter. Bank of America will hold off on bringing in new workers until at least mid-year or until the economy shows signs of a turnaround, according to the people, who asked not to be identified discussing private plans.
Bonuses Will ‘Absolutely’ Fall, Says JPMorgan’s Co-Head of Investment Banking
Marion Dakers and Francine Lacqua – Bloomberg
JPMorgan Chase & Co.’s Vis Raghavan said bonuses for investment bankers will fall after a “pretty anemic year.” “All banks pay for performance, so if the performance isn’t there, the compensation isn’t going to be there,” the firm’s global investment-banking co-head who also oversees Europe, the Middle East and Africa said in a Bloomberg Television interview at Davos on Wednesday.
Big Hedge Funds Are Top Performers, for a Change; Funds including those using quant, macro and arbitrage strategies beat more-focused offerings
Gregory Zuckerman – The Wall Street Journal
Lately, bigger is better for hedge funds. For the first time since 2018, larger hedge funds outperformed smaller hedge funds. The evidence: HFRI Fund Weighted Composite Index, which gives equal weight to funds of all sizes, fell -4.25% in 2022, while the HFRI Asset Weighted Composite Index, which gives more weighting to the larger funds, rose: 0.97%.
Market pressures add to US active mutual fund woes; The vehicles suffered outflows of $879bn in the 11 months to the end of November
Nicole Jao – Financial Times
Sales of active US mutual funds suffered in 2022, as investors continued to demand cheaper products while inflation soared and the Federal Reserve continued to raise rates.
Morgan Stanley CEO Says His Three Potential Successors Are Already in Place
Max Abelson – Bloomberg
James Gorman isn’t going to stay in Morgan Stanley’s top job for life. And he knows the three finalists who are competing to replace him. “You plan a generation of people who can take over,” Gorman said in an interview Thursday with Bloomberg TV from Davos, Switzerland. “Ultimately the board will decide.”
Work & Management
Microsoft, Amazon Set to Erase 28,000 Jobs as Tech Slump Deepens; Nadella says Microsoft will hire in ‘key strategic areas’; Amazon kicks off round of 18,000 job cuts as spending slows
Dina Bass, Matt Day and Spencer Soper – Bloomberg
Microsoft Corp. and Amazon.com Inc., two of the world’s biggest companies, began cutting a total of 28,000 jobs on Wednesday in a post-pandemic reckoning that has left almost no tech name unscathed. The software giant began notifying some of the 10,000 workers that will lose their jobs this quarter, while its Seattle-based neighbor and cloud rival Amazon started sending out emails to people in the US, Canada and Costa Rica who are among 18,000 people whose positions will be eliminated.
Job Market’s 2.6 Million Missing People Unnerves Star Harvard Economist
Ben Steverman – Bloomberg
Behind the five-decade low US unemployment rate of 3.5% lies a 2.6 million-person mystery. That’s roughly how many more Americans should be working or looking for jobs if the economy’s labor force participation rate was the same as before the Covid-19 pandemic. But something’s still off, leaving everyone from mom-and-pop businesses to Federal Reserve economists scrambling to answer a crucial question: Where are these workers?
Crypto Software Company ConsenSys Confirms 11% Cut in Workforce; All 96 of the impacted employees will be notified Wednesday; The layoff comes after raising multiple rounds of funding
David Pan – Bloomberg
Ethereum software company ConsenSys confirmed that it’s eliminating 96 positions, representing 11% of the crypto firm’s total workforce. The job cuts are the latest amid a wave of layoffs among major digital-asset companies in recent weeks. Coinbase Global Inc. cut 20% of its staff, which is around 950 people, while crypto-friendly bank Silvergate Capital Corp. laid off 40% of its force. Crypto lender Genesis eliminated 30% of employees with another exchange Huobi firing 20%. Trade publication CoinDesk first reported the ConsenSys cuts last week.
When Employees Leave, Sensitive Data Often Leaves With Them; Disgruntled workers can take corporate secrets or get careless with them.
Andrew Martin – Bloomberg
Brian Armstrong, the co-founder and chief executive officer of Coinbase Global, announced on Jan. 10 that he was laying off about 950 employees-approximately 20% of Coinbase’s overall workforce. In a blog post, Armstrong wrote that employees who were losing their jobs would receive an email on their personal email accounts-and added that they’d already been locked out of the company’s systems. “I realize this last step feels sudden and harsh,” he wrote. “But I believe it’s the only prudent choice given our responsibility to protect customer information.”
How to Cope When You’re Shown the Door; Tips for how to act when your company doesn’t behave in the most humane of manners.
Roxane Gay – The New York Times
I work for a large international bank, and my job was just made redundant because of restructuring and cost cutting measures. I’ve worked there for 25 years, so my redundancy package will be a year’s salary, which is great. My last day will be less than a month before 2022 bonuses are paid, and internal policy is firm that you have to be employed on bonus day to receive your bonus. I’m furious – after 25 very successful years, I can’t believe they are going to rob me of the bonus I worked hard for all year over a matter of 20 days. Legally, they can do this, so I don’t believe there is any point in getting a lawyer. What other recourse do I have? I’m tempted to post about it but know I’ll regret such an unprofessional decision later. – Anonymous
Number of EU bankers earning above EUR1mn hits record following Brexit; Ranks of highest earners on continent grew more than 40% in 2021
Siddharth Venkataramakrishnan – Financial Times
The number of bankers and investment professionals in the EU earning more than EUR1mn hit a record in 2021 as investment banking boomed and Brexit pushed more staff to the continent. The ranks of top earners swelled more than 40 per cent to 1,957 in 2021, according to figures released on Thursday by the European Banking Authority. It is the highest level since the EBA began data collection in 2010.
There’s Never Been a Better Time to Try Plant-Based Eggs; By one metric, the US price tag on plant-based eggs fell below that of chicken eggs at the end of last year.
Zahra Hirji – Bloomberg
At the end of 2022, something strange happened in the US egg market: On a per-unit basis, consumer prices for plant-based eggs fell below those for chicken eggs. While the phenomenon is likely temporary, it is undeniable evidence that at least one corner of the plant-based food market can be cost-competitive. And consumers seem to have noticed – plant-based egg sales rose over the same period.
Here are the 10 states with the least healthy populations
Alejandra O’Connell-Domenech – The Hill
A new survey from Forbes Advisor ranked all 50 states from least healthy to most healthy. Survey crafters determined that West Virginia, followed by Mississippi and Kentucky, have the three least healthy populations in the entire nation. Meanwhile, Hawaii and Utah are the two healthiest states, according to the survey. West Virginia has the highest prevalence of illness and death from chronic diseases in the nation, according to the survey. The Mountain State also has the second lowest average life expectancy out of all 50 states at 73.9 years.
Entrepreneurs Flee China’s Heavy Hand: ‘You Don’t Have to Stay There’; Weary of crackdowns and lockdowns, businesspeople are moving out of China and taking their wealth with them. Many have found a new home in Singapore.
Li Yuan – The New York Times
They left after the government cracked down on the private sector. They ran away from a harsh “zero Covid” policy. They searched for safe havens âEURŒfor their wealth and their families. They went to Singapore, Dubai, Malta, London, Tokyo and New York – anywhere but their home country of China, where they felt that their assets, and their personal safety, were increasingly at the mercy of the authoritarian government.
Parts of Greenland now hotter than at any time in the past 1,000 years, scientists say
Chris Mooney – The Washington Post
The coldest and highest parts of the Greenland ice sheet, nearly two miles above sea level in many locations, are warming rapidly and showing changes that are unprecedented in at least a millennium, scientists reported Wednesday. That’s the finding from research that extracted multiple 100-foot or longer cores of ice from atop the world’s second-largest ice sheet. The samples allowed the researchers to construct a new temperature record based on the oxygen bubbles stored inside them, which reflect the temperatures at the time when the ice was originally laid down.
The avian flu is hammering U.S. poultry farmers, leaving experts to ask: What has changed? More than 40 million egg-laying hens have been culled in the U.S. alone, making it the worst outbreak on record.
Denise Chow and Evan Bush – NBC News
The worst outbreak of avian influenza on record is threatening to stretch into a second year, as the U.S. races to contain a virus that has already caused some food prices to soar amid a shortage of eggs. Nearly 58 million birds from commercial and backyard flocks have been wiped out in the U.S. since last February, according to the U.S. Department of Agriculture’s Animal and Plant Health Inspection Service.
Croatia, the euro and a coffee controversy – but is it all just froth?
Guy De Launey – BBC News, Zagreb
Only the very brave – or the very foolish – would dare to come between a Croatian and their coffee. Stroll the streets of the capital Zagreb, and even in the winter months you will find the pavement cafÃ©s crowded with cappuccino-quaffing locals. But early in the New Year, some have been finding that their favourite beverage now comes with a bitter aftertaste. Croatia adopted the euro as its currency on 1 January, a decade after it became the European Union’s newest – and still most recent – member. And the switch from the kuna has left many Croatians convinced that cafÃ©s, as well as retailers and service providers, are taking advantage by hiking their prices.
Kuaishou Co-Founder Sells $483 Million in Stock to Fund Donations; Sale comes after recovery in shares of Chinese short-video app operator
Dave Sebastian and Raffaele Huang – The Wall Street Journal
Kuaishou Technology Chairman Su Hua sold $483 million worth of shares in the short-video app operator to fund charitable contributions and other causes, joining other founders of Chinese technology giants who have made similar moves. A company owned by Mr. Su and his family sold a roughly 1.3% stake in Hong Kong-listed Kuaishou on Wednesday in an off-market block trade, according to a regulatory filing. Beijing-based Kuaishou said some of the proceeds will go to a foundation that will make donations entirely for public-benefit purposes. Other funds will be directed to a trust supporting the development of cutting-edge technology and related infrastructure.
The Hidden Cost of Cheap TVs; Screens have gotten inexpensive-and they’re watching you back.
Justin Pot – The Atlantic
The television I grew up with-a Quasar from the early 1980s-was more like a piece of furniture than an electronic device. It was huge, for one thing: a roughly four-foot cube with a tiny curved screen. You couldn’t always make out a lot of details, partially because of the low resolution and partially because we lived in rural Ontario, didn’t have cable, and relied on an antenna. I remember the screen being covered in a fuzzy layer of static as we tried to watch Hockey Night in Canada.