Crypto, Social-Media Scams Are on the Rise, State Regulators Warn

Feb 28, 2024

First Read

Hits & Takes
John Lothian & JLN Staff

The Senate finally did it. On February 26, 2024, the Senate confirmed Summer K. Mersinger from South Dakota as a commissioner of the Commodity Futures Trading Commission, with her term set to expire on April 13, 2028. This is a new full term for the commissioner. Mersinger had previously been nominated by President Joe Biden on December 15, 2021 and confirmed by the Senate to fill one of the Republican spots on the CFTC.

Intercontinental Exchange (ICE) today announced plans to adjust the ICE Midland WTI (HOU) futures contract specifications to closely match the quality of Midland WTI crude oil, as included in the Dated Brent basket. Changes involve setting specific maximum contents for Iron, Nickel, and Vanadium, and increasing the Reid Vapor Pressure limit. These adjustments, effective from June 2024, aim to ensure that the crude oil quality of ICE’s HOU futures aligns with the globally recognized quality standards of physical cargoes for export from the U.S. Gulf Coast to Europe.

Today, Trading Technologies International, Inc. announced it has established connectivity to the European Power Exchange (EPEX SPOT), Europe’s largest power exchange, via the TT platform. This new connection enables clients to trade in the European physical power markets on the TT platform for the first time.

FIA announced you can register today for L&C 2024 – FIA’s Law & Compliance Division Conference, taking place at the Gaylord National Resort in National Harbor, MD from April 24 to 26. Curated by legal and compliance experts, this year’s program tackles important developments in markets, law and technology.

The team at WilmerHale has published an alert titled “CFTC Year in Review: 23 Takeaways From 2023 and Predictions for 2024.” The law firm says, “This alert lays out 23 of our key takeaways from the CFTC’s past year and offers insights on what might take place in the coming months. We project what to expect with respect to rulemaking, enforcement, and policymaking in key areas like digital assets and voluntary carbon credit markets.” Those contributing to the alert included Matthew B. Kulkin (chair, futures and derivatives practice), Elizabeth L. Mitchell (partner}, Roin Gretchen (partner), Timothy F. Silva (chair, investment management practice), Tiffany J. Smith (co-chair, blockchain & cryptocurrency working group), Dino Wu (partner), Matthew Beville (special counsel), Joseph M. Toner (special counsel), Benjamin Lobley (senior associate), Alexandrea L. Rahill (senior associate), Andy V. Reynolds (senior associate), Ayana Dow (associate) and Joshua Nathanson (associate).

The Financial Times has a visual story titled “Inside the miracle of modern chip manufacturing” with the subheadline “After coming up against the limits of physics, scientists are rethinking chip architecture like never before.”

There is a great story in The Athletic, which is owned by the New York Times, about Purdue’s 7 foot four inch center Zach Edey titled “Toronto tall tales of Zach Edey: On the ice, the diamond … and ‘What’s a Purdue?'”

Mother Nature decided to send WGN Channel Nine weatherman Tom Skilling into retirement with a full slate of weather, as yesterday’s soaring 72 degree fahrenheit high temperature led to high winds, severe thunderstorms and tornadoes in Chicagoland last night. Today the temperatures are expected to drop to a low of 23 degrees, or 8 degrees with the windchill. Skilling can’t retire soon enough!

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


The YouTube channel Veritasium posted a video, The Trillion Dollar Equation (31 minutes long). The video details the history of the math that led to the Black-Scholes/Merton equation that made options trading mainstream. It will not teach you to trade options or use the equation (which I suspect most reading this already know). What it does do is show the fascinating line between physics and the trading we do today – more broadly, how math jumped disciplines. It’s a fun history lesson (did you know the earliest options were bought around 600 BC on the use of olive presses?). The video is well worth watching. ~JB

Our most read stories from our previous edition of JLN Options were:
– Traders Spent Over $20 Billion on Nvidia Options Last Week from The Wall Street Journal.
– Euronext launches Daily Options on the CAC 40 index from Euronext.
– BlackRock Says ‘New Regime’ Calls for More Active Management from Bloomberg. ~JB

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


Sponsored Content

Russell 2000 Index Quarterly Chartbook – February 2024

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SIX’s Martina Macpherson discusses the cyclical nature of ESG and new green assessment tools for small businesses

Martina Macpherson, the head of ESG Product Management at SIX, the Swiss Exchange Group, now Europe’s third largest stock exchange operator, spoke with Sally Duros for the John Lothian News ESG Podcast. In a wide-ranging conversation, Macpherson discussed her background and what brought her to SIX and ESG investing and its evolution.

Listen to the podcast »


Trading Technologies extends energy trading capabilities with connectivity to the European intraday physical power markets on EPEX
Trading Technologies International, Inc.
Trading Technologies International, Inc. (TT), a global capital markets technology platform provider, today announced connectivity to the European Power Exchange (EPEX SPOT), the largest power exchange in Europe. through the TT® platform. The connection gives clients the ability to trade the European physical power markets for the first time on the TT platform. In collaboration with a large European energy supplier, TT offers the new continuous intraday power trading capability to clients globally as a fully co-located service. Operating out of Paris, EPEX SPOT is an independent subsidiary of the European Energy Exchange (EEX) covering power markets in Austria, Belgium, Denmark, Germany, Finland, France, Luxembourg, the Netherlands, Norway, Poland, Sweden, the UK and Switzerland. Clients trading EPEX SPOT intraday markets on TT can leverage the platform’s sophisticated algorithmic and other automated trading tools, as well as its risk management capabilities across the trade life cycle.

****** Brings new meaning to powering up your TT terminal.~JJL


JPMorgan CEO Jamie Dimon warns no one will be able to escape the claws of AI-and that sets it apart from the dotcom bubble: ‘This is not hype’
Orianna Rosa Royle – Fortune
When it comes to artificial intelligence there are two camps: those who are skeptical about how much AI will impact our future and those who believe it will change the world forever. JPMorgan Chase’s CEO Jamie Dimon falls firmly in the latter group. Whether or not you currently work with technology, the billionaire boss of the New York-based bank has even insisted that nearly all professions will get an AI makeover.

****** Ask the trading floor runners and the deck holders how the change to electronic trading worked out for them.~JJL


Texas Fires Threaten Nuclear Weapons Plant to Oil Refining
Michelle Ma, Dan Murtaugh and Joe Carroll – Bloomberg
Firefighters in Texas face “another tricky day” as rampaging wildfires threaten everything from oil refineries to cattle ranches after prompting an evacuation of the main US nuclear weapons assembly plant. Shifting winds may push the blazes in new directions, and humidity will stay low enough so they can keep spreading, said David Roth, a senior branch forecaster with the US Weather Prediction Center. Rain and snow overnight may eventually give firefighters some help.

****** Just when you thought things in Texas could not get any worse, you are proven wrong.~JJL


Tuesday’s Top Three
Our top story Tuesday was Warren Buffett says the stock market is increasingly ‘casino-like’-and young investors need to remember this ‘one fact of financial life’ to avoid the mess, from Fortune via Yahoo Finance. Second was Nvidia bets dominate US options market as AI fervor grows, from Reuters. And third was How Index Evolution propels further growth of Derivatives, from Eurex.



Lead Stories

Crypto, Social-Media Scams Are on the Rise, State Regulators Warn
Kenneth Corbin – Barron’s
State securities regulators are seeing a surge in technology-driven scams involving digital assets and social media. The North American Securities Administrators Association on Tuesday released its latest enforcement survey reflecting cases member agencies investigated and took action to stop in 2022. “State securities regulators are on the front lines of the fight to stop bad actors from harming investors-as we often say, we are the cops on the beat,” Claire McHenry, Nasaa president and deputy director of the Nebraska Department of Banking and Finance, said in an online event discussing the report. “The data in this year’s report shows a tremendous commitment of resources put toward stopping schemes tied to precious metals and other commodities, digital assets, and internet and social-media fraud.”

Man Who Laundered Billions in Bitcoins Says Bitcoin Fog Was a Help: Bloomberg
Jesse Hamilton – Bloomberg
Ilya Lichtenstein, one of the crypto industry’s most high-stakes criminals, is now helping federal prosecutors in their case against Bitcoin Fog, one of the mixing services he said he’d used to conceal assets. Lichtenstein – known for the multi-billion Bitfinex hack of bitcoins worth $3.6 billion when he pleaded guilty to money laundering last year – appeared this week in a Washington, D.C., trial of the accused operator of the mixing service associated with darkweb criminality, according to a report from Bloomberg News.

Investing Platform Webull to Go Public Through SPAC Deal; The brokerage, which surged in popularity during the GameStop mania, had previously considered an IPO
Hannah Miao – The Wall Street Journal
Digital brokerage Webull said it has struck a deal to go public through a merger with a special-purpose acquisition company. Webull said it would merge with SK Growth Opportunities, which trades on the Nasdaq under the ticker SKGR. After the deal’s closing, the combined company would be listed on the Nasdaq as Webull. Webull expects to begin trading under a new ticker around September, according to Webull Group President Anthony Denier.

Traders amass big bet on falling grain prices after bumper harvests; Biggest short bet in 20 years in corn, wheat and soy futures suggests market slump could continue
Susannah Savage and George Steer – Financial Times
Commodity traders have increased their bets on a slump in grain prices as bumper harvests lead to a global supply glut of corn, wheat and soyabeans. Hedge funds and other speculators have accumulated a net short position of 546,000 futures contracts across the three crops, the largest negative bet in nearly 20 years, according to the latest figures from the US Commodity Futures Trading Commission.

The unfulfilled potential of Europe’s stock markets; The EU is missing out on trillions of euros of capital for its businesses
The Editorial Board
The S&P 500’s record-breaking start to the year was followed last week by the Stoxx Europe 600, which hit an all-time high and surpassed its previous peak in January 2022. Stock watchers are used to European equities being pipped to milestones by fast-growing American indices. Between 2009 and 2023, cumulative S&P 500 gains were five times those of the Euro Stoxx 50, a eurozone blue-chip index, in local currency terms. Businesses still dream of listing in New York, not Paris or Amsterdam. US stock markets are deeper and more liquid, investors tend to be less risk averse, and regulation is less onerous.

Why London’s Once-Vibrant Stock Market Is in a Rut
Swetha Gopinath, Michael Msika, and Joe Easton – Bloomberg
Since Prime Minister Margaret Thatcher unleashed a wave of privatizations in the 1980s, the London Stock Exchange has been a symbol of Britain’s free-market economy. Home to companies that dominate global industries, including AstraZeneca Plc, Shell Plc and HSBC Holdings Plc, the FTSE 100 Index is an international benchmark. However, trading volume has slumped in recent years and some British companies have picked other markets to list their shares. That appears to fit the narrative of a nation whose economy is being held back by weak productivity, under-investment and the jolt to trade from Brexit. Yet there are other, more complex factors at play.

Politicians Urge SEC to Leave Robinhood-Style Trading Apps Alone
Alexander Osipovich – The Wall Street Journal
A bipartisan group of members of Congress is urging the Securities and Exchange Commission to dump its proposal to restrict the use of advanced analytics and artificial intelligence by firms such as Robinhood Markets. In a Tuesday letter to SEC Chair Gary Gensler, 20 members of the House of Representatives described the agency’s proposed rule as overly broad and warned that it could limit access to even the simplest investing tools, such as web-based retirement calculators.

Sam Bankman-Fried Calls for Shorter Prison Sentence, Citing Autism; Lawyers for the FTX founder say he wasn’t motivated by greed but by a desire to better the world through philanthropic giving
Caitlin Ostroff – The Wall Street Journal
Sam Bankman-Fried’s attorneys suggested a sentence of five to six years in prison, sharply lower than the roughly 100 years that he faces for stealing billions of dollars from FTX customers. Lawyers for Bankman-Fried argued for 63 to 78 months in jail, citing medical conditions, including autism, and his intentions to better the world with his now-fallen crypto exchange.

FTX Trial: Read the Sentencing Memo From Sam Bankman-Fried’s Lawyers
WSJ Staff
Sam Bankman-Fried’s attorneys suggested the crypto entrepreneur receive a sentence of five to six years in prison-much less than the roughly 100 years he faces for stealing billions of dollars from FTX customers. Read the full sentencing memo here.

Sam Bankman-Fried pleads for lenient prison sentence after fraud conviction; FTX founder should face no more than six and a half years behind bars, his lawyers argue ahead of hearing next month
Joe Miller – Financial Times
Sam Bankman-Fried deserves to spend just a few years in prison, lawyers for the convicted FTX founder have argued in a last-ditch appeal for clemency, portraying him as a “selfless” and “altruistic” young man who “committed his life to philanthropy”. The former crypto tycoon, who was found guilty on seven charges of fraud and money laundering last year, is a “first-time, non-violent offender…in a matter where victims are poised to recover – were always poised to recover – a hundred cents on the dollar”, they said in a court filing on Tuesday.

FTX fraudster Sam Bankman-Fried asks judge for 6.5 or years or less, says public doesn’t know his ‘true’ self
Leo Schwartz – Fortune
As Sam Bankman-Fried faces the prospect of decades in prison, the disgraced FTX founder is making one last plea for a lenient sentence from a federal judge. In a filing on Tuesday night, Bankman-Fried’s new team of attorneys made their recommendation to Judge Lewis Kaplan, who oversaw the criminal trial last fall where a jury convicted Bankman-Fried on seven fraud-related counts related to the November 2022 collapse of his crypto empire, FTX.

Sam Bankman-Fried Makes His Last Stand; Since the disgraced cryptocurrency mogul was convicted of fraud last year, his supporters have maneuvered to secure a lenient sentence and change the public narrative about his case.
David Yaffe-Bellany and Matthew Goldstein – The New York Times
Since Sam Bankman-Fried was convicted of fraud last year, he has hired a new lawyer known for courtroom showmanship. A group of sympathetic law professors has pushed for a reappraisal of his actions. And his parents have turned for help to former employees of FTX, the collapsed cryptocurrency exchange he founded. From a federal detention center in Brooklyn, Mr. Bankman-Fried, 31, has continued to fight his case behind the scenes, as he argues for a lenient sentence and prepares to appeal his conviction. On Tuesday, his lawyers are scheduled to file a legal memo in the U.S. District Court in Manhattan, making the case that he doesn’t deserve to go to prison for the rest of his life.

Sam Bankman-Fried’s parents are begging a judge to keep him out of prison, warning their son’s social awkwardness could put him in ‘extreme danger’
Jacob Shamsian – Business Insider
Sam Bankman-Fried’s family members begged the judge who oversaw his criminal trial to give him a light sentence, arguing that his social awkwardness could put him in “extreme danger” behind bars. “I genuinely fear for Sam’s life in the typical prison environment,” Barbara Fried, his mother, wrote in a letter to the judge. “Sam’s outward presentation, his inability to read or respond appropriately to many social cues, and his touching but naive belief in the power of facts and reason to resolve disputes, put him in extreme danger.”

In America, there is finally good news on the anti-money laundering front; The Biden administration is making a serious and concerted effort to clamp down on the practice
Casey Michel – Financial Times
For years, the US acted as one of the world’s leading centres for money laundering and offshore finance. Now, that reality is changing fast. With little fanfare, the US has in the past few weeks announced or implemented new reforms across a range of sectors that traditionally lent themselves to money laundering. All of this is an outgrowth of the Biden administration’s focus on countering corruption.

The SEC’s Latest Insider-Trading Theory; The agency rewrites the law to invent a new offense: ‘shadow trading.’
The Editorial Board – The Wall Street Journal
Congress has never clearly defined insider trading in stocks, but that hasn’t stopped the Securities and Exchange Commission and prosecutors from finding the meaning in statutory penumbras. Chairman Gary Gensler’s SEC is at it again in a civil trial next month that will try to extend its reach to punish trading in the shares of another company about which the defendant had no insider information. Federal law doesn’t explicitly ban trading on confidential information. But courts have said that insiders defraud companies by “misappropriating” private information for personal gain. In a classic case, an insider trades in his company’s stock based on proprietary information or tips off someone else who then trades and cashes in. While courts have circumscribed insider-trading liability, regulators keep inventing new theories.

China Tells Quants to Phase Out Strategy Blamed for Turmoil
Chinese regulators are taking steps to gradually shrink the size of a popular quantitative trading strategy that contributed to turmoil in the nation’s stock market this month, according to people familiar with the matter. Some quantitative funds that manage “Direct Market Access” products for external clients were told to stop accepting new inflows and phase out their existing products, which typically use swap contracts and are often highly leveraged, the people said, requesting not to be named because they weren’t authorized to speak publicly. The gradual exit would help prevent drastic selloffs, the people said.

The EU Gives Carbon Traders What They Want – More Rules; New regulations should help establish benchmarks for offset credits.
Lara Williams – Bloomberg
The European Union is quietly setting the direction for the future of the carbon markets, with two pieces of regulation clearing big hurdles in recent weeks. Watch closely, because these initiatives will reshape the industry. On Tuesday , the European Commission and the European Parliament struck a provisional deal to compile rules for certifying carbon-removal credits – the Carbon Removal Certification Framework (CRCF). “This is the first time in history that we have a policy which clearly defines quality carbon removal and seeks to quantify it,” Sebastian Manhart, senior policy advisor at removals marketplace Carbonfuture GmbH, told me. “Other nations will probably copy it.”

The Great Irony of Modern Markets
WSJ Staff
Here is a great irony of 21st-century capitalism, according to Streetwise columnist James Mackintosh: Private investors are so ineffective at corporate governance that state funds have stepped in. “Money floods into shares based on memes, is shifted around by algorithms based on past patterns, or goes into vast passive index trackers sold on the basis of being virtually free,” he writes.

CFTC Seeks Comments on Use of AI in Derivatives Markets
Alexander Holtan, Douglas Youngman – Holland & Knight LLP via JDSupra
The Commodity Futures Trading Commission (CFTC) has issued a request for comment (RFC) seeking public input on the use of artificial intelligence (AI) in CFTC-regulated markets. The RFC – distributed jointly by the CFTC’s Divisions of Market Oversight, Clearing and Risk, Market Participants and Data, along with the Office of Technology Innovation – was issued partially in response to an Executive Order issued by the White House on Oct. 30, 2023, encouraging federal agencies to “consider using their full range of authorities to protect American consumers from fraud, discrimination and threats to privacy and to address other risks that may arise from the use of AI.” The RFC will remain open for submission of comments until April 24, 2024.

Shein Tempts London With Prospect of Biggest-Ever Listing
Sagarika Jaisinghani, Alexandra Muller and Alex Wickham – Bloomberg
A multi-billion dollar listing by fast fashion label Shein could become London’s biggest ever IPO, although analysts are wary that the plan, revealed by Bloomberg News, may never come to fruition. The company, founded in China and popular with young shoppers around the world, is applying to list in New York yet faces political and regulatory hurdles in the US as well as scrutiny from Chinese authorities. The Securities and Exchange Commission has been urged to block the listing by US politicians such as Marco Rubio, partly due to accusations that cotton from forced labor in the Xinjiang region was used in Shein’s clothing.

John Kerry blasts US investors for scaling back on climate action; Large asset managers will end up on the ‘wrong side of history’, Washington envoy says
Attracta Mooney and Brooke Masters – Financial Times
Departing US climate envoy John Kerry has accused asset managers of “turning away from science” just weeks after a clutch of the world’s biggest investors stepped back from an industry group set up to tackle climate change. JPMorgan Asset Management, Pimco and State Street Global Advisors this month announced they would leave Climate Action 100+, an initiative to encourage companies to take action on climate change. BlackRock, the world’s largest asset manager, said it would play a lesser role in the group.

Bank of England says cash still ‘hugely relevant’; New banknotes will feature King Charles III
Martha Muir – Financial Times
The value and number of banknotes in circulation has increased sharply since 2020, said the Bank of England as it marked the opening of a new exhibition on the future of money. Counter to the view that cash is in terminal decline, the total value of notes in circulation has risen by nearly 16 per cent, while the total volume is up by nearly 17 per cent, according to the bank’s data.

Ukraine Invasion

Russian Oil Tankers Behave Strangely After Latest US Sanctions
Julian Lee – Bloomberg
Two oil tankers appeared to stop what they were doing off the coast of Greece just a few days after the US Treasury imposed fresh sanctions on 14 Russian ships, another sign of how a toughening of western measures is disrupting Moscow’s petroleum trade.The NS Creation and the Zaliv Amurskiy seemed to abandon a so-called ship-to-ship oil cargo transfer that they were undertaking in the Laconian Gulf, an expanse of water to the south of Greece, ship-tracking data compiled by Bloomberg show. This isn’t the first time that ships involved in Russia’s oil trade have maneuvered oddly soon after being sanctioned. Another one performed a near-immediate u-turn after being designated by the Treasury earlier this month, and almost all those specifically identified by the US late last year or early in 2024 haven’t loaded cargo since.

Ukraine will be on back foot in war for months, says UK armed forces chief; Kyiv unlikely to be able to mount fresh counteroffensive until late summer at very earliest, says Adm Sir Tony Radakin
Dan Sabbagh, Defence and security editor – The Guardian
Ukraine is expected to remain short of ammunition and on the back foot in its war with Russia for several months until the west agrees further steps to support Kyiv, the head of Britain’s armed forces has acknowledged. Adm Sir Tony Radakin, speaking at a conference in London, did not directly comment on a French suggestion of deploying western ground troops in Ukraine, but instead emphasised an urgent need to increase industrial assistance.

Use profits from frozen Russian assets to arm Ukraine, says Ursula von der Leyen; European Commission head outlines plans for joint weapons procurement for Kyiv
Henry Foy and Alice Hancock and Paola Tamma – Financial Times
Ursula von der Leyen said windfall profits from Russian frozen assets should be used to buy weapons for Ukraine as discussions intensified between European allies about how to continue supporting the war-torn country. The proposal is the latest idea about how to use the roughly EUR 300bn in Russian sovereign assets frozen by G7 allies in response to Moscow’s full-scale invasion of Ukraine two years ago, amid a lack of consensus over the legality of using the funds and the most appropriate way to do so.

Israel/Palestine Conflict

Israeli soldier’s video diaries offer unique perspective on war in Gaza
Geoff Bennett and Malcolm Brabant – PBS
We have a rare glimpse into the Israel-Hamas war from an ordinary Israeli infantryman, Sam Sank, who in normal life works in information technology. His period of service has just ended and special correspondent Malcolm Brabant caught up with him during a brief visit to the Sank family home in London.

Exchanges, OTC and Clearing

Euronext FX appoints new head of sales; Individual has been with the business since 2018; previously worked at Brown Brothers Harriman (BBH), HSBC global banking and markets, and Bank of New York Mellon.
Claudia Preece – The Trade
Stuart Parris has been appointed head of sales at Euronext FX, overseeing a global sales team covering the Americas, EMEA and APAC regions. Parris has been with the business since 2018 and has held different senior roles during his tenure, most recently as director, EMEA sales focused on sell-side tier 1 client engagement.

EEX to work with local bourse on carbon trading in Turkey
The European Energy Exchange (EEX) and Turkish energy bourse Enerji Piyasalari Isletme A.S. (EPIAS) on Wednesday signed a memorandum of understanding underlining their commitment to developing carbon emissions trading in Turkey. “We look forward to working with EPIAS in creating a robust emissions trading system (ETS) in Turkey by providing our expertise in carbon markets,” said EEX chief executive Peter Reitz in a press release issued in Germany.

Cboe Global Markets to Present at the Raymond James Institutional Investors Conference on March 4
Cboe Global Markets, Inc. (Cboe: CBOE), the world’s leading derivatives and securities exchange network, announced today that Fredric Tomczyk, Chief Executive Officer, Jill Griebenow, Executive Vice President and Chief Financial Officer, and David Howson, Executive Vice President and Global President, will present at the Raymond James Institutional Investors Conference in Orlando, Florida on Monday, March 4 at 8:05 a.m. ET. The live webcast and replay of the presentation will be accessible at in the Investor Relations section, under Events and Presentations. The archived webcast is expected to be available within an hour of the presentation.

DTCC Comments on Affirmation Progress for DTC Trade Submission as T+1 Draws Near
DTCC issued the following statement: “With the U.S. transition to a T+1 settlement cycle less than three months away, market participants must accelerate their preparations with a focus on enhancing operational efficiencies, including the achievement of same-day affirmation. When the SEC adopted final T+1 rules, the agency instituted new requirements around same-day affirmation practices for both broker-dealers and certain institutional investors to help ensure timely settlement in a T+1 environment. Importantly, the requirement for broker-dealers is that they take certain actions so that 100% of all trades are affirmed as soon as technologically practicable and no later than the end of trade date, as reinforced by FINRA in a recent regulatory notice.

EEX Press Release – EEX and EPIAS sign MoU for the development and implementation of a Turkish ETS
The European Energy Exchange (EEX) and the Turkish energy exchange Enerji Piyasaları Isletme A.S. (EPIAS) today signed a Memorandum of Understanding to underline their joint commitment in developing the Emissions Trading System (ETS) in Turkiye. Peter Reitz, CEO of EEX, says: “EEX has a proven track record in developing and operating emissions trading schemes in Europe and beyond. We look forward to working with EPÄ°AÅž in creating a robust ETS in Türkiye by providing our expertise in carbon markets. National ETS are essential to create a global carbon price, and hence, an important market-based tool to drive decarbonisation. We are committed to contributing to the development of carbon pricing all around the globe.”

ICE to Align Crude Quality Contract Specifications of ICE Midland WTI (HOU) Futures with Physical Gulf Coast Crude Cargoes
Intercontinental Exchange
Intercontinental Exchange (NYSE: ICE), a leading global provider of technology and data, today announced plans to further align the ICE Midland WTI (ICE:HOU) futures contract with Midland WTI crude oil included in the Dated Brent basket. The contract changes to the crude oil quality of ICE HOU futures include the addition of a maximum Iron content of 10 milligrams per kilogram (mg/kg) and to replace the combined Nickel and Vanadium maximum content of 3.0 mg/kg to individual maximum contents for Nickel and Vanadium of 2.0 mg/kg each. In addition, the Reid Vapor Pressure (RVP) maximum of the crude will increase by 0.5 pounds per square inch (Psi) to 9.5 Psi.

Construction of JPX’s Integrated Data Services Platform (J-LAKE)
Japan Exchange Group
We at JPX Market Innovation & Research, Inc. (JPXI), the strategic data and digital business arm of Japan Exchange Group, Inc. (JPX), has started JPX’s integrated data services platform J-LAKE on Amazon Web Services (AWS) and hope to release it before the end of FY2024. We will use J-LAKE to centralize the management of JPX’s data and distribute it promptly and accurately based on an analysis of client needs, thereby accelerating efforts to improve the attractiveness of the Japanese financial and capital markets as a whole and to make the potential of these markets more appealing both inside and outside Japan.

FTSE China Index Series Quarterly Review – Q1 2024
London Stock Exchange Group
Four additions to the FTSE China A50 Index. Three additions to the FTSE China 50 Index. FTSE Russell, a leading global index provider, has today announced the results of the FTSE China Index Series quarterly review for March 2024.

Position Limits – Government Of Canada Bond Listed Products (Spot Month)
The applicable position limits for the Government of Canada bond futures and options on the Government of Canada bond futures have been updated and are reflected in the position limit file. The position limit file is retrievable here. The position limits will apply as follows:

Nasdaq Announces Mid-Month Open Short Interest Positions in Nasdaq Stocks as of Settlement Date February 15, 2024
At the end of the settlement date of February 15, 2024, short interest in 3,153 Nasdaq Global MarketSM securities totaled 10,714,388,932 shares compared with 10,558,925,893 shares in 3,159 Global Market issues reported for the prior settlement date of January 31, 2024. The mid-February short interest represents 2.83 days compared with 2.85 days for the prior reporting period.

Replacements in indices
National Stock Exchange of India
The Index Maintenance Sub-Committee (Equity) of NSE Indices Limited has decided to make the replacement of stocks in various indices as part of its periodic review as listed hereunder. These changes shall become effective from March 28, 2024 (close of March 27, 2024).

Appendix 3Y
Change of Director’s Interest Notice
Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.


FIS acquires post-trade platform Torstone Technology; Upstart fintech gains a major partner having built up its SaaS post-trade platform over the past 13 years, as FIS continues to bolster capital markets tech offering.
Jonathan Watkins – Financial Times
Fintech giant FIS has acquired SaaS post-trade platform Torstone Technology, according to multiple sources close to the matter. The deal will further bolster FIS’ capital markets technology offering, having acquired SunGard in a major deal back in 2015. The firm has also made waves through a number of other bolt-on acquisitions and landmark mandates.

Stripe Strikes Employee Share Deal Valuing Firm at $65 Billion
Paige Smith – Bloomberg
Stripe Inc. struck a deal with investors that allows current and former employees to cash out some of their shares in an offering valuing the startup at $65 billion, according to a statement. Under the deal, Stripe and some of the firm’s investors will buy more than $1 billion of stock from such staffers, according to a person familiar with the matter who asked not to be identified discussing private information. Stripe said in the statement that using a portion of its own capital to buy the shares will offset dilution from the firm’s employee equity compensation programs.

Daniel Křetínský drops plans to buy Atos unit; End of talks with Czech billionaire piles pressure on French IT company which seeks to avoid insolvency proceedings
Sarah White and Adrienne Klasa – Financial Times
Czech billionaire Daniel KÅ™etínský has dropped plans to buy a unit of Atos, imperilling last-ditch efforts by the French IT company to avoid insolvency proceedings. Atos said on Wednesday that talks with EPEI, KÅ™etínský’s investment vehicle, had ended with no agreement over the purchase of its lossmaking division, Tech Foundations.

AI is Uncle Sam’s new secret weapon to fight fraud
Matt Egan – CNN
Uncle Sam has quietly deployed a new secret weapon designed to catch bad guys trying to steal from taxpayers: artificial intelligence. Starting around late 2022, the Treasury Department began using enhanced fraud-detection methods powered by AI to spot fraud, CNN has learned. The strategy mirrors what is already being done in the private sector. Banks and payment companies are increasingly turning to AI to root out suspicious transactions – which the technology can often do with lightning speed.

Call-Center Firm Sinks on Klarna Claims AI Is Doing Agents’ Jobs; France’s Teleperformance slumps on fears over AI impact; Klarna says AI helps solve customer errands faster than humans
Paul Jarvis and Henry Ren – Bloomberg
Teleperformance SE shares plunged on Wednesday after a statement from Klarna rekindled concerns over the impact of artificial intelligence on the French firm’s call-center business. Buy-now-pay-later firm Klarna said its AI assistant, powered by OpenAI, is doing the equivalent work of 700 full-time agents and has had 2.3 million conversations, equal to two-thirds of its customer service chats within the first month of being deployed. The AI tool resolved errands much faster and matched human levels on customer satisfaction, Klarna said.

Amazon to invest in start-ups that combine AI with robotics; Franziska Bossart, head of ecommerce giant’s $1bn innovation fund, vows to increase deals aimed at automating retail network
Camilla Hodgson – Financial Times
Amazon’s $1bn industrial innovation fund is to step up investments in companies that combine artificial intelligence and robotics, as the ecommerce giant seeks to drive efficiencies across its logistics network. Franziska Bossart, head of the corporate venture capital arm that was set up in 2022, told the Financial Times that “generative AI holds a lot of promise for robotics and automation” and is an area “we are going to focus on this year”.

Google CEO Calls AI Chatbot Responses Biased and Unacceptable; Sundar Pichai tells employees the company will make structural changes after controversy over ahistoric images and blocked requests
Miles Kruppa – The Wall Street Journal


Revamped Cybersecurity Guidance Is Map for Regulators, Companies; Updated NIST framework has expanded corporate focus; New guidance on managing cyber governance, third-party risks
Skye Witley – Bloomberg
Expanded US Commerce Department cybersecurity guidance released this week could yield a sweeping “Rosetta Stone” of digital security for regulators, as well as a compliance blueprint for a wide array of entities with a history of questionable network security practices. The department’s National Institute of Standards and Technology added new sections on corporate governance responsibilities and supply chain risks to its cybersecurity framework on Feb. 26 , which were previously limited to guidance on protecting critical infrastructure. The latest framework contains a litany of cybersecurity best practices and implementation tools for a range of organizations including schools, small businesses, and local governments.

AI in cybersecurity presents a complex duality
Help Net Security
Companies more than ever view GRC (Governance, Risk, and Compliance) as a holistic process and are taking steps toward getting a complete view of their risk environment and compliance obligations, according to Hyperproof.


Binance to Lure Non-Crypto Traders With New VIP Program
Muyao Shen – Bloomberg
Binance is launching a program that it hopes will attract a new cohort of traders from traditional markets while the world’s biggest cryptocurrency exchange loses market share. The initiative will allow new users to apply for Binance’s VIP program using their aggregated volume of cryptocurrencies and traditional assets, like equity, from other external trading venues, according to a statement.

Hot New Bitcoin Funds Could Soon Have Rivals; BlackRock, Fidelity and other Wall Street firms have applied to launch ether ETFs
Vicky Ge Huang – The Wall Street Journal
Wall Street firms launched bitcoin exchange-traded funds just a few weeks ago. Now, they want to offer everyday investors funds holding a smaller and more volatile crypto asset. At least 10 firms including BlackRock and Fidelity Investments have filed applications to launch what would be the first U.S.-listed ETFs holding ether, the second-largest cryptocurrency. As with bitcoin and other ETFs, the firms would earn management fees for any investments people make.

BlackRock Bitcoin ETF Hits Record Volume of Over $1.3B for Second Consecutive Day
Krisztian Sandor, Helene Braun – CoinDesk
BlackRock’s spot bitcoin {{BTC}} exchange-traded fund (ETF) had another massive trading day Tuesday, recording over $1.3 billion in daily trading volume for the second consecutive day, fueled by bitcoin’s rally to $57,000. BlackRock’s IBIT booked $1.357 billion in trading volume during the day, breaking Monday’s record of $1.3 billion, Bloomberg Intelligence ETF analyst Eric Balchunas noted in an X post Tuesday afternoon at market close. Nearly 42 million shares changed hands, Nasdaq data showed, more than double of the average since it started trading in January.

The New Face of Crypto: Wall Street’s Big Firms; What’s next for Bitcoin as the financial industry’s selling machine revs up.
Joe Light – Barron’s
Wall Street finally has its hands on Bitcoin. Investors are about to see what happens when its selling machine springs into action. The new Bitcoin exchange-traded funds-from BlackRock, Fidelity Investments, and other firms-top $16 billion in assets since launching in early January. All told, Bitcoin ETFs hold more than $40 billion, including the giant Grayscale Bitcoin Trust, which converted to an ETF.


Senators Stabenow, Boozman Statement on the Confirmation of Dr. Basil Gooden and Summer Mersinger
U.S. Senate Committee on Agriculture, Nutrition & Forestry
U.S. Senators Debbie Stabenow (D-Mich.), Chairwoman of the U.S. Senate Committee on Agriculture, Nutrition, and Forestry, and John Boozman (R-Ark.), Ranking Member, announced that the Senate has confirmed Dr. Basil Gooden to be Under Secretary of Agriculture for Rural Development and the Honorable Summer Mersinger to serve a second term as a Commissioner of the Commodity Futures Trading Commission.

Central Bankers Used to Keep Out of Politics. Not Any More; Policymakers more accustomed to fighting inflation are now finding themselves staring down politicians in a high-wire contest for their independence
Jana Randow – Bloomberg
Bundesbank board member Sabine Mauderer stepped uneasily from side to side as she waited to speak. From the stage she could watch the crowds of anti-fascist demonstrators filling Frankfurt’s central square and hear the chants that have rung out across Germany in response to the rise of the far-right AfD. Such rallies have become common this year after a surge in its support. But for a central banker to speak at one is unusual, still, and risky.

Nvidia billionaire co-founder created a $70 million supercomputer at University of Florida. Then Ron DeSantis banned top AI experts from China
Michael Smith and Bloomberg via Fortune
When Chris Malachowsky, a billionaire founder of chip giant Nvidia Corp., bankrolled one of the world’s biggest supercomputers at the University of Florida, Ron DeSantis predicted the machine would be a magnet for artificial intelligence talent. Almost four years later, the Florida governor’s anti-China crusade is preventing some highly skilled AI researchers from ever setting foot in the state.

Trump Eyes $4 Billion Stock Windfall as His Legal Bills Pile Up
Bailey Lipschultz – Bloomberg
On the financial front, the news has appeared dire for former president Donald Trump this year. Within a span of just a month, two judges in two separate cases ordered him to pay about $540 million in total – a sum so great that pundits have speculated it could erode his campaign finances.

John Kerry blasts US investors for scaling back on climate action; Large asset managers will end up on the ‘wrong side of history’, Washington envoy says
Attracta Mooney and Brooke Masters – Financial Times
Departing US climate envoy John Kerry has accused asset managers of “turning away from science” just weeks after a clutch of the world’s biggest investors stepped back from an industry group set up to tackle climate change. JPMorgan Asset Management, Pimco and State Street Global Advisors this month announced they would leave Climate Action 100+, an initiative to encourage companies to take action on climate change. BlackRock, the world’s largest asset manager, said it would play a lesser role in the group.

More than 140,000 UK SMEs suffered ‘debanking’ last year; Data to MPs from 8 lenders show concerns over financial crime and risk appetite among reasons for business account closures
Michael O’Dwyer and Akila Quinio – The Wall Street Journal


How the CFTC Stays on Top of Financial Market Innovations; The U.S. Commodity Futures Trading Commission has fostered collaboration with other financial industry regulators while maintaining its independence.
Wharton School of the University of Pennsylvania
The rapid evolution of the financial industry with advanced technologies has demanded increased agility from regulatory agencies to adapt, and also govern cohesively between themselves. The U.S. Commodity Futures Trading Commission (CFTC), which regulates the derivatives markets, including futures, swaps, and select options, has risen to the challenge, according to three former CFTC chairmen – J. Christopher Giancarlo, Heath Tarbert, and Timothy Massad.

SIFMA: Proposed Basel III Endgame new trading capital rules would hobble U.S. banks, capital markets, and the broader economy
Kenneth E. Bentsen, Jr. – Fortune
There has been widespread criticism of the proposed Basel III Endgame reforms of U.S. bank capital requirements from both sides of the aisle and all corners of the economy. U.S. bank capital levels are already extraordinarily robust by historical standards as they appropriately balance financial stability with economic growth. The Basel Endgame proposal would dramatically hike capital requirements, resulting in higher prices and increased costs of financing for American businesses and consumers.

Founder Used Burner Account to Boost Meme Stock Alfi, SEC Claims
Austin Weinstein – Bloomberg
The co-founder of a now-bankrupt advertising software firm posted phony, bullish statements about the company with a pseudonymous social media account to drive up its share price, the Securities and Exchange Commission alleged Tuesday. Paul Pereira, who served as chief executive officer of Alfi from 2018 to 2022, used an account on Stocktwits to mislead investors about the company’s financials, according to a lawsuit from the regulator filed in federal court in Miami. He also used the account, which he created in May 2021 with the name “uptix12,” to disparage users who criticized Alfi, the SEC alleged.

SEC Charges Former Alfi CEO Paul Pereira with Fraud for Making False Statements on Social Media
The Securities and Exchange Commission today charged Paul A. Pereira, the former CEO and co-founder of Alfi, Inc., with making materially false and misleading statements on social media about the company’s financial and performance metrics in an attempt to boost the now defunct company’s stock price.

Prepared Remarks before the Small Business Capital Formation Advisory Committee
Chair Gary Gensler – SEC
I understand that the Committee will be deliberating recommendations on the definition of accredited investor and hear from experts on the state of the initial public offering (IPO) market. Since the 1930s, we’ve benefitted from the basic bargain Congress embedded in the securities laws. Congress required that public offerings of securities be registered with the SEC and include specified disclosures to investors. Congress also recognized that there were certain transactions or issuers that would be exempt from such disclosure requirements, in essence, forming part of the private markets. We’ve seen continued development over the years of robust public and private markets, and our economy has benefited from both.

Remarks at the Small Business Advisory Committee Meeting
Commissioner Jaime Lizarraga – SEC
As highlighted in the Small Business Advocate’s most recent Annual Report, much work remains to be done. Last year, 78 percent of small business owners expressed concerns about their ability to access capital. In 2022, compared to 2020, nearly 4 times more startups failed due to lack of financing or investors. Venture capital’s reach into disadvantaged communities remains very limited. In 2022, Latino, African-American, and women-only founders each received less than 2 percent of VC dollars. Rural small businesses fared no better.

Angels and IPOs: Remarks Before the Small Business Capital Formation Advisory Committee
Commissioner Hester M. Peirce – SEC
A company should succeed or fail based on how well it serves customers, not on whether its founder has a network of rich friends or whether it is located in Silicon Valley. On a recent trip to Pittsburgh, through the kind assistance of former Committee member Catherine Mott, I met with early-stage, regionally-focused investors. Pittsburgh is a lot like my hometown of Cleveland-a city with a proud history of being at the center of the country’s economic growth during the industrial era and a promising future being built on a new set of industries, such as biotech and robotics. But getting capital flowing in places like Pittsburgh is key to that future. One important source is local angel networks that fund founders in their communities. Changing the accredited investor definition to prevent more Americans from investing in private markets, as some suggest, could devastate these networks.

Final Judgments Entered Against Harmel S. Rayat, Jatinder Bhogal, and RenovaCare, Inc. in Microcap Fraud Case
On February 27, 2024, the Honorable Lewis J. Liman entered final judgments against defendants Harmel S. Rayat, Jatinder Bhogal, and RenovaCare, Inc., along with relief defendant 1420527 Alberta Ltd., in SEC v. Harmel S. Rayat, et al., No. 1:21‑cv‑04771, a case in the United States District Court for the Southern District of New York. The SEC’s amended complaint, filed on August 30, 2022, charges Rayat, a Canadian citizen and controlling shareholder of RenovaCare, Bhogal, a Canadian citizen and former advisor and chief operating officer of RenovaCare, and RenovaCare, a Nevada corporation purportedly developing a medical device called the “SkinGun,” with securities fraud. The amended complaint alleges the defendants conducted a fraudulent “pump and dump” scheme that included materially false statements to investors, undisclosed sales of shares while promoting the stock, and manipulative trading. The amended complaint also charges other associates of Rayat and Bhogal, and names several relief defendants, including 1420527 Alberta Ltd., an entity Bhogal owns and controls. Rayat, Bhogal, and RenovaCare consented to the final judgments without admitting or denying the allegations.

SEC Charges Former Alfi CEO Paul Pereira with Fraud for Making False Statements on Social Media
The Securities and Exchange Commission today charged Paul A. Pereira, the former CEO and co-founder of Alfi, Inc., with making materially false and misleading statements on social media about the company’s financial and performance metrics in an attempt to boost the now defunct company’s stock price.

Investing and Trading

Investors Bid Record EUR2.6 Trillion for Europe’s Bond Bonanza
Hannah Benjamin-Cook and Paul Cohen – Bloomberg
Investors have put in a record EUR2.6 trillion ($2.8 trillion) of orders for new bond sales in Europe so far this year, outbidding the debt on offer by the most ever. Total orders have reached more than five times the record EUR507 billion of issuance in Europe’s syndicated primary market in the first two months of 2024, according to data compiled by Bloomberg. That’s higher than any subscription ratio covering similar amounts and periods since at least 2018, when Bloomberg first started collating the data.

Is There an AI Bubble? The Nifty Fifty Show It Isn’t That Simple; Investors need a new term for a market that isn’t in a bubble but still carries a higher-than-normal risk of disappointment
Jon Sindreu – The Wall Street Journal
Is artificial intelligence blowing a bubble? Probably not, but the rally is still risky. Nvidia has become the undisputed leader in a stock market powered by AI hopes. Valuations are lofty for both the U.S. chip maker and the technology giants that are buying its products to train their AI models-a group dubbed the Magnificent Seven. Some investors worry a bubble may be inflating. The famous “Nifty Fifty” stocks of the 1970s are one guide to today’s hopes and fears. They were also powerful blue-chip corporations with extravagant valuations. Whether they ended up justifying them is still a matter of debate.

CRE and systemic risk; It’s probably not going to cause a financial crisis…but non-bank lenders and investors are still worth a look
Alexandra Scaggs – Financial Times
Last week we looked at smaller regional banks with the greatest exposure to US commercial property loans. Now it’s worth reviewing what systemic risk – if any – could come from these loans. This discussion isn’t all that new; see the many pieces written (by us and Unhedged) about US regional banks and commercial real estate over the past year. But the slide in office valuations is ongoing. And because New York Community Bancorp has given investors a scare, and as the Fed’s BTFP facility starts to wind down, it’s worth revisiting.

Cocoa Jumps to Fresh Record on Persistent Supply Fears
Áine Quinn and Dayanne Sousa – Bloomberg
Cocoa’s rally shows no sign of slowing, with prices surging to a fresh record in New York on mounting fears about supply shortages. Futures climbed as much as 5% on Monday, after capping the biggest weekly jump since 1999. Prices have soared as drought and disease ravaged crops in key West African producers, threatening to raise costs for chocolate makers that risk being passed on to consumers.

Flawed Valuations Threaten $1.7 Trillion Private Credit Boom
Silas Brown, Laura Benitez, John Sage, Kat Hidalgo and Ellen Schneider – Bloomberg
Colm Kelleher whipped up a storm at the end of last year when the UBS Group AG chairman warned of a dangerous bubble in private credit. As investors dive headfirst into this booming asset class, the more urgent question for regulators is how anybody could even know for sure what it’s really worth. The meteoric rise of private credit funds has been powered by a simple pitch to the insurers and pensions who manage people’s money over decades: Invest in our loans and avoid the price gyrations of rival types of corporate finance. The loans will trade so rarely – in many cases, never – that their value will stay steady, letting backers enjoy bountiful and stress-free returns. This irresistible proposal has transformed a Wall Street backwater into a $1.7 trillion market.

It turns out, the U.S. is one of the least concentrated stock markets in the world
Steve Goldstein – MarketWatch

Environmental, Social and Corporate Governance

Climate change confined to mere annex in draft WTO deal
Emma Farge – Reuters
WTO meets in Abu Dhabi to reach trade deals. ‘Deep divergences’ on climate seen among countries. Some seek rules on plastics, fossil fuel subsidies. Others, like India, say no place for climate on WTO agenda. The World Trade Organization’s chief is on a mission to put climate change at the heart of its work as part of an effort she is leading to get the watchdog to square up to some of the world’s most pressing challenges. But at a biennial WTO meeting, opens new tab in Abu Dhabi where negotiators hope to fix new rules for global commerce, the sole paragraph in a 56-page draft agreement that explicitly addresses the topic is stuck in an annex – with an explanatory note referring to “deep divergences” among members.

OPEC+ Can Trade Short-Term Oil Pain for Long-Term Gain; The cartel should pump more crude in the second quarter.
Javier Blas – Bloomberg
Over the next few days, OPEC+ countries need to decide whether to extend their “voluntary” oil output cuts into the second quarter. The market anticipates a full rollover. Instead, I believe the cartel has a chance to add a bit of extra supply, taking some short-term pain for a long-term gain. In November, several OPEC+ nations, led by Saudi Arabia and Russia, announced a series of production curbs totaling 2.2 million barrels a day for the first quarter of 20241. The official explanation was that the reduction was to support “the stability and balance of oil markets.” Even if left unsaid, the actual objective was clear: establish a firm floor for crude prices at around $80 a barrel.

Climate graphic of the week: huge ice loss risks Antarctica’s ‘destabilisation’
Financial Times
Melting season was more than a month longer than usual in parts of the continent

Harmful waste generation set to jump, U.N. warns
Aaron Ross – Reuters
Waste produced by the public will surge by 2050, causing hundreds of billions of dollars of damage through biodiversity loss, climate change and deadly pollution, the United Nations Environment Programme (UNEP) said in a report on Wednesday. The report said unless urgent measures were taken global waste generation would soar, driven largely by fast-growing economies, including in Asia and sub-Saharan Africa where many countries are already struggling to manage current production levels.

A National Tour Calling for a Reborn and Ramped Up Green New Deal Lands in Pittsburgh
Keerti Gopal – Inside Climate News
In the communities most heavily impacted by the fossil fuel industry, a national movement pushing the Green New Deal is amplifying calls for government investment in climate jobs.

Canada Sells First Bond in Program That Allows Nuclear Finance
Chunzi Xu – Bloomberg

A French CEO’s Pitch for More Wind Turbines: They’re ‘Poetic’
William Mathis – Bloomberg

Boeing-Backed Startup Is Building a Plant to Zap Seawater and Grab CO2; Equatic is working with Singapore’s utility on a demonstration facility with unique technology to remove carbon from the atmosphere.
Michelle Ma – Bloomberg


Top Wall Street bankers are being careful not to overhype M&A revival
David Hollerith – Yahoo Finance
Mergers and acquisitions are seeing a resurgence so far in 2024, but some of the top bankers on Wall Street are being careful not to overhype the dealmaking revival. Goldman Sachs (GS) CEO David Solomon said Tuesday at a UBS financial services conference that “it’s gotten better” compared with “super anemic” activity during parts of 2022 and 2023.

ETF Focused on Cash-Flow Rakes In Billions Despite Snubbing AI Mania
Isabelle Lee – Bloomberg
Over the past year and counting, money managers have ramped up exposure to a handful of Big Tech companies – swelling market valuations along the way. Yet for all the AI euphoria, traders have also poured billions into a tried-and-tested ETF that simply buys companies offering healthy cash flows, in an industry-neutral bet. Exhibit A is the Pacer US Cash Cows 100 ETF (ticker COWZ), which has seen assets soar to around $20 billion, from $12.5 billion a year ago. The exchange-traded fund, which tracks mid- and large-cap companies with high free-cash-flow yields, has drawn an almost uninterrupted stream of money since July 2023, with only a single day of outflows, data compiled by Bloomberg show.

M&G Fund Went Big in China Stock Purchases on Capitulation Bets
Abhishek Vishnoi – Bloomberg
A macro fund of M&G Investment Management Ltd. loaded up on Chinese stocks last month, taking advantage of the heavy selloff, which further cheapened valuations. “We took a pretty aggressive bet in January in China equities,” fund managers Gautam Samarth and Stuart Canning, who help oversee M&G (Lux) Episode Macro Fund and more than $4 billion in separate accounts, told Bloomberg News in an interview. “We now have 15% of net asset value in China stocks” compared with almost zero in December, they said on Friday.

ESG funds outperformed peers during Covid stress, finds Esma; European markets watchdog report says findings should contribute to retail investor debate
Robert Van Egghen – Financial Times
Environmental, social and governance funds outperformed non-ESG funds during the market turmoil caused by the Covid-19 crisis, according to new analysis by Europe’s markets watchdog. The European Securities and Markets Authority said the finding that active ESG funds performed better than non-ESG funds “adds to the active [versus] passive fund investing debate” for retail investors and could also help influence its work on sustainable finance.

St James’s Place shares fall 30% as it takes £426mn provision for client refunds; UK wealth manager under fire from regulators over fee structure
Sally Hickey and Oliver Ralph – Financial Times
Wealth manager St James’s Place has announced a £426mn provision for potential client refunds and slashed its dividend, sending shares in the group down almost a third in early trading on Wednesday. The group said it had received a significant increase in the number of client complaints late last year about whether they had received a sufficient level of service, prompting St James’s Place to make the provision.

DWS Group’s global head of capital markets leaves the business; He had worked for the German investment manager in London for over ten years.
Will Canny – The Trade
The global head of capital markets at German asset manager DWS, Keshava Shastry, has left the business, according to two people with knowledge of the matter, The TRADE can reveal. Shastry, a managing director based in London, had been with the German firm for over ten years. He recently left the business, the people said, who spoke on condition of anonymity as the matter is private.

Work & Management

Deutsche Bank faces ‘enormous resistance among staff’ in return-to-office push, union says
Steven Arons and Bloomberg – Fortune
Deutsche Bank AG’s decision to force workers into the office more frequently has met with fierce internal criticism, demonstrating the challenges in reversing a policy introduced during the Covid pandemic. A large number of employees have made critical remarks on an internal messaging board since Deutsche Bank cut the time staff can work from home, according to a memo sent last Thursday by Chief Executive Officer Christian Sewing and Chief Operating Officer Rebecca Short. The two executives, who signed off on the initial decision, now plan to hold renewed talks with labor representatives about the changes, they said in the memo, which was seen by Bloomberg.

Klarna says its AI assistant does the work of 700 people after it laid off 700 people; The Swedish fintech, which was criticized for its handling of a dramatic staff reduction in 2022, is touting new efficiencies powered by OpenAI.
Christopher Zara – Fast Company
Klarna is bullish on bots. One month after taking its OpenAI-powered virtual assistant global, the Swedish buy-now, pay-later company has released new data touting its ability to handle customer communications, make shoppers happier, and even drive better financial results. The app-based AI chatbot already handles two-thirds of all customer service chats, the company said Tuesday-some 2.3 million conversations so far-with the virtual assistant earning customer satisfaction ratings at the same level as human agents. Klarna, which is expected to go public this year and will need all the hype it can get at a time when investors have been generally frosty toward IPOs, estimates that the chatbot could help improve its profits by $40 million in 2024.

Wellness Exchange

What to Know about Lead Exposure in Children; Hundreds of children sickened from high levels of lead in applesauce pouches last year put a spotlight on lapses in the food-safety system.
Christina Jewett – The New York Times
A recent outbreak of lead poisoning from cinnamon in applesauce has drawn attention to the toxic effect the heavy metal can have on children. The cinnamon in the applesauce was believed to have been intentionally contaminated, possibly to add to its value as a commodity sold by weight. It had unusually high levels of lead. The Centers for Disease Control and Prevention estimates that more than 400 children were poisoned in the applesauce outbreak. Their median blood lead levels were six times higher than the average seen during the height of the Flint water crisis, the C.D.C. said.

Test Your Exercise I.Q.; Is your workout really working for you? Take our quiz to find out.
Hilary Achauer and Erik Vance – The New York Times
Few things are more important to your overall health and longevity than exercise. Improving your fitness level can have a significant effect on mood, sexual health, energy, even immune function and cancer prevention. But getting started can feel overwhelming. How much do you really have to exercise? Should you stretch first? And what the heck is a burpee anyway?


South Korea Warns of Delisting of Companies That Fail to Grow
Youkyung Lee – Bloomberg
South Korean companies that have not seen growth in a long time risk being dropped from the stock exchange, the nation’s financial watchdog said. Shares rallied. “There are companies that have been around for at least 10 years without growing,” Financial Supervisory Service Governor Lee Bokhyun said Wednesday. “We are considering various measures, including preparing specific criteria,” for possible delisting, he said.

Texas Wildfires Prompt Disaster Declaration in Key Cattle Region; Declaration covers 60 counties with hot, dry, windy conditions; Panhandle towns ordered to evacuate or shelter in place
Michelle Ma, Julie Fine, and Joe Carroll – Bloomberg
Texas Governor Greg Abbott issued a disaster declaration for 60 counties as four fires ravaged the Panhandle, burning hundreds of thousands of acres in a critical cattle-ranching region of the state. Officials have ordered residents in the Panhandle cities of Canadian, Fritch and Glazier to shelter in place after high winds made it unsafe for some to travel and evacuate, according to the Texas Tribune. Although wildfires are not uncommon this time of year in Texas, the state has experienced a series of disruptive seasons that have caused widespread damage in the Texas Panhandle, a key ranching and meatpacking region. The US cattle herd already is at its lowest in decades and further losses could result in higher beef prices.

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