Deutsche Bank whistleblower paid $200m in record reward

Oct 22, 2021

First Read

$53,806/$300,000 (17.9%)


Hits & Takes
John Lothian & JLN Staff

Cantor Fitzgerald Chairman and CEO Howard W. Lutnick posted a video to YouTube in which he disclosed he had COVID-19 despite being fully vaccinated and then later was diagnosed with Non-Hodgkin’s Lymphoma and is undergoing chemo. He said it is treatable and that he will be done with chemo on January 31, 2022. He will continue to work during the treatment. He is in very good spirits in the video and even joked about becoming a bald guy and losing his hair, the 12 hairs that have stayed with him all this time. He said he feels perfect throughout this and said his doctor expects him to be cancer free. He said this is the biggest challenge he has faced since 9/11. — YouTube

The Senate Agriculture Committee will hold a nomination hearing for the Honorable Rostin Behnam to become the chairman of the Commodity Futures Trading Commission on October 27 at 9:40 a.m. ET. — U.S. Senate Committee on Agriculture, Nutrition, & Forestry

Last night was the ALTSO Rocktoberfest in Chicago with an online virtual event, and in New York the Robin Hood Foundation gala took place as an in-person event. The Robin Hood event raised $77.5 million to combat poverty. Paul McCartney made an appearance and Bruce Springsteen sang at the star-studded event at the Javits Center. — NY Post

The CME Group hit a new daily volume record and open interest for SOFR futures on October 18, 2021. CME saw 396,421 SOFR futures contracts trade that day, surpassing the previous record of 341,922 contracts set on June 18, 2021. — CME

The FIA is holding a webinar on November 9 at 10:30 a.m. to 11:30 a.m. ET about the “Q3 trends in futures and options.” The webinar will feature a buy-side perspective on trends in equity index futures and FX futures and cover category and regional breakdowns as well as exchange and contract rankings. FIA’s Will Acworth will lead the webinar. For more information and to register, click HERE.

My mother had the experience of someone creating a fake Facebook account and impersonating her. Do you worry about identity theft? It is a personal and business issue. You might consider taking the identity theft prevention course from Exchange Analytics. — |Exchange Analytics

As a member of the media, and someone who goes into the public for my job, especially with EXPO coming up, I have an appointment today to get my third shot of the COVID-19 vaccine.

We had no new donations to the JLN MarketsWiki Education GoFundMe campaign yesterday.

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


Trillions Is a History Lesson for Anyone Involved in the Markets

Robin Wigglesworth loves history. He is the author of a new book on the history of passive investing titled, “Trillions; How A Band Of Wall Street Renegades Invented The Index Fund And Changed Finance Forever.” Wigglesworth spoke to John Lothian News over Zoom from Oslo, Norway where he is stationed as a correspondent with the Financial Times. We interviewed him about this first book he has written and why he wrote it.

Watch the video »


CFTC Awards Nearly $200 Million to a Whistleblower; Largest Award to a Single Whistleblower
The Commodity Futures Trading Commission today announced an award of nearly $200 million to a whistleblower whose specific, credible, and timely original information significantly contributed to an already open investigation and led to a successful enforcement action, as well as to the success of two related actions, by a U.S. federal regulator and a foreign regulator.

***** As big as this award is, the fine was even bigger. ~JJL


Statement of Commissioner Dawn D. Stump Regarding Claim for Award by Claimant 1 in Connection with Whistleblower Award Determination No. 21-WB-07
The Commission today issues a Whistleblower Award Determination based on an enforcement action that led to an Order of the Commission making findings of liability and imposing a civil monetary penalty, among other sanctions. Parallel actions were brought, based on the same misconduct, by: 1) a Federal Regulator; and 2) a foreign futures authority (Foreign Regulator). The Commission is approving the Proposed Final Determination of its Claims Review Staff (CRS) that would make an award to Claimant 1 based on the monetary sanctions collected in the Commission’s enforcement action, the Federal Regulator’s action, and the Foreign Regulator’s action.

*****As the only remaining CFTC commissioner who is not going before the Senate soon, Dawn Stump weighs in with a lengthy comment.~JJL


NYC Robin Hood gala draws Paul McCartney — and brings in $77.5 million
Lydia Moynihan – NY Post
If the star-studded — and in-person — gala for the Robin Hood Foundation is any indication, New York is back, baby. Paul McCartney made an appearance. Bruce Springsteen serenaded the 3,000 people who attended. Alicia Keys sang. The Jonas Brothers ended the night. And the event at the Javits Center on Wednesday night raised $77.5 million for the charity that focuses on reducing poverty.

***** Congratulations to the Robin Hood Foundation leaders on this great achievement, yet again.~JJL


Thursday’s Top Three
Our top story Thursday was Bloomberg Businessweek’s The Hidden Ways the Ultrarich Pass Wealth to Their Heirs Tax-Free. Second was the CFTC press release CFTC Charges Energy Broker, Its Owners, and Affiliated Firms with Fraud, Unauthorized Trading, and Supervision Violations. Third was What Happens if the World’s Key Metal Exchange Has No Metal? from Bloomberg via Yahoo Finance.


MarketsWiki Stats
26,635 pages; 236,080 edits
MarketsWiki Statistics


Lead Stories

Deutsche Bank whistleblower paid $200m in record reward; Payment made for information that led to enforcement action by US and overseas regulators
Stefania Palma in Washington and Neil Hume in London – Bloomberg
The Commodity Futures Trading Commission has awarded almost $200m to a former Deutsche Bank employee who raised concerns about the manipulation of the Libor interest rate benchmark, marking the largest-ever payment under US whistleblower programmes.

Fed Curbs Trading by Top Officials as Powell Does Damage Control
Molly Smith and Steve Matthews – Bloomberg
Sweeping move seen helping Powell’s chances to win second term; Review follows trading disclosures that led to two departures
The Federal Reserve will ban top officials from buying individual stocks and bonds as well as limit active trading after an embarrassing scandal that led two officials to resign and clouded Chair Jerome Powell’s path to renomination. “These tough new rules raise the bar high in order to assure the public we serve that all of our senior officials maintain a single-minded focus on the public mission of the Federal Reserve,” Powell said in the statement Thursday.

How Russia Is Cashing In on Climate Change; Global warming may pose grave dangers around the world, but as one tiny Russian town on the Arctic Ocean shows, it can also be a ticket to prosperity.
Andrew E. Kramer – NY Times
A refurbished port. A spanking new plant to generate electricity. Repaved roads. And money left over to repair the library and put in a new esplanade along the shore of the Arctic Ocean.Globally, the warming climate is a creeping disaster, threatening lives and livelihoods with floods, fires and droughts, and requiring tremendous effort and expenditure to combat.

First Bitcoin ETF Is Already in Danger of Breaching a Limit on Futures Contracts
Katherine Greifeld – Bloomberg
Explosive debut means BITO is hoovering up futures contracts; Arrival of competing funds could help alleviate pressure
Just days after launch, the first U.S. Bitcoin futures exchange-traded fund risks becoming too popular for its own good. The Proshares Bitcoin Strategy ETF (ticker BITO) is already on track to breach a limit on the number of futures contracts it is permitted to hold by the Chicago Mercantile Exchange, according to data compiled by Bloomberg.

Fed ethics office cautioned policymakers last year about personal securities trading – NYT
Howard Schneider – Reuters
Federal Reserve ethics officials in March 2020 cautioned Fed policymakers about personal securities trading as the central bank geared up for what became a massive and wide-ranging effort to battle the pandemic and keep the economy and asset markets from crashing, the New York Times reported on Wednesday.

Focus of Fed trading furore shifts to Powell’s activities; Scandal risks complicating reappointment of chair and leaving central bank rudderless
James Politi – FT
Jay Powell sought on Thursday to quash the trading scandal that has rippled through the US central bank in recent weeks by adopting a string of new restrictions on investments by the Federal Reserve’s top officials. But Fed watchers said the furore has already hit too close to the central bank’s inner circle — including scrutiny of Powell’s own financial activities — to avoid a substantial blow to the institution’s standing. Worse still, the turmoil comes just weeks ahead a big policy shift and with the chair’s bid for a second term on the line.

Boston Fed will not release documents on its former president’s trades
Howard Schneider – Reuters
The Boston Federal Reserve will not release documents that could show whether its former president vetted a series of personal investments last year with its ethics officer, a spokesman for the regional Fed bank said, a key point in an ongoing ethics controversy at the U.S. central bank.

Bitcoin briefly crashed 87% to about $8,000 on Binance’s US crypto-trading platform
Natasha Dailey – Business Insider
Bitcoin briefly plummeted to about $8,000 on Thursday – but only on the Binance US trading platform. The coin had been trading around $65,000 when Binance US posted a candle that showed the price sank to about $8,000, Cointelegraph first reported, adding that the coin’s one-minute candle floor on other crypto platforms was about $64,000.

Nassim Nicholas Taleb Calls Bitcoin a Tulip Bubble Without the Aesthetics
Luke McGrath – Bloomberg
Nassim Nicholas Taleb says Bitcoin is like the 17th century bubble that saw the price of tulip bulbs skyrocket before crashing. The cryptocurrency is a tulip bubble without aesthetics and disguised as a “currency,” the former options trader said in a tweet Thursday. It is as irrational to buy it as it is to short it, he added.

JPMorgan Warns Boom for Bitcoin Futures ETFs May Come at a Cost
Joanna Ossinger – Bloomberg
Before the game-changing launch of the first ever Bitcoin-linked ETF in the U.S., plenty on Wall Street cautioned the derivatives-powered trade was no free lunch, given the holding costs. But after just two days of trading, JPMorgan Chase & Co. strategists warn pent-up demand for Bitcoin exchange traded-funds risks distorting the futures market — ramping up ETF investors’ costs along the way.

Hedge funds make millions as shares in Trump media Spac jump; DE Shaw, Saba Capital and others in line for windfall on deal with former US president’s newly launched outlet
Arash Massoudi and Antoine Gara and James Fontanella-Khan – FT
A group of 11 hedge funds including DE Shaw and Saba Capital earned millions of dollars in potential gains in a single day after a special purpose acquisition company that merged with Donald Trump’s new social media group rose as much as 421 per cent on Thursday.

Deutsche Bank’s Singapore e-FX hub completes first trades; The exchange group confirmed in June last year that it would be launching the hub as part of an ongoing market-wide scheme with the Monetary Authority of Singapore.
Annabel Smith – The Trade
Deutsche Bank has gone live with trading on its newly launched electronic foreign exchange pricing and trading hub based in Singapore. The bank announced the launch of the hub in June last year with the aim of allowing its clients to execute foreign exchange transactions faster by aligning them more closely with the geographic location as opposed to waiting for prices to be matched in London, New York or Tokyo where there is still a significant time lag.


Ivermectin Poisonings Rise as Unproven Use for Covid Soars
Robert Langreth – Bloomberg
Ivermectin calls surged in August, Oregon Poison Center says; Six people hospitalized after taking ivermectin preventively
Poisonings from taking ivermectin, an antiparasitic drug that some people have used in an attempt to treat or prevent Covid-19, rose sharply in August, according to a report from the Oregon Poison Center.

COVID cases and deaths keep falling
Sam Baker, Kavya Beheraj – Axios
America’s coronavirus outbreak is rapidly improving as the Delta wave recedes, and vaccines for kids — which could become available within weeks — will help the situation improve even further. By the numbers: Nationwide, the U.S. is now averaging about 79,000 new cases per day — a 22% drop over the past two weeks.

One of the World’s Longest Lockdowns Comes to an End
Ainslie Chandler – Bloomberg
After running one of the most hardcore Covid containment strategies in the world, Australia is finally reopening—and it’s dizzying. For the 107 days to Oct. 11, Sydney’s more than 5 million residents were back in lockdown as authorities tried to wipe out an outbreak of the delta variant that dashed the virus-free idyll we’d enjoyed for much of 2020. We weren’t allowed more than 5 kilometers (3.1 miles) from our homes, and non-essential retail was shuttered. Kids were back to e-learning.

Covid calculus shifts as NHS faces ‘extremely challenging’ winter; Ministers weigh fresh restrictions as medics juggle flu cases with rise in emergency demand and patient backlog
Sarah Neville, Oliver Barnes and John Burn-Murdoch – FT
The NHS has been the lodestar of the UK government’s response to Covid-19, with restrictive lockdowns justified largely by the need to ensure infections did not overwhelm the taxpayer-funded health service.

Polarisation clouds the role for Regeneron’s Covid treatment; Excessive boosterism and US partisan divisions risk undermining a limited but effective therapy
Tom Braithwaite – FT
Executives must believe in their products. The classic cautionary tale is jewellery boss Gerald Ratner, who boasted he was selling “total crap” and wrecked his career.

Pfizer-BioNTech Covid-19 Vaccine for Kids Was 90.7% Effective and Safe, Companies Say; The FDA is expected to soon release its own evaluation of testing data on the shot’s safety and effectiveness in 5- to 11-year-olds, a step toward authorization of the use
Peter Loftus and Jared S. Hopkins – WSJ
U.S. health regulators are expected to weigh in soon on the evidence for giving the Covid-19 vaccine from Pfizer Inc. PFE 0.14% and BioNTech SE BNTX 6.29% to children 5 to 11 years old. The companies released new data Friday showing the vaccine was 90.7% effective at preventing symptomatic Covid-19 in a study of children in this age group, information that health authorities will likely factor as they weigh whether to authorize the shots for use.

Covid-19 Vaccine Mandates Are Surviving Nearly All Court Challenges; With limited exceptions, judges uphold requirements that government workers, public-university students and contractors get shots
Jacob Gershman – WSJ
A range of people—from nurses to firefighters to students—have filed lawsuits objecting to the mandatory Covid-19 vaccinations imposed by states and cities, claiming the policies infringe on their constitutional rights. Nearly every legal challenge has failed so far.

CDC expands COVID vaccine booster rollout, OKs mixing shots
Mark Lungariello – NY Post
The Centers for Disease Control and Prevention backed a plan on Thursday to allow Americans to get a COVID-19 booster shot — and mix-and-match the vaccine brands. People who got injected with the Pfizer vaccine were already eligible for a booster, and the CDC now says many who got the Moderna and Johnson & Johnson vaccines can get an extra dose, too.

Exchanges, OTC and Clearing

Cboe acquires crypto derivatives exchange ErisX, betting big on the soaring digital asset space
Matthew Fox – Business Insider
Cboe Global Markets is jumping into the cryptocurrency space with its acquisition of ErisX,
a regulated futures exchange and clearing house that provides investors access to cryptocurrency derivatives. The proposed acquisition, which is expected to close in the first half of 2022, would give Cboe exposure to the booming cryptocurrency market and allow the exchange operator to create indices and other derivative products that are tied to various cryptocurrencies.

London Stock Exchange Says Supply Chains to Delay Tech Spend
Marion Dakers – Bloomberg
Bourse warns that ‘supply chain pressures’ are affecting plans; Company says integration of Refinitiv remains on track
Problems in the world’s supply chains have reached as far as London Stock Exchange Group Plc. The bourse said in a third-quarter trading statement Friday that “supply chain pressures may impact the timing of some technology spend this year.” It said there was no change to its overall cost and capital expenditure guidance.

Cboe and MSCI plan options growth following partnership extension
New agreement extends Cboe’s rights to offer options trading on MSCI global indices through 2031.
Wesley Bray – The Trade
Cboe Global Markets and MSCI have signed a licensing agreement that extends and broadens their strategic relationship. The new agreement follows several years of collaboration between the two companies and will extend Cboe’s rights to offer options trading on MSCI global indices through 2031.

Ebusco lists on Euronext Amsterdam
Successful raising of c. EUR300 million resulting in a market capitalisation of EUR 1.33 billion[1]; 164th listing on Euronext and 19th listing on Euronext Amsterdam in 2021; Ebusco further strengthens Euronext’s leading position for growth companies active in the European energy transition
Euronext today congratulates Ebusco Holding N.V., a frontrunner in the development of electric buses and charging systems, on its listing on Euronext Amsterdam (ticker code: EBUS). It is the 164th listing on Euronext in 2021 and the 19th listing on Euronext Amsterdam this year.

Portfolio compression: Extension of fee holiday for portfolio compressors
The Executive Board of Eurex Frankfurt AG decided to extend the fee holiday for portfolio compressors according to the Price List to Connection Agreement, Provider Connection Agreement and STPIP and QTPIP Connection Agreement

CME Group Announces Record SOFR Futures Volume and Open Interest
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that a record 396,421 SOFR futures contracts were traded on October 18, 2021, surpassing the previous record of 341,922 contracts set on June 18, 2021.

— EBS Market Integration Notice: New and Updated Content — CME
— Resetting of Price Limits for Grain, Oilseed and Lumber Futures — CME
— Performance Bond Requirements – Agriculture, Energy, Rates, and FX Margin – Effective October 22, 2021 — CME
— Performance Bond Requirements: Energy & Interest Rate Margins – Effective October 22, 2021 — CME
— Notice Of Disciplinary Action; MEMBER: Maven Europe Ltd, NYMEX RULE VIOLATIONS: Rule 575.D. Disruptive Practices Prohibited — CME
— Notice Of Disciplinary Action; MEMBER: Maven Europe Ltd., CME RULE VIOLATIONS: Rule 575.D. Disruptive Practices Prohibited — CME
— Notice Of Disciplinary Action;NON-MEMBER: Wang Yao, CBOT RULE VIOLATION: Rule 534 Wash Trades Prohibited — CME
— Notice Of Disciplinary Action; NON-MEMBER: Guangdong HAID Group Co. Ltd., CBOT RULE VIOLATIONS:
Rule 534 Wash Trades Prohibited — CME
— Notice Of Disciplinary Action; NON-MEMBER: CPT, LP, NYMEX RULE VIOLATIONS: Rule 432 (“General Offenses”) (in part) — CME
— Notice Of Disciplinary Action; MEMBER: Nomura Securities International, Inc., CBOT RULE VIOLATIONS: 538.C. Related Position — CME
— REVISED: Product Modification Summary: Amendments to Align CME Globex and CME ClearPort Listing Schedules of Nine (9) FX Options Contracts – November 08, 2021 — CME
— Notice Of Disciplinary Action; NON-MEMBER; Eugene Investment & Futures Co. Ltd., EXCHANGE RULES: RULE 534. WASH TRADES PROHIBITED — CME


Global fintech giant Stripe acquires Bengaluru-based Recko, marking its first India acquisition; San Francisco-based Stripe said in a blogpost that the acquisition of Recko will help the company include payment reconciliation within its infrastructure.
Bismah Malik – BusinessToday.IN
Global fintech firm, Stripe has announced the acquisition of Bengaluru-based enterprise financial software firm, Recko at an undisclosed amount, marking its first India acquisition. San Francisco-based Stripe said in a blogpost that the acquisition of Recko will help the company include payment reconciliation within its infrastructure. Recko’s team will join Stripe’s remote engineering hub, helping to build and scale Stripe’s products globally. This acquisition comes amid Stripe’s increased investment in India, including updated data locality architecture and rapid local hiring, the company said in a statement.

Bloomberg to offer Sustainalytics’ ESG research and ratings on its terminal; The offering will allow investors to utilise material ESG insights for security selection, portfolio management activities, ESG integration, and engagement and voting activities.
Wesley Bray – The Trade
Bloomberg has announced that Sustainalytics’ ESG Research and Ratings are now available on its Terminal platform, meeting the needs of investors to access in-depth ESG information.


Cybersecurity breaches: disclosure considerations amid increasing SEC scrutiny
Jenner & Block – JDSupra
Recent cybersecurity events have tested the cybersecurity defenses of many of America’s largest public companies and given rise to private class actions and insider trading cases. At the same time, the U.S. Securities and Exchange Commission (the “SEC”) has ramped up its enforcement against misleading cybersecurity disclosures and announced plans to consider adopting new disclosure obligations. Thus, companies may find their ability to respond to a cybersecurity event in real time tested on multiple fronts.

BeyondTrust Releases Cybersecurity Predictions for 2022 and Beyond
Yahoo Finance
BeyondTrust, the worldwide leader in Privileged Access Management (PAM), today released its annual forecast of cybersecurity trends emerging for the New Year and beyond. These projections, authored by BeyondTrust experts Morey J. Haber, Chief Security Officer, Brian Chappell, Chief Security Strategist EMEA/APAC, and James Maude, Lead Cyber Security Researcher, are based on shifts in technology, threat actor habits, culture, and decades of combined experience.

Why is Cybersecurity Failing Against Ransomware?
Nate Warfield – Threatpost
Hardly a week goes by without another major company falling victim to a ransomware attack. Nate Warfield, CTO at Prevailion, discusses the immense challenges in changing that status quo.
Yes, security is hard – no one is ever 100 percent safe from the threats lurking out there. But how is it that time and time again, companies – big companies – are continuing to fall for ransomware attacks? Why aren’t we getting any better at preventing them?


Here’s how one of NYSE’s largest market makers is breaking into DeFi
Frank Chaparro – The Block
Episode 66 of Season 3 of The Scoop was recorded remotely with The Block’s Frank Chaparro and Ari Rubenstein, Co-Founder and Ryan Sheftel, Co-Founder & CEO at Radkl.

DeFi Platform EQIFI Launches Crypto Mastercards, Backed by a Regulated Bank; EQIFI’s Global Mastercard debit card follows its recent launch of a decentralized product suite on the Tezos network, boasting a myriad of features for borderless transactions
EQIFI, the decentralized finance (DeFi) platform for lending, borrowing, and investing for ETH, stablecoins, and select fiat currencies, has today announced the launch of its global, secure, crypto Mastercards. These debit cards allow users of the platform to make real-time payments in-store and online leveraging digital assets. EQIFI is backed by EQIBank, the wealthtech innovator and the regulated, borderless digital bank for crypto and traditional assets, giving users of the DeFi platform access to a range of banking products and services.

Crypto entrepreneurs have engaged in regulatory ‘arbitrage’ to avoid oversight, says SEC’s Gensler
Chris Matthews – MarketWatch
Crypto entrepreneurs have engaged in regulatory ‘arbitrage’ to avoid oversight, says SEC’s Gensler
U.S. Securities and Exchange Commission Chairman Gary Gensler encouraged crypto entrepreneurs to seek to comply with U.S. financial and banking regulations, placing special emphasis on the need for oversight of stablecoins, or digital assets that seek to maintain a peg to the U.S. dollar.

Walmart Shoppers Can Now Buy Bitcoin at 200 Kiosks in Its Stores
Brendan Case and Vildana Hajric – Bloomberg
Presence in largest U.S. retailer boosts Bitcoin’s profile; Coinstar is offering Bitcoin access in venture with Coinme
Walmart Inc. has started a pilot program in which shoppers can buy Bitcoin at Coinstar kiosks in some of its U.S. stores. The test with Coinstar, which is known for the machines that let customers exchange U.S. coins for paper bills or gift cards, began earlier this month, Walmart spokeswoman Molly Blakeman said Thursday. The pilot includes 200 kiosks in Walmart stores. That’s part of a broader initiative by Coinstar, which has teamed up with a cryptocurrency cash exchange called Coinme to offer Bitcoin at more than 8,000 kiosks. The pilot includes 200 kiosks in Walmart stores.

CrossTower to Offer Credit to Attract Indian Crypto Investors
Suvashree Ghosh – Bloomberg
U.S. crypto firm CrossTower Inc. is offering 5,000 rupees ($67) credit to Indian users to invest in digital currencies on its platform, even as the nation’s policymakers remain skeptical of the assets. CrossTower, which introduced its crypto trading platform in India last month, is starting the program to allow “Indians to fearlessly understand the world of crypto, start earning safely and rapidly to secure future savings,” India Chief Executive Officer Vikas Ahuja said in a statement on Friday.

A Free-Crypto Project Scanned Eyeballs of 130,000 People
Joanna Ossinger – Bloomberg
Worldcoin aims to get crypto to as many users as possible; Company was co-founded by former Y Combinator head Sam Altman
A project that aims to get cryptocurrency into the hands of as many people as possible has signed up more than 130,000 users so far — they just need to get their eyeballs scanned in exchange.

FTX lures blue-chip investors in funding round, valuing crypto group at $25bn; BlackRock, Sequoia and Ontario Teachers’ Pension Plan took part in $421m deal
Harriet Agnew, Eva Szalay, Joshua Oliver and Arash Massoudi – FT
FTX has agreed a $421m funding round with backing from groups including BlackRock, Sequoia and the Ontario Teachers’ Pension Plan, marking the latest sign that blue-chip investors are warming to digital assets.


Winter Crisis Raises Prospect of Energy Blockades in Europe
Vanessa Dezem and Rachel Morison – Bloomberg
Cold weather could spur governments to halt energy flows; Irish grid stopped power flows to U.K. already this winter
Europe’s heading into winter facing an unprecedented energy squeeze, and politicians are trying to figure out how to stop their citizens freezing. If the shortages worsen, European governments could resort to curbing sales of natural gas and power to other regions. An even more extreme scenario could see them halt flows to one another, triggering a political and economic crisis.

China Hints Its Crackdown on Tech Giants Is Coming to an End
Shiyin Chen – Bloomberg
More than half of proposed fintech fixes have been implemented; Remarks add to optimism that tech crackdown is near end
China’s top financial regulator said he expects to achieve significant progress in the ongoing crackdown on fintech firms before the year-end, reinforcing speculation that Beijing’s campaign to rein in its tech giants may be receding.

Moneyman Behind Trump’s Media Company Runs a Firm in Wuhan
Blake Schmidt, Felipe Marques, and Heather Perlberg – Bloomberg
Patrick Orlando, head of SPAC, is CEO of China’s Yunhong; Braganca, a descendant of Brazil’s former monarchy, is CFO
From a WeWork office in Miami, an obscure financier by the name of Patrick Orlando has become an unlikely power behind what is, for a meme-stock minute, the ultimate MAGA stock: the nascent media company of former President Donald J. Trump.

The British government has a people problem; Key posts are unfilled at important regulators — the ones being handed more responsibilities
Helen Thomas – FT
This government seems to have quite a low opinion of business. Just not low enough to regulate it properly. Big business has found itself accused of various failings in recent years — from inadequately preparing for a Brexit that hadn’t yet been negotiated to neglecting to single-handedly overhaul the labour market to boost UK productivity.

Putin says Russia could deliver 10% more gas if Nord Stream 2 approved; Russia’s president spells out the conditions under which he will help to resolve Europe’s energy shortage
Max Seddon and David Sheppard – FT
Russia can increase gas supplies to Europe as soon as Germany approves the new Nord Stream 2 pipeline, President Vladimir Putin said, underlining Moscow’s conditions for help to resolve the continent’s energy crisis.

With Coercion and Black Boxes, Russia Installs a Digital Iron Curtain
Adam Satariano and Paul Mozur – NY Times
Russia’s boldest moves to censor the internet began in the most mundane of ways — with a series of bureaucratic emails and forms. The messages, sent by Russia’s powerful internet regulator, demanded technical details — like traffic numbers, equipment specifications and connection speeds — from companies that provide internet and telecommunications services across the country. Then the black boxes arrived.


Hearing Insights From Our Future Leaders
One of the hallmarks of ISDA has always been the wide variety of perspectives across our membership. With 960 institutions across 78 countries, ISDA represents the full breadth of the derivatives market, spanning all geographies and sectors. Across our working groups and committees, we recognize and value the different views, insights and experience that our members bring to the table.

SEC Blasts Broker-Dealers With Reg BI Exam Deficiency Letters
Tracey Longo – Financial Advisor
A wide array of broker-dealers—including wirehouses, independents and insurance-affiliated firms—have received Regulation Best Interest e deficiency letters from the Securities and Exchange Commission regarding conflicts of interest and alternative investment obligations, a leading attorney for the securities industry told Financial Advisor Magazine.

Fed bans stock trading, restricts other investing activities by top officials
The U.S. Federal Reserve on Thursday banned individual stock purchases by top officials at the central bank and unveiled a broad set of other restrictions on their investing activities roughly six weeks after reports of active trading by some senior policymakers triggered an ethics uproar.

Confusion “R” Us: Does the CFTC Imply That Stablecoins Are Not Securities in Settlement Order Regarding Tether?
Gary DeWaal – Katten
The CFTC has sowed more confusion regarding the regulatory status of stablecoins under United States laws through its order of October 15, 2021 instituting and settling proceedings against four Tether entities.

Bank regulators seek better way to ride out a crisis; Capital buffers for lenders did not work as well as expected during the pandemic stress
Laura Noonan – FT
In the scorched-earth aftermath of the financial crisis, regulators were looking for novel ways to avoid a repeat of the carnage they had just lived through. Capital buffers — war chests of reserves specifically designed to help banks navigate the highs and lows of their businesses — seemed to offer just that.

Cryptocurrency Industry Gets Tailored Guidance on Complying With U.S. Sanctions; Treasury’s guidelines for virtual-currency companies are the latest move in the Biden administration’s effort to address risks posed by the emerging sector
Dylan Tokar – WSJ
Virtual-currency companies now have a set of Treasury Department guidelines on how to ensure they comply with U.S. sanctions, the latest salvo in an effort by the Biden administration to combat ransomware and other nefarious uses of cryptocurrencies.

CCP Supervisory Committee Chair Delivers Keynote Speech At The Second Each CCP Risk Management Summit
The Chair of ESMA’s CCP Supervisory Committee, Klaus Löber, today delivered a keynote speech on the role of CCPs in supporting the safety and efficiency of global financial markets.

ESAs invite stakeholders’ input on PRIIPs review
The European Supervisory Authorities (ESAs) have opened today a call for evidence regarding the PRIIPs (Packaged retail and insurance-based investment products) Regulation.

FINRA Updates the OTCBB/OTC Equities High Price Dissemination List
FINRA is publishing its quarterly OTCBB/OTC Equities High Price Dissemination List for the second quarter of 2021. This updated list of OTC equity securities eligible for trade report dissemination for trades of fewer than 100 shares is effective as of October 22, 2021. To view changes, visit the Daily List: Security Attribute Changes page, select the “Unit of Trades” filter and enter October 21, 2021 as the “Start” date and October 22, 2021 as the “End” date.

Investment Firms Prudential Regime final rules published
We have today made final rules to streamline and simplify prudential requirements for solo-regulated UK firms authorised under the Markets in Financial Instruments Directive (MiFID). This is part of the Investment Firms Prudential Regime, a major change for FCA investment firms. If you’re an FCA investment firm, it’s critical that you prepare for the regime which comes into force on 1 January 2022.

Investing and Trading

Donald Trump Does a SPAC Deal; Also convertible-debt usury, not saying ‘deal’ and puzzle hunts.
Matt Levine – Bloomberg
Trump SPAC
Donald Trump is a very famous person who likes to talk and who has a lot of enthusiastic fans. If he started a television channel that consisted of him talking about whatever for two hours every afternoon, surrounded by 22 hours of other people talking about how great he is, it would probably get a lot of viewers and could carry a lot of ads for pillows or whatever. But this would probably involve a certain amount of work and competence — you’d have to hire people to point the cameras at him and negotiate cable carriage and ad deals — and television is expensive; there would be some real financial risk to it.

What’s Fueling Bitcoin’s Ride? It’s More FOMO Than Inflation; For that reason, regulators need to be on their guard.
Lionel Laurent – Bloomberg
A “validating moment” for Bitcoin — that’s how some have described its fresh all-time high, fueled by the successful launch of an inaugural U.S. exchange-traded fund (ETF) for the cryptocurrency. The fund has racked up assets of over $1 billion in two days and raised hopes of more launches down the line. It has also boosted preexisting Bitcoiner narratives such as it being a hedge against inflation, despite history suggesting otherwise.

DWAC, the Trump Social-Media SPAC, Quadruples; Frenzied buying is similar to gains in special-purpose acquisition companies earlier this year
Amrith Ramkumar – WSJ
Investors on Thursday piled into shares of the special-purpose acquisition company taking former President Donald Trump’s new social-media platform public, igniting a buying frenzy reminiscent of the SPAC craze from early this year.

Investors look to exploit lucrative trade after US bitcoin ETF launch; Discrepancy in price of token on spot and futures markets opens opportunities for arbitrageurs
Eva Szalay – FT
The launch of Wall Street’s first bitcoin exchange traded fund has created an opportunity for professional investors to make juicy profits on a simple bet, enabled by a lack of large players in the young crypto market.

Notes on a statistical scandal; The demise of the Doing Business report is a cautionary tale, but we’re in danger of learning the wrong lessons
Tim Harford – FT
Even a spreadsheet can become a victim of its own success. Just ask the World Bank’s Doing Business report. While many worthy publications from the World Bank are never downloaded, Doing Business has been a smash hit for years. No longer. Amid an ugly scandal about data manipulation that has left the head of the IMF, Kristalina Georgieva, fighting for her career, Doing Business has been cancelled.

Environmental, Social and Corporate Governance

White House, intelligence agencies, Pentagon issue reports warning that climate change threatens global security
Shane Harris and Michael Birnbaum – Washington Post
As the United States and nations around the world struggle to blunt the effects of rising temperatures and extreme weather, sweeping assessments released Thursday by the White House, the U.S. intelligence community and the Pentagon conclude that climate change will exacerbate long-standing threats to global security.

South Africa to Develop $500 Million Green Investment Plan
Paul Burkhardt – Bloomberg
Initial amount can leverage additional blended finance: Creecy; Environment minister doesn’t ‘expect checkbooks’ at COP26
South Africa will develop a green investment plan of as much as $500 million, representing a fraction of what’s needed, to fund its energy transition away from coal.

One of California’s Wealthiest Counties Could Run Out of Water Next Summer; To increase supply during the severe drought, Marin County is considering buying water from agricultural areas and piping it across the San Francisco Bay.
Todd Woody – Bloomberg
Welcome to the future in Marin County, one where a $2 million house with an ocean view doesn’t necessarily come with a reliable water supply.

Lawmakers Need to Do Whatever It Takes to Price Carbon; No policy should be excluded based on purist economic or environmentalist principles
Gernot Wagner – Bloomberg
Washington is once again talking about pricing carbon. The Clean Electricity Payment Program might be dead, but a carbon tax could still be on the table. Or it might not, or perhaps be replaced by expanded loan guarantees for clean energy, or by clean energy tax credits. Whichever form it might take, the politics will be tough. They always are, until they suddenly aren’t.

Getting heard on climate: small investors take on big companies; Retail shareholders can get organised and can push for change if they band together
Alice Ross – FT
David Gowenlock, a financial services professional, was at his office near London’s Old Street when he got an email from his father, who was feeling a bit emotional. “It looks like you were successful,” his dad wrote.


The Top Money Maker at Deutsche Bank Reaps Billions From Singapore; He may not be well-known on Wall Street, but Chetankumar Shah’s team accounts for about a third of the investment bank’s total revenue.
Ambereen Choudhury, Nabila Ahmed, Donal Griffin – Bloomberg
To find the biggest money maker at the rarely-money-making Deutsche Bank AG, you need to travel 6,370 miles from Frankfurt to the 18th floor of a glass office tower overlooking the green waters of Marina Bay in Singapore.

Morgan Stanley’s Robot Libor Lawyers Saved 50,000 Hours of Work
William Shaw – Bloomberg
Finance giants use AI to deal with Libor’s complex demise; Goldman says algorithms accelerated transition ‘drastically’
Untangling trillions of dollars worth of loans and other financial contracts from Libor is a complex, expensive and time-consuming job. So, finance giants are turning to artificial intelligence to simplify and speed up a task mandated by regulators — and spare human lawyers some serious drudgery.


U.K. Banks Under Pressure to Start Raising Mortgage Prices
Greg Ritchie – Bloomberg
Swaps used by lenders have risen in the past few weeks; Repricing could see mortgage rates rise in early-2022: BI
A new era for the U.K. mortgage market is approaching as the Bank of England prepares to raise interest rates, and markets are already shifting rapidly.

Germany’s Inflation Dilemma Is a Threat to Europe; A swing to tighter monetary and fiscal policy could reignite the region’s sovereign debt crisis.
John Authers – Bloomberg
Inflation — European Edition
If any country has a difficult inflation problem at present, it might be Germany. Several emerging market central banks have already resorted to tightening, to fend off endemic price pressures. But the dilemma for Germany, and with it the euro zone, is profound.

Polish Miners Take to Luxembourg Streets in Mine Closure Protest
Maciej Martewicz – Bloomberg
EU’s top court ordered to halt mine after Czechs filed lawsuit; Miners warn the closure would lead to job losses, energy cuts
A group of about 2,000 Polish miners has traveled more than 800 kilometers (497 miles) to Luxembourg to protest against the decision of the European Court of Justice to halt production at their lignite mine.

Magnesium Buyers Warn Crunch Threatens Millions of European Jobs
Mark Burton – Bloomberg
Europe buys almost all of its magnesium from Chinese producers; Chinese exports have plunged due to curbs on power usage
Europe’s magnesium shortage could shutter industrial operations within weeks, threatening thousands of businesses and millions of jobs in sectors from cars to packaging, associations warned.

Difficult Winter Looms for Spain With Key Gas Link Set to Stop
Anna Shiryaevskaya, Rodrigo Orihuela, and Javier Blas – Bloomberg
Orders for North African pipeline are at zero for Nov.: Enagas; Potential supplies through expanded alternate route uncertain
Spain is set to stop receiving natural gas shipments through its main import pipeline from November, accelerating the start of a potential energy supply crisis. Shippers have placed zero orders for capacity, a practice known as “nominations,” for November for the Maghreb-Europe pipeline, which delivers Algerian gas via Morocco, according to data published by gas network operator Enagas SA.

China Tightens Online Insurance Rules in Widened Crackdown
Bloomberg News
Lays out regulations to root out ‘disorderly’ competition; Rules could slow growth in market with $391 billion potential
China tightened rules for online insurance sales, seeking to root out irregularities in a burgeoning business that has bolstered platforms like Waterdrop Inc. and Huize Holding Ltd.

State Street says it has no plan to offload asset management arm; ETFs help fuel 26% surge in assets under management in 12 months to September 30
Rheaa Rao – FT
State Street has no plans to relinquish its asset management arm, executives said, as the company revealed exchange traded funds had buoyed a 26 per cent jump in assets under management in the year to September 30.


Fox Weather is Stockpiling Meteorologists and Taking on the Weather Channel; Rupert Murdoch’s new streaming service will feature 3D-radar, storm chasers, stadium cams, ‘The Dancing Weatherman’ and 42 flavors of weather alerts.
Gerry Smith – Bloomberg
Amid all the droughts, forest fires, floods, hurricanes and tornados that have battered America this year, Rupert Murdoch sees an opportunity to make it rain. On Oct. 25, Murdoch’s media empire will launch Fox Weather, a new 24-hour streaming service, aiming to take on meteorological incumbents like the Weather Channel and capitalize on the increasingly frightening state of Earth’s daily forecasts. As weather events grow more intense, Fox Corp. executives are betting that consumers are hungry for more than just an iPhone app that tells them the temperature and whether they should be carrying an umbrella.

Scotch’s new sustainable spirit; When it comes to pushing for carbon-zero in whisky, a tiny young distiller is way ahead of the curve
Alice Lascelles – FT
It’s been a long time coming, but sustainability is now a hot topic in spirits – and Scotch whisky is leading the charge. Last month, the Scotch Whisky Association became the first UK food and drink trade body to partner with Race to Zero, the UN’s campaign to promote carbon-cutting initiatives worldwide. The SWA’s goal is net-zero emissions by 2040, 10 years ahead of the UK Government’s deadline. Which sounds impressive until you learn that one of Scotland’s newest distilleries, Nc’nean, is already there.

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The Spread

Market Volatility Not Over, Allspring’s Miletti Says

Lead Stories Market Volatility Not Over, Allspring's Miletti Says Bloomberg (Video) Ann Miletti, head of active equity at Allspring Global Investments, says the recent market rally has been healthy but the volatility isn't over yet. She speaks on "Bloomberg Markets:...

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