Hits & Takes
John Lothian & JLN Staff
It is primary election day in Illinois, when we select the nominees from the different parties to run in the fall election. The big race is for Illinois governor, where JB Pritzker will win the Democratic nomination for governor against a crowded Republican field that includes Richard Irvin, the candidate backed by $50 million of Citadel’s Ken Griffin’s money. There are many important local races as well, as many of the economic and social issues facing the U.S. are being battled in local or state governments.
Loose lips sink (skyrocket?) men in green tights? FTX evidently was having some discussions internally about how to take over Robinhood and someone decided to share that information with Bloomberg. Bloomberg ran a story titled “Bankman-Fried’s FTX Is Seeking a Path to Buy Robinhood that ran Robinhood’s stock up 14 percent as a result. However, Sam Bankman-Fried said in an emailed statement quoted by Reuters that there have been no discussions between FTX and Robinhood to acquire the brokerage firm. SBF, as Bankman-Fried is known, last month bought 7.6% of Robinhood’s share, but said in his SEC filing he was not seeking control of the firm. It would be really bad form, let alone legally problematic, to change course so soon on this, as Elon Musk can tell SBF based on his Twitter investing.
Robinhood is certainly beaten down. I can see why it would be attractive to FTX, given their plans to dominate all things trading. But given the rumblings at the SEC about the meme stock trading issues, I suggest SBF might be better off just creating his own equities brokerage firm from scratch. If he wants he can name it after me and call it “Little John.”
CME Group announced it is expanding its suite of voluntary carbon emission offset contracts amid record volume and open interest. There is a lot going on in ESG.
CME Group yesterday also awarded 25 Star Scholarships of $5,000 each to 25 associate graduates from City Colleges of Chicago. Chicago Mayor Lori Lightfoot was on hand to participate in the ceremony.
The NFA released the Board Update for its May 2022 meeting, which includes a reception hosted by NFA, FY2023 budget, and NFA’s recent comment letter to the CFTC. The video was produced by John Lothian Productions.
Chris Edmonds is the guest of the ICE House podcast series for episode 308 titled “ICE’s Chris Edmonds on Clearing, Credit, and Crypto.”
ICE Managing Director Gordon Bennett and NYSE Head of ESG Advisory Brian Matt are the authors of a piece titled “Capitalizing on nature’s value for a net zero world; Helping market participants mitigate their environmental impact.”
Tom Scott has done a YouTube video about the Royal FloraHolland’s flower auction in Aalsmeer and its famous clock, which was part of the auction process. He has his own YouTube show. It is an interesting video as it explains how a physical market has moved online for a very old market. Rather than pits, this market had stands in front of a big clock. Thanks to Jeff Bergstrom for finding this interesting story.
There was an accident in Missouri in which a high speed train hit a dump truck, which derailed the train. The truck driver died from injuries from the crash in a ditch, but not before being comforted by a 15-year-old Boy Scout who was on his way back with his troop from a trip to the Philmont Scout Ranch. Other Scouts were also helpful during the emergency situation. The New York Post has the story.
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 John Lothian News Daily Update (Weekly Roundup) – Week of 6/20/2022
John’s summary of the previous week’s news.
The great Ken Griffin exit and what it does and does not portend
The Editorial Board – Chicago Tribune
At the end of this week, moving vans will block Chicago’s alleys and all of those college hunks, man-with-a vans and two guys with trucks will find themselves gainfully employed. Chicago is a huge city. People come and go, each and every day. They take a job out East, hanker for the mountains or maybe, bones wearying and climate change rationalized, they head to warmer places. But the voluntary exit of one individual, Ken Griffin, has sucked up more attention in recent days than anyone we can remember. There are two reasons. One is that Griffin, founder of Citadel, is extraordinarily wealthy ($25 billion says Forbes), so much so that his fortune greatly exceeds that of our billionaire governor. His departure has a meaningful impact on the amount of money Illinois collects each year in taxes.
****** Good editorial from the Chicago Tribune. Worth the read.~JJL
Why the Future of Crypto Is Entirely Up to Apple; Crypto lacks credibility for many people. That’s something Apple could give it.
Jason Aten – Inc.
Apple isn’t exactly known for taking risks. Even when it launches something new, it’s usually after a lot of careful consideration. It’s almost never first to a new market, preferring instead to take its time watching everyone else try and figure it out. That’s understandable–as the world’s most valuable company, it has a lot to lose. Also, there’s the fact that it owes its $2.5 trillion market cap to the fact everything it makes is built on the promise of being simple and secure. Apple, after all, is the it-just-works company. Of course, when it does get involved, it usually ends up on top. That’s why it’s so interesting to think about Apple and crypto.
****** Champagne and rotten eggs would make an interesting combination too.~JJL
The Lights Are Going Out for Crypto’s Laser-Eyed Grifters; Bitcoin’s latest market rout has quietened influencers on social media. That’s a welcome development.
Lionel Laurent – Bloomberg
There aren’t many silver linings to be found in the cryptocurrency crash. People have lost money, often those who could least afford it. But one welcome casualty is the army of laser-eyed social media “influencers,” toxic promoters in what must surely rank as the one of the most egregious product-placement manias in financial history. What comes next should be a healthier focus on consumer protection in an age of digital investing.
****** Lionel Laurent is a hopeless optimist. I hope he is right. What does that make me?~JJL
Monday’s Top Three
Our top story Monday was ‘We will humble them’: four fuel traders took on Wall Street and saved $1.2bn, from The Financial Times, about how Southwest Airlines hedges against surging oil prices and is one of the few U.S. airlines to do so. Second was Employees Scrambled to Keep Robinhood Afloat in January 2021 Meme-Stock Frenzy, House Report Finds, from NPR. Third was Why billionaire Ken Griffin is moving Citadel’s HQ to Miami from Chicago: riots, an employee stabbed, and the attempted hijacking of his own car, from Business Insider via Yahoo! Finance. This was its second time in the top three.
26,885 pages; 239,165 edits
Ernst & Young to Pay $100 Million Penalty for Employees Cheating on CPA Ethics Exams and Misleading Investigation; Largest Penalty Ever Imposed by SEC Against an Audit Firm
The Securities and Exchange Commission today charged Ernst & Young LLP (EY) for cheating by its audit professionals on exams required to obtain and maintain Certified Public Accountant (CPA) licenses, and for withholding evidence of this misconduct from the SEC’s Enforcement Division during the Division’s investigation of the matter. EY admits the facts underlying the SEC’s charges and agrees to pay a $100 million penalty and undertake extensive remedial measures to fix the firm’s ethical issues.
Stock-Exchange Startup Gets $100 Million Investment Funded by Walton Family Member; Silicon Valley’s Long-Term Stock Exchange gets a check from James Walton, who partnered with a venture fund
Corrie Driebusch – WSJ
The Long-Term Stock Exchange, a Silicon Valley firm trying to push for sustainable investing, said it raised $100 million in June from James Walton, part of the famed family associated with Walmart Inc. The investment comes as traditional venture-capital firms are pumping the brakes on funding startups right now, wary of taking on new risk when the markets and economy appear to be in a tenuous position. Companies are instead having to strike deals at big discounts to their prior funding rounds, cut costs or look to less common investors, such as corporations, to write checks.
Banks Face Risks From Geopolitics, Staff Turnover, OCC Says; Office of the Comptroller of the Currency says challenges for banks include more complex sanctions compliance and staff departures
Mengqi Sun – WSJ
Banks are facing a number of challenges this year, including more complex sanctions compliance and increasing staff turnover, the Office of the Comptroller of the Currency said. The OCC, which regulates national banks and federal savings associations, said in its semiannual risk report published Thursday that banks have continued to navigate challenges related to the Covid-19 pandemic. Geopolitical events, such as Russia’s invasion of Ukraine, inflation and higher interest rates are posing more headwinds, the OCC said, but banks are financially strong enough to deal with the challenges.
Bankman-Fried’s FTX says no talks to acquire Robinhood
Manya Saini, John McCrank and Krystal Hu – Reuters
Sam Bankman-Fried’s FTX crypto exchange said it is not in talks to acquire Robinhood Markets Inc, after a report on Monday claimed the exchange was exploring such a deal. Bloomberg News reported on Monday FTX was discussing internally how to buy the app-based brokerage and that Robinhood had not received a formal takeover approach, citing people with knowledge of the matter.
Will SBF go Robin Hood on Robinhood?; The Central Bank of Crypto is reportedly making eyes at the meme stock shop.
Bryce Elder – FT
Remember Robinhood? It was last year’s crisis, when meme-stock mania tore through collateral limits, and is back in the news right now because of a House Financial Services Committee report on its very near miss. Perhaps SBF saw a headline and got confused. Robinhood survived the 2021 episode, just, but a share price down 87 per cent from the high of August that year tells its own story.
Financial Stress Spans All US Income Brackets, Survey Shows; High earners cite paying for a family member’s costs as driver; Living costs add to financial insecurity, Pymnts.com reports
Alexandre Tanzi – Bloomberg
About two-thirds of American consumers who live paycheck to paycheck said they experienced at least one sudden income disruption — from losing a job to a serious illness or the birth of a child — in the past three years, according to a survey. The findings highlight the financial insecurity faced by many households in the US, even among high earners. In the survey, a partnership of industry publication Pymnts.com and LendingClub Corp., consumers in the upper-income bracket often cited paying for a family member’s expenses as a driver of financial distress.Skyrocketing prices for food, gas and homes in the past year have added to the uncertainty: Almost 45% of the respondents cite “dramatically increased” costs of housing, health care or other relevant expense as a reason why they have next to nothing left at the end of the month.
Meme Stocks Were Too Good to Robinhood; Also Russian debt and crypto depositors.
Matt Levine – Bloomberg
Robinhood Markets Inc. is in the business of getting people to trade stock (and options, and cryptocurrencies) on their phones. The more people who sign up for accounts, and the more they trade, the happier Robinhood is. The way it makes money is that each time its customers trade stocks (or options, or cryptocurrencies), Robinhood sends their order to a market maker, and the market maker pays Robinhood a tiny fee for the right to execute the order. Unlike many other retail brokers, Robinhood charges these market makers a variable fee that is, roughly speaking, higher for very volatile stocks. 1 So the more people who sign up for Robinhood’s service, and the more they trade, and the more volatile the stocks that they trade are, the more money Robinhood makes.
China to Ban Over One Million ‘Fake’ Foreign A-Share Investors
China will ban more than one million mainland investors from trading onshore shares via the stock connect programs with Hong Kong, as authorities act on a new regulation to crack down on “fake foreign capital.” Under the rules taking effect on July 25, domestic investors with Hong Kong accounts can no longer purchase A shares through the northbound trading links, according to the China Securities Regulatory Commission. Brokers in Hong Kong must stop giving new trading permits to mainlanders, while investors already in violation will be given a one-year grace period after which they are only allowed to sell the remaining shares.
Taliban Declare Online Forex Trading Illegal in Afghanistan; The central bank said online forex trading is against Islam; Many Afghans want to keep their money out of Taliban’s reach
Eltaf Najafizada – Bloomberg
Afghanistan’s central bank has banned online foreign exchange trading, declaring it “illegal” in Islam and warned that anyone engaging in it would face prosecution, a spokesman of the bank said. “Da Afghanistan Bank considers online forex trading illegal and fraudulent, and there is no instruction in Islamic law to approve it,” Saber Mohmand said over the phone. “As a result, we have banned it.”
What can the past tell us about Bitcoin’s future? A deep dive into the FT archive reveals what has driven the cryptocurrency’s rises and falls
David Hindley – FT
Bitcoin has crashed in value by more than 50 per cent in the past six months, but holders of the cryptocurrency are used to volatility. Here we look at how the FT covered bitcoin’s previous booms and busts to see if history is repeating itself.
Credit Suisse is fined for helping a Bulgarian drug ring launder money, a court said.; The bank, which has been struggling with losses and management turmoil, said it would appeal the decision by a Swiss court.
Jack Ewing – NY Times
Credit Suisse must pay fines and compensation of 21 million Swiss francs, or $22 million, for lax controls that allowed an employee of the bank to help a Bulgarian drug ring launder money, Switzerland’s Federal Criminal Court said on Monday. The ruling was the latest setback for the bank, which issued a profit warning this month and has been suffering from boardroom turmoil. Credit Suisse, based in Zurich, said it would appeal the decision, which stems from the actions of a bank employee in 2007 and 2008. The employee, who was not named, helped the cocaine-smuggling ring make bank transfers “despite concrete indications regarding the money’s criminal origins,” the court said in a statement.
Credit Suisse Found Guilty in Money-Laundering Case Tied to Cocaine Ring; Swiss bank said it would appeal the criminal court’s findings that it didn’t do enough to monitor accounts used by a Bulgarian crime ring
Margot Patrick – WSJ
Credit Suisse Group AG and a former employee were found guilty Monday in a Swiss federal criminal court of helping a Bulgarian crime ring launder money related to cocaine trafficking. The court found Credit Suisse didn’t do enough to prevent money laundering by members of the crime ring, which prosecutors said moved tons of cocaine into Europe and washed millions of dollars through Credit Suisse. It fined Credit Suisse around $2.1 million and ordered it to pay around $20 million to the Swiss government. The former employee, who prosecutors said regularly accepted suitcases of cash from one of the ring members that went beyond allowed limits, was given a 20-month suspended sentence.
FTX CEO Sam Bankman-Fried says ‘no active M&A conversations with Robinhood’; FTX internally discussing ways to buy app-based brokerage: Bloomberg
Frances Yue – MarketWatch
Sam Bankman-Fried, chief executive at crypto exchange FTX, said the company is not having any active mergers and acquisitions conversations with Robinhood Markets after a Bloomberg article said FTX is exploring whether it may be able to acquire the digital trading platform. “We are excited about Robinhood’s business prospects and potential ways we could partner with them, and I have always been impressed by the business that Vlad and his team have built,” Bankman-Fried wrote in an emailed statement to MarketWatch. “That being said there are no active M&A conversations with Robinhood.” Bankman-Fried wrote. Bloomberg, citing people with knowledge of the matter, reported that FTX is having discussions internally on how to buy Robinhood, while the latter hasn’t received a formal takeover approach from FTX. Shares of Robinhood surged 14% Monday afternoon following the article.
China Said to Ask Banks to Prepare for Longer Yuan Trading Hours; Onshore yuan trading may end at 3 a.m. the next day: sources; PBOC had previously pledged to extend currency trading hours
China plans to extend the yuan’s trading hours as it seeks to increase global investor participation in onshore currency trading as part of its internationalization push. Regulators led by the People’s Bank of China have told some banks to prepare for an extension of onshore yuan trading hours, according to people familiar with the matter, who asked not to be identified discussing private information. The trading will close at 3 a.m. the next day, instead of the 11:30 p.m. local time, the people said. It’s not known when the change would be effective. The PBOC had pledged to extend currency trading hours and vowed to further open up the financial market in May after the International Monetary Fund lifted yuan’s weighting in the Special Drawing Rights currency basket. The further extension of yuan trading into New York hours could boost China’s foreign exchange trading volume, which dwindled in May due to Covid lockdowns in Beijing and Shanghai.
Inside one company’s plan to be Latin America’s NYSE for cryptocurrencies
Jared Blikre – Yahoo! Finance
Bitcoin (BTC-USD) just wrapped its worst week since the pandemic bear market two years ago, falling 30% and giving back all of last year’s gains. Yet, some on Wall Street remain committed to building out cryptocurrency infrastructure — adding to the billions already spent on institutionalizing crypto for the masses. Keith Bliss, Global Head of Markets Strategy at BloxCross, recently appeared on Yahoo Finance Live (video above) to discuss the rollout of the new BloxCross cryptocurrency exchange, which is set to go live in Colombia on July 1, with a subsequent rollout in Brazil and Mexico. “Think of us as the New York Stock Exchange for cryptocurrencies in Latin America,” Bliss said. “We hold none of the balance. We’re not the market maker. We simply provide the technology to allow people to enter this market.” Given the recent crypto meltdown in Celcius and Tether — and the associated industry fallout — U.S. regulators are setting their sights on customer protection.
Can Regulators Catch Up to Crypto?
Sonari Glinton – Slate
In April, Fidelity became the first major retirement plan provider to allow everyday people to invest in Bitcoin with their retirement accounts. This move, according to Anthony Lee Zhang, assistant professor of finance at the University of Chicago’s Booth School of Business, signaled a major shift in how traditional financial institutions view cryptocurrency. In the past, crypto investors tended to be people on the fringes of traditional finance. But this cycle, everyone was getting in.
SEC adopts new electronic filing requirements for institutional investment managers and advisers; The Commission claims the new requirements will enhance efficiency, transparency and operational resiliency, while also making data more accessible to the public.
Wesley Bray – The Trade
The Securities and Exchange Commission (SEC) has adopted amendments requiring investment advisers, institutional investment managers, and other entities to file or submit certain documents electronically. The SEC also looks to make technical changes to Form 13F – the reporting document filed by institutional investment managers pursuant to Section 13(f) of the Securities Exchange Act of 1934 – to modernise it and improve the information provided.
Ukraine Latest: At Least 18 Dead After Missile Strike on Mall
A Russian missile strike on a mall in central Ukraine left at least 18 people dead and dozens injured, authorities said. Group of Seven leaders branded the attack a war crime. Ukrainian President Volodymyr Zelenskiy joined the G-7 summit taking place in the Bavarian Alps by video link from Kyiv and said he wants the war to be over by the end of the year, according to officials familiar with his remarks. NATO announced a plan to boost the size of its high-readiness force to 300,000 as it implements a “fundamental shift” in its deterrence plans after Russia’s invasion of Ukraine.
Russian Industry Faces Code Crisis as Critical Software Pulled
Russia’s reliance on foreign software to run its factories, farms and oil fields is turning into one of the biggest headaches for domestic industry as more IT providers pull out of the market in response to President Vladimir Putin’s invasion of Ukraine.
G7 to explore caps on energy prices to curb Russian revenues; Leaders seek to ease pressures on global economies and impose ‘severe economic costs’ on Moscow for Ukraine war
Sam Fleming and Guy Chazan in Schloss Elmau – FT
G7 members will explore ways of curbing energy costs, including via possible caps on the price of oil and gas, as leaders vow to prevent Russia from profiting from its “war of aggression” against Ukraine. In a communiqué released on Tuesday, the G7 leaders said they would look for ways to reduce Russia’s hydrocarbon revenues while minimising the negative impact of high energy prices, especially on low and middle-income countries.
Exchanges, OTC and Clearing
BME makes custody and settlement of Swiss securities available to its Spanish clients
The connection between the Spanish and Swiss CSDs is another step forward in the integration of BME into SIX, Europe’s third largest financial market operator
This development will reduce costs and times for Iberclear’s, Spanish BME CSD, participants by simplifying the securities custody chain
Since yesterday, BME, through Iberclear, the Spanish Central Securities Depository, has made the custody and settlement of Swiss securities available to its clients. This will be possible thanks to the link between the Spanish and Swiss central securities depositories. This represents a new step forward in the integration of BME into SIX, the third largest financial markets operator in Europe.
CME Group and Mayor Lightfoot Award Scholarships to 25 Star Scholars Moving Up to Four-Year Colleges and Universities
CME Group, the world’s leading derivatives marketplace, and Chicago Mayor Lori Lightfoot have awarded 25 associate graduates from City Colleges of Chicago with a $5,000 scholarship towards their four-year degree. For the sixth consecutive year, CME Group is recognizing the academic achievements of Star Scholars at City Colleges of Chicago, in step with its mission to advance equitable opportunities for talented students in Chicago.
CME Group Expands Suite of Voluntary Carbon Emissions Offset Contracts Amid Record Volume, Open Interest
CME Group, the world’s leading derivatives marketplace, today announced that it will add two new futures contracts to its suite of voluntary carbon products, which have quickly found market adoption since launching last year.
Deutsche Börse opens visitor center
The new visitor center (Deutsche Börse Visitors Center) in the historic stock exchange building of the IHK Frankfurt will open its doors to visitors on July 1, 2022. The aim is to bring the topics of stock exchange trading and share culture closer to the public. Under the motto “See. Understand. Act.”, the Deutsche Börse Visitors Center offers visitors insights into the world of the capital market in a multimedia exhibition.
Introducing the next generation of exchange-traded derivatives contracts
Enabling the future: on 27 June, the infrastructure for the next generation of exchange-traded derivatives (ETD) contracts went live, allowing for more flexibility in the design of exchange-traded products. We sat down with our Chief Operating Officer Jonas Ullmann to talk about the launch and upcoming product initiatives that will leverage the new structure.
Euronext announces its science-based climate targets supporting its “Fit for 1.5°” commitment
Euronext, the leading pan-European market infrastructure, today announced its science-based climate targets to reduce greenhouse gas emissions in alignment with the Paris Agreement, based on the framework provided by the Science Based Targets initiative (SBTi)1. These targets support Euronext’s recently announced “Fit for 1.5°” commitment to net zero through the “Business Ambition for 1.5°” initiative2 in partnership with the United Nations Climate Change “Race to Zero” campaign3. Euronext’s ESG commitment is a key pillar of Euronext’s “Growth for Impact 2024” strategic plan announced in November 2021.
HKEX to include ETFS in Stock Connect on 4 July
Hong Kong Exchanges and Clearing Limited (HKEX) welcomes the joint announcement issued today (Tuesday) by the Hong Kong’s Securities and Futures Commission (SFC) and the China Securities Regulatory Commission (CSRC), on the inclusion of Exchange Traded Funds (ETFs) into Stock Connect, with effect from Monday, 4 July 2022.
Launch of Real-time Calculation of Prime, Standard, and Growth Market Indices
Today, JPX Market Innovation & Research, Inc. commenced real-time calculation for the Tokyo Stock Exchange Prime Market Index, Tokyo Stock Exchange Standard Market Index and Tokyo Stock Exchange Growth Market Index.
New MIAX Options Obvious Error Procedures Effective July 1, 2022
The MIAX Option Exchanges will implement a proposed rule change to amend Exchange Rule 521, Nullification and Adjustment of Options Transactions Including Obvious Errors, on July 1, 2022, in coordination with all other options exchanges. The rule amendments include the following.
Nasdaq Closing Cross Has Record Day
Shanny Basar – MarketsMedia
Nasdaq, Inc. announced the Nasdaq Closing Cross had a record day as it was used for the 19th consecutive year to rebalance Nasdaq-listed securities in the entire family of Russell US Indexes, part of leading global index provider FTSE Russell, during its annual reconstitution.
Nasdaq Announces Mid-Month Open Short Interest Positions in Nasdaq Stocks as of Settlement Date June
At the end of the settlement date of June 15, 2022, short interest in 3,411 Nasdaq Global MarketSM securities totaled 10,650,038,311 shares compared with 10,398,950,775 shares in 3,405 Global Market issues reported for the prior settlement date of May 31, 2022. The mid-June short interest represents 2.92 days compared with 2.70 days for the prior reporting period.
Changes in the Fixed Income Indices w.e.f. June 30, 2022
The Saudi Exchange announces Indices Maintenance for the 2nd Quarter 2022
The Saudi Exchange announces the update of the free float shares for all listed issuers in the main market and the parallel market (NOMU), effective from the start of trading on Sunday, 03/07/2022.
DTCC’S Report Hub Community Grows To Over 70 Firms As Industry Prepares For Global Derivatives Trade Reporting Regulatory Changes
Report Hub helps firms manage regulatory reporting complexities across 14 jurisdictions, including global derivatives regulations, SFTR and MiFID II
The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, today announced that the community leveraging its DTCC Report Hub service has grown to more than 70 firms, including leading banks, major swap dealers, and some of the largest custodians, clearing houses and buy-side firms across the globe. The increased adoption of Report Hub comes as the industry prepares for forthcoming regulatory changes in global derivatives trade reporting.
Citi tech tweaks halt UK online ETF purchases; Customers forced to place orders by phone as US bank suffers another systems issue
Philip Stafford in London and Joshua Franklin – FT
Citigroup has halted the online purchase of exchange traded funds for UK customers pending system enhancements, the latest in a string of technology issues to affect the US bank’s business. Over the weekend customers holding wealth management accounts were informed they could no longer make purchases of low-cost funds online for “operational reasons”, according to a client notice seen by the Financial Times.
FCA investigates Wise CEO Kristo Kaarmann over tax default
Ryan Browne – CNBC
The CEO of £3.9 billion ($4.8 billion) fintech firm Wise is being investigated by U.K. regulators after tax authorities found he failed to pay a tax bill worth over £720,000.
Kristo Kaarmann, who co-founded Wise in 2011, was recently fined £365,651 by Her Majesty’s Revenue and Customs — the U.K. government department responsible for collecting taxes — for defaulting on the tax bill in 2018.
Fintech Amount, which was valued at $1B last year, lays off 18% of staff
Mary Ann Azevedo – TechCrunch
Amount, a fintech that reached unicorn status last year, has laid off 18% of its workforce.
The exact number of how many people were affected is not known, but when TechCrunch reported on its last raise in May of 2021, the company said that it had 400 employees. If that is still the case today, then about 72 people were let go. When contacted, the company confirmed that the 18% figure was correct but did not specify the exact number.
What’s a fintech even worth these days?
Alex Wilhelm – TechCrunch
It’s not news that times have changed in the world of fintech. After financial technology startups saw their fortunes rise during the venture capital boom that loosely wrapped as 2021 came to a close, they’re now suffering from a slump of a similar scale.
How CSOs and CISOs Can Bridge the Gap Between Physical and Cybersecurity
Will Plummer – CPO Magazine
Throughout the pandemic, the growing need for companies to rely on digital infrastructure has given CSOs and CISOs plenty of reasons to worry about cybersecurity. The problem is, physical threats like those that come through the mail often go unnoticed, with disastrous results. A physical device hidden in a seemingly innocuous package can introduce malicious code into your network. A cyberthreat that comes by way of a physical device is known as a “phygital” threat.
Cybersecurity Experts Warn of Emerging Threat of “Black Basta” Ransomware
Ravie Lakshmanan – The Hacker News
The Black Basta ransomware-as-a-service (RaaS) syndicate has amassed nearly 50 victims in the U.S., Canada, the U.K., Australia, and New Zealand within two months of its emergence in the wild, making it a prominent threat in a short window.
“Black Basta has been observed targeting a range of industries, including manufacturing, construction, transportation, telcos, pharmaceuticals, cosmetics, plumbing and heating, automobile dealers, undergarments manufacturers, and more,” Cybereason said in a report.
Ransomware attacks are the biggest global cyber threat and still evolving, warns cybersecurity chief
Danny Palmer – ZDNet
Ransomware is the biggest cybersecurity threat facing the world today, with the potential to significantly affect whole societies and economies – and the attacks are unrelenting, the head of the National Cyber Security Centre (NCSC) has warned.
Cryptocurrency is ‘biggest Ponzi scheme in human history’, Chinese execs from state-backed blockchain drive say; Executives from China’s Blockchain-based Service Network say Web3 games and cryptocurrencies, such as bitcoin and ether, are investment frauds; The recent crypto implosion has prompted fresh warnings from state media and authorities in China, where cryptocurrency trading is banned
Xinmei Shen – South China Morning Post
Executives at China’s Blockchain-based Service Network (BSN), a state-backed initiative aimed at driving the commercial adoption of blockchain technology, likened cryptocurrencies and popular Web3 business models to investment frauds, after a recent market rout inflicted heavy losses on global investors. BSN’s Shan Zhiguang and He Yifan called cryptocurrencies “the biggest Ponzi scheme in human history”, propped up by communities that are “trying every means to keep the fraud going”, in an article published in state media People’s Daily on Sunday. Critics of cryptocurrencies have long compared such digital assets with Ponzi schemes, where scammers use money from new investors to pay earlier investors until the fraud can no longer be sustained. However, proponents argue that bitcoin, ether and their like will be useful in the future if they are adopted on a large scale.
France’s approval of crypto exchange Binance branded ‘incomprehensible’ by MEP; European lawmaker Aurore Lalucq urges country’s markets regulator to review its ruling
Scott Chipolina and Akila Quinio – FT
The French markets regulator is facing a backlash over its decision to approve crypto exchange Binance last month, with one European lawmaker describing the agency’s decision as “incomprehensible”. Aurore Lalucq, French MEP and member of the European parliament’s Committee on Economic and Monetary Affairs, has urged the Autorité des Marchés Financiers to review its May ruling, which she said gave Binance a “guarantee of respectability”. Her comments reflect concerns over the Paris-based regulator’s May decision to register a Binance subsidiary as a digital assets service provider. The ruling followed a months-long effort by the world’s biggest digital asset exchange to court French authorities, including President Emmanuel Macron, who met Binance chief executive Changpeng Zhao in November 2021.
Bankman-Fried’s FTX Is Seeking a Path to Buy Robinhood; FTX chief says that he’s ‘excited’ about Robinhood’s prospects; Robinhood surges on Bloomberg report, triggering trading pause
Annie Massa, Matthew Monks, and Katie Roof – Bloomberg
Sam Bankman-Fried’s FTX crypto exchange is exploring whether it might be able to acquire Robinhood Markets Inc., according to people with knowledge of the matter. FTX is deliberating internally how to buy the app-based brokerage, one of the people said, asking not to be identified because the matter isn’t public. Robinhood hasn’t received a formal takeover approach from FTX, another person said. No final decision has been made and FTX could opt against pursuing a deal, the people said. “We are excited about Robinhood’s business prospects and potential ways we could partner with them,” Bankman-Fried said Monday in an emailed statement. “That being said, there are no active M&A conversations with Robinhood.” A spokesman for Menlo Park, California-based Robinhood declined to comment.
Grayscale Bitcoin Trust Lines Up Jane Street, Virtu in ETF Bid; Firms would become authorized participants if ETF approved; The US SEC has yet to approve a ETF that holds Bitcoin
Joanna Ossinger – Bloomberg
Grayscale Investment LLC has recruited a couple of heavyweight partners to help with a bid to convert its Bitcoin trust into an exchange-traded fund. The firm has filed with the US Securities and Exchange Commission for its Grayscale Bitcoin Trust, ticker GBTC, to become an ETF. The trust, which has a market cap of about $13.6 billion and a premium of negative 32% to the price of Bitcoin, has enlisted Jane Street and Virtu as authorized participants if it does become an ETF. APs are specialized traders that have the right to create and redeem shares of an ETF, which is done to help keep the price close to its net asset value. “This announcement from Virtu and Jane Street should really be digested as validation that the market has matured to the place where you have institutional players standing ready to support such an ETF,” said Michael Sonnenshein, chief executive of Grayscale Investment.
Crypto Exchange CoinFlex to Issue Tokens After Withdrawal Freeze; Paused withdrawals after one client failed to repay debt; CoinFlex among firms hit by crypto sector’s liquidity crunch
Immanual John Milton and Yueqi Yang – Bloomberg
Cryptocurrency exchange CoinFlex plans to raise funds by issuing a new token that will offer a 20% annual return, in an effort to resume withdrawals after a client failed to repay a $47 million debt. The platform said it will start to issue $47 million of what it calls “Recovery Value USD” tokens on Tuesday. The resumption of withdrawals, targeted for June 30, will depend on the level of demand for the new tokens. “We’ve spoken to a significant amount of private investors such that we think that at least half of the issuance is going to be subscribed for,” Mark Lamb, chief executive officer of CoinFlex, told Bloomberg News in New York on Monday. The token sale is eligible only to non-US, sophisticated investors, according to the statement. Founded in 2019, CoinFlex is a smaller crypto exchange focusing on derivatives trading. The exchange’s investors include Roger Ver, one of the most vocal Bitcoin Cash advocates.
Robinhood Shares Spike on Report FTX May Be Seeking to Acquire It
Nelson Wang – CoinDesk
Shares of no-commission trading platform Robinhood (HOOD) were rising about 16% and trading was briefly halted after Bloomberg reported that crypto exchange FTX was looking into a possible deal to acquire the company, citing people with knowledge of the matter.
FTX exploring a deal to buy Robinhood: Bloomberg report
Emily McCormick and David Hollerith – Yahoo! Finance
The cryptocurrency exchange FTX is reportedly considering a deal to acquire digital trading platform Robinhood (HOOD), Bloomberg reported Monday, citing unnamed people familiar with the deal. Robinhood has not yet received a formal notice from FTX of any such takeover, the report said, while adding that FTX could ultimately choose not to pursue a purchase. The report of a potential acquisition by FTX comes just over a month after Sam Bankman-Fried, the CEO and founder of FTX, disclosed a 7.6% stake in Robinhood, paying $648 million at the time. As of Monday’s close, this position was worth closer to $513 million. In a statement to Yahoo Finance following this report, Bankman-Fried said: “We are excited about Robinhood’s business prospects and potential ways we could partner with them, and I have always been impressed by the business that Vlad and his team have built. That being said there are no active M&A conversations with Robinhood.”
Crypto Funds Post Record $423 Million Outflows As Bitcoin Plunge Rattles Market
Jonathan Ponciano – Forbes
TOPLINE Investors piled out of cryptocurrency investment funds at a record pace last week after bitcoin plummeted to its lowest level in 18 months, crypto asset management firm CoinShares reported Monday, highlighting the bearishness that’s come to a head this month as markets grapple with the Federal Reserve’s reversal of pandemic-era stimulus measures.
Crypto hedge fund Three Arrows Capital in default on $665 million loan
Hamza Shaban – Washington Post
The crypto broker Voyager Digital issued a notice of default Monday to the hedge fund Three Arrows Capital for failing to make the required payments on a loan worth more than $665 million, the latest sign of financial turmoil that has rocked the world of cryptocurrencies as the value of tokens has plummeted.
Ripple WILL Leave the Country if SEC Wins, Says CEO Garlinghouse
Aaryamann Shrivastava – FX Empire
While the Securities and Exchange Commission (SEC) has been pounding on the crypto company, today, the Chief Executive Officer (CEO) of Ripple, Brad Garlinghouse, made the headlines for announcing their decision should the lawsuit end up in SEC’s favor.
France’s approval of crypto exchange Binance branded ‘incomprehensible’ by MEP; European lawmaker Aurore Lalucq urges country’s markets regulator to review its ruling
Scott Chipolina and Akila Quinio – FT
The French markets regulator is facing a backlash over its decision to approve crypto exchange Binance last month, with one European lawmaker describing the agency’s decision as “incomprehensible”. Aurore Lalucq, French MEP and member of the European parliament’s Committee on Economic and Monetary Affairs, has urged the Autorité des Marchés Financiers to review its May ruling, which she said gave Binance a “guarantee of respectability”.
Fried circuits at the bitcoin miners; Electricity costs up, margins down — though it’s a bit more complicated than that.
George Steer – FT
Rapidly rising electricity prices should be bad news for cryptocurrency miners, right? Boutique investment house Kuros Associates believes so, having shorted US-listed Microstrategy and Riot Blockchain in spite of being a short term bitcoin bull.
Crypto Data Firm Kaiko Raises $53 Million During Market Rout; Blockchain analytics provider triples valuation from June 2021; Investor caution made closing the deal ‘a marathon,’ CEO says
Emily Nicolle – Bloomberg
Blockchain analytics firm Kaiko raised $53 million from new and existing investors in its latest financing round, even as crypto-exposed companies struggle through a rout in digital assets. The series B deal tripled Kaiko’s valuation from its last round in June 2021, a spokesperson for the firm said, declining to provide exact figures. The investment was led by Alibaba backer Eight Roads, alongside French venture capital firm Revaia and existing investors Alven, Point Nine, Anthemis and Underscore.
Cozy Wood-Burning Fireplace at G-7 Jars With Climate Goals
Chiara Albanese and Annmarie Hordern – Bloomberg
In the Bavarian castle where Group of Seven leaders are discussing how to tackle global problems including climate change, a cozy fire was lit to recreate the quaint charms of the mountain retreat. It makes for a picturesque backdrop. But burning wood, never mind in the sweltering heat of summer, causes air pollution. While a small detail it’s a telling one, that speaks to perceptions that politicians might talk a big game on the environment but don’t always lead by example. Heat waves are getting longer and hotter and that was certainly on display for leaders at Germany’s Schloss Elmau, where they are meeting for the better part of three days.
Why Did Republicans Become So Extreme?
Paul Krugman – NY Times
Many political analysts have spent years warning that the G.O.P. was becoming an extremist, anti-democratic party. Long before Republicans nominated Donald Trump for president, let alone before Trump refused to acknowledge electoral defeat, the congressional scholars Thomas Mann and Norman Ornstein declared that the party had become “an insurgent outlier” that rejected “facts, evidence and science” and didn’t accept the legitimacy of political opposition.
Canadian Securities Regulators Release 2022-2025 Business Plan Focused On Investor Protection In An Innovative Financial Marketplace
Ontario Securities Commission
The Canadian Securities Administrators (CSA) today released the 2022-2025 CSA Business Plan, which outlines the priorities of its members over the next three years. The plan coincides with the appointment of Stan Magidson, Chair and CEO of the Alberta Securities Commission (ASC), as the new Chair of the CSA for a three-year term, effective July 1, 2022. This new plan re-affirms the CSA’s commitment to responsive and harmonized regulation across Canada and alignment with international standards, where appropriate. In particular, the 2022-2025 Business Plan sets out six strategic goals focused on maintaining investor confidence in, and ensuring efficient operation of, the Canadian capital markets. The strategic goals are.
Demystifying Derivatives Trading in the EU
International Swaps and Derivatives Association
This paper examines the dynamics of derivatives trading in the EU. It analyzes transactions executed on and off trading venues (TVs), such as multilateral trading facilities and organized trading facilities. The analysis considers why some transactions outside the scope of the derivatives trading obligation are executed on TVs. The paper also explores the composition of transactions executed by systematic internalizers (SIs) and describes the role SIs play in the market, both as liquidity providers to clients and on TVs, where they are commonly referred to as market makers or dealers.
Feds Could Stop Trump SPAC Deal; An investigation by a federal grand jury could halt the proposed SPAC deal with Trump’s social media company.
Ellen Chang – The Street
A proposed merger between former President Donald Trump’s social media business and a special purpose acquisition company could fail as the company’s board received subpoenas from a federal grand jury. All members of the board of Digital World Acquisition Corp. (DWAC) received a subpoenas from the Southern District of New York. The company said in a U.S. Securities and Exchange Commission filing on June 27 that they learned about the grand jury probe on June 16. SPACs give companies access to more capital from the public markets and the proposed merger could have provided billions of dollars in cashflow. Shares of Digital World Acquisition fell by over 9% Monday on the news after the company lost over 52.2% during the past six months. The broader market, such as the S&P 500 fell by 18.2% during the same period. After the deal with Trump’s company was announced in October, shares rose to $90.
EY agrees record $100mn US settlement over ethics exam cheating; SEC alleges ‘breaches of trust’ involving dozens of employees at Big Four audit firm
Stefania Palma and Michael O’Dwyer – FT
Big Four auditing firm EY has agreed to a record $100mn settlement with the US securities regulator to resolve claims that dozens of its employees cheated on an ethics exam and that it misled investigators. The fine is the highest ever imposed by the US Securities and Exchange Commission on an auditor, twice the penalty paid by KPMG in 2019 for exam cheating and illegal tip-offs.
FMSB issues final statement of good practice on trading platform disclosures; The statement of good practice covers a broad range of platforms including established multilateral trading facilities (MTFs) and single dealer platforms.
Wesley Bray – The Trade
The Financial Markets Standards Board (FMSB) has launched its final statement of good practice on trading platform disclosures, drawing extensively from existing European and UK regulatory requirements and initiatives. FMSB has established best practices around how platform operators should disclose to their participants, addressing the fixed income, currencies and commodities markets – including platforms that are covered by existing regulation such as Mifid II, as well as those that are not, such as single dealer platforms
NFA Board Update—May 2022 Meeting
Today, NFA released its latest Board Update video. This video covers important topics from NFA’s May Board meeting, including a reception hosted by NFA, FY2023 budget, and NFA’s recent comment letter to the CFTC. NFA’s quarterly Board Update videos are a way for Members to stay abreast of regulatory obligations and other initiatives.
The Neutral Corner – Volume 2—2022
Promotion of Arbitration Services: Best Practices (by Victoria Bonadies, Contractor Analyst, FINRA Neutral Management)
FINRA Dispute Resolution Services and FINRA News
SEC Charges Canadian Public Company and Its CEO in Fraudulent Microcap Scheme
The Securities and Exchange Commission charged Canadian citizen Bradley Moynes and Canadian corporation Digatrade Financial Corp. for engaging in a deceptive scheme involving microcap companies that generated more than $1.5 million in unlawful stock sale proceeds at the expense of unsuspecting retail investors.
ASIC calls on industry to continue to improve resilience during market outages
ASIC is calling on market operators and participants to continue to implement its expectations to improve the resilience of the Australian equity market during outages, including by facilitating trading on alternative markets.
ESMA Will Not Publish August Systematic Internaliser Regime Data For Non-equity Instruments Other Than Bonds And CTP Data
The European Securities and Markets Authority (ESMA) will not publish the 1 August 2022 publication of the systematic internaliser (SI) regime data for non-equity instruments other than bonds, as well as that of the consolidated tape (CTP) data. This is due to operational constraints which prevent it from performing the scheduled calculations.
FMA publishes NZX obligations annual review
FMA New Zealand
NZX achieved compliance with its licensed market operator obligations over the last year and has successfully implemented its action plan, significantly improving the stock exchange’s technology capabilities.
Individual charged for carrying on fund management without a capital markets services licence; Singapore, 28 June 2022… Ms Lee Ying Hui (“Lee”), was charged today for an offence under the Securities and Futures Act1 (“SFA”).
Monetary Authority of Singapore
Ms Lee is accused of managing her clients’ portfolio of capital markets products and entering into spot foreign exchange contracts for the purpose of managing her clients’ funds, between 14 December 2017 and 30 June 2020. She was charged under section 82(1) of the SFA for carrying on business in fund management, without holding a capital market services licence granted by the Monetary Authority of Singapore.
Launch of ETF Connect
SFC – Hong Kong
The Securities and Futures Commission (SFC) and the China Securities Regulatory Commission (CSRC) today issued a joint announcement on the launch of ETF Connect. Trading of exchange-traded funds (ETFs) under Mainland-Hong Kong Stock Connect will commence on 4 July 2022 (Note 1).
New synopsis: Keynote by Ashley Alder at IFRS Foundation Conference 2022
SFC – Hong Kong
A synopsis of a keynote speech entitled “Implementing a global baseline for corporate climate disclosures” delivered by Mr Ashley Alder at the IFRS Foundation Conference 2022 was posted on the SFC website.
Investing and Trading
Michael Burry’s ‘Bullwhip’ Tweet Deserves Serious Attention; The hedge fund investor has hit on an uncomfortable truth for those expecting more inflation and endless Fed rate hikes.
Jared Dillian – Bloomberg
Hedge fund manager Michael Burry issued a tweet Monday suggesting that the Federal Reserve may pause or even reverse its campaign of interest-rate hikes: What he’s referring to with the “Bullwhip Effect” is the deflationary effects of retailers holding too much inventory. The theory is that they will eventually have to drop prices to relieve themselves of the goods they have stockpiled.
Europe’s Spacs scramble for targets as market hit by hangover; The region’s largest blank-cheque vehicle Pegasus Europe is among those seeking a company to merge with
Owen Walker and Sarah White – FT
Europe may have been late to the Spac boom but that did not stop some of the continent’s wealthiest and highest-profile business figures from muscling in. Bernard Arnault, who runs luxury goods group LVMH, and fellow fashion billionaire François Pinault, backed special purpose acquisition vehicles. The craze proved a magnet for former European bank bosses, including Jean Pierre Mustier, Sergio Ermotti, Tidjane Thiam and Martin Blessing, who have all sought to capitalise with their own launches.
ExxonMobil chief predicts continuing surge in oil markets; ‘It’s a question of how high prices eventually rise’ to spur investment, says Darren Woods
Tom Wilson and Justin Jacobs – FT
ExxonMobil’s chief executive predicted a resurgence of investment in fossil fuel production as he blamed soaring oil and gas prices on pressure to move to cleaner energy at a time of relentless demand. Darren Woods, the head of the biggest western oil and gas supermajor, said efforts to reduce emissions by cutting production before addressing consumption had left the world struggling to meet energy needs, pointing to an “optimistic view” about how quickly the energy transition can happen.
Municipal Bonds Increasingly Held by Funds Instead of Individuals; Share of munis held by individuals falls to 40% in the first three months of the year from 46% in 2020, study finds
Heather Gillers – WSJ
One factor aggravating volatility in munis this year: Asset managers’ increasing share of a $4 trillion market once dominated by buy-and-hold individual investors. The share of outstanding municipal bonds held by U.S. households fell to 40% in the first three months of the year from 46% in 2020, according to a Municipal Securities Rulemaking Board report scheduled for release Wednesday. The board, a self-regulatory body overseeing the muni market, analyzed Federal Reserve data and determined that the market is shifting from direct ownership of bonds to investment through funds.
Environmental, Social and Corporate Governance
AFME recommends co-legislators focus on original objectives of EU Green Bond Standard
The Association for Financial Markets in Europe (AFME)
In light of the ongoing interinstitutional negotiations (trilogues) on the EU Green Bond Standard (EU GBS) proposal, the Association for Financial Markets in Europe (AFME) has today published a paper highlighting 6 priorities to fulfil the objectives of the EU GBS framework and to support the establishment of an effective and successful market for EU Green Bonds. The French Presidency of the European Council commenced the final phase of negotiations in June and talks will continue over the second half of the year under the auspices of the Czech presidency. Among the key issues for discussion are the scope of the regulation and additional entity-level requirements. This comes after the Parliament proposed introducing requirements for all issuers of sustainable bonds in the EU and to add entity-level disclosure requirements.
Yellen Presses Europeans on Price-Cap Proposal for Russia’s Oil; Spoke to Cyprus minister on depriving ‘Kremlin of revenue’; Treasury chief seeking to maintain supply, cut Russia revenue
Daniel Flatley and Georgios Georgiou – Bloomberg
Treasury Secretary Janet Yellen is pressing European counterparts to embrace measures designed to enforce a price cap on Russian oil, a move that US officials hope would maintain global crude oil supplies while at the same time limiting Moscow’s revenue. Yellen spoke Monday with Constantinos Petrides, the finance minister of Cyprus, a major maritime player that serves as Europe’s largest ship-management center.
Europe’s Coal Plant Comeback Drives Up Carbon Permit Prices
Todd Gillespie – Bloomberg
European plans to mobilize idle coal-fired power plants across the continent are pushing up the price of carbon permits needed to burn the dirtiest fossil fuel. Germany plans to reopen around 10 gigawatts of coal capacity to replace gas-fired generation, along with similar moves to increase burning of the fuel in the Netherlands, Austria, Belgium and France. That means utilities using coal need to buy up more permits in the European Union’s Emissions Trading System to be compliant, tightening their supply.
BHP sets biodiversity targets in ‘social value’ push; Miner aims for 30% of its land and water under conservation, restoration or regeneration programmes
Neil Hume – FT
BHP has announced plans to tackle biodiversity loss, in a move that the world’s biggest mining company hopes will put it ahead of rivals in the race to secure the best mineral deposits in the shift to clean energy. The Australian company is seeking to place 30 per cent of the land and water it owns, leases or manages under conservation, restoration or regenerative practices by 2030.
The future of farming: how to feed a troubled world; Can agriculture solve the problems it helped to create? Three books suggest ways to sustain humanity without destroying the planet
Laura Battle – FT
When my father was born, in 1943, our farm was still powered by horses. Today he frets about the cost of a 345-horsepower tractor and follows the latest developments in “agtech” robotics.
The Hottest Investor in Renewables Is a Big Oil Producer; Seeking international clout, the United Arab Emirates is emerging as the world’s biggest state financier of clean energy while remaining a influential investor in oil and gas
Rory Jones – WSJ
The United Arab Emirates is emerging as one of the world’s biggest state financiers of clean energy, seeking to become as influential in renewables as it currently is in oil and gas. Since November, when global nations agreed to accelerate emissions-cutting plans at a United Nations summit, the U.A.E. has said it will fund development of thousands of megawatts of solar-energy projects in countries across the world. It has committed $400 million to enable developing nations’ transition to clean energy and pledged to help supply green electricity to 100 million Africans by 2035.
Jefferies’ Revenue Slips as Market Turmoil Crimps Dealmaking
Shubham Saharan – Bloomberg
Jefferies Financial Group Inc. said investment-banking and capital-markets revenue slipped 31% from a year earlier, while still beating analysts’ estimates, as a turbulent geopolitical and macroeconomic picture chilled the pace of deal activity. The decline contributed to a 30% drop in overall revenue at the company during the three months through June, Jefferies said in a statement Monday. The company’s $1.1 billion in investment-banking and capital-markets revenue was higher than the $967 million consensus from analysts in a Bloomberg survey. Revenue from debt and equity underwriting was lower than a year earlier, “consistent with a reduction in industrywide deal activity,” the company said.
Four big U.S. banks raise dividends after stress tests
Carolina Mandl and Michelle Price – Reuters
Morgan Stanley, Goldman Sachs, Bank of America and Wells Fargo hiked their dividends on Monday after the U.S. banks cleared their annual stress test exercise last week. The U.S. Federal Reserve said on Thursday the country’s largest lenders could easily weather a severe economic downturn, giving them a clean bill of health and paving the way for them to redistribute excess capital to shareholders. The results allowed banks to announce higher dividends despite the Fed’s test being tougher than in 2021, pushing up some lenders’ required capital buffers more than expected.
Vanguard Sues Financial Advisor Over Alleged Client Solicitation
Andrew Welsch – Barron’s
The Vanguard Group is suing one of its former ultrahigh-net-worth financial advisors for allegedly violating a one-year nonsolicitation agreement he signed while an employee. The financial services giant accuses Matthew Snipes of breach of contract and misappropriation of trade secrets in its lawsuit filed June 9 in a federal court in North Carolina. It’s the latest legal battle between wealth management firms and advisors over client contacts. It is also the second time in recent weeks that Vanguard has filed a case against Snipes.
Cryptocurrency ‘bloodbath’ threatens multibillion-dollar hedge fund; Three Arrows Capital founder takes to Twitter to assuage fears after 25% drop in price of bitcoin in a single day
Alex Hern and Dan Milmo – The Guardian
The “bloodbath” in the cryptocurrency sector may claim another victim, with the co-founder of multibillion dollar hedge fund Three Arrows Capital using Twitter in an attempt to battle rumours that the company is insolvent following the market collapse. With a net asset value of $18bn (£14.9bn) in its last public statement, the Singapore-based hedge fund was known for taking large, highly leveraged stakes in crypto businesses and cryptocurrencies directly. It holds positions in cryptocurrencies including bitcoin, Ethereum and Solana, as well as equity investments in companies such as the BlockFi exchange and options trading platform Deribit.
Credit Suisse to Lean on Wealth Unit, Technology in Revamp
Marion Halftermeyer and Myriam Balezou – Bloomberg
Credit Suisse Group AG vowed to boost the business with rich clients and cut costs through simplifying technology as it seeks to emerge from two years of scandal and losses. The bank on Tuesday outlined plans to grow the wealth unit by focusing on priority markets such as Hong Kong and Singapore, in a presentation for an “investor deep dive” that gave more detail on how it wants to reach its targets while improving risk management.
Jupiter CEO Quits $68 Billion Firm to Sit at the Beach and ‘Do Nothing’
Andrew Formica, the chief executive officer of Jupiter Fund Management Plc, suddenly announced he’s leaving the £55.3 billion ($67.9 billion) asset manager he joined in 2019. Formica, 51, will leave the position on Oct. 1 and will also resign as a director of the London-based company on that date, according to a statement Tuesday. He will be succeeded by Matthew Beesley, the company’s chief investment officer, who will take up the role of CEO with effect from that time.
Jupiter names new chief executive as Andrew Formica prepares to exit; Chief investment officer Matthew Beesley to take the top job at UK asset manager
Harriet Agnew and Emma Dunkley – FT
Jupiter Fund Management chief executive Andrew Formica is retiring after only three years in the role, following a lacklustre period marked by fund outflows and a falling share price. The London-listed fund group, which manages £55bn, said on Tuesday that Formica will step down in October and will be replaced by the asset manager’s new chief investment officer, Matthew Beesley.
Smart beta ETF launches sink to 12-year low; Plain-vanilla strategic beta strategies are gathering the most assets, according to Morningstar
Jackie Noblett – FT
Factor-focused strategies may no longer be the exchange traded fund industry’s shiny new thing. However, investors have not abandoned strategic beta ETFs with “plain vanilla” tilts and relatively low fees, Morningstar research shows.
Ex-UBS Staffer Wants Payout for Exposing $10 Billion Swiss Stash; Gibaud’s bid for compensation gets boost from court adviser; Case shows gap between French, U.S. whistle-blowing awards
Gaspard Sebag – Bloomberg
An ex-UBS Group AG employee turned whistle-blower may be getting closer to forcing reluctant French authorities to compensate her for helping them uncover about 9.6 billion euros ($10.2 billion) that taxpayers stashed away in Swiss bank accounts.
Danske Finds Sexual Harassment Cases Among Bankers in Survey; Lender says findings are in line with smaller surveys at banks; Danske is working to improve its reputation after scandals
Christian Wienberg – Bloomberg
Danske Bank A/S said it found examples of bullying and sexual harassment after conducting the first comprehensive employee survey for its entire staff. The survey, which included replies from 13,000 of the bank’s 22,000 employees, showed that 2.7% said they had faced bullying, discrimination or harassment, while 0.7% had experienced sexual harassment during the past 12 months, Danske said on Tuesday
JonesTrading’s European outsourced desk head departs for Outset Global; New managing director for Outset has held head of trading roles at Perry Capital, Adams Hill Partners, Caxton Associates and JonesTrading.
Annabel Smith – The Trade
Outset Global has appointed a buy-side industry veteran to become a new managing director in its outsourced trading group, The TRADE can reveal. Peter Sellers joins Outset Global in a US-based but European focused role after most recently serving as head of European outsourced trading at JonesTrading for nearly three years.
Vaccines Begin to Arrive in EU Nations in Response to Monkeypox
James Paton – Bloomberg
European Union health authorities said the first of more than 100,000 vaccine doses purchased in response to the monkeypox outbreak are being delivered to member states. An initial 5,300 doses of the Bavarian Nordic A/S vaccine are arriving in Spain, with Portugal, Germany and Belgium set to receive doses next, according to a statement Tuesday from the European Commission. Further deliveries of the doses — purchased by the bloc’s new Health Emergency Preparedness and Response Authority, or HERA — will take place in July and August, it said.
Live Q&A: How worried should we be about new Covid variants and rising infections? FT science editor Clive Cookson and global pharma correspondent Hannah Kuchler will answer your questions on Wednesday June 29
Covid infections continue to rise across the UK, with the latest data from the Office for National Statistics showing 1.7mn people testing positive, a 23 per cent increase on the week before.
Hong Kong can be a hub, not just for capital going into China, but also funds coming out of mainland for M&A, ex-SFC chairman says; City an ideal platform for Chinese companies conducting M&A deals overseas, former SFC chairman Anthony Neoh says; Hong Kong is a ‘very important international buffer’ for China’s currency and financial system
Enoch Yiu – South China Morning Post
Hong Kong, which is already a fundraising centre for mainland Chinese companies, can also become a hub for such firms when it comes to mergers and acquisitions abroad, said a former regulator. With its strong capital markets, rule of law and a large pool of English-speaking financial professionals, Hong Kong is an ideal platform for Chinese companies conducting M&A deals involving overseas targets, Anthony Neoh, the former chairman of the Securities and Futures Commission (SFC) from 1995 to 1998, told the Post. “Hong Kong could become a financing hub, not just for capital going into China, but also capital coming out of China for mergers and acquisitions,” he said. The city will mark the 25th anniversary of its handover to China on July 1. Neoh, a Hong Kong barrister, was the SFC’s first Chinese chairman and led it through the handover in 1997 and then the Asian financial crisis in 1998.
Hong Kong, Singapore investors filling void in London property left by mainland Chinese retreat; Beijing’s imposition of capital controls, escalating trade tensions with the West and regulatory tightening has ended a years-long buying spree; As mainland money departs, other Asian investors still value the safety, liquidity and transparency of London’s property market
Nicholas Spiro – South China Morning Post
In 2017, mainland Chinese investors ploughed US$9.7 billion into British commercial property. That was slightly higher than the amount invested in Hong Kong and significantly more than in the United States, which in the preceding two years had attracted the lion’s share of Chinese outbound investment. According to data from Knight Frank, Chinese buyers – including those based in Hong Kong – accounted for nearly 40 per cent of purchases of central London offices by overseas investors.
Africa’s dream of feeding China hits hard reality
Duncan Miriri and Joe Bavier – Reuters
Watching workers poke avocados from the treetops in an orchard owned by Kenyan agriculture firm Kakuzi, managing director Chris Flowers revels in the thought some might soon go to the crown jewel of emerging consumer markets: China.