Hits & Takes
John Lothian & JLN Staff
The Kilt Challenge has achieved new prominence today as the last kilt wearer, Robbert Booij, has been named the new chief executive of Eurex, replacing Michael Peters. The Financial Times has the story of the former ABN AMRO Clearing Bank CEO taking over for Peters, who is retiring. Booij led the most successful Kilt Challenge fundraising operation to date, leading up to last year’s FIA IDX gala dinner. Congratulations to Robbert on his new role and to the Eurex team on garnering a terrific new leader.
Today we published a two-part interview with former KCG and GETCO CEO Daniel Coleman, who is currently the president of Birmingham-Southern, a struggling liberal arts college in Alabama. The interview was prompted by a Wall Street Journal story about the college and Coleman titled “This Private College Has Been on Its Deathbed-for 15 Years” with the subheadline “Birmingham-Southern seeks new Alabama lifeline as city pushes to avoid closing of campus.”
The first part of our video interview covers Coleman’s career in the financial services industry, which saw him graduate from Yale and be hired by O’Connor & Associates. He traded in Philadelphia before coming to Chicago to get his MBA from the University of Chicago while continuing with O’Connor. His career weaved its way through O’Connor’s various deals, mergers and acquisitions until the financial crisis, when he decided it was time to find something new. General Atlantic connected him with GETCO and he became its new CEO. Watch the video and get the whole story.
The second video seems to have been produced for Citadel’s Ken Griffin, who today is in the news for saying he is not giving more money to Harvard because it produces “whiny snowflakes” instead of future leaders, Bloomberg reported. Coleman left KCG after it was acquired by Virtu and headed home to Alabama. He reconnected with a local college, started teaching investments, joined the board and was asked to become its president. That is the short version. The long version is that the college has longstanding financial problems and Coleman jumped into the breach to try to solve them. He needs some help from people who are interested in education and the potential to create a contemporary program that provides students with the skills and knowledge necessary for today. Watch the video to learn more. And if you are a friend of Ken Griffin, forward him the video and story.
I messed up yesterday with the Abaxx news. The press release I mentioned here in the Hits & Takes section was actually released back on January 10. I grabbed the wrong press release yesterday. The one I should have mentioned is “StoneX Becomes Abaxx Exchange’s First Clearing and Trading Member to Expand Market Offering.” My apologies for the error.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
Corporate climate validations by the Science Based Targets initiative (SBTi) have doubled in one year to 4,204 companies. The demand for corporate decarbonization standards and target validation services provided momentum for the scale-up of the SBTi into a free-standing organization. Previously a collaboration among CDP, We Mean Business Coalition, World Resources Institute (WRI), the World Wide Fund for Nature and the UN Global Compact, the SBTi’s independent launch was enabled by a $36m donation package – half from the IKEA Foundation and half from the Bezos Earth Fund. Priorities for 2024 include updating the SBTi Corporate Net-Zero Standards and the SBTi Financial Institutions Net-Zero Standards. Learn more about the SBTi on its website. ~SAED
Our most read stories from our previous edition of JLN Options were:
– Banks Are Hawking US Recession Hedges Tied to Both Stocks, Bonds from Bloomberg via Yahoo Finance.
– Traders Price In Trump Win by Piling Into Currency Hedges from Bloomberg.
– Cboe exchange withdraws application to list Global X spot Bitcoin ETF from CoinTelegraph. ~JB
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The Journey of Daniel Coleman: From English Literature to Financial Markets, Part One
Daniel Coleman’s path to success in the financial markets is a tale of a chance encounter that led him to a career he never anticipated. Born in Alabama, Coleman embarked on a journey that took him from the Ivy League halls of academia to the high-stakes world of trading in Philadelphia, Chicago and New York and back home in academia’s highest level.
Reviving Birmingham-Southern: Dan Coleman’s Journey to Save a Struggling College
Dan Coleman left KCG after it was acquired by Virtu Financial and moved back to Birmingham, Alabama to contemplate his future. He reached out to a local college, Birmingham-Southern, whose board he once served on. Little did he know he would soon end up as its president.
Griffin Rips Harvard, Says Colleges Spawn ‘Whiny Snowflakes’
Janet Lorin – Bloomberg
Ken Griffin, one of the largest donors to Harvard University, said he won’t support the school financially unless it makes significant changes and accused elite US colleges of producing “whiny snowflakes” instead of future leaders. “I’m not interested in supporting the institution,” Griffin said of Harvard at the MFA Network conference in Miami on Tuesday. The billionaire said the university must make clear that it will “resume its role educating young American men and women to be leaders and problem solvers.”
****** I dislike the use of the word snowflakes here. Snowflakes are all unique. ~JJL
The Future of Financial Markets: What Canada Must Do Now to Win
Tim Babcock, Vice President and Head, TSX Venture Exchange via LinkedIn
With the support of a robust financial ecosystem, Canadian companies continue to grow and compete in a global environment. Rather than fully-formed, mature companies bursting onto the world stage, the majority of our public companies start out as small enterprises nurtured from inception: by their founding entrepreneurs and the powerful, interconnected network of investors, advisors and other stakeholders that make up our public markets ecosystem. This community plays a critical role in the success of the groundbreaking companies that will position Canada as a globally competitive economy into the future.
****** Remember, it is not where the puck is now, but where the puck is going to be that matters.~JJL
Tuesday’s Top Three
Our top story Tuesday was Hong Kong eyes moves to attract IPOs of mainland Chinese, Middle Eastern firms to spur stock market, Paul Chan says, from South China Morning Post. Second was Global Clean Energy Spending Surges to $1.8 Trillion. It’s Not Enough, from Bloomberg. Third was JPMorgan Quants Warn of Dot-Com Style Concentration in US Stocks, also from Bloomberg.
German derivatives exchange Eurex to appoint ABN Amro’s Booij as chief; Dutch banker set to be named head of Europe’s largest futures marketplace
Costas Mourselas and Nikou Asgari – Financial Times
Eurex, Europe’s largest derivatives exchange, will name Dutch banker Robbert Booij as its new chief executive, according to two people with knowledge of the matter. Booij is currently chief executive for Europe at ABN Amro Clearing Bank, a division of the Dutch bank that connects trading firms and hedge funds with exchanges such as Eurex. An announcement could come as soon as Wednesday, the people said.
BGC settles lawsuit with ex-partner over alleged $35mn fraud; New York-based group settles case that was due to go to trial in London
Alistair Gray and Nikou Asgari – Financial Times
BGC Partners has reached a settlement with a former senior partner following allegations that he took part in a $35mn scheme to defraud the broker. The New York-based broker, led by billionaire Howard Lutnick, had sued Xavier Alcan, who was a long-serving partner at the group’s London office, alongside a tax adviser called Michael Viney. BGC accused the pair of orchestrating a scheme to divert tax payments into their own pockets. Court officials said BGC had reached a settlement with Alcan ahead of proceedings that were due to begin in London’s High Court this week. The group had previously discontinued proceedings against Viney.
Swiss Bourse CEO Eyes Sizeable Acquisition In Next Three Years; SIX reportedly has shown interest in platform Allfunds; Investment needed to stay competitive amid consolidation
Allegra Catelli – Bloomberg
The head of the Swiss stock exchange said the company must invest to stay competitive and he expects to do a sizeable acquisition in the coming years. “I would be disappointed if in the next three years we don’t acquire something of size,” SIX Group AG Chief Executive Officer Jos Dijsselhof said in an interview. “It doesn’t have to be within the next 12 months.” SIX already owns Bolsas y Mercados Espanoles SA, the operator of Spain’s stock exchange. This month, it was reported to be considering a bid for Allfunds Group Plc. Last year, Bloomberg reported that Allfunds was working with advisers on a strategic review that could lead to a sale.
DTCC targets 90% affirmation by 9pm on trade date ahead of T+1; Trades processed through the NSCC are on track, with more work to be done around the bilateral settlement segment.
Chris Lemmon – The Trade
The Depository Trust and Clearing Corporation (DTCC) has published new research tracking the progress of affirmation in the US ahead of the switch to T+1 and has set a target of 90% affirmation by 9pm ET on trade date come 28 May. “When you look at the US regulation on T+1, there are no specific targets for affirmation rates,” Val Wotton, head of ITP at DTCC told The TRADE’s sister publication, Global Custodian. “Same day affirmation and the obligation to achieve it is called out but there are no specific targets that have been set. DTCC has taken a thought leadership role here to coalesce the industry, and we’ve set a target which everyone can progress towards.”
The multi-asset multiverse: Anticipating the trading landscape of the future
Following a volatile year for capital markets, Mark Govoni, chief executive of Liquidnet, delves into some key considerations for the ever-accelerating market, including: continuing multi-asset migration, the importance of emerging technologies in the pursuit of liquidity, and the evolving role of brokers. Blink and you’ll miss it. The past 12 months have been nothing short of a rollercoaster in the markets and technology landscape. We’ve faced the harsh reality of prolonged higher rates, persistent inflation, and seismic events like Silicon Valley Bank’s collapse. Meanwhile, tight liquidity has become the name of the game, turning the playing field into a high-stakes battleground. Last year also saw the emergence of generative AI, thrusting capabilities once thought decades away into our present reality.
Is $203 Trillion In Derivatives Held By Goldman Sachs, JPMorgan And Other Top Banks Causing an ‘Everything Bubble?’
Caleb Naysmith – Benzinga
The scale of derivatives held by major banks like JPMorgan Chase & Co., Citibank and Goldman Sachs, amounting to $203 trillion, has raised concerns about the potential risks these positions might pose to the global economy. The third-quarter Quarterly Report on Bank Trading and Derivatives Activities, published by the Office of the Comptroller of Currency, provides a comprehensive dive into this issue. This figure surpasses the world’s gross domestic product (GDP) by roughly double, highlighting the enormity of the market. JPMorgan Chase, in particular, is noted for its substantial exposure to derivatives risk, topping the list with roughly $58 trillion in derivatives. The mounting scale of derivatives owned by banks raises several questions and concerns among regulators and investors.
US bitcoin ETFs raise questions over broader financial system risks
Elizabeth Howcroft and Hannah Lang – Reuters
The launch of U.S. exchange-traded funds (ETFs) tracking bitcoin deepens ties between the volatile world of cryptocurrencies and the traditional financial system, potentially creating unforeseen new risks, some experts say. The Securities and Exchange Commission (SEC) this month approved 11 spot bitcoin ETFs from issuers including BlackRock (BLK.N), opens new tab and Invesco/Galaxy Digital, in a watershed moment for a crypto industry dogged by bankruptcies and crime.
CME to Launch FX Spot+ After Restructuring FX Business; FX Forwards Move Toward Clearing Mandate
Shanny Basar – MarketsMedia
In December last year CME Group said it is launching an all-to-all spot foreign exchange market to connect cash market participants with the exchange’s FX futures liquidity. CME FX Spot+ is expected to be made available for client testing during the second half of this year. Paul Houston, global head of FX Products at CME Group, told Markets Media: “FX futures and options and the EBS platforms are all on Globex, which is the CME Group technology infrastructure. The collective strength of the businesses can offer more to customers, enable us to be more streamlined and innovate across cash and derivatives FX.”
StoneX Becomes Abaxx Exchange’s First Clearing and Trading Member to Expand Market Offering; StoneX will offer its clients access to Abaxx Exchange’s physically deliverable commodities contracts to facilitate their energy transition needs
StoneX Financial Pte Ltd
StoneX Financial Pte Ltd (“StoneX”), a subsidiary of StoneX Group Inc. (NASDAQ: SNEX), and Abaxx Technologies Inc. (NEO:ABXX)(OTCQX:ABXXF) (“Abaxx”), today announced that StoneX has become the first approved clearing and trading member of Abaxx’s indirectly held, majority-owned Singapore-based exchange (“Abaxx Exchange”) and clearinghouse (“Abaxx Clearing”), introducing centrally cleared, physically-deliverable futures contracts, and licensed as a Recognised Market Operator (“RMO”) and Approved Clearing House (“ACH”) with the Monetary Authority of Singapore (“MAS”).
Citigroup Sued Over Handling of Online Scams; New York Attorney General Letitia James wants bank to pay back defrauded customers
Justin Baer and Dean Seal – The Wall Street Journal
New York Attorney General Letitia James sued a unit of Citigroup, alleging that the bank had failed to protect its customers from online scams and then illegally denied those account holders reimbursements. “The results are devastating,” James’s office wrote Tuesday in its civil complaint. “Consumers lose tens of thousands of dollars or more by doing nothing more than clicking on a link in a text that appears to be from a trusted source, providing information on a call with a purported representative of Citi, or answering security questions on a website that looks official.”
Elon Musk’s $55.8 Billion Tesla Pay Package Struck Down by Judge; Delaware judge cites Musk’s ‘extensive ties’ with directors who determined his most recent pay deal
Rebecca Elliott – The Wall Street Journal
A Delaware judge struck down Elon Musk’s multibillion-dollar pay package at Tesla after finding the process for securing its approval “deeply flawed,” a major setback for the chief executive of the world’s most valuable automaker. The decision, issued Tuesday in the Delaware Court of Chancery, calls into question how Tesla’s board plans to compensate Musk, a serial entrepreneur with an array of other business interests.
Brought to You by BlackRock: Airports, Pipelines and Data Centers; World’s largest asset manager has ambitions beyond index funds
Jack Pitcher – The Wall Street Journal
BlackRock’s $10 trillion asset management empire is built around passive index investing. Chief Executive Larry Fink is betting that infrastructure will help drive his firm’s next wave of growth. The money manager agreed in early January to buy Global Infrastructure Partners for $12.5 billion, its biggest push yet into what are known as private-market investments that don’t trade on a public exchange. GIP, a New York-based infrastructure fund manager with roughly $100 billion in assets, owns and operates energy, transportation, and waste and water companies around the world.
Europe Regulates Its Way to Last Place; From mergers to AI, the EU’s aggressive rule making hampers its ability to compete with China and the U.S.
Greg Ip – The Wall Street Journal
These are humbling times for Europe. The continent barely escaped recession late last year as the U.S. boomed. It is losing out to the U.S. on artificial intelligence, and to China on electric vehicles. There is one field where the European Union still leads the world: regulation. Having set the standard on regulating mergers, carbon emissions, data privacy, and e-commerce competition, the EU now seeks to do the same on AI. In December it unveiled a sweeping draft law that bans certain types of AI, tightly regulates others, and imposes huge fines for violators. Its executive arm, the European Commission, might investigate Microsoft’s tie-up with OpenAI as potentially anticompetitive.
China Merges Hundreds of Rural Banks as Financial Risks Mount
China is embarking on its biggest consolidation in the banking industry by merging hundreds of rural lenders into regional behemoths amid growing signs of financial stress. After engineering mergers of rural cooperatives and rural commercial banks in at least seven provinces since 2022, policymakers pinpointed tackling risks at the $6.7 trillion sector as one of its top priorities for this year. That means another wave of consolidation is on the way across the nation.
China ETFs See Inflows Top 2015, Suggesting State Rescue
Record inflows into a handful of key Chinese exchange traded funds suggest state-led funds have sprung into action to buffer the stock market plunge. The Huatai-Pinebridge CSI 300, E Fund CSI 300, China AMC CSI 300, Harvest CSI 300 and China AMC SSE 50 ETF together saw 128.5 billion yuan ($17.9 billion) of inflows so far in January, more than five times the aggregate amount seen in July 2015, when the so-called “national team” jumped in to stem a rout.
Brexit Is Making Britain More European; Continental populism has come to the U.K., and the two-party system is about to face a stress test.
Dominic Green – The Wall Street Journal
Britain’s exit from the European Union marks its fourth anniversary on Wednesday. Brexit is turning out to be neither the blessing that its advocates promised nor the curse that its opponents feared. Contrary to the expectations of Leavers and Remainers alike, Brexit is making British politics more European.
Hedge Funds With 2,000% Leverage Catch EU Watchdog’s Eye; Big exposure to mortgage bonds poses risk to market: ESMA; Funds are buyers in rising markets, sellers during downturn
Alice Gledhill – Bloomberg
European regulators are closely following a group of hedge funds with exposure to mortgage bonds and average gross leverage in excess of 2,000%, a position so large it risks impacting markets. The funds predominantly are buyers in rising markets and sellers during a downturn, according to a Tuesday report by the European Securities and Markets Authority about the risk posed by leveraged alternative investment funds. It’s an approach to trading that tends to compound market moves and can be an added source of instability.
Musk Loses $51 Billion, But There’s a Lot More at Stake; The CEO’s centrality to the Tesla mystique means he is the chief risk to its $610 billion valuation as well as the company’s greatest asset.
Liam Denning – Bloomberg
For Elon Musk, the Delaware Court of Chancery is like a giant anti-ATM, sucking wealth away from him. Late on Tuesday, Chancellor Kathaleen St. J. McCormick voided a $55 billion compensation package that Tesla Inc. awarded the chief executive in 2018. In 2022, the same judge presided over the case in which Twitter Inc. eventually forced Musk to go through with his acquisition of the company, with him backing down before it went to trial. Twitter, now X, has not thus far been a star performer.
CEOs Should Think Twice About Transparency; And other valuable lessons from a new book on how corporations can survive in the dangerous world of “doing well by doing good.”
Adrian Wooldridge – Bloomberg (Opinion)
Business is under intense pressure to embrace social responsibility. Asset managers allocate billions on the basis of “ESG” (environmental, social and corporate governance) scores. The public trusts business more than politicians to solve social problems. Activists beat the drum of corporate responsibility more loudly by the day. Yet the idea of ethical business is a conceptual and practical minefield. Companies such as Unilever Plc that take the lead are often slammed not just by investors but also by activists. Conservatives are pig-wrestling mad about “woke corporations.” Governments exploit corporate activism as a way of handing social problems to the private sector.
The World Is Transitioning to American Oil From Saudi Crude; Riyadh’s decision to cancel a planned increase in production capacity says nothing about the shift away from fossil fuels.
Javier Blas – Bloomberg
Picture the scene: Weeks after the world came together at the COP28 summit with a deal for “transitioning away from fossil fuels,” Saudi Arabia, the oil industry’s flagship producer, cancels a planned increase in its crude output capabilities. On paper, it’s the stuff climate activists dream about. No so fast. First, the details. On Tuesday, Saudi Aramco, the state-owned oil giant, announced it was abandoning a plan worth several dozen billion dollars to boost its production capacity – with the emphasis on capacity – to 13 million barrels a day, from 12 million barrels currently. Due to OPEC+ output cuts, Riyadh is well below its maximum output potential, currently pumping about 9 million barrels a day.
Wind Power Is Starting to Learn Big Oil’s Dirty Little Secret; If we’re to switch to a zero-emissions economy, some cutthroat tactics will be necessary.
David Fickling – Bloomberg (Opinion)
For the fossil fuel industry, every crisis has always contained both danger and opportunity. It’s a trick the renewables business has struggled to master. John D. Rockefeller created Standard Oil Co. by paying liquidation prices for rival refiners amid an industry-wide glut – and then using his control of processing to squash the cycles of boom and bust in oil drilling, too. Losing its monopoly on Iranian crude after a 1953 coup spurred BP Plc to explore fields in Alaska and the North Sea that would sustain it for decades. The global oil market exists largely because of the way the eight-year closure of the Suez Canal after the 1967 Arab-Israeli war prompted shipping companies to develop unprecedentedly large tankers.
Russia Is Wearing Down Ukraine’s Defenses While Zelenskiy Fights With His Top General; With allied assistance delayed, Kyiv’s troops don’t have enough artillery and air-defense munitions.
Natalia Drozdiak, Milda Seputyte, and Peter Martin – Bloomberg
Ukraine is running short of weapons to protect its cities, with vital assistance from Europe and the US held up by political disputes, while President Volodymyr Zelenskiy fights with his commander-in-chief over military strategy. Zelenskiy tried – and failed – to push General Valeriy Zaluzhnyi aside this week, according to people briefed on the discussions. Zelenskiy is looking for a bolder approach to the conflict following last year’s failed counteroffensive and has appeared at odds with his general’s more conservative view.
Israel and Hamas Weigh Three-Stage Cease-Fire; Draft agreement hammered out by intelligence chiefs envisages an initial six-week pause in fighting to release hostages
Summer Said and Jared Malsin – The Wall Street Journal
Israel and Hamas are considering a three-stage deal that would release hostages in Gaza beginning with a six-week cease-fire, according to officials with knowledge of the draft agreement hashed out by international intelligence chiefs in Paris this week. Washington says a deal to free more hostages and stop the clashes in Gaza is closer than at any time since the collapse of a cease-fire in December. Getting it over the line would mean surmounting internal divisions and entrenched differences between the warring sides. Officials say the obstacles make an imminent deal unlikely, but suggest that if they are overcome an agreement could be completed within a week to 10 days.
Iran-Backed Militia Suspected of Strike on U.S. Troops Says It Will Suspend Attacks; Kataib Hezbollah’s announcement of a ‘suspension’ won’t change U.S. plans for reprisal, Pentagon says
David S. Cloud and Ken Thomas – The Wall Street Journal
An Iraqi militia suspected of involvement in the drone strike that killed three American soldiers said Tuesday it was suspending attacks on U.S. forces in Iraq and Syria, as the Biden administration weighed a possible military response. The leader of Iranian-backed Kataib Hezbollah said it was halting attacks on U.S. bases and troops, calling the move temporary and warning against “hostile American action.”
Exchanges, OTC and Clearing
Robbert Booij becomes CEO of Eurex Frankfurt AG, succeeding Michael Peters. Michael Peters will retire in September 2024 after almost 30 years. Robbert Booij is moving from ABN AMRO Clearing to Eurex in May.
Robbert Booij will become a member of the Executive Board of Eurex Frankfurt AG on May 1, 2024. He will succeed Michael Peters as CEO on July 1, 2024. Booij is moving to Eurex from ABN Amro Clearing Bank NV, where he has been CEO Europe since March 2018. Michael Peters, CEO of Eurex Frankfurt AG since July 2020 and member of the Eurex Board of Directors since 2006, has decided to step down as CEO at the end of June and retire in September 2024.
DTCC Issues New Affirmation Progress Report and Details Post-Trade Best Practices to Achieve T+1; Report recommends the industry target at least 90% of all trades to be affirmed by 9:00 PM ET on trade date in support of US move to T+1; In December 2023, 69% of all trades were affirmed by 9 pm ET on trade date
With less than four months until the US moves to a T+1 settlement cycle, DTCC, the premier post-trade market infrastructure for the global financial services industry, today issued a report, “Hitting 90% Affirmation by 9:00 PM ET on Trade Date: The Key to T+1 Success”. The report encourages market participants to automate their post-trade operations to have adequate time to allocate, confirm and affirm at least 90% of their transactions by 9:00 PM ET on trade date, a critical step for firms and the industry in achieving T+1 settlement.
Sucden Group Selects ICE to Support OTC Derivatives Pricing, Trading and Risk Management
Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of technology and data, today announced that Sucden Group (Sucden), a leading soft commodities trading firm, has selected ICE’s Portfolio Analytics platform to support pricing, trading and risk management of derivatives products. As Sucden continues to expand its global trading and investment activities, it will use ICE Portfolio Analytics to support its real-time pricing, trading and risk management of derivatives. ICE Portfolio Analytics offers streaming market data and analytics, which include access to pricing and analytics solutions for vanilla and exotic OTC products across asset classes, giving Sucden the ability to price and monitor their exposure on an intraday basis.
Xetra ETF statistics 2023: Bond ETFs and active ETFs in an upward trend.
Deutsche Boerse Group
Invested assets in the ETF segment on Xetra rise by 26 percent to a new record of 1.29 trillion Euro. Continued high listing activity expands product range by 123 to 2,125 ETFs. Xetra remains Europe’s largest ETF exchange in terms of product number and trading volume. The market for exchange traded funds (ETFs) on Xetra continued to record high investor interest last year: with an increase of 26 percent to 1.29 trillion. Euro, ETF fund assets reached a new high (2022: 1.02 trillion euros). During the same period, the product range on Xetra increased by 123 ETFs to a new record of 2,125 ETFs (2022: 2,002 ETFs). The ETF trading volume declined across Europe last year against the background of overall lower market volatility and amounted to 169.5 billion euros for Xetra (2022: 232.8 billion euros). Xetra was once again the ETF trading venue with the highest turnover among all European stock exchanges.
LSEG Announces Launch of Matching & Market Tracker for FX Traders of Interbank Market in Pakistan
London Stock Exchange Group
LSEG (London Stock Exchange Group) today announced the simultaneous adoption of two innovative solutions for the Foreign Exchange (FX) interbank market in Pakistan: Matching and Market Tracker. Tailored to the specific needs of the Pakistani market, these launches represent a significant advancement in FX trading infrastructure and oversight capabilities in the region.
Hearing Before The Disciplinary Committee Of Bourse De Montréal Inc. Desjardins Securities Inc. And Antoine Morrissette-Boileau
The Montreal Exchange
The Disciplinary Committee of Bourse de Montréal Inc. (the “Bourse”) will hold a hearing on February 29, 2024 at 9:30 a.m. by videoconference, in order to decide on the acceptance of a settlement agreement negotiated between the staff of the Regulatory Division of the Bourse and Desjardins Securities Inc. (“DSI”) and Antoine Morrissette-Boileau (“Mr. Morrissette-Boileau”), in connection with a disciplinary complaint filed against DSI and Mr. Morrissette-Boileau.
Nasdaq Announces Quarterly Dividend of $0.22 Per Share
The Board of Directors of Nasdaq, Inc. (Nasdaq: NDAQ) has declared a regular quarterly dividend of $0.22 per share on the company’s outstanding common stock. The dividend is payable on March 28, 2024 to shareholders of record at the close of business on March 14, 2024. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to approval by the Board of Directors.
Nasdaq Reports Fourth Quarter and Full Year 2023 Results; Revenue Growth & Strategic Investments Underpin Solid Year of Performance
Nasdaq, Inc. (Nasdaq: NDAQ) today reported financial results for the fourth quarter and year 2023. 2023 net revenues1 were $3.9 billion, an increase of 9% over 2022 and an increase of 5% organically. Solutions2 revenues increased 13%, with organic growth3 of 7%. Market Services net revenues were flat on a reported and organic basis.
SGX Securities debuts first active ETF
SGX marks new milestone with first active ETF. Underscores commitment to pioneer new financial instruments catering to the evolving market landscape. SGX Securities today welcomed the listing of the Lion-Nomura Japan Active ETF with assets under management (AUM) of S$37 million. This is the first active ETF in Singapore and is managed by Lion Global Investors (LGI) and Nomura Asset Management Singapore.
The Moscow Exchange began trading in an exchange-traded fund for long-term investments
On January 31, 2024, trading began on the Moscow Exchange stock market in the new exchange-traded mutual investment fund (MUIF) Alfa Capital Smart Portfolio, managed by Alfa Capital Management Company. Trade code – AKUP. BPIF “Alfa Capital Smart Portfolio” is a ready-made solution for balanced investments, suitable for a wide range of investors due to its universal strategy and low entry threshold. The fund invests in shares and bonds of Russian companies, as well as gold and money market instruments.
India’s ancient carpet weaving industry meets AI
Priti Gupta – BBC
An ancient symbolic code lies behind the intricate patterns of Kashmir’s traditional handwoven carpets and rugs. Called talim, the code has been used for hundreds of years to design carpets and convey information to weavers. From the age of eight, and following in the footsteps of his father, Mohammad Rafiq Sofi has been weaving carpets using talim designs.
Microsoft’s and Google’s AI plans clouded by concerns of rising costs; Tech giants tout new tools that will need significant investment as the technology takes hold
Camilla Hodgson and Tabby Kinder – Financial Times
Investor buzz about Big Tech’s financial gains from generative artificial intelligence was damped after Microsoft and Google warned of more large costs this year in the arms race to develop cutting-edge AI products. Strong quarterly results from the rival tech giants on Tuesday failed to persuade investors that growth will keep up with the massive investments they plan to make in data centres and servers this year to deliver generative AI.
PayPal cuts 2,500 jobs in the face of rising competition
Mariko Oi – BBC
PayPal says it will cut another 2,500 jobs, or 9% of its global workforce, a year after making a similar move. Chief executive officer Alex Chriss told staff that the decision was made to “right-size” the company “through both direct reductions and the elimination of open roles”. The staff who are affected will be notified by the end of the week, the digital payments giant said. PayPal faces rising competition from rivals such as Apple, Zelle and Block.
Nvidia’s biggest customers are also the AI chip maker’s biggest threat; Microsoft and Meta are buying up chips from Nvidia while also building their own
Michelle Cheng – Quartz
Nvidia-which roughly translates to “envy” in Latin-has been having its AI moment. The chip maker’s stock is up almost 30% year-to-date, closing at $624.65 on Monday, Jan. 29. Microsoft and Meta are the biggest spenders on the company’s H100, the coveted $30,000 chip that powers generative AI products. In 2023, both companies spent $9 billion on these hot chips, according to a report by financial services firm DA Davidson. But these buyers are also building their own AI chips, raising questions about Nvidia’s long-term revenue growth.
India Orders Paytm Payments Bank to Stop Conducting Business; RBI finds persistent non-compliance and supervisory concerns; PayTM Payments Bank must stop transacting after Feb 29
Anup Roy – Bloomberg
The Reserve Bank of India on Wednesday ordered Paytm Payments Bank Ltd., a unit of One 97 Communications Ltd., to stop its popular mobile wallet business along with other activities, citing persistent non-compliance and supervisory concerns. The regulator said the firm, which processes transactions for India’s digital payments giant Paytm, must stop its banking activities after Feb. 29 Existing customers, however, can withdraw their funds and use up the balance in the prepaid cards or wallets without any restrictions, the RBI said.
The SEC Won’t Let CISOs Be: Understanding New SaaS Cybersecurity Rules
The Hacker News
The SEC isn’t giving SaaS a free pass. Applicable public companies, known as “registrants,” are now subject to cyber incident disclosure and cybersecurity readiness requirements for data stored in SaaS systems, along with the 3rd and 4th party apps connected to them. The new cybersecurity mandates make no distinction between data exposed in a breach that was stored on-premise, in the cloud, or in SaaS environments. In the SEC’s own words: “We do not believe that a reasonable investor would view a significant data breach as immaterial merely because the data are housed on a cloud service.”
20 Cybersecurity Strategies Businesses Can Implement Today
As financial transactions and data storage increasingly shift to online platforms, the vulnerability to cyber threats is multiplying. For businesses, this means the implementation of robust cybersecurity measures is more important than ever. Below, Forbes Finance Council members share 20 cybersecurity strategies business leaders should implement to safeguard their digital financial ecosystem. From regular security audits to comprehensive employee training, these practices can help protect against the growing sophistication of cyber attacks.
Growing threats outpace cybersecurity workforce
In 2023, tech employees found themselves in an unaccustomed position: scrambling for work. Since last January, tech firms including Google, Meta, and Microsoft have laid off around a quarter of a million people. In early December, online music company Spotify announced that it was furloughing about 17% of its workforce-roughly 1,500 employees. Many tech firms that expanded their headcounts during the pandemic have retrenched as growth slows and investors demand cost-cutting.
Blackstone Is Building a $25 Billion Empire of Power-Hungry Data Centers; The private equity giant says landlord QTS could be one of its best investments ever – but the resources needed for growth are vast.
Dawn Lim – Bloomberg
Off a highway in Phoenix, cranes tower over a stretch of land larger than 60 football fields. The first of five hulking bunkers are under construction. Thirty miles away, engineers are plotting another complex on 400 acres, some three times the footprint of the Mall of America, all but erasing the land’s farming roots. If all goes as planned, both sites will be home to thousands of computers churning mountains of data, powered by the energy needed for hundreds of thousands of homes.
Why People Still Think Bitcoin Will Die; Unstoppability is one of its most important and reliable features. So why do so many respondents to a recent survey think Bitcoin will fail in 2024?
Michael J. Casey – Coindesk (opinion)
If you’re looking for more proof of the gap of comprehension between “normies” and crypto fanatics, look no further than the results of a Deutsche Bank survey of 2,000 retail clients last week. The most striking result wasn’t even that a third of respondents saw bitcoin below $20,000 by year end. That’s less than half its current price, and well shy of Anthony Scaramucci’s $170,000 price target, which, like other bullish predictions, sees ETF-spurred demand running up against thinner supply after the next “halving” this April.
George Osborne joins crypto exchange Coinbase as it eyes UK move
Matthew Field – The Telegraph
George Osborne has taken a job at Coinbase as the cryptocurrency exchange considers moving to Britain. The former chancellor is joining the US-listed company’s global advisory council in what will be his 11th current role, including unpaid positions. The former chancellor is a partner at boutique investment bank Robey Warshaw, co-founder of a Silicon Valley investment firm run by his brother, chairman of the British Museum and the Northern Powerhouse Partnership.
Binance Reviews Its Majority Stake in South Korean Crypto Exchange GOPAX
Jamie Crawley – CoinDesk
Binance is in “early-stage discussions” about its stake in South Korean cryptocurrency exchange GOPAX. The world’s largest crypto exchange by trading volume acquired a majority stake in GOPAX in February 2023, re-entering a market it had vacated two years previously. South Korea news outlet News 1 on Tuesday said Binance will announce the reduction of its stake in GOPAX “within a month or two,” citing Steve Young Kim, director of Binance’s Asia-Pacific region.
“Bitcoin Beautee” is pleading guilty to her role in a $2 billion crypto Ponzi scheme; Brenda Chunga is one of many scammers to meet their demise in the past year
Laura Bratton – Quartz
Brenda Chunga, known online as “Bitcoin Beautee,” was the American face of an Australian Ponzi scheme called HyperFund. Chunga made nearly $4 million promoting the scheme-which defrauded investors across the globe of $1.9 billion (pdf)-on social media, according to the US Securities and Exchange Commission (SEC). With her fortune, she bought a million-dollar house in her home state of Maryland, a million-dollar condo in Dubai, a BMW, and some designer handbags.
Donald Trump will not win a war against the Swifties
Madison Hall – Business Insider
If former President Donald Trump and his campaign choose to attack Taylor Swift, he’ll have to defeat a far scarier and more dangerous force than Joe Biden’s reelection campaign: her scorned fans. After weeks of Republican media pundits and a former presidential candidate vilifying her, going as far as saying she’s a Defense Department psy-op, it seems all but certain Trump will jump into the fray soon as well after Rolling Stone reported one of his confidants predicted a “holy war” against the pop sensation.
Trump puts on full-court press for big-time donors – and nabs more than a few; The former president has scored a commitment from Ron DeSantis’ former top money man, among others.
Alex Isenstadt – Politico
Donald Trump is aggressively courting potential megadonors to his campaign, targeting those who’ve kept their powder dry so far this cycle and at least one who was the biggest backer of his chief primary rival. The former president is set to dine with more than two dozen of the party’s biggest check-writers on Thursday evening at the Palm Beach, Florida, home of billionaire investor John Paulson, a Trump ally who has pledged to support his campaign.
$500 million Harvard megadonor halts donations, says elite schools produce ‘whiny snowflakes’
Matt Egan – CNN
Hedge fund billionaire Ken Griffin, who has donated more than $500 million to Harvard University over the years, has halted contributions to his alma mater and claimed elite schools produce “whiny snowflakes.” Griffin, one of the richest people in the world, joins a growing list of donors to Harvard, the University of Pennsylvania, Columbia and other top schools who have decided to close their checkbooks.
Ken Griffin casts doubt on Nikki Haley’s hopes after $5mn donation; Hedge fund billionaire says Donald Trump’s challenger has ‘narrower’ path to the presidency
Alex Rogers and Ortenca Aliaj – Financial Times
Ken Griffin gave a pro-Nikki Haley super Pac $5mn in December and January, boosting her campaign even as the hedge fund billionaire has cast doubt on her chances of winning the Republican presidential nomination. A person familiar with the matter confirmed that the donations to SFA Fund were made before the Iowa caucuses and New Hampshire primary.
Post-Brexit controls on food and farm imports start
Michael Race – BBC
Post-Brexit controls on food, plant and animal imports to Britain from the EU have come into force. Health certificates will now be required on EU goods ranging from cut flowers, to fresh produce including meat, fruit and vegetables. Some industry bodies raised concerns the rules could cause delays and push up costs, but others said they would help UK farmers be more competitive.
Bankers’ bonuses: No cap under Labour, says Reeves
Simon Jack – BBC
EU climate chief rebuts business fears that green policies hit competitiveness; Wopke Hoekstra says measures to tackle global warming should not undermine industry
Alice Hancock – Financial Times
India regulator reviewing small, mid-cap funds’ stress tests -sources
Jayshree P Upadhyay – Reuters
India’s markets regulator is looking at whether local mutual fund schemes investing in small and mid-cap stocks would be able to withstand sharp falls in stock prices or sudden outflows, according to two sources with direct knowledge of the matter. Such funds have seen heavy inflows over the past year, pushing up the prices of small and mid-cap stocks and raising the risks of a steep correction should market conditions suddenly deteriorate.
Should savers worry about compensation after HSBC fine? Need to Know: Protections for customers
John Aglionby – Financial Times
HSBC was fined £57.4mn on Tuesday for failing to identify billions of pounds worth of deposits held by hundreds of its customers who were eligible for protection under the UK’s Financial Services Compensation Scheme (FSCS). Under the scheme, authorised financial services firms are required to ensure they have systems in place to help regulators identify those customers who would be eligible for up to £85,000 in protection – or £170,000 for a joint account – within seven days of a bank failing.
German Authorities Seize $2 Billion Worth of Bitcoin; The police described the transfer of funds as the “most extensive seizure of Bitcoins by law enforcement in the Federal Republic of Germany.”
Christopher F. Schuetze – The New York Times
A German programmer who is accused of running an illegal movie streaming site more than a decade ago transferred $2.17 billion worth of Bitcoin to the authorities to repay at least some of the money he had made illegally, the police said on Tuesday. The transfer required the man to use his unique Bitcoin credentials to hand over the funds.
CFTC’s Energy and Environmental Markets Advisory Committee to Meet February 13
CFTC Commissioner Summer K. Mersinger, sponsor of the Energy and Environmental Markets Advisory Committee (EEMAC), today announced the EEMAC will hold a public meeting from 9:00 a.m. to 11:30 a.m. (MST) on Tuesday, February 13 at the Colorado School of Mines in Golden, Colorado. Members of the public may also attend the meeting virtually or in person, if space permits.
Statement on the Denial of a Rulemaking Petition Regarding the Commission’s No-Admit/No-Deny Policy
Chair Gary Gensler – CFTC
Today, the Commission denied a Petition for Rulemaking to amend Rule 202.5(e), more commonly known as the Commission’s no-admit/no-deny policy. I was pleased to support the Commission’s decision. The Commission’s no admit/no deny policy was adopted in 1972. As the Commission said at the time: “The Commission has adopted the policy that in any civil lawsuit brought by it or in any administrative proceeding of an accusatory nature pending before it, it is important to avoid creating, or permitting to be created, an impression that a decree is being entered or a sanction imposed, when the conduct alleged did not, in fact, occur.”
Unsettling Silence: Dissent from Denial of Request for Rulemaking to Amend 17 C.F.R. § 202.5(e)
Commissioner Hester M. Peirce – CFTC
I dissent from the Commission’s denial of a petition to amend Rule 202.5(e), our so-called gag rule. This de facto rule follows from the Commission’s enforcement of its policy, adopted in 1972, that it will not “permit a defendant or respondent to consent to a judgment or order that imposes a sanction while denying the allegations in the complaint or order for proceedings.” In that same policy, the Commission articulated its belief “that a refusal to admit the allegations is equivalent to a denial, unless the defendant or respondent states that he neither admits nor denies the allegations.” These two strands-the refusal to settle with persons who deny the allegations and the belief that refusing to admit is a denial-converge in the requirement that to settle with the Commission, a person must either (1) admit the allegations underlying the Commission’s enforcement action or (2) state that she neither admits nor denies the allegations.
Court Grants Partial Summary Judgment Against CFO and Controller
On January 26, 2024, the U.S. District Court for the Southern District of New York granted the SEC partial summary judgment against former Synchronoss Technologies, Inc. (“Synchronoss”) CFO, Karen Rosenberger, and Synchronoss controller, Joanna Lanni.
SEC Charges Founder of $1.7 Billion “HyperFund” Crypto Pyramid Scheme and Top Promoter with Fraud
The Securities and Exchange Commission today charged Xue Lee (aka Sam Lee) and Brenda Chunga (aka Bitcoin Beautee) for their involvement in a fraudulent crypto asset pyramid scheme known as HyperFund that raised more than $1.7 billion from investors worldwide.
We’re not there yet: Current regulation around AI may not be sufficient
“Existing laws likely do not adequately prevent AI-facilitated harms before they occur, and more work is needed to ensure there is an adequate response to harms after they occur.” These words are from the Federal Government’s interim report on AI regulation. I’m sure most of you are familiar with it. It’s clear, then, that a divide exists between our current regulatory environment and the ideal. Today’s theme of ‘bridging the governance gap’ presupposes such a divide. It invites us to consider what AI governance and regulation might look like in the ideal, how great the divide is between that ideal and current circumstances – and, of course, how we might go about bridging that divide.
Remarkable resilience of financial markets in a higher-for-longer interest-rate environment – Press Release – ESMA
Speech by Samantha Barrass to the Financial Services Council Outlook 2024
Financial Markets Authority
The Minister this morning set out a clear vision and direction for financial services regulation in New Zealand. Based on my experience across multiple jurisdictions, these changes offer the opportunity to streamline and bring New Zealand up to best of class, learning from what has, and has not worked overseas. I’m going to build on some of the points the Minister has raised, speak to the importance of the Twin Peaks regime working well, reflect on how a move to outcome focused regulation is rooted in the reasons that I became a regulator and touch on the importance of work to further develop New Zealand’s capital markets.
Securities Commission Malaysia Welcomes New Board Member
The Securities Commission Malaysia (SC) has welcomed the appointment of Kemal Rizadi Arbi as its new Board member for a two-year term, effective on 15 January 2024. The Board is responsible for the SC’s overall governance and has oversight of its regulatory and developmental mandates. The Board members are appointed by the Minister of Finance.
Investing and Trading
Gold Demand to Hit Record With Central-Bank Buying, WGC Says
Yvonne Yue Li – Bloomberg
Total gold demand hit a record last year and is expected to expand again in 2024 as the US Federal Reserve moves toward cutting interest rates, potentially aiding prices, according to the World Gold Council. Overall consumption climbed by about 3% to 4,899 tons last year, supported by strong demand in the opaque over-the-counter market, as well as from sustained central-bank buying, according to the WGC’s full-year report. That’s the highest total figure in data going back to 2010.
US Is Shrinking T-Bill Supply at Just the Right Time for Investors
Alexandra Harris – Bloomberg
A pullback in Treasury bill supply is coming at an ideal moment for investors who’ve already gorged on the debt as the Federal Reserve looks to begin tapering its balance sheet unwind. Wall Street is on alert ahead of the Treasury’s Wednesday refunding announcement, with most prepared for one last increase in sales of long-term debt. Already, the department’s latest borrowing estimates imply a reduction in bill sales of more than $250 billion between April and June, according to Wrightson ICAP.
BondBloxx launches triple B rated corporate bond ETFs; Three offerings target segment of bond market that has been outperforming broader market peers
Brian Ponte – Financial Times
BondBloxx has rolled out three ETFs that offer exposure to triple B rated corporate bonds. The BBB Rated 1-5 Year Corporate Bond ETF, BBB Rated 5-10 Year Corporate Bond ETF and BBB Rated 10+ Year Corporate Bond ETF will target triple B rated corporate bonds within their respective maturity ranges, the company said in an announcement. “While there are existing funds that target maturity ranges within investment-grade corporate bonds, these funds offer a new level of precision by enabling investors to target BBB-rated corporate bonds within various maturity ranges,” the company said.
European diesel prices squeezed by supply disruption fears; US production cuts add to Red Sea security concerns
Lukanyo Mnyanda – Financial Times
Global diesel prices have hit a near three-month high as traders fear Houthi attacks on shipping in the Red Sea will raise costs for consumers and disrupt crucial supplies from Asia to Europe. Gasoil futures, the global benchmark, have risen 15 per cent from mid-December, to $845 a metric tonne, reflecting investors’ growing concerns that Europe will be squeezed by supply chain issues in coming months.
Environmental, Social and Corporate Governance
Top European Leaders Test Positive for Cancerous ‘Forever Chemicals’; Campaign argues no one is safe from ‘forever chemicals’; Substances are used in a variety of consumer products
Laura Millan – Bloomberg
Chemicals linked to severe health issues including cancer, infertility, birth defects and immune system disruptions are everywhere and no one is safe from them – not even top politicians, according to a campaign advocating for a European Union-wide ban. Former vice-presidents of the European Commission including Frans Timmermans and the current environment commissioner Virginijus Sinkevičius took part in the campaign, which tested EU officials’ blood for per- and polyfluorinated chemicals, also known as PFAS or forever chemicals. The toxic substances were found in all tested individuals, with five politicians exceeding what are deemed safe levels.
JPMorgan, Lloyds Among Banks Adding New Senior ESG Roles; Banks are directing resources into monetizing biodiversity; New regulations force industry to pay attention to nature loss
Natasha White – Bloomberg
From Wall Street to the City of London, senior roles are being created around one of ESG’s youngest but fastest-growing areas: biodiversity. Banks adding such positions include JPMorgan Chase & Co., Lloyds Banking Group Plc, NatWest Group Plc and Standard Chartered Plc. The goal is to monetize biodiversity through financial innovation, while navigating new regulations designed to protect the natural environment.
Joe Biden factors domestic energy costs into decision to pause LNG permits; Debate over climate effects of gas exports comes as White House contends with inflation
Myles McCormick and Aime Williams – Financial Times
Climate campaigners rejoiced last week when US President Joe Biden froze approvals for new liquefied natural gas terminals that export the fuel. But the White House hopes the “pause” in LNG permits will win it political kudos with a much bigger group: US consumers worried about the price of heating and electricity.
‘Smoking gun proof’: fossil fuel industry knew of climate danger as early as 1954, documents show; Documents show industry-backed Air Pollution Foundation uncovered the severe harm climate change would wreak
Oliver Milman – The Guardian
The fossil fuel industry funded some of the world’s most foundational climate science as early as 1954, newly unearthed documents have shown, including the early research of Charles Keeling, famous for the so-called “Keeling curve” that has charted the upward march of the Earth’s carbon dioxide levels.
More Than 1,000 New EV Stations Have Come Online in the US Since Summer; Fast-charging infrastructure for electric cars grew by 16% in the second half of 2023. That’s before federal spending even kicks in.
Kyle Stock – Bloomberg
The vastness of rural America has long been a challenge for electric vehicles, but the country’s electron deserts are disappearing quickly. US drivers welcomed almost 1,100 new public, fast-charging stations in the second half of 2023, a 16% increase, according to a Bloomberg Green analysis of federal data. Put another way: There is now one quick-turn EV station for every 16 or so gas stations in the country (though many convenience stores now sell both kinds of go-juice).
Climate Change Behind Africa Cholera Surge, Top Health Body Says; Africa CDC sees spread as primarily a climate change issue; The outbreaks have hit more than a dozen African countries
Godfrey Marawanyika – Bloomberg
The $2.6 Billion Experiment to Cover Up Europe’s Dirty Habit; A Norwegian project to bury carbon waste under the sea is getting backing from Germany.
Kari Lundgren and Petra Sorge – Bloomberg
After Another Year of Record-Breaking Heat, a Heightened Focus on Public Health;
Victoria St. Martin – Inside Climate News
With heat deaths surging in Texas, Arizona and across the nation, researchers model a myriad of heat effects on the human body and focus on the disproportionate impacts suffered by the elderly and people of color.
Sustainable investment can lift Britain out of its slump; Shifts in policy and a misguided obsession with North Sea oil and gas have undermined confidence
Nicholas Stern – Financial Times
Japan Inc opens door to more women directors, but managers remain rare
Anton Bridge – Reuters
Velocity Clearing Partners With Raymond James
Anna Lyudvig – Traders Magazine
Velocity Clearing, a global financial services technology company, has entered into a Prime Brokerage services referral agreement with Raymond James Financial, a diversified financial services company. Brian Schaeffer, President of Velocity Clearing, told Traders Magazine, the agreement remains in place for as long as both firms want it to be.
Banking Industry May Need to Spend Millions to Gain Access to Company Ownership Database; FinCEN details the procedures for banks and local agencies to use the sprawling new database
Mengqi Sun – The Wall Street Journal
The banking industry may need to spend hundreds of millions of dollars in the first year to set up protocols to access the new corporate-ownership information database, the U.S. Treasury Department said. The Financial Crimes Enforcement Network, the Treasury unit in charge of managing the database that became effective this month, estimated that financial institutions would need about 6.5 million hours of work in the first year to establish procedures and implement safeguards to meet the security and confidentiality requirements to access the database.
UBS Weighs Cutting About 90 Jobs at Asia Wealth, Banking Teams
Cathy Chan – Bloomberg
UBS Group AG is looking to cut about 90 jobs in Asia private wealth and investment banking in March as China’s stock market rout and a slump in dealmaking have eroded revenue, people familiar with the matter said. The Zurich-based lender is weighing a plan to cut about 70 jobs at the private bank and 20 at its global banking division, one of the people said, asking not to be identified because the matter is confidential.
Nomura’s Trading Overhaul Advances as Okuda Plans Buyback
Takashi Nakamichi and Nao Sano – Bloomberg
Nomura Holdings Inc.’s Chief Executive Officer Kentaro Okuda rewarded investors for sticking with a turnaround plan as his key investment banking and trading division returned to profit. The firm announced a buyback of up to 100 billion yen ($677 million).
JPMorgan and Citigroup Are Ramping Up Their Investments in Repackaged Loans
Lisa Lee and Scott Carpenter – Bloomberg
The biggest US banks are stepping back into the $1.3 trillion market for collateralized loan obligations after nearly two years of shying away from investing in the securities. Citigroup Inc. has resumed buying CLOs, according to people with knowledge of the situation. JPMorgan Chase & Co. and Bank of America Corp. are also ramping up holdings of AAA rated tranches, the safest and largest slices of the structures that bundle leveraged loans into slices of varying risk and return, said the people, asking not to be named discussing private transactions.
Ex-Deutsche Bank Executive Seeks $800 Million for Two Asia Funds
Cathy Chan – Bloomberg
Millennium to Back Goldman Sachs Veteran’s Asia Hedge Fund
Bei Hu and Julia Fioretti – Bloomberg
Work & Management
Elon Musk tops list of largest US corporate pay packages
A judge on Tuesday invalidated Elon Musk’s record $56 billion pay package from Tesla, which was approved by the company’s shareholders in 2018. Tesla estimated in 2018 that the fair value of Musk’s award on the grant date was $2.284 billion, according to Equilar. Below is a look at some of the largest corporate compensation agreements based on the estimated value of the equity awards on the date the awards were granted, as compiled by Equilar, which specializes in corporate pay analysis. The recipients were chief executives unless noted.
Who is Kathaleen McCormick, the judge who slashed Elon Musk’s pay package?
Tom Hals – Reuters
The Delaware judge who rescinded Elon Musk’s record $56 billion compensation from Tesla on Tuesday has a reputation for her calm demeanor and demanding standards for corporate behavior. Chancellor Kathaleen McCormick’s ruling on Musk’s pay follows decisions against a private equity firm that tried to wriggle out of a takeover deal and a CEO who shortchanged his own shareholders when he sold his company.
Job Quitting Fell 12% Last Year-and That’s Bad News for the Economy; Fewer resignations reflect less confidence in the labor market amid news of layoffs and expected slower growth
Austen Hufford – The Wall Street Journal
Workers called it quits less frequently in 2023, a sign confidence in the labor market is falling as the U.S. economy is expected to slow and Americans are taking longer to find new jobs. Americans quit 6.1 million fewer jobs last year than in 2022-a decline of 12%, the Labor Department said Tuesday. In December alone, quits fell to the lowest monthly level in nearly three years, after adjusting for seasonal fluctuations.
The Companies Calling Workers Back to the Office Five Days a Week; UPS, Boeing and other employers insist on full-time attendance as some bosses lose patience with remote work
Chip Cutter – The Wall Street Journal
UPS on Tuesday joined a small group of large companies pushing for a return to what has become an anomaly in American worklife: five days in the office. The delivery giant followed JPMorgan Chase and Boeing among employers requiring full-time attendance for at least some segment of their workforces.
These Billionaires Want to Disrupt Death-and Keep Their Fortunes Forever; Sci-fi meets Silicon Valley meets the trust industry.
Kalena Thomhave – Mother Jones
They say the only things certain in life are death and taxes, but America’s billionaires, having taken care of the latter, are now trying to disrupt the former-and make sure nobody can pry their fortunes from their cold dead hands. Four decades of nerds hitting the jackpot has brought about a gruesome parade of zillionaire techies intent on cheating the grim reaper. OpenAI’s Sam Altman, Jeff Bezos, Larry Ellison, and Peter Thiel are among the would-be immortals sinking hundreds of millions of dollars into startups and research based on the notion, as fellow tech bro Peter Diamandis put it, that “aging is a disease” that “can be slowed, stopped, and perhaps even reversed.” Another tech founder, Bryan Johnson, famously transfused himself with the blood of fit young people, including his teenage son, for six months last year-an act of depravity he hoped would help cure the disease. “Discontinuing therapy…no benefits detected,” he tweeted in July.
Your Brain Doesn’t Want You to Exercise
Jamie Ducharme – Time
If the benefits of physical activity were distilled into a pill, everyone would be on it. Studies show that moving improves nearly every aspect of health: boosting sleep, strength, and mental well-being while slashing the risk of chronic conditions and premature death. What’s more, studies show that exercise has a positive impact even when done in very short chunks and with no equipment or fancy gym membership required. Still, most people don’t exercise nearly enough. According to data published in 2023, less than a third of U.S. adults get the government-recommended amount of physical activity in their free time: at least 20 minutes of moderate-intensity aerobic movement (think brisk walking) per day, plus a couple muscle-strengthening sessions (such as resistance training) each week.
State-backed ‘national team’ of investors piles in to support China stocks
A rescue operation is underway in China’s equity markets with large and unusual flows into blue-chip funds suggesting a plunge by state-backed investors. It is unclear exactly who is buying, or whether their pockets are deep enough to turn around the sliding market.
China Stocks Sink to Five-Year Low as Traders Unwind Rescue Bets
A selloff in Chinese stocks deepened, with a key index falling to a five-year low and wiping out all the gains that it made last week on optimism over stronger support measures by the authorities. The CSI 300 Index of mainland shares slipped 0.9%, ending the day below its close on Jan. 22 when authorities pledged more forceful measures to support the market. That was followed by expectations of a 2 trillion yuan ($278 billion) rescue package and the central bank’s decision to cut banks’ reserve requirement ratio.
EU shifts spending focus from climate to defence; War in Ukraine and tightening national budgets prompt bloc’s funding priorities to change
Alice Hancock and Paola Tamma – Financial Times
The EU is shifting its spending priorities from greening the economy to investing in defence, as the bloc faces backlash over climate regulation and grapples with Russia’s war in Ukraine. Faced with tightening national budgets, member states have reduced a common fund designed to spur innovation in the bloc from EUR10bn to EUR1.5bn – and have ensured that it can only be used for defence-related projects, not green technology or other climate-related investments. The European Investment Bank, the world’s largest lender that labelled itself the “climate bank” in 2019, is also under pressure to fund more projects in the arms industry.
Hopes rise of a break in Brazil’s IPO drought; Domestic stock market has experienced the longest stretch without a new flotation for at least two decades
Michael Pooler – Financial Times
Brazil’s stock market is in the throes of its longest stretch without a new flotation for at least two decades. Could the drought in Latin America’s largest bourse be coming to an end? That at least is the talk among investment bankers and money managers on Avenida Faria Lima, the Brazilian version of Wall Street.
Oil Traders Won Ecuador Deals With $70,000 Watch and Bags of Cash; Traders’ bribes also paid for a 120,000-euro bathroom remodelling for a senior official at Ecuador’s state oil company.
Jack Farchy, Maria Clara Cobo, and Patricia Hurtado – Bloomberg
A $70,000 Patek Philippe wristwatch, a luxury bathroom remodeling, and at least a dozen bags of cash. Those are just some of the bribes paid to win oil trading business in Ecuador, according to testimony heard in a Brooklyn courtroom over the past four weeks. Commodity traders have a reputation for brown envelopes and backhanders that dates back at least to the days of Glencore Plc founder Marc Rich. But the trial of a former Vitol Group trader has provided an unprecedented window into brazen wrongdoing that continued even into the current decade.
Carlyle co-founder David Rubenstein plans to buy Baltimore Orioles baseball team; Investor group behind $1.73bn deal would also include Ares Management CEO Michael Arougheti
Antoine Gara, Sara Germano and James Fontanella-Khan – Financial Times
Private equity billionaire David Rubenstein, the cofounder of Carlyle Group, plans to buy the Baltimore Orioles baseball team alongside an investor group including Michael Arougheti, the chief executive of Ares Management, for $1.73bn. The planned multi-stage deal is subject to approval from Major League Baseball, two sources familiar with the matter told the Financial Times.
Sotheby’s cleared of art fraud in Russian billionaire’s lawsuit; Dmitry Rybolovlev had accused auction house of conspiring to overcharge him for works by da Vinci, Klimt and others
Madison Darbyshire – Financial Times
Sotheby’s has been cleared of liability in a lawsuit brought by Russian billionaire Dmitry Rybolovlev, who had accused the famed auction house of participating in an alleged scheme to overcharge him for works of art. After a trial that lasted nearly four weeks, jurors in Manhattan federal court deliberated just five hours before finding in Sotheby’s favour on multiple counts of aiding and abetting fraud.