Hedge Fund Two Sigma Is Hit by Trading Scandal

Oct 30, 2023

First Read

Hits & Takes
John Lothian & JLN Staff

Former European Climate Exchange CEO Patrick Birley has died at the age of 58, JLN learned over the weekend from Patrick Young‘s ExchangeInvest, and it was confirmed by London sources. Birley, who was the second employee of the fledgling South African Futures Exchange (SAFEX), helped develop it into one of the world’s most active derivatives exchanges before leading its sale to the Johannesburg Stock Exchange

Birley developed an eternally cheerful disposition after he and his family survived having gunmen break into their home in Johannesburg. He would subsequently move his family to London and embark on furthering his career there, where he would serve as chief executive of the UK arm of LCH.Clearnet. He also had roles with the London Metal Exchange and London Stock Exchange, as well as serving as the chief executive officer of ICAP Securities and Derivatives Exchange

In 2014, Birley spoke at a London session of the MarketsWiki Education World of Opportunity (“WOO”) series held in the offices of the CME Group, where he delivered his life story in a presentation titled “Variety is the Spice of Life.” If you want to know Birley’s life story, his self-deprecating humor and optimistic outlook on life, it is well worth a view.

I am glad we were able to capture Patrick’s story in this WOO video. I would not have suspected that it would be the last one we did with him, nor that a piece of industry history would be captured by a WOO video rather than one of our historical series pieces.

The JLN team is greatly saddened by Birley’s untimely passing and offers our condolences to his family, friends and former colleagues. He will be missed.

Last week, Miami International Holdings (“MIH”) put out a press release titled “Miami International Holdings Participates in World Investor Week’s Ring the Bell for Financial Literacy 2023 Ceremony.” In the press release, MIH said, “The ‘Ring the Bell for Financial Literacy’ Campaign supports World Investor Week 2023 (WIW), a global campaign to raise awareness about the importance of investor education and protection. This marks the fourth consecutive year that IOSCO and the WFE are working in partnership on the ‘Ring the Bell for Financial Literacy’ initiative.

Thomas P. Gallagher, Chairman and CEO of MIH, said, “MIH is also expanding its financial literacy efforts in U.S. futures markets through our exclusive sponsorship of the new Futures Discovery video series created by John Lothian News. The video series provides a unique way for young investors to learn more about futures markets since it is being taught by students from Roosevelt University in Chicago.”

On Friday, as I announced, JLN published a two-part interview with two leaders of Women in Financial Markets (WIFM), the rebranded Women in Derivatives group. Marisol Collazo and Cassandra Seier talked to JLN about the rebrand and more about WIFM. To promote the interviews, Part One and Part Two, on LinkedIn, JLN posted three shorts. You can see those shorts HERE, HERE and HERE.

Here is the latest from The Wall Street Journal podcast, “The Trial of Crypto’s Golden Boy,” a podcast series bringing you regular updates.

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


Our most read stories yesterday on JLN Options were:
First Mover Americas: Bitcoin and Ether Options Activity Hits $20B from CoinDesk.
‘Big Short’ Michael Burry’s bets against S&P 500 and Nasdaq pay off from Markets Insider.
Goldman’s JPMorgan Copycat ETF Launches in ‘Early Days’ of Boom from Yahoo Finance. ~JB

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


Women in Derivatives Rebrands as Women in Financial Markets: A Pivot Towards a More Inclusive Future

Women in Derivatives has unveiled its rebranding as Women in Financial Markets (WIFM). John Lothian News reached out to Marisol Collazo, WIFM board chair, and Cassandra Seier, the organization’s president & CEO, for insights into the rebrand and other developments within the organization.

Watch the video »


WIFM’s Broad Appeal: Rapid Program Fill-Up, Male Ally Initiatives, and Record-breaking Gala Attendance Highlighted by Leadership

In the second segment of JLN’s conversation with WIFM’s Chair Marisol Collazo and President & CEO Cassandra Seier, Collazo pinpointed high-caliber events and robust networking as major draws for members.

Watch the video »


The ‘great wealth transfer’ isn’t $72 trillion but $129 trillion, BofA says-and the government gave most of it to baby boomers
Hillary Hoffower and Chloe Berger – Fortune
You’ve probably heard about the “great wealth transfer.” It’s the $72 trillion stack of assets that baby boomers are sitting on and going to pass onto millennials someday, thereby solving many of the economically beleaguered younger generation’s problems. But there was another, even more “massive” wealth transfer from the government to the baby boomers over the last 40 years, according to Bank of America Research.

****** As a Baby Boomer and on behalf of the Baby Boomers, I would like to say thank you, but OMG that is a lot of money.~JJL


He Pioneered Carbon Offsets to Save Tropical Forests. Now the Market Is Collapsing; Mike Korchinsky used offset credits to funnel millions of dollars to conservation projects. Now he’s fighting a crisis of confidence in the industry.
Phred Dvorak – The Wall Street Journal
Mike Korchinsky gave up a lucrative career in management consulting after an “epiphany in the African bush,” turning to wildlife conservation and ultimately helping create one of the most popular tools for cutting carbon emissions. Now, the 62-year-old from the California Bay Area is fighting to keep that business-and his own revenue stream-alive amid a crisis of confidence that is shaking the industry he helped start.

****** Environmental markets innovation can sometimes be a real sh*tshow.~JJL


Biden to Use Emergency Powers to Mitigate AI Risks; Executive order seeks to manage artificial-intelligence threats from privacy to national security
John D. McKinnon, Sabrina Siddiqui and Dustin Volz – The Wall Street Journal
The Biden administration plans to invoke emergency federal powers as part of a new executive order aimed at reining in the risks of artificial intelligence, a new technology as powerful as it is potentially disruptive. President Biden will release on Monday an order invoking the Korean War-era Defense Production Act which would compel major AI companies to notify the government when developing any system that poses a “serious risk to national security, national economic security or national public health and safety,” according to fact sheet that White House aides shared over the weekend.

***** I think he should use his magic powers instead. This executive order does not solve anything. ~JJL


Friday’s Top Three
Our top story Friday was Where Does the Prop Trading Industry Go from Here? from Finance Magnates. Second was Bloomberg’s China Selloff Threatens $27 Billion of ‘Snowball’ Derivatives. Third was a three-way tie among Markets Insider’s A famed trader known as ’50 Cent’ is making a big bet that the world’s worst-performing currency is about to surge ‘violently’, Bloomberg’s Griffin Says Scrutiny of SEC Basis Trade ‘Utterly Beyond Me’, and The Verge’s The tragically millennial vocabulary of the Sam Bankman-Fried trial.


Lead Stories

Hedge Fund Two Sigma Is Hit by Trading Scandal; Firm tells clients that researcher made unauthorized adjustments that resulted in $620 million in unexpected gains and losses
Gregory Zuckerman and Juliet Chung – The Wall Street Journal
A researcher at Two Sigma Investments adjusted the hedge fund’s investing models without authorization, the firm has told clients, leading to losses in some funds, big gains in others and fresh regulatory scrutiny. The researcher, Jian Wu, a senior vice president at New York-based Two Sigma, was trying to boost his compensation, Two Sigma has told clients, without identifying Wu. He made changes over the past year that resulted in a total of $620 million in unexpected gains and losses, according to people close to the matter and investor letters. Two Sigma has placed Wu on administrative leave.

The Hunt for Crypto’s Most Famous Fugitive. ‘Everyone Is Looking for Me’; After a $40 billion cryptocurrency crash, Do Kwon hopscotched across Asia and Europe to evade authorities
Alexander Osipovich, Jiyoung Sohn, Weilun Soon and Drew Hinshaw – The Wall Street Journal
Fallen crypto tycoon Do Kwon was ready to get out of Montenegro. He and his colleague arrived at the small Balkan country’s main airport, where a Bombardier business jet was waiting to take them to Dubai. Inside the VIP terminal, Kwon handed his passport to an immigration officer, who swiped it. An alert flashed across the officer’s screen. Kwon, it said, was the target of an Interpol red notice-a request to police around the world to arrest him.

Climate Risk Is Becoming Uninsurable. Better Forecasting Can Help; Households and businesses are being priced out of insurance just as the effects of climate change start to bite
Jon Sindreu – The Wall Street Journal
A new generation of mathematical modelers might be able to help defuse a looming insurance crisis. Floods, electrical storms and wildfires, together with raw-material inflation, are pushing up premiums for so-called catastrophe insurance. Some Americans are moving away from riskier places such as Florida, while others are foregoing cover. Insurers such as Allstate, State Farm and Farmers Insurance, owned by Zurich Insurance Group, are withdrawing from disaster-prone areas.

Morgan Stanley’s James Gorman Picked a Good Time to Leave; The CEO built the right bank for the years of low rates. How will his successor cope with the potential end of that era?
Telis Demos – The Wall Street Journal
James Gorman guided Morgan Stanley through years of superlow interest rates and booming stock markets. His successor, Ted Pick, might have to come up with some new ideas for a new era. Gorman, who will step down at the end of the year after almost 14 years as chief executive, bet big on wealth and asset management by absorbing all of Smith Barney and later buying E*Trade and Eaton Vance. He certainly had the right strategy in the market’s eyes: Since the start of 2010, when he became CEO, the firm’s 8.6% annualized total return has been second only to JPMorgan Chase’s among the U.S. global banks, according to FactSet data. And by valuation, Morgan Stanley has often been the leader of the pack, generally trading at a higher price-to-book ratio than even JPMorgan since the start of last year.

Quants With $23 Trillion See AI Takeover Even as They Hold Back; Tech expected to become as important as traditional analysis; Less than 10% of systematic players use AI extensively for now
Justina Lee – Bloomberg
The financial world’s computer-loving crowd is preparing for the dawn of a new AI-powered era – but that doesn’t mean they’re ready to fully embrace the technology just yet. In an Invesco survey of systematic investors with $22.5 trillion under management, 62% said artificial intelligence is going to be just as important as traditional analysis in a decade’s time, while 13% reckoned it will be even more significant.

Investor frenzy will overvalue AI tech start-ups, says early OpenAI backer; Many are ‘investing because everybody else is’ and most will lose money, claims Vinod Khosla
George Hammond – Financial Times
Artificial intelligence start-ups are overvalued and most will fail to make money, according to Vinod Khosla, an early OpenAI backer, in a warning to investors who are pouring billions into the buzzy sector. Since the launch of OpenAI’s ChatGPT chatbot a year ago, investors have rushed to put their money in AI start-ups, including rival chatbot makers Inflection, Anthropic and Cohere, sending valuations soaring.

Europe’s top banking supervisor says fragmenting market raises risks; ECB’s Andrea Enria says lack of cross-border integration increases costs for customers
Laura Noonan and Martin Arnold – Financial Times
The increasing fragmentation of Europe’s banking system is a “faultline” that heightens financial vulnerability and saddles everyone with higher costs, the European Central Bank’s outgoing head of supervision Andrea Enria has warned. Enria, who is stepping down at the end of this year after five years as the ECB’s chair of supervision, told the Financial Times his biggest “personal regret” was how the banking market of the 20-country eurozone was becoming “more and more segmented along national lines”.

UK Confirms Plans to Bring Crypto Under Stricter Regulation; Plans would bring activities in line with other asset classes; Government intends legislation in 2024 to make changes
Joe Mayes and Anna Irrera – Bloomberg
The UK government confirmed plans to regulate cryptoasset activities more strictly, bringing them under the same regime as traditional financial services. The government intends to proceed with legislation in 2024 to implement the changes, according to a Treasury announcement on Monday, responding to a consultation it launched earlier this year.

The Planet’s Axis Has Shifted and Other Climate Science You Missed; We read peer-reviewed science journals – so you don’t have to.
Eric Roston – Bloomberg
An encouraging trend is emerging, even as extreme weather losses mount. Estimates for global warming are coming down. The International Energy Agency expects fossil fuel demand and emissions to peak by 2030. (OPEC disagrees.) The Inevitable Policy Response, a United Nations-supported research group for investors, now delivers a “high-conviction forecast” that the rise in the global average temperature will peak at 1.7C to 1.8C, and countries will zero out emissions by 2080. That’s less dangerous than 2C but more dangerous than 1.5C, the high- and low-end international targets. The first UN assessment of national climate commitments finds “the Paris Agreement has led to contributions that significantly reduce forecasts of future warming, yet the world is not on track to meet the long-term goals.”

BlackRock warns investor disdain for mining threatens green transition; World’s biggest asset manager hits out at complacency over supply of transition metals
Harry Dempsey – Financial Times
BlackRock, the world’s largest asset manager, has warned that investor reticence towards mining risks starving the sector of capital and stymying the energy transition by creating shortages of metals vital for green technologies. Evy Hambro, global head of thematic and sector-based investing at the US group, said funding needed to flow into the industry to ensure an adequate supply of materials for products from wind turbines to electric cars as well as to upgrade power grids.

Can Cathie Wood’s Ark conquer Europe? ETF group is pushing into the region as once high-flying US business faces challenges
Chris Flood and Emma Boyde – Financial Times
Armed with messianic conviction and social media savvy, Cathie Wood has built a lucrative career pitching disruptive companies to US retail investors. But even the 67-year-old acknowledges that her quest to bring Ark Investment Management, the firm she set up in 2014 and that is headquartered in the Florida beachside town of St Petersburg, to Europe is a daunting one.

Big Oil’s transatlantic strategy gulf has never been wider – and that is OK; Mega-deals in the US make sense, but it’s not obvious why European groups should scale up too
Helen Thomas – Financial Times
An old industry joke about Hess, based according to the New York Times in 1972 on the family patriarch’s work ethic, was that the company name stood for holidays, evenings, Saturdays and Sundays. Sector advisers know the feeling. Two mammoth oil and gas deals, Exxon buying Pioneer for $60bn then Chevron buying Hess for $53bn, have ignited the deals market and set off another round of soul-searching about who is doing what in the net zero transition.

Success of a Goldman alumnus highlights the bank’s talent challenges; Diverging paths of David Solomon and Sixth Street’s Alan Waxman shown in deal over GreenSky consumer lending unit
Sujeet Indap – Financial Times
David Solomon started at Goldman Sachs in 1999, joining in his mid-30s from the scruffy Bear Stearns, as a partner in the junk bond group of the investment bank he now runs. Alan Waxman came to Goldman’s 85 Broad Street headquarters just a year earlier, fresh with an undergraduate degree from the University of Pennsylvania. Their respective careers journeys since the late 1990s recently converged in an intriguing way.

Allen & Overy sells legal tech unit to private equity groups; UK law firm is latest business to take PE money to help expand non-core units
Will Louch and Suzi Ring – Financial Times
UK law firm Allen & Overy is selling its legal tech business aosphere to private equity, the latest in a series of deals between large corporations and investment groups. The transaction, which involves UK private equity firm Inflexion and US investor Endicott Capital taking stakes in the business, values aosphere at more than £200mn, according to a person familiar with the details. Allen & Overy will retain a minority interest in the company.

Hedge funds increasingly uneasy over impact of FX prime broker consolidation on liquidity; Capturing new or unique trading opportunities among the main reasons for 24% of hedge funds looking to change or increase their number of FX prime brokerage providers, finds Acuiti report.
Claudia Preece – The Trade
As consolidation among sell-side providers of FX prime brokerage (FX PB) continues, hedge funds are growing increasingly uneasy about the risk of reduced access to liquidity, an Acuiti report has found. This is specifically as a result of offboarding, a highly disruptive process which is also costly due to the process of finding and onboarding new prime brokers, highlighted by respondents as a significant drag.

Ukraine Invasion

Russia’s new offensive zeroes in on eastern Ukrainian city; Moscow has gambled on pouring troops, bombs and artillery into large-scale assault on Avdiivka
Christopher Miller – Financial Times
While much of the world’s gaze turned to the conflict in the Middle East, Russia launched a new ground offensive in Ukraine, seeking to gain momentum in a war that has devolved into a gruelling fight of attrition. For more than two weeks, Russian forces have zeroed in on the eastern industrial city of Avdiivka, using so-called human waves, airdropped bombs and heavy artillery to try to overwhelm Ukrainian forces and encircle them. If successful, this offensive would mark a rare battlefield victory for Russia this year.

Israel/Palestine Conflict

Biden and Sisi Agree Gazans Shouldn’t Be Displaced to Egypt
Salma El Wardany and Tarek El-Tablawy – Bloomberg
Palestinians in Gaza shouldn’t be displaced to Egypt or some other country, US President Joe Biden and his Egyptian counterpart said, as Israel presses ahead with an offensive that’s forced more than half the residents of the enclave to flee their homes.

How This Israel-Hamas Conflict Is Like Nothing That’s Happened Before; In the current battle between Israel and the Islamist militants, both display a new level of commitment to destroying the other.
Lisa Beyer – Bloomberg
The long history of the Israeli-Palestinian conflict is filled with bloodshed, dislocation and trauma. But even by those relative standards, the current conflagration stands out. For one thing, it’s especially brutal. Not since the Holocaust have as many Jews been massacred at one time as were on Oct. 7, when Hamas militants stormed Israel, killing 1,400 people and taking more than 200 hostage. Before Israel escalated its ground operations in the Hamas-run Gaza Strip, its retaliatory strikes, mostly from the air, killed more than 7,700, according to Gazan authorities, and dislocated nearly half the population of 2.3 million, by an estimate of UN officials. Israel’s decision to cut off power to Gaza – and severely limit water and food supplies – threatens a larger humanitarian calamity.

The tactics behind Israel’s ground offensive; Gaza incursion’s limited initial scope helps IDF use firepower advantage against Hamas while minimising risk
James Shotter, Neri Zilber and Mehul Srivastava and Andrew England – Financial Times
Israel responded to Hamas’s devastating assault on October 7 with the biggest mobilisation in the nation’s history. But when its tanks and troops finally entered Gaza this weekend, it was not the full-scale invasion some had expected. Current and former officials said the seemingly limited scope of Israel’s initial incursion – which Prime Minister Benjamin Netanyahu has dubbed the “second stage” of Israel’s war with Hamas – reflected a complex mix of factors. But above all, Israel wanted to maximise its firepower advantage over Hamas and minimise its own casualties, while attempting to avoid drawing other adversaries into the war, they added.

America, Iran and the threat of a wider war in the Middle East; None of the region’s big powers wants further conflict but it could happen nonetheless
Gideon Rachman – Financial Times
Historians are fascinated by the outbreak of the first world war. How could the assassination of an Austrian archduke in Sarajevo in June 1914 have led, just a few weeks later, to a conflict that dragged in every major power in Europe, and eventually the US? The question is particularly troubling because many of the leaders involved tried hard to avoid a general European war. The German and Russian emperors exchanged numerous messages trying to defuse the month-long crisis that led to conflict. But they failed.

Exchanges, OTC and Clearing

CME Group Expands Suite of Short-Term Options on U.S. Treasury Futures
CME Group
CME Group, the world’s leading derivatives marketplace, today announced the expansion of its U.S. Treasury options suite with the launch of Monday expiries. In addition to the existing Wednesday and Friday expiries, Monday expiries can deliver more precise risk management around market-moving events.

DTCC Report Hub Introduces Trade Reporting Analytics And UTI Exchange Capabilities As Industry Prepares For Upcoming Trade Reporting Rules Rewrites
DTCC, the premier post-trade market infrastructure for the global financial services industry, today announced the launch of Trade Reporting Analytics and UTI Exchange as part of its DTCC Report Hub service. Report Hub is a cloud-based pre and post reporting platform that helps firms manage the complexities of meeting multiple derivatives and securities financing transactions mandates across 14 global regimes. DTCC Report Hub’s new Trade Reporting Analytics provides reporting parties access to a growing library of over 100 data insights on their own reporting behavior to identify potential errors, highlight trends, and benchmark performance against anonymized peers. Report Hub’s Trade Reporting Analytics capabilities have been validated by a pilot user group of some of the world’s largest firms, including J.P. Morgan, Nomura Americas Services, LLC and Wells Fargo.

ICE Announces Successful Transition of Credit Default Swap Open Interest from ICE Clear Europe
Intercontinental Exchange
Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of data, technology and market infrastructure, today announced it has completed the cessation of credit default swap (CDS) clearing at ICE Clear Europe. ICE Clear Europe announced in June 2022 that it would cease offering clearing services for CDS instruments and work with Clearing Members and their Clients to close-out their positions at ICE Clear Europe and re-establish over $400 billion of open interest at alternate clearing houses.

ICE Expands Global Energy Portfolio With the Launch of TTF Natural Gas Calendar Spread Options
Intercontinental Exchange
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of data, technology, and market infrastructure, and home to the broadest range of benchmarks to support the liberalization of natural gas, today announced plans to launch TTF Natural Gas Calendar Spread Options (CSO) on December 11, 2023, subject to regulatory approval. TTF is the global benchmark for natural gas and TTF CSOs allow market participants to take a position on the expected price differentials between TTF natural gas futures with different delivery months. ICE expects to list TTF CSOs for a range of delivery months, including 1-month to 6-month and 12-month contracts.

The Moscow Exchange SPFI market turns 10 years old
On October 28, 2023, the standardized derivatives market (SDFI) celebrates its 10th anniversary. Since its inception, the market has shown strong growth and has become one of the key financial platforms for trading interest rates and currencies with a powerful set of tools for hedging risks. The platform began its journey of becoming a full-fledged market in 2013, and at first, participants connected to it mainly for the purpose of testing trading systems. In 2017, a significant increase in trading activity began, and a year later the SPFI market demonstrated an eightfold increase in trading volumes. In 2020, the volume of open positions on the market exceeded 1 trillion rubles for the first time. The growth in the activity of participants was facilitated by a number of technological innovations, expansion of capabilities and terms of traded contracts.

Saudi Exchange announces its intention to launch Single Stock Options contracts; The Saudi Exchange will launch physically settled American options; SSOs contracts will be available to trade on the 27th of November 2023
The Saudi Exchange today announced its intention to launch the Single Stock Options (SSOs) contracts, the third derivatives product to be introduced in the Saudi Exchange. SSOs contracts will be available to trade on 27 November 2023, enabling local and international investors to hedge and manage portfolio risks effectively. SSOs contracts will be cleared and settled by the Securities Clearing Center Company (Muqassa) in line with international best practices.


Broadcom and VMWare Say $61 Billion Deal Will Close ‘Soon’; Companies didn’t give an update on status of Chinese approvals; The companies’ merger agreement is due to expire on Nov. 26
Nick Turner and Amy Thomson – Bloomberg
Broadcom Inc. said its $61 billion agreement to buy software maker VMware Inc., which it had expected to complete by Monday, will instead close before the expiration of their merger agreement next month. While the companies didn’t give an update on their outstanding approval from Chinese regulators, the last major hurdle to closing the deal, they said in a statement on Monday that there’s “no legal impediment” to closing under US merger regulations. The merger agreement expires on Nov. 26.

Building a successful multi-asset trading desk
Claudia Preece – The Trade
What is the principal consideration for desks when looking at the merging of asset classes? In multi-asset trading, merging desks can be a viable option if the desks’ flows are not heavily reliant on specialisation and can benefit from a broader understanding of the market. It is crucial to have sufficient overlap in trading tools, knowledge, and interests for a successful integration. It’s also of prime importance that in the process of merging there’s still at least one trader who acts as a specialist and single point of contact to ensure accountability.

Joe Biden moves to compel tech groups to share AI safety test results; White House plans to use Defense Production Act to mitigate national security risks in powerful AI models
Stefania Palma and George Hammond – Financial Times
Companies whose artificial intelligence models could threaten US national security will have to share how they are ensuring their tools’ safety under a sweeping order by Joe Biden intended to curb risks posed by the new technology. The order, which the US president issued on Monday, is the broadest step taken by the administration so far in tackling AI threats, from national security to competition and consumer privacy. The measure seeks to mobilise agencies across Washington, including the departments of commerce, energy and homeland security.

AI policymaking must include business leaders; Industry preparedness and input on solutions to the risks of the technology are vital to exploiting its potential
Kathryn Parsons – Financial Times
There are just a few days to go until Rishi Sunak rolls out the red carpet at Bletchley Park for an A-list assortment of global tech titans, thought leaders and government policymakers. They will be joining the UK prime minister at the artificial intelligence safety conference, billed as “the first major global summit” of its kind. The agenda promises to focus on “frontier AI” risks: the misuse of cutting-edge technology, particularly biosecurity, cyber security, online safety and the existential threats of AI to human society.

The Ethical Use of AI in Today’s FX Marketplace
Colin Lambert – The FullFX
The Ethical Use of AI in Today’s FX Marketplace
AI has been used in the FX world for at least the last five years and its use continues to grow with the advancement of machine learning (ML). It drives market making, pricing, risk management as well as direct client tiering, and will continue to work its way through more and more front and back-office functions, streamlining jobs and driving efficiencies.


SEC Regulations, Government Overreach and Access to Cybersecurity Information
Crystal Morin – SecurityBoulevard
A fine line exists between government guidance and oversight and heavy-handed, intrusive control. In the new world of all things cybersecurity and cybersecurity defenses, that line is still being drawn. While the federal government’s National Institute of Standards and Technology (NIST) Cybersecurity Framework (CSF) is a popular and well-received set of guidelines and best practices, the recently finalized SEC cybersecurity rules seem to be triggering some folks to say the line is being crossed.

Navigating The Future Of Generative AI And ERP Cybersecurity
Juan Perez-Etchegoyen – Forbes
If you’ve been following the news lately, you know the era of artificial intelligence (AI) is truly here, and the biggest vendors of ERP and business applications are leading the way through the secure (and ethical) adoption of AI-incorporating it straight into business processes. Examples of this are Oracle discussing how the company is embedding generative AI into its portfolio of cloud services and SAP releasing its generative AI business copilot, Joule.

Check Point Software beats earnings expectations as Israel-based cybersecurity company sees business operate ‘as planned’
Tomi Kilgore – MarketWatch
Israel-based cybersecurity company Check Point Software Technologies Ltd. CHKP, -0.48% reported Monday third-quarter profit and revenue that rose above expectations, and said its business has operated “as planned” despite the Hamas-Israel war. The stock was still inactive in the premarket.

20 scary cybersecurity facts and figures for a haunting Halloween
Phil Muncaster – WeLiveSecurity
October is Cybersecurity Awareness Month (CSAM) in the US and Canada and European Cybersecurity Month (ECMS) on the other side of the pond. These campaigns represent a great opportunity to share best practice and improve awareness of all things cybersecurity among businesses and consumers alike.


Singapore, Japan, UK, Swiss Regulators Plan Asset Tokenization Pilots; Project Guardian seeks to advance digital asset tokenization pilots for fixed income, foreign exchange and asset management products.
Sandali Handagama – CoinDesk
Regulators in Singapore, Japan, the U.K. and Switzerland are planning asset tokenization tests for fixed income, foreign exchange and asset management products, according to a Monday announcement. The Monetary Authority of Singapore (MAS) has set up Project Guardian, a policymaker group that includes Japan’s Financial Services Agency (FSA), the U.K’s Financial Conduct Authority (FCA) and the Swiss Financial Market Supervisory Authority (FINMA) to advance cross-border collaboration in asset tokenization.

Bitcoin Whales Take Charge as Number of $100K Transactions Surge; The number of transactions of over $100,000 on the Bitcoin blockchain rose to a new year-to-date high last week.
Omkar Godbole – Bloomberg
Bitcoin’s (BTC) onchain activity suggests whales, or investors with ample capital supply and the ability to influence market trends, have been active during the cryptocurrency’s recent move above $35,000. The number of transactions processed on the Bitcoin blockchain involving a movement of at least $100,000 worth of BTC rose to a year-to-date high of 23,400 last week, according to data tracked by blockchain analytics firm IntoTheBlock.

Sam Bankman-Fried says he was ‘surprised’ by FTX’s $8bn balance-sheet hole; Former billionaire denies intending to defraud customers in testimony to the jury at trial
Joshua Oliver and Joe Miller – Financial Times
Sam Bankman-Fried said he was “very surprised” in October 2022 to learn about the $8bn of customer deposits his private trading firm Alameda Research owed to his FTX crypto exchange, giving new details in testimony on Friday of the companies’ dramatic collapse. In a day of gruelling testimony, Bankman-Fried offered his account of FTX’s implosion, acknowledging he had made “mistakes” but implying that his closest employees and friends had kept him in the dark about the scale of the hole until weeks before his crypto empire came crashing down.


EU and UK seek ban on subsidies for foreign fossil fuel projects; Move would target oil and gas infrastructure as well as coal mining
Kenza Bryan and Alice Hancock – Financial Times
The UK and EU will push the world’s richest countries to end subsidies for foreign oil and gas operations and coal mining at a closed-door OECD meeting next month, according to people familiar with the matter.


UK Publishes Final Proposals for Crypto, Stablecoin Regulation; The government plans to propose legislation on fiat-backed stablecoins by early 2024.
Camomile Shumba, Jack Schickler – CoinDesk
The U.K. government published its final rules for the crypto ecosystem, saying it plans a phased introduction of regulation, with legislation for fiat-backed stablecoins being introduced early next year. Other crypto areas, such as algorithmic stablecoins, will follow as the government brings activities like lending and trading into the fold of conventional financial regulation, according to an update published Monday. These rules will bring relevant activities under the purview of the Financial Conduct Authority (FCA).

UK financial regulators face City backlash over diversity drive; Risks to privacy and mandatory data collection on religion flagged as concerns
Laura Noonan in London and Brooke Masters – Financial Times
The UK’s financial regulators are facing fierce backlash from the City to their flagship diversity initiative, with companies objecting to proposals for mandatory disclosures in areas such as religion and warning that they risk flouting employees’ privacy.

Keynote Address by Commissioner Summer K. Mersinger: Confronting Change – CFTC Perspectives on Trading and Power Markets
I don’t think this choice was intentional, although if it is, I give S&P and Nodal a great deal of credit, but today is Theodore Roosevelt’s birthday.[1] We often hear about Teddy Roosevelt’s legacy as a conservationist and a naturalist. In fact, growing up in South Dakota, I learned about President Roosevelt while on a family trip through Teddy Roosevelt National Park located in our sister state – North Dakota – where a young Teddy Roosevelt bought land in the Dakota Territory after a hunting trip in 1883. I could also easily identify his likeness on Mount Rushmore thanks to his iconic mustache and spectacles.

CFTC and French AMF Sign MOU for Supervision of Certain Cross-Border Firms
The Commodity Futures Trading Commission and the French Autorite des marches financiers (AMF) have signed a Memorandum of Understanding (MOU) regarding cooperation and the exchange of information in the supervision and oversight of certain regulated firms that operate on a cross-border basis in the United States and in France.

Overdue: Statement of Dissent on LBRY
Commissioner Hester M. Peirce – SEC
The Commission has brought many troubling crypto enforcement actions, but the LBRY, Inc. (“LBRY”) case has especially unsettled me. A statement on the case is overdue. I did not support bringing the case, but have been unable to speak publicly about my concerns while the case has been in litigation. Last week, after losing in federal district court on the question of whether the sale of LBRY tokens was an unregistered securities offering, LBRY announced that it will not move forward with an appeal of the decision.[1] Instead, the company will shut down and its assets will be placed in receivership and used to satisfy its debts, including the civil money penalty owed to the Commission.[2] Are investors and the market really better off now after the Commission’s litigation contributed to the demise of a company that had built a functioning blockchain with a real-world application running on top of it? This case illustrates the arbitrariness and real-life consequences of the Commission’s misguided enforcement-driven approach to crypto.

Final Judgment Entered Against Medifirst Solutions, Inc.
On September 25, 2023, the United States District Court for the Eastern District of New York entered a final judgment against Medifirst Solutions, Inc., a Nevada corporation with its principal office in Freehold, New Jersey. The SEC’s Complaint, filed on February 23, 2021, alleged that Defendants Medifirst, Medifirst’s president and chief executive officer, Bruce Schoengood, and stock promoter Joshua Tyrell, engaged in a fraudulent scheme designed to evade registration requirements of the federal securities laws.

FMA reinforces importance of cyber-resilience for financial service providers
Financial Markets Authority
The Financial Markets Authority (FMA) -Te Mana Tatai Hokohoko – is reminding licensed financial service providers about the importance of cyber-resilience as part of Cyber Smart Week 2023. Cyber Smart Week is CERT NZ’s annual cyber resilience awareness campaign which runs from October 30 – November 5. CERT NZ has also launched a new website for New Zealanders to stay secure online called Own Your Online.

Investing and Trading

Brace for a Trading Bounce or Recession – or Both; Seldom do the stock market and the economy diverge quite this much, but they’re also more tightly linked than usual right now.
John Authers – Bloomberg
A Receding Recession? The economy and the stock market are not the same thing, at all. In the short run, there’s no particular reason to expect them to move in the same direction, even though in the long run they both tend to grow, with occasional interruptions. At present, the disjunction seems extreme: Last month saw both a blowout number for third-quarter gross domestic product growth, of 4.9%, and a selloff in the stock market that brought the S&P 500 more than 10% below its recent peak – satisfying a popular definition of a “correction.”

Mortgage Rates at 8% Make a Brutal US Housing Market Even Worse; Seven straight weeks of rising borrowing costs are sideling more homebuyers. Shoppers forging ahead are trying to take advantage of a less competitive market.
Jennifer Epstein and Shelly Hagan – Bloomberg
Surging US mortgage rates are delivering a stark warning to would-be buyers: A brutal market is getting even more challenging. Over the past two months, rates for 30-year mortgages have hurtled toward 8% by most measures. Affordability pressures are cutting into sales, with purchases of previously owned homes in September dropping to the lowest level since 2010, according to the National Association of Realtors.

‘Range of uncertainties’ faces Federal Reserve at rate-setting meeting; Bond-yield surge and Israel-Hamas war cloud decision on whether to tighten monetary policy further
Colby Smith – Financial Times
Just days before Federal Reserve officials hunkered down to prepare for this week’s policy meeting, chair Jay Powell conceded that the US central bank’s already difficult job had become even trickier. “A range of uncertainties, both old and new, complicate our task of balancing the risk of tightening monetary policy too much against the risk of tightening too little,” the Fed chair told an event hosted by the Economic Club of New York.

Big asset managers snap up Treasuries after bond rout; Pimco, BlackRock and Vanguard are among the firms wading back into long-term US government debt
Kate Duguid in New York and Mary McDougall – Financial Times
Heavy-hitting investors are snapping up US government bonds with longer maturities, betting the pain in the Treasury market is nearly over and an elusive slowdown in the US economy may be on the horizon. Money managers including Pimco, Janus Henderson, Vanguard and BlackRock are taking the plunge – a bold bet after a multi-month rout in bond prices that has repeatedly wrongfooted asset managers and sent the 10-year Treasury yield above 5 per cent this week for the first time since 2007.

‘Buy the Dip’ Investing Mantra Lives On-in the Bond Market at Least; Investors this year have poured $21 billion into TLT, BlackRock’s long-dated Treasury fund, despite punishing decline in its shares
Jack Pitcher – The Wall Street Journal
One of the hottest investments on Wall Street is something of a surprise-it’s a battered long-dated Treasury bond fund. Shares of the iShares 20+ Year Treasury Bond ETF are near a 16-year low and have lost more than half their value from their 2020 peak, but investors are piling in. They added more than $2 billion to the fund on Tuesday and Wednesday alone, bringing its total inflows for the year to $21 billion.

Heard on the Street’s Stock-Picking Contest; Read about our columnists’ most- and least-favorite stocks
Spencer Jakab – The Wall Street Journal

Saving More in a 401(k) Can Now Boost Your College Financial Aid; How the new Fafsa application changes the formula for financial aid
Oyin Adedoyin – The Wall Street Journal

Environmental, Social and Corporate Governance

Who Were the Worst of the Worst Climate Polluters in 2022? EPA’s annual greenhouse gas report for large emitters show some facilities slashed their emissions while others polluted more than ever.
Phil McKenna – Inside Climate News
Emissions from the largest greenhouse gas emitters in the U.S. were down slightly in 2022, but thousands of industrial facilities with substantial emissions remain, according to the Environmental Protection Agency’s recently released Greenhouse Gas Reporting Program data. Emissions from large industrial sources decreased by approximately 1 percent to 2.7 billion metric tons of carbon dioxide equivalent in 2022, according to the annual update of emissions data released on Oct. 5. The data represents emissions from 7,586 industrial facilities across nearly all sectors of the economy and represents about half of all U.S. emissions.

How solid-state batteries could transform transport; Toyota appears close to a manufacturing breakthrough that could accelerate the transition to electric vehicles. But will the technology ever be commercially viable?
Harry Dempsey, Kana Inagaki, Christian Davies, Song Jung-a – Financial Times
In 1992, Sony unleashed a revolution in portable electronics. Taking advantage of decades of laboratory research on lithium-ion batteries, the Japanese company was able to introduce products such as mobile phones and handheld video cameras that have changed the lives of billions of consumers. Batteries now underpin the prodigious task of overhauling the global energy and transport system to reduce reliance on fossil fuels. While the cost to make lithium-ion batteries has plummeted, allowing electric car sales to take off in recent years, the bare bones of the technology have remained little changed since commercialisation.

Q&A: Rich and Poor Nations Have One More Chance to Come to Terms Over a Climate Change ‘Loss and Damage’ Fund; Heading into COP28 in Dubai, the U.S. and other developed countries want the fund run by the World Bank. Developing nations see the bank as an exploiting force and want the fund to have greater independence.
Jenni Doering – NPR via Inside Climate News
Wealthy nations agreed at the annual U.N. climate conference last year, COP27, to pay low-income countries for some of the “loss and damage” caused by the climate crisis. It’s a huge toll and growing. According to a May 2023 report from the World Meteorological Organization, extreme weather and climate-related events over the last 50 years caused a whopping $4.3 trillion in economic losses worldwide.

Insurer body plans infrastructure fund for climate-hit economies; Insurance Development Forum backed by UN and World Bank seeks to raise hundreds of millions of dollars
Ian Smith and Kenza Bryan – Financial Times
The Insurance Development Forum, a World Bank and UN-backed partnership of insurers and international bodies, plans to raise an infrastructure fund of hundreds of millions of dollars to help developing countries deal with the effects of climate change. Speaking to the Financial Times ahead of next month’s COP28 climate summit in Dubai, IDF secretary-general Ekhosuehi Iyahen said the fund would seek to help those countries already “feeling the brunt” of climate change.

Enough Meaningless Phrases on Fossil Fuels; The Pied Piper of bureaucratic double-talk is leading consensus on net zero down a haphazard path.
Lara Williams – Bloomberg
A sphinxlike term keeps popping up in discourse around phasing out fossil fuels: “unabated.” Easily overlooked, it’s an important modifier that changes an ambitious demand – stop burning fossil fuels – into phrases with more elusive meanings. The European Union has decided it will push for the phasing out of unabated fossil fuels at COP28 in Dubai. More than 130 businesses, collectively worth almost $1 trillion, signed a letter this week calling for governments to commit to the full discontinuance of unabated hydrocarbons. US climate envoy John Kerry has pressed for the end of new unabated coal-fired power plants. Sultan Al Jaber, president-designate of this year’s United Nations climate summit, has set an action plan for “an energy system free of unabated fossil fuels in the middle of this century.” Back in 2021, at COP26 in Glasgow, nations promised to accelerate efforts toward the “phasedown of unabated coal power.”

As Wind Industry Struggles, Investors Brace for Orsted Losses; Danish renewables company set to report earnings on Wednesday; Industry has been hard hit by higher costs, supply-chain woes
Priscila Azevedo Rocha, Todd Gillespie, and Lars Paulsson – Bloomberg

Nature’s DNA Detectives; Startups are using cutting-edge eDNA science to help big companies measure their biodiversity impact. It could be an accountability breakthrough-or the new vanguard of greenwashing.
Eric Roston and Natasha White – Bloomberg

BlackRock Says Buy Metals Companies If You Care About Climate; Hambro says sector is undervalued as he predicts coming boom; BlackRock also calls on miners to decarbonize their own output
Jack Farchy – Bloomberg

Finland Discovers Rare Earth Minerals Key for Battery Industry
Leo Laikola – Bloomberg

UK Tech Firms With Higher RTO Demands Hire Fewer Women
Irina Anghel – Bloomberg

Law firms under pressure to make more women partners; Recent promotion rounds show progress but senior ranks still dominated by men
Kate Beioley – Financial Times

‘Jewel in the crown’: Chevron follows Exxon to Guyana’s oil riches; US supermajors open a controversial fossil fuel frontier in one of Latin America’s poorest nations
Jamie Smyth in New York and Ian Johnston – Financial Times

‘We need a decarbonisation strategy’: climate shift threatens UK oil refineries; At Essar’s Stanlow refinery on Merseyside, efforts are focused on carbon capture and hydrogen
Rachel Millard – Financial Times


HSBC Plans $3 Billion Buyback, CEO Touts Capital Strength; Operating expenses rise on high tech and compensation costs; Lender also plans to increase compensation for some staff
Harry Wilson and Ambereen Choudhury – Bloomberg
HSBC Holdings Plc announced a fresh buyback program and hinted at the potential for further returns to investors despite announcing profits for the third-quarter that missed market expectations. The London-headquartered bank said that it would shortly begin buying back an additional $3 billion of its shares, taking total stock repurchases for the year to $7 billion. HSBC Chief Executive Officer Noel Quinn signaled there may be more to come.

HSBC May Lift Variable Pay By $300 Million, Costs to Rise; Operating expenses slightly higher than consensus estimates; Quinn says variable pay hike to reward staff for performance
Denise Wee and Tom Mackenzie – Bloomberg
HSBC Holdings Plc said it may increase some variable pay, resulting in higher expenses, after it announced a surge in third-quarter earnings. “We have signaled, potentially in Q4 because of the very strong trading performance of the business, we may well top up our variable pay by an extra 1%, or $300 million,” said Noel Quinn, Chief Executive Officer of HSBC in an interview with Bloomberg Tv’S Tom Mackenzie, adding that the lender wants to reward staff.

HSBC Hopes Results Please Ping An, Which Had Sought Breakup; HSBC profit surges from a year earlier, with buybacks planned; Ping An had earlier sought carving out HSBC’s Asia business
Denise Wee – Bloomberg
HSBC Holdings Plc Chief Executive Officer Noel Quinn said he hopes the bank’s latest quarterly performance has been greeted positively by Ping An Insurance Group Co., a key Chinese shareholder that earlier pushed for a breakup of the UK bank. HSBC’s returns have been strong for the first nine months of the year, with about 17% return on tangible equity, Quinn said in a briefing with journalists. The bank reported pretax profit more than doubled in the three months through September from a year earlier.

Hedge Funds Pile Into Uranium Stocks Set for ‘Dramatic’ Rise; Uranium prices have soared 125% since the end of 2020; IEA estimates global nuclear capacity needs to double by 2050
Sheryl Tian Tong Lee – Bloomberg
Several hedge fund managers have started ratcheting up their exposure to uranium stocks, as they bet on significant price gains. Terra Capital’s Matthew Langsford, Segra Capital’s Arthur Hyde, Argonaut Capital Partners’ Barry Norris and Anaconda Invest’s Renaud Saleur are among managers building bets on uranium companies such as Cameco Corp., Energy Fuels Inc., Ur-Energy Inc. and NexGen Energy Ltd.

Citadel’s Griffin Flies Asia-Based Staff to Disney in Tokyo; Billionaire picked up the tab for 1,200 staff and family; Maroon 5, Calvin Harris performed for the event in Japan
Lulu Yilun Chen – Bloomberg
Billionaire Ken Griffin paid for some 1,200 Asia-based staff and family members to travel to Tokyo’s Disney resort for a three-day celebration for his companies’ anniversary. The founder of Citadel picked up the tab for employees from six Asia Pacific offices including Hong Kong and Sydney for Oct. 27-29, while also treating them to performances by Maroon 5 and Calvin Harris, the company said. Griffin and Zhao Peng, chief executive officer of Citadel Securities LLC, were at the event.

Morgan Stanley Gives All Three CEO Contenders Special Bonuses of $20 Million; Pick, Saperstein, Simkowitz granted $20 million each; In rare move for Wall Street, all CEO candidates will stay on
Katherine Doherty and Hannah Levitt – Bloomberg

Work & Management

City of London Finance Jobs Are Disappearing as Gloom Sets In; Post-pandemic hiring frenzy has left some firms overstaffed; Number of job seekers also declined, employment report says
Liza Tetley – Bloomberg
The City of London has fewer finance jobs to offer after a post-pandemic hiring boom left companies overstaffed while economic uncertainty caused a sense of gloom among workers and businesses alike. Financial services job postings in the Square Mile dropped almost a third in the quarter through September from a year earlier, according to a report published by recruitment consultancy Morgan McKinley. The decline extends a downward trend in vacancies seen since the end to the hiring frenzy of 2021 and early 2022, when financial firms were desperate to bolster their workforce.

UBS Takes Down Credit Suisse Logo From Canary Wharf Office; Credit Suisse staff are relocating to the City of London; A number of banks and law firms are leaving Canary Wharf
Lucca De Paoli and Marion Halftermeyer – Bloomberg
The sign atop Credit Suisse’s London headquarters has been removed, one of the most visible signs yet of the changes sweeping the bank as staff prepare to move to UBS Group AG’s building in the City of London. The facade of One Cabot Square in Canary Wharf, which has long borne Credit Suisse’s sign, was bare on Sunday, with the scaffolding used to remove it jutting out from the ledge above. The high-rise has been Credit Suisse’s London home since 1991, when the office block was initially completed. Renovations on the building were completed as recently as 2019.

In defence of the Gen Z challenge to the ‘work ethic’; Contempt for younger workers protesting at the daily grind masks the fact that so few are happy with it
Jemima Kelly – Financial Times
A TikTok video of a young American woman crying about her first real job and her long commute, with the caption “qotd” – question of the day – “in a 9-5 how do u have time for ur life”, has gone viral on X (formerly Twitter) in recent days. “I don’t have time to do anything,” the woman says disconsolately to her phone’s camera, after explaining that she has to get a 7.30 train to work every morning and doesn’t get back until 6.15pm at the earliest. “I want to shower, eat my dinner and go to sleep. I don’t have time or energy to cook my dinner…I don’t have energy to work out…I’m so upset, like oh my God.”

Wellness Exchange

Extreme Heat Set to Increase Heart Attack, Stroke Deaths in US; Cardiovascular deaths due to heat will rise as high-temperature days become more frequent, a new study finds.
Coco Liu – Bloomberg
Cardiovascular-related deaths due to extreme heat are expected to nearly triple in the US by mid-century as climate change raises the frequency of very hot days, according to a new study. Older and Black adults are likely to be the most affected. The study, supported by the National Institutes of Health and published Monday in the journal Circulation, predicts that the number of heat-related cardiovascular deaths in the contiguous US will increase from an annual average of 1,651 recorded in recent years to 4,320 by mid-century (defined as from 2036 to 2065).

If Some Cold Medicines Don’t Work, What Should You Take for a Stuffy Nose? With FDA advisers determining that phenylephrine is ineffective, doctors and pharmacists recommend alternatives for congestion relief
Jared S. Hopkins – The Wall Street Journal
When a cold or flu strikes, choosing among hundreds of products can be overwhelming. But to clear up a stuffy nose, doctors and pharmacists say consumers should choose medicine wisely. A key ingredient found in many over-the-counter medicines-oral phenylephrine-just doesn’t work, according to a finding last month by advisers to the Food and Drug Administration. A few weeks after that determination, CVS Health stopped selling certain oral medicines with the ingredient.


Traders Abandon China’s ‘Copper King’ as Metals Woes Spread; More than a dozen employees have left Amer’s Shanghai units; Group has been downsizing and unwinding some contracts
Alfred Cang – Bloomberg
More than a dozen employees have left Shanghai-based copper traders affiliated with Chinese conglomerate Amer International Group Co. in the past few weeks, according to people familiar with the matter, in the latest sign of challenges facing one of China’s biggest private companies. Amer, founded by billionaire copper tycoon Wang Wenyin, is China’s 38th largest company by revenue, according to the Fortune 500 ranking, and once boasted that it was responsible for 10% of the country’s copper imports. The exodus of staff – which includes some of the group’s top physical and derivative traders – highlights the strain in China’s metals sector, which has been hit by a lackluster recovery from the pandemic and a crackdown on trading at state companies.

HSBC chief says worst is over for China real estate; Crisis-hit sector had ‘deep’ correction but can now recover, says Noel Quinn
Kaye Wiggins and Hudson Lockett and Stephen Morris – Financial Times
The chief executive of HSBC said he believed China’s property sector has hit its lowest ebb and can begin to recover, even as banks take hundreds of millions of dollars in charges over their exposure to a crisis in the sector. Speaking as the bank announced its third-quarter earnings, which included a $500mn provision related to commercial property in mainland China, Noel Quinn said Beijing’s most dramatic actions to rein in excesses in the industry were over.

China tech IPOs decline as regulators turn tough on start-ups; Policy reversal leads to record number of listing applications pulled this year from tech-focused Star Market
Sun Yu – Financial Times
A record number of companies have dropped plans to list on Shanghai’s tech-focused stock market, after regulators raised the bar for initial public offerings in order to pick out domestic champions that can help Beijing’s drive towards technological self-sufficiency. Public records show 126 companies have cancelled or suspended IPO applications on Shanghai’s Star Market in 2023, more than in the previous four years combined.

Pearson Upgrades Profit Guidance and Launches Buyback
Thomas Seal – Bloomberg
Pearson Plc upgraded its profit outlook and launched a £300 million ($364 million) share buyback program. The London-based education publisher said it expects full year operating profits between £570 million to £575 million, a £20 million upgrade, in a third-quarter trading update Monday. It highlighted strong earnings in professional training and testing division VUE, and growth in its English language testing products.

Citigroup Clinches $260 Million Asset-Backed Financing for WeLab; WeLab, backed by tycoon Li, seeks capital to fund loan growth; Deal comes as deepening China credit crisis spreads to Europe
Cathy Chan – Bloomberg
Citigroup Inc. led a $260 million asset-backed financing for WeLab Ltd., Hong Kong’s biggest online lending platform, people familiar with the matter said. Citigroup is the sole senior underwriter on the deal, the people said, asking not to be identified because it’s private. Hong Kong-based representatives for Citigroup and WeLab declined to comment.

Norsk Hydro warns flood of Chinese electric vehicles threatens aluminium demand in Europe; Major producer says regional orders for the lightweight metal will drop if European carmakers cannot compete
Harry Dempsey – Financial Times

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The Spread

Traders Betting on China Easing Boost Bearish Options on Banks

Observations & Insight Miami International Holdings, Inc. (MIH) announced that the SEC has approved MIAX Sapphire LLC's application to become a national securities exchange. MIAX Sapphire, MIH's fourth national securities exchange for U.S. multi-listed options,...

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