Hits & Takes
John Lothian & JLN Staff
Chris Giancarlo and Gary Gensler are not the only former CFTC chairmen with strong opinions about crypto. Tim Massad, the Gary Gensler body double who succeeded the now SEC chairman as CFTC chair, was recently interviewed by Tracy Alloway and Joe Weisenthal of Bloomberg. Massad, a current research fellow at Harvard’s Kennedy School of Government, opined on “How to Regulate Stablecoins Without Passing Any New Laws.”
Gordon Bennett has been named Environmental Finance’s Sustainable Business Leader of the Year, recognized for his role in expanding ICE’s environmental markets portfolio and his work on establishing market-based solutions to create an asset class for natural capital.
JLN interviewed Gordon during FIA IDX 2022 for a new series we started, The History of Environmental Trading.
Citadel posted a new video to its YouTube channel titled “2022 Citadel Internship Experience” that just makes you believe Citadel is the best place to work. The work environment, the work-life/fun balance and personal development, as well as access to senior Citadel leadership, is just a great story that makes you want to go to work at Citadel. It is a very effective, well-done video.
The CEO of Kraken, Jesse Powell, has stepped down and been replaced by Kraken COO David Ripley, believe it or not.
Hong Kong Exchanges and Clearing Limited (HKEX) won the Best IR Company (Large Cap) Award at the Hong Kong Investor Relations Association’s (HKIRA) 8th Investor Relations Awards 2022.
Congratulations to Kate Lahey, who has been promoted to lead project manager at the CME Group.
Andrew Leavell is starting a new position as a compliance examiner with the National Futures Association. Andrew was a teaching assistant with the Greenwood Project previously.
Here is your demographic statistic of the day. For the first time Catholics outnumber Protestants in Northern Ireland, the Financial Times reported. The FT said “Census shows 45.7% of people in the region identify as Catholic, 43.5% as Protestant.”
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
Among the highlights of the FIA’s August 2022 volumes are: Worldwide volume of exchange-traded derivatives reached 7.30 billion contracts in the month of August, the highest monthly total ever recorded. The August total was up 11.2% from July 2022 and up 38.1% from August 2021. The FIA said the main driver of the record trading volumes was options rather than futures. Global trading of options reached 4.71 billion contracts in August, up by more than 62% from 2021, with most of that trading happening in the Asia-Pacific region. Global trading of futures reached 2.59 billion contracts, up 8.4% from last year. FIA members and non-member subscribers can find more information here. ~SR
CDP, an international non-profit that helps companies and cities disclose their environmental impact, is expanding its global environmental disclosure system to help solve the plastic pollution problem. From 2023 plastics will be incorporated into the disclosure system. The Pew Charitable Trusts, The Minderoo Foundation and the Ellen MacArthur Foundation are providing expertise and support. ~SAED
A new report from the Global Reporting Initiative (GRI), State of Progress: Business Contributions to the SDGs, looks at the latest trends in Sustainable Development Goals (SDG) reporting. The report explores the role of sustainability reporting in enabling companies and governments to measure progress on meeting sustainable development goals. ~SAED
MWE SHORT: Leslie Sutphen – How I Discovered My WILD Side
In this video from MarketsWiki Education’s World of Opportunity event in Chicago, Leslie Sutphen, co-founder of Women in Listed Derivatives (WILD), talks about starting her career when there were very few women working in the futures and options industry. After looking around room after room during her career and seeing the same gender disparity, Sutphen decided to create WILD. WILD’s mission is to help women in the financial industry through mentorship and networking.
SEC Set to Let Wall Street Keep Payment-for-Order-Flow Deals; Gensler had floated possible prohibition in sweeping overhaul; Regulator weighing ways to push more trading to exchanges
Lydia Beyoud and Katherine Doherty – Bloomberg
The US Securities and Exchange Commission will stop short of banning payment for order flow, a controversial way to process retail stock trades, as it proposes new rules for the $48 trillion American equities market. The decision, described by people familiar with the matter, follows months of internal deliberations at the agency. It marks a win for brokerages that get paid for processing rights, although the SEC may still enact other changes that make the practice less profitable, according to the people.
****** Payment for order flow just can’t be killed.~JJL
Exchanges provide new opportunities for American bettors of all levels
David Purdum – ESPN
American bettors have a new opportunity this football season with the arrival of regulated sports betting exchanges in the United States. Experts say betting exchanges can benefit both professional and recreational bettors, but hurdles exist. This summer, the New Jersey Division of Gaming Enforcement approved betting exchanges Prophet Exchange and Sporttrade. The companies, which are both led by 20-something founders, launched in September in New Jersey, becoming the first regulated sports betting exchanges in the United States.
****** Are there opportunities for bettors who don’t bet, like me?~JJL
Five Rules for Family Businesses to Thrive; From the Windsors to the Fords, and the Kochs to the Tatas, the dynastic principle continues to flourish. But the rules of the family game in business are changing.
Adrian Wooldridge – Bloomberg
Nobody does dynasty better than the British royal family. The recent days of pomp and circumstance have not only been a celebration of a life well lived. They have been a celebration of the power of the family to transcend death and to link the past to the present and thence to the future. Individual monarchs may die. The institution lives on because of the fusion of biological and social inheritance. The Queen is dead. Long live the King! It is easy, particularly after watching days of soldiers in red jackets and bearskins, marching bands and union flags, to see the Windsors as an expression of the peculiarities of the British. To a man and a woman, social theorists have predicted that modernity would mean the end of the dynastic principle in the face of democracy and meritocracy. And they have been able to point to the demise of great royal dynasties such as the Romanovs and the Habsburgs. Queen Victoria’s funeral resembled a gathering of crowned heads of state, many of them her relations. At Elizabeth II’s funeral, most of the heads of state were commoners.
****** There are more than five rules for family businesses.~JJL
Wednesday’s Top Three
Our top story Wednesday was Inside a college student’s ‘abusive’ summer from hell on Wall Street, from Insider. Second was Citadel’s Griffin Brings Billions to Miami With Political Winds at His Back, from Bloomberg. Third was a tie between For New Yorkers, 6 p.m. Is the New 8 p.m., from The New York Times Style Magazine, and High-Frequency Trading Techniques to Run Your Business Like a Hedge Fund, from Inc.
27,011 pages; 240,826 edits
Jamie Dimon calls crypto tokens ‘decentralized Ponzi schemes’
David Hollerith – Yahoo Finance
JPMorgan Chase CEO Jamie Dimon likened crypto tokens to Ponzi schemes before a U.S. House Committee Oversight hearing on Wednesday, reiterating his well-known criticism of cryptocurrencies. “I’m a major skeptic on crypto tokens, which you call currency like Bitcoin. They are decentralized Ponzi schemes,” he said, pointing to the billions of dollars lost each year through crypto-related hacks and how cryptocurrencies are used in crimes such as ransomware payments, money laundering, and sex-trafficking. “And the notion that it is good for anybody is unbelievable,” Dimon added.
CEO of Crypto Exchange Kraken Steps Down; Operating chief Dave Ripley to succeed co-founder Jesse Powell as chief executive
Paul Vigna – The Wall Street Journal
Jesse Powell, an early bitcoin backer and co-founder of the cryptocurrency exchange Kraken, plans to step down from his role as chief executive, the company said on Wednesday. Dave Ripley, the current chief operating officer, will succeed Mr. Powell. Kraken’s largest shareholder, Mr. Powell will remain on the board as chairman. He plans to stay active in the company, spending his time on product development and industry advocacy.
A Great Copper Squeeze Is Coming for the Global Economy
James Attwood – Bloomberg
The price of copper — used in everything from computer chips and toasters to power systems and air conditioners — has fallen by nearly a third since March. Investors are selling on fears that a global recession will stunt demand for a metal that’s synonymous with growth and expansion.
Once-bitten markets are ignoring Putin’s warnings again at their own peril
Dhara Ranasinghe and John O’Donnell – Reuters
Earlier this year, markets were complacent as Russia massed troops on the Ukraine border. Now, they’re once again largely shrugging off Vladimir Putin’s signal that he could be prepared to use nuclear weapons. World shares weathered an early knock to risk appetite on Wednesday after Putin mobilised more troops for Ukraine and threatened to use all of Russia’s arsenal against what he called the West’s “nuclear blackmail” over the war there.
Crypto Shakeout Engulfs the C-Suite as CEOs Start Stepping Down; Kraken CEO joins peers at Genesis, Alameda in stepping down; Crypto faces regulatory scrutiny after a series of meltdowns
Yueqi Yang – Bloomberg
The cryptocurrency industry’s epic shakeout, having cost thousands of jobs and set off a round of consolidation, is reaching the corner office. Crypto exchange Kraken announced on Wednesday that co-founder Jesse Powell will step down as CEO, to be replaced by Chief Operating Officer David Ripley. The reshuffle comes shortly after Genesis’s Michael Moro and Bitcoin evangelist Michael Saylor, along with Sam Trabucco of Alameda Research, relinquished top positions.
The SPAC King Folds, Ending the Blank-Check Frenzy; Chamath Palihapitiya pioneered a new way of raising money. Now he’s giving $1.6 billion back, and his preferred investment vehicle looks increasingly like a passing fad.
Zeke Faux – Bloomberg
In October 2020, Chamath Palihapitiya raised $2.4 billion from investors for three blank-check companies. He used a previously obscure financial vehicle known as a SPAC. All he had to do was find startups to buy, and he stood to make hundreds of millions of dollars. The Facebook-executive-turned-venture-capitalist loves high-stakes poker, and it looked as if he’d found a can’t-lose bet.
Credit Suisse mulling investment bank split into three: report
Anviksha Patel – MarketWatch
Swiss bank Credit Suisse is reportedly considering splitting its investment bank into three as part of a new strategy to save itself from years of scandal. The Financial Times reports that the lender’s proposal entails dividing the group into three parts: an advisory part of the business, a “bad bank” to hold risky assets, and everything else. Credit Suisse CSGN, -1.04% CS, -1.38% is planning to reveal the new strategy at its third-quarter results on Oct 27, which the FT reports will include thousands of job cuts.
Ken Griffin moved Citadel out of Chicago after colleague was robbed at gunpoint: report
Ariel Zilber – New York Post
Billionaire Ken Griffin decided it was time to relocate the headquarters of his giant hedge fund Citadel from Chicago after a colleague was robbed while having a gun pressed to his head during a coffee run, according to a report. Griffin, whose net worth is pegged by Forbes at $31 billion, announced earlier this year that his family and the investment firm would decamp from the Windy City in favor of Miami. The 53-year-old financial tycoon cited Chicago’s soaring rate of violent crime as a key factor in the decision, telling Bloomberg News that he has personally been affected by Chicago’s descent into what the news site calls “anarchy.” One of his colleagues went to get coffee when he was accosted by an armed assailant who put “a gun to his head” and robbed him, Griffin told the site.
Jamie Dimon: Bitcoin and Other Crypto Tokens Are ‘Decentralized Ponzi Schemes’
Jack Denton – Barron’s
Jamie Dimon hasn’t relented in his rhetoric against cryptocurrencies, calling BitcoinBTCUSD +1.00% and other digital tokens little more than “decentralized Ponzi schemes” in testimony before Congress. “I’m a major skeptic on crypto tokens … like Bitcoin, ” Dimon said Wednesday, speaking at a House Financial Services Committee meeting with the leaders of other major banks. “They are decentralized Ponzi schemes, and the notion that it’s good for anybody is unbelievable.”
Former CFTC Chair on How to Regulate Stablecoins Without Passing Any New Laws; Tim Massad explains how it can be done
Tracy Alloway and Joe Weisenthal – Bloomberg
Stablecoin regulation has become a hot topic, and for very good reason. For one thing, it’s an extremely fast growing space. Stablecoins are also a primary way that the crypto interacts with the banking system. And beyond that, as we know, crises often originate from assets that promise to be safe (remember money market mutual funds that broke the buck during the 2008 financial crisis. But are regulators equipped to deal with stablecoins under existing law? On this episode, we speak with Timothy Massad, the former chair of the CFTC and a current research fellow at Harvard’s Kennedy School of Government. He explains why he believes regulatory progress can be made right now with the laws that currently exist, and what a new arrangement for issuers would look like.
Binance Hires Big-Name Former Government Officials to Set Up Advisory Board
Jesse Hamilton – CoinDesk
Binance, the world’s largest crypto exchange by trading volume, has rounded up prominent former government officials to act as a global board of advisers as the company negotiates the regulatory and political minefield the crypto industry finds itself in. The board – led by Max Baucus, a former U.S. Senate Finance Committee chairman and ambassador to China – also includes David Wright, a former secretary general of the International Organization of Securities Commissions; Bruno Bézard, a former head of the French Treasury and economic adviser to the prime minister; Henrique de Campos Meirelles, Brazil’s former minister of the economy and one-time president of its central bank; and seven others.
Wall Street Bank CEOs Tell Congress They’re Unlikely to Finance Crypto Miners
Michael Bellusci – CoinDesk
The heads of several of the top U.S. banks said Wednesday they don’t have any plans to finance cryptocurrency miners. Rep. Brad Sherman (D-Calif.), a crypto mining critic, asked the heads of three major banks whether they intended to finance crypto mining during a congressional hearing of the House Financial Services Committee.
Coinbase Tested Group to Speculate on Crypto; The company completed a $100 million transaction before ending the effort. It says that it hasn’t engaged in proprietary trading.
Gregory Zuckerman – The Wall Street Journal
Coinbase Global Inc. has been searching for new ways to make money. One business it flirted with was controversial: using its own money to speculate on cryptocurrencies.Last year, Coinbase—which operates a large cryptocurrency exchange that handles bitcoin and other digital coins—hired at least four senior Wall Street traders and launched a group to generate profit, in part, by using the company’s cash to trade and “stake,” or lock up, cryptocurrencies, according to people close to the matter. The activity was described as “proprietary” trading by the people at the company.
Wall Street’s Bosses Reassert Themselves With the Return of Annual Culls; Even junior bankers gained ground during the pandemic. But now the bosses—from David Solomon at Goldman Sachs on down—are preparing to shed staff and bring down bonuses.
Sridhar Natarajan and Hannah Levitt – Bloomberg
JPMorgan Chase and Co. executives were in a bind. Amid a flurry of job-hopping on Wall Street last year, Chief Executive Officer Jamie Dimon had told the bank’s US staff it was time to return to offices on a regular basis. But with Covid-19 cases climbing at the time, some managers were reluctant to take a hard line with staff who could quit. A number of divisions were already wrestling with resignations and racing to refill positions.
JPMorgan Sees Concerns for Ethereum Blockchain After the Merge
Will Canny – CoinDesk
There are some concerns specific to the Ethereum blockchain following the recent transition to a proof-of-stake (PoS) consensus mechanism, a process known as the Merge, JPMorgan (JPM) said in a research report Wednesday.
How a Looming Oil Ban Could Devastate a Small Italian City; Italy’s largest refinery, owned by Russia’s Lukoil, has lost financing because of sanctions. Now, it faces the cutoff of its crude supply, putting thousands of jobs at risk.
Patricia Cohen – The New York Times
Like thousands of Sicilians who live near Priolo Gargallo, part of an industrial petrochemical hub on this island’s southeastern coast, Davide Mauro has tied his livelihood to the giant Russian-owned Lukoil refinery — a landscape of towering chimney stacks, steel cranes and flat-topped gas tanks that rise above the Ionian Sea’s brilliant turquoise waters. Ever since the European Union agreed to ban most imports of crude oil from Russia because of its invasion of Ukraine, the future of this refinery — the largest in Italy — has been thrown into doubt. The deadline for the embargo is less than three months away, but workers still have no idea whether they will have jobs once it goes into effect on Dec. 5.
Europe burns cash to help businesses in energy crisis
Kirsti Knolle and Paul Sandle – Reuters
Germany nationalised gas importer Uniper (UN01.DE) on Wednesday and Britain said it would halve energy bills for businesses in response to a deepening energy crisis that has exposed Europe’s reliance on Russian fuel. Russian President Vladimir Putin added to the upward pressure on energy prices by announcing a partial military mobilisation, in the biggest escalation of the Ukraine war since Moscow’s Feb. 24 invasion. European governments had already earmarked almost 500 billion euros ($496 billion) in the last year to shield citizens and companies from soaring gas and power prices, according to research by think-tank Bruegel.
Gary Cohn SPAC Latest Hit by Mass Exodus as 91% of Holders Bail; Shares redeemed when investors OKed merger deadline extension; Smaller pool of cash may complicate plans to merge with Allwyn
Bailey Lipschultz – Bloomberg
A SPAC led by Gary Cohn, a former adviser to Donald Trump, is the latest firm to be rocked by the industry’s volatility as investors chose to swap their stock for cash. Cohn Robbins Holdings Corp., the special-purpose acquisition company led by the former Goldman Sachs Group Inc. president and Clifton Robbins, said roughly 91% of its 82.8 million shares were redeemed when investors approved a deadline extension for the SPAC’s merger with one of Europe’s largest lottery operators, Allwyn Entertainment AG.
Don’t believe the ‘maximalists’: bitcoin can’t be separated from crypto; The people who push it have the same financial incentives as those pushing any other token
Jemima Kelly – Financial Times
If you have ever dared to direct criticism at the world of crypto, the chances are you will have received some charming rebukes. You are likely to have been told to “have fun staying poor” as you’re “never gonna make it”; your criticisms have probably been dismissed as mere “FUD” (fear, uncertainty and doubt); and you may well have been informed that you are in fact nothing more than a “salty no-coiner”.
Donald Trump’s business empire imperilled by sweeping NY fraud lawsuit; $250mn case from state attorney-general Letitia James accuses ex-president of cheating lenders
Joshua Chaffin – Financial Times
New York state attorney-general Letitia James on Wednesday sued Donald Trump and three of his adult children for what she called an “astounding” fraud to falsely inflate the value of assets held by their family business, the Trump Organization, for their own financial gain. James is seeking penalties that, if imposed, could effectively end the former president’s real estate career and would imperil the Trump Organization itself, which was started by his father in Queens in the 1920s.
Chinese tech executives pay fines after SEC insider trading charges; Action against Cheetah Mobile follows FT investigation that highlighted share sales made ahead of poor earnings
Eleanor Olcott – Financial Times
Two Chinese tech executives have paid fines related to insider trading charges, after an FT investigation highlighted share sales ahead of poor earnings results. The US Securities and Exchange Commission had charged Cheetah Mobile chief executive Sheng Fu and its former president and chief technology officer Ming Xu. Its action came 10 months after a Financial Times investigation found that in 2016, Fu initiated share sales worth as much as $31mn a few weeks before reporting quarterly results that sent Cheetah shares plummeting 30 per cent.
Eliminating one-penny minimum quoting increment could have ‘negative unintended consequences’, finds Citadel Securities; Whitepaper by Citadel Securities discredits arguments that eliminating the increment would create a more level playing field between on- and off-exchange venues.
Annabel Smith – The Trade
Citadel Securities has published a new whitepaper outlining its view that eliminating the one-penny minimum quoting increment could have “negative” and “unintended” consequences for the market. It follows a whitepaper by the market maker in May last year that suggested a reduction in the minimum quoting increment to a half-penny for tick-constrained stocks could alleviate concerns that exchanges were struggling to compete with off-exchange venues for retail flow. Citadel Securities argued such a reduction for tick-constrained stocks would encourage participants to quote a tighter spread.
Biden Urges the World to Stand United Against Russia in Address to U.N.; U.S. president says ‘Russia has shamelessly violated the core tenets of the United Nations charter’
Catherine Lucey – The Wall Street Journal
President Biden accused Russia of “shamelessly violating” the United Nations charter during an address before the U.N. General Assembly on Wednesday, decrying the war in Ukraine and excoriating Russian President Vladimir Putin for hinting that he could use nuclear weapons in the conflict there. Mr. Biden’s speech at the annual gathering in New York City came after Mr. Putin used a national address Wednesday to raise the potential for a nuclear response in the conflict and ordered reservists to mobilize following losses on the battlefield. Nearly seven months into the conflict, Ukraine has made gains with a rapid counteroffensive, and Russia has struggled to oppose Ukraine and the West. Mr. Biden sought to rally other countries against Russia, saying: “This world should see these outrageous acts for what they are.”
The Kremlin Must Be in Crisis; Putin’s erratic actions are not those of a secure leader.
Anne Applebaum – The Atlantic
If an American president announced a major speech, booked the networks for 8 p.m., and then disappeared until the following morning, the analysis would be immediate and damning: chaos, disarray, indecision. The White House must be in crisis. In the past 24 hours, this is exactly what happened in Moscow. The Russian president really did announce a major speech, alert state television, warn journalists, and then disappear without explanation. Although Vladimir Putin finally gave his speech to the nation this morning, the same conclusions have to apply: chaos, disarray, indecision. The Kremlin must be in crisis.
Putin’s Escalation Faces Risks in Russia-Ukraine War; Calling up 300,000 recruits and issuing fresh nuclear threats after the Kremlin’s battlefield setbacks isn’t likely to stop Ukrainian offensives in the near term, analysts say
Yaroslav Trofimov – The Wall Street Journal
President Vladimir Putin’s moves to mobilize as many as 300,000 reservists, threaten nuclear strikes and annex occupied parts of Ukraine show how badly the war has gone for Russia, military and political analysts say, and are unlikely to stop the Ukrainian advance or reverse the battlefield situation in the immediate future. Mr. Putin made these announcements a day after snap referendums on joining Russia were called for Friday in the Russian-occupied parts of the Donetsk, Luhansk, Kherson and Zaporizhzhia regions of Ukraine. The decisions followed a swift military defeat that forced Russian forces to vacate another partially occupied Ukrainian region, Kharkiv, earlier this month and drew pressure from Russian nationalists to escalate the war.
Norway PM: Russia’s War Is Pushing Global ‘Speed-Up’ of Clean Energy; Jonas Gahr Store says Norway’s role supplying gas to Europe is “critical” as he announces a new initiative to help developing countries adopt renewable energy.
Leslie Kaufman – Bloomberg
As Russia turns off Europe’s gas for the winter, all eyes are on Norway, now the continent’s largest supplier of natural gas. Although Norway has pumped up production nearly 10% this year, prices are still painfully high. Prime Minister Jonas Gahr Store agreed last week to set up a task force with the Europe Union to negotiate those prices, but not before taking price caps off the table and sending gas futures soaring.
Three EU leaders urge calm over Putin’s nuclear rhetoric
Gabriela Baczynska – Reuters
President Vladimir Putin’s latest steps in Russia’s war against Ukraine show his panic and the European Union will continue supporting Kyiv, three of the bloc’s leaders said on Wednesday. The Belgian and Dutch prime ministers and the chairman of all the EU’s 27 national leaders spoke after Putin mobilised more troops for Ukraine, backed a plan to annex swathes of the country and issued a nuclear threat to the West. “It is all a sign of panic. His rhetoric on nuclear weapons is something we have heard many times before, and it leaves us cold,” said Dutch Prime Minister Mark Rutte. “It is all part of the rhetoric we know. I would advise to remain calm.”
Russian opposition calls for protests against Putin’s ‘criminal war’
Jake Cordell – Reuters
Russia’s opposition on Wednesday called for protests against President Vladimir Putin after he ordered the mobilisation of 300,000 reservists for what Kremlin foe Alexei Navalny said was a failing criminal war. Putin on Wednesday ordered Russia’s first mobilisation since World War Two and backed a plan to annex swathes of Ukraine, warning the West he was not bluffing when he said he would be ready to use nuclear weapons to defend Russia. Navalny, Russia’s most prominent opposition leader, said Putin was sending more Russians to their deaths for a failing war.
Russians protest in the streets against first military call-up since World War Two
Russian police officers detain a man during an unsanctioned rally, after opposition activists called for street protests against the mobilization of reservists ordered by President Vladimir Putin, in Moscow, September 21.
Orban Calls for End of EU Sanctions on Russia, Nemzet Reports
Zoltan Simon – Bloomberg
The European Union should scrap its sanctions against Russia by the end of this year, Hungarian Prime Minister Viktor Orban said, according to Magyar Nemzet newspaper.
In Ukraine’s retaken battlefields, soldiers recover bodies
Elena Becatoros – Associated Press
The four soldiers lay in the grass, sleeping bags and cans of food, some opened, scattered around them. Beneath nearby trees, their cars were smashed and torn by shrapnel. The men had been dead for months.
Putin’s Call-Up Brings Reality of War Home to Many Russians; Police detain about 1,400 at protests in dozens of cities; ‘Partial mobilization’ order triggers alarm among reservists
President Vladimir Putin’s order to call up as many as 300,000 reservists to fight in Ukraine triggered alarm and scattered demonstrations as Russians were forced to confront the reality of the deadly conflict.
Take Putin’s Nuclear Threat Seriously, But Not Too Seriously
Few think the Russian leader would be foolish enough to escalate radically, but there’s also a strong argument to be made that he’s not bluffing.
Hal Brands – Bloomberg
Russian President Vladimir Putin has raised anew the possibility he might use nuclear weapons against Ukraine to prevail in a conflict going sideways. The smart money says he won’t, because doing so — or otherwise expanding the conflict drastically — wouldn’t make a bad situation any better.
Russia releases foreign PoWs in brokered prisoner swap; Freed detainees on way to Saudi Arabia from fighting in Ukraine include UK and US citizens
Samer Al-Atrush – Financial Times
Russia has released a number of prisoners, including Britons and Americans, after mediation by Saudi Arabia’s Crown Prince Mohammed bin Salman, the official Saudi news agency reported on Wednesday. The prisoners, who also included Swedish and Moroccan citizens, have been flown to the Gulf kingdom, from where they will be repatriated, the official Saudi Press Agency said, adding that their freedom was part of an exchange.
Exchanges, OTC and Clearing
Enhancing the level playing field: Eurex adds EURO STOXX 50® Options to PLP; On 10 October 2022, Eurex will activate Passive Liquidity Protection (PLP) in the EURO STOXX 50® Index Options (OESX). This is the next logical step towards our goal of balancing the interests of all trading participants and improving market quality and efficiency.
Improvement of liquidity and pricing process in the order book; Passive Liquidity Protection has been found to be particularly effective for products where price discovery is dominated by underlying or exogenous markets, i.e. markets where latency arbitrage significantly affects liquidity. This is especially true in options markets, where latency arbitrageurs can exploit price effects of underlying or correlated instruments on the options. Of course, index products, where price signals can come from multiple constituents, are similarly influenced by external signals as single stock options.
Zero Emissions Day 2022 – Comment From Head Of BME Growth
Today is World Zero Emissions Day. Commenting on Zero Emissions Day, Jesús González Nieto, Head of BME Growth, said: “Zero Emissions Day reminds us that organisations have a responsibility to conduct business in a sustainable way. Environmental, social, and corporate governance (ESG) has become a crucial part of business strategy for companies of all sizes, and it’s a topic that’s resonating in the trading community as well. There are now substantial expectations for each company to have sustainability goals and even more importantly, report on progress against them. Accurate ESG data plays a key role for investors as they have to demonstrate that they are satisfying their ESG responsibilities. However, the number of ESG standards and ratings make it difficult to properly judge how companies are tracking against ESG goals. This is particularly critical for SMEs.
Exchanges increase number of ESG initiatives to meet demand
Christine Dawson – ESG Clarity
ESG education rises to second most sought after programme; Exchanges and clearing houses have seen significant advances in the level of ESG and initiatives on offer and being sought. According to the industry group World Federation of Exchanges (WFE), the 2021 Sustainability Survey shows eight of 54 respondents participated in 12 ESG initiatives last year, up from five out of 61 respondents the year before. ESG education initiatives have gone from being the eighth most sought after initiative in 2019 to second in 2021. On average, the number of sustainability initiatives each exchange is participating in rose from 7.7 to 8.4.
Israeli Exchange Bits of Gold Becomes First Crypto Firm to Receive Capital Markets License
Sandali Handagama – Coindesk
Israel’s top markets regulator has granted local cryptocurrency exchange Bits of Gold one of the first licenses targeting crypto financial services providers in the country.
Financial Literacy Day
For yet another year, BME is pleased to invite you to the Financial Education Day Bell Ringing , which will be held on October 3 at the Barcelona Stock Exchange. On this occasion, the event will take place at the Barcelona Stock Exchange and will be led by Pablo Hernández de Cos, Governor of the Bank of Spain , with whom we join the “Ring the Bell for Financial Literacy” initiative promoted by the World Federation of Stock Exchanges (WFE) and IOSCO. Date:October 3; Hour: From 8:30 a.m. to 9:10 a.m.; Place: Barcelona Stock Exchange; Paseo de Gracia, 19.
EBS Market on CME Globex Notice
Topics in this issue include: Critical Information; Excessive Messaging Threshold and Revised EBS Messaging Efficiency Program; Post-Migration iCross Connectivity – October 15; Launch of EBS Ultra 20 Millisecond Conflated TCP Market Data Group – November 6 New; SDR Reporting Requirements – CFTC Rule Re-Write; Reminder: Short Code Identifiers on CME Globex; Reminder: Disorderly Market Testing for NEX SEF and EBS UK MTF on CME Globex Reminder: FirmSoft; Announcements and Additional Resources; Subscription Center for EBS Market on CME Globex Notice.
DTCC Outlines Post-Quantum Security Risks & Considerations For The Financial Industry As Technology Capabilities Continue To Advance
As quantum computing creates vast new possibilities to analyze and solve complex problems that are unsolvable by today’s computers, it also has the potential to disrupt entire industries and create significant new risks for financial firms by making even the most highly protected computer systems vulnerable to hacking. The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, today issued a white paper that brings this risk into focus, while identifying initial steps organizations can take to protect themselves in the future.
Change in Trading Unit and Tick Sizes for Domestic ETFs: 2 issues including iShares Core 7-10 Year US Treasury Bond ETF (code: 1656)
Tokyo Stock Exchange, Inc. (TSE) has announced that we will change the trading unit for 2 ETFs and will start trading in the new trading unit from October 7 (Friday) as follows. In addition, in line with the change in the trading unit, the tick size will be changed from the same day.
Information Barriers Between Warehouse Companies And Trading Companies
Summary: 1. This Notice informs the market that the LME has carried out a review (the “Review”) of the third party assurance reports (the “Reports”) of information barriers between Warehouse Companies and Trading Companies for the period 1 January 2021 to 31 December 2021 (the “Relevant Period”). The Review did not identify any issues of general concern for the market.Defined Terms: 2. Capitalised terms not otherwise defined in this Notice shall have the meaning ascribed to them in the LME Rulebook and Notice 14/202 : A195 : W098 dated 2 July 2014 “Information Barriers between Warehouse Companies and Trading Companies” (the “Information Barriers Notice”).
Refinitiv launches forward looking term rate versions of ARRC recommended fallback rates to facilitate industry transition from USD LIBOR
Today Refinitiv commences publication of forward-looking term rate versions of its ARRC recommended fallback rates – USD IBOR Cash Fallbacks. This follows the Alternative Reference Rates Committee’s (ARRC) March 2021 announcement that it had selected Refinitiv to publish its recommended fallback rates for cash products, and Refinitiv’s July 2022 announcement that it intends to launch the new USD IBOR Cash Fallbacks settings in September 2022.
Real-Time Accounting Platform Integral Raises $8.5M in First Round of Funding
Margaux Nijkerk – CoinDesk
Real-time accounting platform, Integral, closed an $8.5 million round of funding that was led by Electric Capital, Integral announced Tuesday. The funding was the first for the company, aimed at bringing financial data to the Web3 world.
TS Imagine taps buy-side for new executive hires; Incoming hires previously served at BlackRock, Agilon Capital, Blue Ridge Capital, GrowthCurve Capital, Edelman and Deutsche Bank.
Wesley Bray – The Trade
TS Imagine has poached from the buy-side for new hires as it expands following the 2021 merger between TradingScreen and Imagine Software. Among the new appointments is Spencer Lee, who joins TS Imagine as chief markets officer, where he will oversee the development and growth of the firm’s global fixed income offering.
FlexTrade selects Plato Partnership’s Karppi for sales and business development role; Incoming SVP joins from Plato Partnership, having also previously served at Plia and The Buyside Perspectives by K&K Global Consulting.
Wesley Bray – The Trade
FlexTrade has appointed Anita Karppi as its new senior vice president, sales and business development. Karppi brings more than 20 years’ experience working with buy-side firms in a range of senior sales and marketing roles to FlexTrade.
EU Project to Fight Fakes Succeeds By Being Open, Founder Says
Jack Schickler – CoinDesk
Eonpass is the latest startup to try to find business applications for Web3 technology that can grow to real-world scale. Galvanized by official backing from the European Union, its founder believes the company can succeed where others have failed, with open-source technology meaning anyone can join forces to stop the influx of counterfeit goods.
DOJ Seeks to Double Jail Time for Money Transmission Crimes
Buried in the U.S. Department of Justice’s crypto crime report last week was a call for Congress to double the criminal penalties for any unlicensed money transmitting violations from five years in prison to 10 years. While the report, “The Role of Law Enforcement in Detecting, Investigating, and Prosecuting Criminal Activity Related to Digital Assets,” came with many recommendations for areas in which laws needed to be expanded to include cryptocurrencies and virtual asset service providers like exchanges and money services businesses, it listed three high priority legislative changes.
SentinelOne launches $100M fund to invest in enterprise cybersecurity startups
Carly Page – TechCrunch
SentinelOne, an AI endpoint security firm that went public last June, has announced the launch of S Ventures, a $100 million fund to invest in the generation of enterprise cybersecurity startups. The launch of S Ventures comes at an interesting time for the cybersecurity market. While startups in this sector have long weathered the current economic storm better than most, layoffs are now becoming commonplace at cyber startups and new data shows that latest numbers are down across financing and M&A.
Mandiant, Google, And The Future Of Cloud Cybersecurity
Chances are that you’ve moved all your important documents, photos, and other digital files to the cloud. So we can’t ignore the significance of cloud cybersecurity moving forward as we continue to go completely digital in so many aspects of our lives. Cybersecurity companies are fighting for market share as data breaches and ransomware attacks become more common, more damaging, and more expensive. With many companies turning towards cloud technology, it’s no secret that companies like Google, Amazon, and Microsoft are going to increase focus on this business sector.
The Worldwide Cyber Security Industry is Projected to Reach
The “Cyber Security Market by Component (Software, Hardware, and Services), Software (IAM, Encryption and Tokenization, and Other Software), Security Type, Deployment Mode, Organization Size, Vertical and Region – Global Forecast to 2027” report has been added to ResearchAndMarkets.com’s offering. The global cyber security market size is expected to grow from an estimated value of USD 173.5 billion in 2022 to USD 266.2 billion by 2027, at a Compound Annual Growth Rate (CAGR) of 8.9% from 2022 to 2027.
Katzenberg: Cybersecurity startup Aura is profitable, but no IPO for now
Jeremy C. Owens – MarketWatch
Cybersecurity startup Aura is profitable and headed for $300 million in annual revenue, according to backer and Hollywood legend Jeffrey Katzenberg, but an initial public offering is not planned in the near term amid market volatility. “We have $300 million in revenue, growing like a rocket ship, it’s a profitable business with hundreds of millions of dollars in the bank,” Katzenberg said in a discussion at MarketWatch’s Best New Ideas in Money Festival on Wednesday.
C.E.O. of Kraken, the Cryptocurrency Exchange, Steps Down; Jesse Powell, the chief executive, has battled with employees after posting messages about race and gender and urging those who disagreed with his values to leave.
David Yaffe-Bellany and Ryan Mac – The New York Times
Jesse Powell, a founder of the cryptocurrency exchange Kraken, is stepping down as chief executive. Mr. Powell will be replaced by Dave Ripley, the chief operating officer, Kraken said on Wednesday. The transition is set to take place in the next few months after the company finds a replacement for Mr. Ripley. Mr. Powell will remain at Kraken as chairman. An early Bitcoin entrepreneur, Mr. Powell has been embroiled in conflict with Kraken employees after he posted inflammatory messages this year about race and gender on the company’s Slack. He urged those who disagreed with his values to leave the company. Some did.
Judge Orders Tether to Produce Records on Stablecoin Backing; Documents requested as part of lawsuit alleging Tether conspired to inflate price of bitcoin
Caitlin Ostroff – The Wall Street Journal
A judge for the Southern District of New York ordered the issuer of the largest stablecoin to produce financial records related to the backing of its coin, tether. Tether Holdings the issuer of the world’s largest stablecoin, will need to produce balance sheets, income statements, cash-flow statements and profit-and-loss statements under the order. It also will have to provide documents to establish sufficient reserves for its stablecoin, tether, including account statements for all its banks. The documents are being requested as part of a continuing lawsuit alleging that Tether conspired to issue its stablecoin as part of a campaign to inflate the price of bitcoin. Yet the documents could provide information long sought about the quality of assets supporting the nearly $68 billion stablecoin.
Jamie Dimon Slams Crypto Tokens as ‘Decentralized Ponzi Schemes’
Max Reyes – Bloomberg
Jamie Dimon didn’t mince words when a US lawmaker mentioned the executive’s history of criticizing cryptocurrencies. “I’m a major skeptic on crypto tokens, which you call currency, like Bitcoin,” the JPMorgan Chase & Co. chief executive officer said in congressional testimony Wednesday. “They are decentralized Ponzi schemes.” Stablecoins — digital assets tied to the value of the US dollar or other currencies — wouldn’t be problematic with the proper regulation, and JPMorgan is active in blockchain, Dimon said.
Crypto Agitator Jesse Powell Steps Down as CEO of Kraken; Powell, the often controversial co-founder of the cryptocurrency exchange, will be succeeded by COO Dave Ripley and take the role of chairman.
Yueqi Yang and Olga Kharif – Bloomberg
Jesse Powell, the outspoken and often controversial co-founder of the Kraken cryptocurrency exchange, said he’s stepping down as chief executive officer to spend more time on the company’s products and broader industry advocacy. Powell, 42, who is being succeeded by Chief Operating Officer Dave Ripley, 45, will become chairman of the board. The transition is expected to take place over the next few months once a new COO is selected. “As the company has gotten bigger, it’s just gotten to be more draining on me, less fun,” Powell said in a video interview on Tuesday. “I still plan to stay very engaged with the company” as the largest shareholder and member of the board.
Messari raises $35M to expand ‘Bloomberg of crypto’ ambitions
Jeff John Roberts – Fortune
Not bad for a Two Bit Idiot. The “idiot” in question is Ryan Selkis, who uses the tongue-in-cheek monicker for his popular Twitter account, and who just raised a $35 million Series B round for Messari, the crypto data firm he founded in 2018. The funding round, led by Brevan Howard Digital, reflects the growing popularity of Messari, one of a handful of firms that have made a business of transforming blockchain data into standardized reports. Selkis likens Messari to the crypto version of Bloomberg, the financial news and data colossus. While Messari’s collection of charts and reports offer investors a clearer picture of the crypto landscape, Selkis also views the service as laying the groundwork for a future era where much of the current corporate compliance and reporting regime will become unnecessary.
Cryptocurrency lobby group gets court approval to weigh in on SEC vs Ripple’s XRP lawsuit
Timmy Shen – Forecast
Cryptocurrency lobby group Chamber of Digital Commerce (CDC) has received approval from a U.S. federal court to be an amicus curiae (Latin for friend of court) in the lawsuit that the U.S. Securities and Exchange Commission (SEC) filed in 2020 against Ripple Labs.
A Call to the SEC: Treat Crypto Assets as if Clients Matter
Neel Maitra, Scott Walker – CoinDesk
Last week marked an exciting moment in technological innovation. The Ethereum blockchain – a global, decentralized computer that anyone can use – changed the way it verifies transactions in a long-anticipated update called the Merge. Despite opening additional opportunities for innovation, this dramatic change highlights legal uncertainty for crypto investors and asset managers. Strict adherence to the U.S. Security and Exchange Commission’s (SEC) “custody rule” would suggest asset managers, acting on behalf of investors, stay away from crypto staking. This is at odds with the fiduciary duty asset managers owe their clients by denying a legal and potentially lucrative revenue stream. It’s a catch-22.
Nasdaq Joins BlackRock as TradFi Defies the Bear Market and Embraces Crypto
Margaux Nijkerk – CoinDesk
Legendary investor Warren Buffett may still hate cryptocurrencies, but other stalwarts of traditional finance (TradFi) are following his maxim to be “fearful when others are greedy and to be greedy only when others are fearful,” piling into digital assets following this year’s rout.
South Korea seizes US$184 mln in crypto towards unpaid taxes
Danny Park -Forkast
Cryptocurrency assets seized from alleged tax delinquents in South Korea in 2021 and 2022 amounted to nearly 260 billion Korean won (US$184.3 million), according to local media reports.
Coinbase Completed $100M Transaction to Test Proprietary Trading: Report
Jamie Crawley – CoinDesk
Cryptocurrency exchange Coinbase (COIN) completed a $100 million transaction as a test of its proprietary trading efforts earlier this year, according to a report by the Wall Street Journal (WSJ) on Thursday. The exchange hired at least four Wall Street traders to form a group called Coinbase Risk Solutions to use the firm’s own cash to trade crypto, the report said.
SEC Wants to ‘Remake the Law,’ Rather Than ‘Apply it,’ Says Ripple General Counsel
Fran Velasquez – CoinDesk
The legal battle between the U.S. Securities and Exchange Commission (SEC) and payment protocol company Ripple Labs could soon be coming to a close – that is, if a federal judge decides the crypto company did not violate federal securities laws. Stuart Alderoty, general counsel at Ripple Labs, told CoinDesk TV the crypto company is feeling “confident,” and thinks it could be “the beginning of the end” of the case, which began in 2020.
CoinDesk Launching New ‘Women Who Web3’ Podcast
Kamala “Kamz” Alcantara joins “The Hash” to share the importance of including women in the Web3 space and her new podcast launching at CoinDesk titled “Women Who Web3.”
S. Korean Watchdog Says $7.2B Transfered Overseas Mainly Through Crypto Exchanges: Report
Camomile Shumba – CoinDesk
South Korea’s financial watchdog found that since June there have been $7.2 billion “abnormal” foreign exchange transactions, most of which were transferred through cryptocurrency exchanges, Bloomberg reported on Thursday.
Crypto Exchange Coinbase Secures Registration From Netherlands’ Central Bank
Jamie Crawley – CoinDesk
Cryptocurrency exchange Coinbase (COIN) was granted regulatory approval by the Dutch central bank, De Nederlandsche Bank (DNB), allowing it to offer crypto products to consumers and businesses in the country. Coinbase is the first crypto exchange to win registration in the Netherlands, the firm said Thursday.
China says blockchain patent applications make up 84% of world’s total
Ningwei Qin – Forkast
China’s Ministry of Industry and Information Technology (MIIT) claimed on Tuesday in a news conference that the country accounted for more than 84 percent of the world’s blockchain patent applications, despite the country’s ban on cryptocurrencies.
Crypto Exchange CoinFlex Floats Plan for Creditors to Own 65%; Vote on proposed restructuring plan is due in coming week; Most shareholders will get wiped out, according to CoinFlex
Joanna Ossinger – Bloomberg
Cryptocurrency exchange CoinFlex has detailed a restructuring plan in which creditors will own 65% of the company, with a vote on the proposal coming over the next week. Existing ordinary and Series A shareholders will lose their equity stakes, while the CoinFlex team will be allocated 15% in the form of an employee share option plan that will vest over time. Series B investors will continue to be shareholders and will be incentivized with future equity, a statement showed.
Meta Quietly Reduces Staff in Cost-Cutting Push; Facebook parent is looking to reduce costs by at least 10%, people familiar with the plans said, while Google has required some employees to apply for new jobs
Jeff Horwitz, Salvador Rodriguez and Miles Kruppa – The Wall Street Journal
Meta Platforms Inc. is planning to cut expenses by at least 10% in the coming months, in part through staff reductions, as the social-media giant confronts stalling growth and increased competition, according to people familiar with the company’s plans. The Menlo Park, Calif., company has begun quietly nudging out a significant number of staffers by reorganizing departments and giving affected employees a limited window to apply for other roles within the company, according to current and former managers familiar with the matter, in a move that achieves staffing cuts while forestalling the mass issuance of pink slips.
Trump Sued by New York Over ‘Fraudulent’ Asset Valuations; Suit follows years-long probe by New York AG Letitia James; Trump responded by calling James’s suit ‘another witch hunt’
Erik Larson and Bob Van Voris – Bloomberg
Donald Trump and three of his children were sued for allegedly inflating the value of his real estate company’s assets, the culmination of a years-long probe by the New York attorney general into the former president. Attorney General Letitia James filed suit Wednesday in New York state court, naming Trump, the Trump Organization, Donald Trump Jr., Ivanka Trump, and Eric Trump — who are senior executives at the company. James is seeking penalties including a permanent ban on the four Trumps running companies in New York, their home state.
Binance taps ex-U.S. senator Max Baucus to chair global advisory board
Timmy Shen – Forkast
Binance has tapped Max Baucus, a former U.S. senator and ambassador to China, to chair its new global advisory board, to advise the world’s largest cryptocurrency exchange on regulatory, political and social issues.
BlackRock is under fire again for its E.S.G. stance
BlackRock is getting the squeeze once again from two sides of the culture war.
Andrew Ross Sorkin – The New York Times
Earlier this month, the world’s biggest money manager defended its environmental, social and governance-based investment practices to 19 Republican state attorneys who accused it of colluding with climate activists. Now that defense has raised eyebrows with those on the left-hand side of the E.S.G. debate — in particular, the New York City comptroller, Brad Lander, who sent BlackRock’s C.E.O., Larry Fink, a letter yesterday arguing that some of the firm’s recent actions contradicted its previous climate commitments.
Donald Trump, 3 of his children accused of business fraud by New York AG; Lawsuit alleges $250 million fraud, seeks to bar the Trumps from serving as executives of any company operating in New York
Shayna Jacobs and Jonathan O’Connell – The Washington Post
New York Attorney General Letitia James filed a lawsuit Wednesday accusing former president Donald Trump, three of his grown children and executives at his company of flagrantly manipulating property and other asset valuations to deceive lenders, insurance brokers and tax authorities into giving them better bank-loan and insurance policy rates and to reduce their tax liability. The 222-page civil complaint asks the New York Supreme Court to bar Trump, as well as Donald Trump Jr., Ivanka Trump and Eric Trump, from serving as executives at any company in New York, and to bar the Trump Organization from acquiring any commercial real estate or receiving loans from any New York-registered financial institution for five years.
New York’s lawsuit against Trump is yet further proof that he’s a loser
Jennifer Rubin – The Washington Post
In yet another indication of Donald Trump’s descent into loser-dom, New York Attorney General Letitia James on Wednesday announced a lawsuit against the defeated former president, three of his children, his company and two longtime Trump Organization executives. James tweeted: “We found that Trump, his family, and the Trump Org used fraudulent and misleading asset valuations over 200 times in 10 years on his annual financial statements. These statements were then used to obtain hundreds of millions of dollars in loans and insurance coverage.”
Trump Ally Tom Barrack Mocks US Foreign-Agent Case as ‘Nonsense’; Prosecutors say Barrack used Trump access for money and power; Jurors hear arguments at start of five-week trial in New York
Patricia Hurtado and David Voreacos – Bloomberg
Tom Barrack was a globe-trotting businessman who ran a $40 billion investment fund and allegations that he was an illegal foreign agent of the United Arab Emirates are “nonsense,” his lawyer told jurors at the start of his criminal trial. Defense lawyer Michael Schachter on Wednesday mocked claims by prosecutors that Barrack acted at the “direction and control” of the Gulf Nation in a secret effort from 2016 to 2018 to influence Donald Trump’s campaign and administration, while also trying to manipulate American opinion on its behalf.
EU Battles Russian Narrative Over Global Food Crisis; Statement clarifies sanctions rules in response to Moscow’s claims, saying that fertilizer and some other products from Russia can be transferred to the rest of the world via the bloc
Laurence Norman – The Wall Street Journal
The European Union reversed guidance on how to apply its economic sanctions against Russia in a bid to sidestep Moscow’s allegations that the bloc’s measures are leading to a food security crisis in developing countries. The EU’s executive body, the European Commission, circulated new guidance to member states on Monday that made it clear that fertilizers, coal and some other products from Russia can be transferred to the rest of the world via the bloc, and insurance and other services can be provided on that transport. The move comes as Western countries and Russia battle to win over countries in the developing world to their narrative over the global food and energy crisis.
Energy Crisis Empowers Europe’s Populists Harnessing Anger; Across the continent, parties on the far right and left are making political capital from the economic impact of the war in Ukraine.
Andrea Dudik and Daniel Hornak – Bloomberg
The crowd of about 5,000 protesters were from the far right and left, and united in their anger. Waving Slovak flags, they demanded an end to the rule of “clowns” and “traitors” they blamed for saddling them with the cost of supporting Ukraine in its fight against Russia. The gathering on Tuesday evening in Bratislava was the first joint demonstration by Slovakia’s opposition parties in two years, though it wasn’t just an isolated event in a small European nation next door to the war. Across the continent, hardline groups are making political capital from the economic impact of the conflict as food and energy prices soar.
Many Russians seek ways out as call-up orders arrive
Caleb Davis – Reuters
Moments after President Vladimir Putin called up 300,000 reservists on Wednesday in Russia’s first such mobilisation since World War Two, a human rights lawyer said citizens had already started getting orders to enlist. In St Petersburg, Pavel Chikov said recruitment offices had handed packs of conscription papers to homeowners’ associations. Defence Minister Sergei Shoigu said the army was calling up people with experience of service and military “specialists” to fight in Ukraine.
SEC Advisory Panel Recommends Oversight of U.S. Accounting Rule Maker; The group of investors and academics said the regulator should form a committee to ensure FASB’s independence amid concerns over minimum tax
Mark Maurer – The Wall Street Journal
An advisory panel to the Securities and Exchange Commission said the regulator should tighten its oversight of the body that sets accounting rules for companies and nonprofits in the U.S. amid concerns from investors about its independence and priorities.
SEC Charges Cheetah Mobile’s CEO and its Former President with Insider Trading; Executives Sold Securities through a Purported 10b5-1 Trading Plan
The Securities and Exchange Commission today charged the CEO of Cheetah Mobile Inc. and the company’s former President with insider trading for selling Cheetah Mobile’s securities, pursuant to a purported 10b5-1 trading plan, while in possession of material nonpublic information. The SEC’s order finds that Sheng Fu, the company’s CEO, and Ming Xu, its then-President and Chief Technology Officer, jointly established a purported 10b5-1 trading plan after becoming aware of a significant drop-off in advertising revenues from the company’s largest advertising partner.
Remarks to the Investor Advisory Committee
Chair Gary Gensler – SEC
Thank you. It is great to speak to the Investor Advisory Committee (IAC). As is customary, I’d like to note that my views are my own and that I am not speaking on behalf of the Securities and Exchange Commission or SEC staff. Today, the Committee will cover a wide range of investor issues through four panels and three recommendations. Of these seven topics, the Commission recently has issued proposals on five of them. Your input helps us, both through this meeting and through any materials—including reports, recommendations, and transcripts from today’s conversation—that you may submit to the respective comment files on our proposals.
Remarks at Meeting of the SEC Investor Advisory Committee
Commissioner Hester Peirce – SEC
Good morning and thank you, Christopher [Mirabile]. Today’s agenda is particularly hefty. Much of the day will be taken up by four separate panel discussions covering a dizzying range of topics: human capital management; the Commission’s recent proposals regarding swaps and beneficial ownership reporting; and ESG investing. Following these panel discussions, the Committee will consider three distinct sets of draft recommendations, each of which is lengthy and detailed. I appreciate the Committee’s enthusiasm, which this agenda evidences.
Remarks at the Meeting of the SEC Investor Advisory Committee (IAC)
Commissioner Jaime Lizárraga – SEC
It is a pleasure to speak at today’s Committee meeting for the first time. The Dodd-Frank Act granted the IAC the critical responsibility of advising the Commission on a range of key issues. By statute, you have the authority to raise, discuss, and submit recommendations to the Commission, including propose legislative changes, on any topic that touches on protecting investor interests and Commission priorities.
Remarks at the Meeting of the Investor Advisory Committee
Commissioner Mark Uyeda – SEC
Good morning. I am pleased to address this Committee for the first time as a Commissioner. I was part of the Commission staff in 2009 when your predecessor committee was formed under the Federal Advisory Committee Act “to give investors a greater voice in the Commission’s work.” The following year, Section 911 of the Dodd-Frank Act statutorily mandated the establishment of this Committee, which held its inaugural meeting in 2012. As a staff member, I assisted the Committee with its review of target date funds during those early years.
SEC Charges Recidivists for Violations of a Previous Commission Order
On September 20, 2022, the Securities and Exchange Commission charged recidivists Manhattan Transfer Registrar Company (“Manhattan Transfer”), a registered transfer agent based in Port Jefferson, New York, and its former principal, John C. Ahearn, a resident of Erie, Colorado, for violations of a Commission order issued against them on May 17, 2018 (“Commission Order”).
SEC Charges Former Registered Investment Advisor Representative with Securities Fraud
Securities and Exchange Commission v. David Sheldon Wells, No. 1:22-cv-5113 (N.D. Ill. filed Sept. 20, 2022)
The Securities and Exchange Commission filed charges against David Sheldon Wells, a former representative of an SEC-registered broker-dealer and investment advisory firm, for misappropriating advisory client funds.
We consult on new guidance on the trading venue perimeter
We have published a Consultation Paper (CP) proposing new guidance on the regulatory perimeter for trading venues. This consultation is part of the Wholesale Markets Review (WMR), the review of the UK wholesale financial markets we have been conducting with the Treasury. Since the current regulatory framework was introduced, changes in technology and market structure have enabled a variety of new service providers to emerge, improving efficiency and choice. However, feedback to the WMR highlighted that firms can sometimes be uncertain of the regulatory permissions they need and recommended that we consult on guidance.
Investing and Trading
Bank of England Is Latest Central Bank to Raise Rates Following Fed Increase; U.K. central bank raises its key rate to 2.25% from 1.75%
Will Horner – The Wall Street Journal
Central banks and governments around the world have moved to increase interest rates or support their currencies after the Federal Reserve raised its main policy rate by a third-consecutive 0.75-point jump and signaled that rates could remain high for some time, giving fresh impetus to an already strong dollar. The Bank of England was the latest to adjust rates higher, raising its key interest rate for the seventh consecutive time Thursday, though it held off from quickening the pace of its rate increases as government measures to cap soaring energy bills promised to ease inflation in the months ahead.
Abu Dhabi Oil Giant in Talks to Buy Trader Gunvor; Early-stage talks could lead to deal creating one of world’s largest traders of oil-and-gas products
Rory Jones, Joe Wallace and Summer Said – The Wall Street Journal
Abu Dhabi’s massive national oil company is in talks to buy commodity trading house Gunvor Group according to people familiar with the talks, a deal that would create one of the world’s largest traders of oil-and-gas products as the war in Ukraine is disrupting global energy supply. Abu Dhabi National Oil Co. is considering a minority stake or taking full control of Gunvor, merging it with the Emirati oil firm’s own trading company, these people said. A deal would mark a major overseas investment for a Gulf state flush with cash earned from elevated oil prices. A deal still might fail to come together, these people added.
Russian Aluminum Imports Are Hurting US Market, Rio Tinto CEO Warns; ‘It just looks strange,’ CEO says about Russian shipments; Aluminum imports from Russia are up almost 60% since April
Joe Deaux – Bloomberg
Rio Tinto Plc’s top executive is raising the alarm that the unfettered flow of Russian aluminum into the US is making North American producers less competitive. Russian imports, which remain exempt from US sanctions, are flowing into the country unrestricted when allies like Australia continue to face restrictions left over from the Trump administration, Chief Executive Officer Jakob Stausholm said in an interview at Bloomberg’s New York headquarters. His comments are the most candid about the aluminum industry since taking the helm of Rio at the start of 2021.
Top Gold CEOs Say Soaring Costs Will Hobble Mining Industry Into 2023; Newmont’s chief says world faces volatile economic environment; Barrick CEO sees world at ‘inflection point’ amid uncertainty
Yvonne Yue Li – Bloomberg
The world’s top gold mining executives see cost pressures sticking around into next year, adding to industry headwinds fueled by economic and political uncertainty, supply-chain disruptions and surging interest rates. Those gathering at the Denver Gold Forum this week shared a collective view that the current economic environment is unprecedented. Gold producers are grappling with the byproduct of a hawkish US central bank whose efforts to combat inflation have supercharged the dollar and driven down bullion prices. Gold prices are under pressure and equities tied to the yellow metal have slumped. A gauge of gold companies has fallen 16% this year, lagging the 7.9% decline of the precious metal.
Think of Powell as Volcker’s Wannabe Second Coming; The Fed chair is plainly channeling his legendary predecessor, and markets finally realize that no early pivot to ease rates seems likely.
John Authers – Bloomberg
It looks like Jerome Powell made himself clear this time. After a bizarre summer in which investors convinced themselves that a Fed “pivot” toward easier money was imminent, the Federal Open Market Committee announced another 75 basis-point hike to the fed funds rate, implicitly promised more of the same, and then watched as markets crossed critical landmarks.
Investors criticise US accounting standards as outdated; SEC urged to shake up rulemaking body that ‘has not kept pace’ with business
Stephen Foley – Financial Times
Frustrated investors are demanding a shake-up of the top US accounting rulemaker, saying its outdated standards mean companies’ financial statements no longer properly reflect their underlying businesses. An influential advisory group said that the Financial Accounting Standards Board needs tough new oversight and a revamped decision-making process to speed up its work. It can sometimes take more than 20 years to update rules on how to calculate vital financial metrics such as cash flow and asset values, the group said.
America Has Lost Its Oil Buffer; The Strategic Petroleum Reserve is at historically low levels, when there are still many supply uncertainties
Jinjoo Lee – The Wall Street Journal
Brace for impact: The U.S. is running out of a cushion reserved for oil shocks. The U.S. Energy Information Administration said Wednesday that the Strategic Petroleum Reserve declined by nearly 7 million barrels in the week ended Sept. 16, leaving it at roughly 427 million barrels—the lowest since 1984. For the first time since 1983, the SPR now holds less oil than commercial storage.
Environmental, Social and Corporate Governance
Larry Fink at BlackRock: Linking Purpose to Profit
Cold Call Podcast – Harvard Business Review
What role should investors play in urging business leaders to take environmental, social, and governance (ESG) issues more seriously and enforcing compliance?
Instinet And Wildlife Conservation Society Launch REDD Positive Campaign – The WCS REDD Positive Fund Will Accelerate The Development Of REDD Positive Projects Worldwide
Instinet Holdings Incorporated, a wholly owned subsidiary of Nomura, today announced a project undertaken with the Wildlife Conservation Society (“WCS”) called REDD Positive, which is designed to fund and accelerate early-stage forest conservation and reforestation projects and to provide education about the critical role nature-positive solutions play in processing greenhouse gasses.
Business needs selfish reasons to be green; Green technologies that boost the bottom line have a vital role in the climate fight
Gillian Tett – Financial Times
This week world leaders have been flocking to the United Nations General Assembly, known as UNGA, in New York, keen to do business face to face after years of disruption. The last time they were gathered at the summit in 2019, global politicians were accused by 16-year-old Greta Thunberg of failing the world’s youth with their response to global warming. This time around, a contrasting figure attempted to take the high ground in the climate debate. On Monday, Andrew “Twiggy” Forrest, a pugnacious Australian mining magnate with an estimated fortune of US$15.6bn, announced that his metals group Fortescue would spend more than $6bn to stop using fossil fuels in the next few years. These would, he said, be replaced with renewable energy sources, such as green hydrogen.
UBS Loses Texas Muni Deal After It’s Named an Energy-Industry Boycotter; Texas school district planned to work with UBS unit on bond; State AG’s office told district it wouldn’t approve the sale
Amanda Albright and Danielle Moran – Bloomberg
UBS Group AG’s municipal-underwriting subsidiary lost out on a Texas bond deal after the state comptroller included the parent company on a list of firms he deems “boycott” the fossil fuels industry. Normangee Independent School District, about 140 miles (225 kilometers) south of Dallas, had accepted a bid by UBS Financial Services Inc. to underwrite a bond deal sold via auction Aug. 8, according to bond documents. But two weeks later, state Comptroller Glenn Hegar, a Republican, included UBS Group on a list of 10 companies that his office considers boycott the energy business. There’s typically a weeks-long gap between when a muni deal prices and when it closes.
Dimon Defends Need for Fossil-Fuel Investments to Congress
Max Reyes and Saijel Kishan – Bloomberg
JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said that the US needs to invest in the fossil-fuel industry to reduce greenhouse-gas emissions in the long term and protect economic growth. “We aren’t getting this one right,” Dimon said when asked for his stance on the nation’s energy strategy during testimony before Congress Wednesday. “Investing in the oil and gas complex is good for reducing CO2.” Dimon also answered multiple questions on environmental, social and governance investing. He said that there needs to be “more work” in making clear what ESG ratings are and what they mean.
California is awash in renewable energy — except when it’s most needed; The state has moved quickly to increase solar power, but can’t store it all for peak demand hours
Erica Werner – The Washington Post
As California suffered through an epic heat wave this month, state officials pleaded with residents to conserve electricity. Almost simultaneously, power grid operators were rejecting thousands of megawatts of solar and wind energy that could have provided a cushion to get through the crisis. The explanation illustrates one of the paradoxes confronting California as it rushes to transition to a clean-energy economy: The state has built up so much renewable energy production in recent years that it can rarely use it all during peak production hours. But it also doesn’t have enough storage capacity to hang onto it for when it might be needed.
HSBC Asset Management to Phase Out Thermal Coal in Active Funds; Move comes as 2022 global coal demand returns to peak level; Critics say HSBC’s plan has ‘loopholes’ and is short on detail
Sheryl Tian Tong Lee – Bloomberg
HSBC Asset Management will exclude thermal coal companies from its active funds by 2040, but that policy won’t apply to its existing exchange-traded and index products. Starting today, the $595 billion asset manager will not participate in listings or primary debt issuance of companies engaged in thermal coal expansion, it said in a statement.
The International Sustainability Standards Board (ISSB) is meeting today from 14:30 BST / 15:30 CEST to discuss financed and facilitated emissions for climate-related disclosures.
Access the agenda papers and watch live.
CDP expands global environmental disclosure system to help tackle plastic pollution crisis
If growth in single-use plastic production continues at current rates, it will account for 5 – 10% of global emissions by 2050; Plastic waste is entering the ocean at a rate of about 11 million metric tons a year, harming marine life and damaging habitats. Companies face US$100 billion annual financial risk if governments require them to cover waste management costs at expected volumes and recyclability. Despite the globally accepted scale of the problem and extent of its impacts, many companies still have a limited understanding of how they contribute to plastic pollution and their exposure to commercial, legal, and reputational risks linked to plastic pollutio. Over 13,000 companies worth over 64% of global market capitalization, disclosed data through CDP on climate change, water security and deforestation in 2021. In 2022, more than 680 financial institutions worth over US$130 trillion in assets requested companies to disclose through CDP.
Banking C.E.O.s Face a Grilling on Capitol Hill; The chief executives of JPMorgan Chase, Bank of America and Citigroup are among the Wall Street leaders set to testify in Washington.
Andrew Ross Sorkin, Bernhard Warner, Vivian Giang, Sarah Kessler, Stephen Gandel, Michael J. de la Merced, Lauren Hirsch and Ephrat Livni – The New York Times
This morning, the heads of the nation’s seven largest banks are in Washington for two days of testimony, starting in the House. More than a decade after bank C.E.O.s were in the hot seat during the financial crisis, many of the same issues remain. JPMorgan Chase, Bank of America and Citigroup are bigger than ever, with nearly $10 trillion in assets between them — about 50 percent more than five years ago. Jamie Dimon of JPMorgan, according to his written testimony, plans to say that regulations have made banks play it too safe with capital requirements, putting them at a disadvantage against foreign competitors. (Reality check: China’s largest bank, ICBC, made $2 billion in profit in its last fiscal year. JPMorgan, the largest in the U.S., made $48 billion.)
U.S. bank CEOs back Fed hikes during congressional grilling on economy, China ties
Pete Schroeder, Lananh Nguyen and Saeed Azhar – Reuters
The country’s top bank chiefs endorsed U.S. Federal Reserve rate hikes as a means to tame soaring inflation, while acknowledging there will be pain ahead, when appearing before Congress during a wide-ranging and mostly sedate hearing on Wednesday. The line-up before the House of Representatives Financial Services Committee included CEOs of the four largest U.S. banks: JPMorgan Chase & Co’s (JPM.N) Jamie Dimon, Wells Fargo’s (WFC.N) Charles Scharf, Bank of America’s (BAC.N) Brian Moynihan and Citigroup’s Jane Fraser. They were joined by the CEOs of the country’s largest regional lenders, US Bancorp (USB.N), PNC Financial (PNC.N) and Truist (TFC.N).
Somerset Capital for sale in potential windfall for Jacob Rees-Mogg; Emerging markets asset manager explores management buyout or deal with rival
Adrienne Klasa, Harriet Agnew and Emma Dunkley – Financial Times
Somerset Capital is exploring a sale in a deal that would provide a windfall to business secretary Jacob Rees-Mogg, who co-founded the boutique fund manager. Three people familiar with the situation said talks to sell the firm, which manages about $5bn, were being held as chief executive Dominic Johnson prepares to step down ahead of a potential move into politics.
Deutsche Bank’s New London Headquarters to Sell for a Discount; Landsec agreed to sell at a 9% discount to the last valuation; The buyer is an investment vehicle managed by Lendlease
Jack Sidders – Bloomberg
Land Securities Group Plc has agreed to sell the building that will house Deutsche Bank AG’s new London headquarters at a sharp discount to its valuation. Landsec has exchanged contracts for the sale of the office development with an investment vehicle managed by Australia’s Lendlease Corp. for £809 million ($917 million), according to a statement Wednesday. That’s 9% less than the March valuation but promises to yield £145 million of development profit.
Societe Generale Introduces Services for Asset Managers Developing Crypto Funds
Jamie Crawley – CoinDesk
Societe Generale (GLE), the third-largest French bank by market cap, has introduced new services for asset manager clients that are looking to respond to the increased demand from investors for cryptocurrencies
Credit Suisse considers splitting investment bank in three – FT
Credit Suisse Group AG has drawn up plans to split its investment bank in three, the Financial Times reported on Thursday, as the Swiss lender attempts to emerge from three years of relentless scandals. Under proposals to the board, the bank is looking to sell profitable units such as its securitised products business to prevent a damaging capital raise, the report said, citing people familiar with the plans. Credit Suisse declined to comment on the story when contacted by Reuters.
U.S. CDC expects Omicron COVID boosters for kids by mid-October
The U.S. Centers for Disease Control and Prevention expects COVID-19 vaccine boosters targeting circulating variants of the virus to be available for children aged 5-11 years by mid-October. The CDC said in a document released on Tuesday that it expects to make a recommendation in early- to mid-October on the use of the new bivalent vaccines in the group, if they are authorized by the U.S. Food and Drug Administration (FDA). The vaccines, which target both the original version and the currently circulating variants of the virus, were rolled out for people 12 years or older earlier this month.
Covid Still Kills, but the Demographics of Its Victims Are Shifting
Phillip Reese – KHN
As California settles into a third year of pandemic, covid-19 continues to pose a serious threat of death. But the number of people dying — and the demographics of those falling victim — has shifted notably from the first two years. Given the collective immunity people have garnered through a combination of mass vaccination and protections built from earlier infections, Californians overall were far less likely to die from covid in 2022, when the omicron variant dominated, than during the first two years of the pandemic, when other variants were largely at play, amplifying a national trend.
Queen Margrethe of Denmark diagnosed with COVID after attending funeral
Queen Margrethe of Denmark has tested positive for COVID-19 for the second time this year, the royal court said on Wednesday. The 82-year-old head of state, who has been on the throne for half a century, has cancelled her appointments for the week. She attended the Queen Elizabeth’s funeral in London on Monday. Queen Margrethe, who has been vaccinated against the coronavirus, was also diagnosed with COVID-19 in February this year, showing mild symptoms at the time.
Hong Kong Won’t Return to Zero Covid Cases as City Weighs Easing; Virus set to linger in the community, though cases will fall; Public hospitals will resume some non-emergency procedures
Jinshan Hong – Bloomberg
A Hong Kong health official said the Asian financial hub is unlikely to again see a day without any Covid-19 infections after keeping the virus largely at bay for the first two years of the pandemic. While cases won’t return to zero — a feat the city managed for most of last year due to some of the world’s strictest quarantine policies — the daily tally is likely to continue its downward trend, health official Albert Au said at a briefing on Thursday.
Indonesia Has Global Plans for Local Crypto Tokens
Sandali Handagama, Ni Dan – CoinDesk
If the Indonesian government is right, locally issued crypto tokens could one day join palm oil or coal among the southeast Asian country’s major export commodities.
Black Market Currency Trade Thrives In Ethiopia as Economy Tanks; Gap between informal and official exchange rates hits record; Foreign currency shortage, resurgence of civil war are factors
Fasika Tadesse – Bloomberg
The gap between the Ethiopian currency’s official and parallel-market exchange rates widened to a record as foreign reserves dwindled and fighting in the country’s north resumed. On Wednesday, the birr traded as high as 92 a dollar on the black market, while the official rate remained at 52.5, according to people familiar with the matter who asked not to be identified speaking about the parallel market.
Crypto Exchange CoinCorner Eyes Middle East Expansion Via Partnership With Emirates CEO’s Private Office
Jamie Crawley – CoinDesk
Isle of Man-based crypto exchange CoinCorner is looking to expand across the Middle East through a partnership with the private office of Sheikh Saeed bin Ahmed Al Maktoum, CEO of the Emirates airline and member of the ruling family of Dubai.
With fresh firepower, brutal bank thieves blitz small-town Brazil
Gabriel Stargardter – Reuters
Shortly before dawn in late June 2019, a heavily armed crew of bank robbers rammed a truck into the Brazilian city of Uberaba’s main Banco do Brasil branch. They left the building several hours later with around $5 million dollars in cash. The thieves were part of a new class of stick-up artists, known as “novo cangaco” gangs, terrorizing Brazil’s interior. Using assault rifles and explosives to turn rural towns into war zones, the specialized crews have netted an astonishing $120 million since emerging in 2015, think tank Alpha Bravo Brasil says.
BP Says Two Employees Died After Fire at Ohio Refinery; British oil company had agreed to sell its stake in facility last month
Jenny Strasburg and Collin Eaton – The Wall Street Journal
BP PLC said two employees have died after suffering injuries in a fire at its Husky Toledo Refinery in Ohio. The London-based oil company said Wednesday that it had shut down the refinery, which it operates. It owns a 50% stake in the facility. BP said the fire was extinguished at 10:15 p.m. Tuesday night local time, and that all other employees had been accounted for. The company didn’t identify the two employees who died. Eric Sweeney, a staff union representative at the United Steelworkers District One Local 346, said Wednesday the two workers who died were brothers Ben and Max Morrissey. The spouse of one of the men confirmed their identities, earlier reported by the Toledo Blade.
Columbia, MIT Explore the Future of Work With New Business School Courses; Leading MBA programs have added further workplace topics to course catalogs, addressing issues from AI hiring software to hybrid work schedules.
Matthew Boyle – Bloomberg
While businesses figure out how to navigate the future of work, business schools face a different challenge: how to teach it. Unlike such MBA staples as accounting or marketing, a subject as broad and sweeping as “work” doesn’t easily lend itself to a typical classroom approach. A course could include discussion of such topics as hybrid work schedules, diversity and inclusion, artificial intelligence hiring algorithms, and the rising labor movement at Starbucks Corp.
Kittyhawk, Larry Page’s Flying-Car Company, Will Shut Down; Wisk, the startup’s joint venture with Boeing, will live on; Kittyhawk was founded in 2010 to popularize eVTOL aircraft
Mark Bergen and Julie Johnsson – Bloomberg
Kittyhawk, the air-taxi company backed by billionaire Google co-founder Larry Page, will be closing down, dealing a setback to the long-elusive dream of developing flying cars. “We have made the decision to wind down Kittyhawk,” the company said on Twitter. “We’re still working on the details of what’s next.” The company’s technology is expected to live on in the form of its Wisk Aero joint venture with Boeing Co. Wisk’s operations won’t be affected by Kittyhawk’s shutdown, Boeing said on Wednesday.
Ex-Tate Modern Boss Builds New Fund Targeting Minority Artists
Rafaela Lindeberg – Bloomberg
Two under-the-radar power brokers from the art world are building out an investment fund with “an activist approach” to diversity, focusing on undervalued female and minority artists. The Arte Collectum I fund is fronted by Tate Modern’s founding director Lars Nittve and Deborah Gunn, who previously managed the vast collection of Microsoft co-founder Paul Allen.