First Read

Feeling Sentimental: A New CME Group And Purdue University Indicator Shows Farm Sentiment
Spencer Doar – JLN

The University of Michigan developed its consumer sentiment index in the late 1940s and now it is a widely followed leading indicator of consumer behavior. Purdue University and CME Group hope to have come up with a similar indicator with the release of their Ag Economy Barometer.

“We felt that there was an information void with respect to sentiment of producers in the agricultural sector and that coincided with what CME was looking for — they wanted something that matched up with what takes place in the macro economy,” said Jim Mintert, Purdue’s director of the Center for Commercial Agriculture and lead researcher for the Ag Economy Barometer. “So, we patterned what we do after the University of Michigan survey of consumer sentiment.”

With so many different indexes and indicators churning around the market, it is surprising that there is not a widely distributed reading of producer sentiment.

Read the rest of the story here

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New Regional Director to lead the Chicago Chapter: Douglas Ashburn
Professional Risk Managers’ International Association – PRMIA
PRMIA announces today the appointment of Douglas Ashburn as the new Regional Director of the Chicago Chapter. Doug is a 20-year veteran derivatives trader who has “reinvented himself”? as a financial journalist. He is currently Chief Operating Officer and Editor-at-Large at John J. Lothian & Co., a Chicago-based financial media company.
goo.gl/j9Hv8h

***** Very deserving volunteer job for the hardest working COO at our company.

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Deutsche Bank Probes Trades That Made Employees Millions; Internal auditors examine whether current and former employees set up the transactions to make lender pay an inflated share of profits and fees to themselves and a hedge fund
By JENNY STRASBURG – WSJ
Deutsche Bank AG is investigating a series of trades that may have improperly generated millions of dollars in personal profits, some at the bank’s expense, for a handful of current and former employees, according to people familiar with the matter.
goo.gl/ENhox8

***** This is the kind of thing that can bring down banks. Deutsche Bank needs to do a complete investigation with a lot of integrity to separate themselves from this.

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INTERCONTINENTAL EXCHANGE RECOGNIZED FOR DATA EXCELLENCE AT INSIDE MARKET DATA’S 2016 AWARDS
ICE
Intercontinental Exchange (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced it received three awards in the 2016 Inside Market Data Awards. The honors were announced at the Awards Dinner in New York last night, hosted by Inside Market Data and Inside Reference Data, which are part of Incisive Media.
goo.gl/1dKyow

***** I have an inside voice and an outside voice. If won an award from Inside Market Data, I would will still use my outside voice.

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CBOE’s Thomas Knorring Inducted into Inside Market Data Hall of Fame
CBOE
The Chicago Board Options Exchange (CBOE) announced today that Thomas Knorring, CBOE Vice President, Business Development, has been inducted into the Inside Market Data Hall of Fame. Knorring was honored during an award ceremony in New York City on May 18, 2016
goo.gl/T5PHck

**** I hope Thomas Knorring has an outside voice.

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Venmo is turning our friends into petty jerks
Kari Paul – Quartz
Stephanie, a 24-year-old living in New York City, went over to a friend’s apartment one recent night for a laid-back night of watching Master of None on Netflix. When she got there, the friend offered her some wine, and they spent a few hours catching up. But on her way out the door, Stephanie was surprised to see a notification on her phone from the digital wallet app Venmo. Her friend had just requested a payment of $6 for the wine they had shared.
goo.gl/Hv2A3s

****** What are friends for if you can’t enjoy some of their free wine?

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Former Hedgeye And Business Insider Employee Arrested For Robbing Three Banks
Tyler Durden – Zero Hedge
The last time we heard the name Vincent Veneziani was several years ago, when he was at Business Insider, a close friend with all of Henry Blodget’s editors and writers, writing stories about Wall Street criminals and frauds such as “Ponzi Schemer Kenneth Starr’s Super Swanky Upper East Side Condo Just Sold For $5.63 Million” and “The Complete Story Of How Lenny Dykstra Went From The Top Of The World To The Jailhouse.” The inherent irony here will become evident in a few moments.
goo.gl/KZlBuK

***** One word. Heroin.

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Thursday’s Top Three
Our top story yesterday was out front by leaps and bounds. Indeed I’ve never seen a story outpace all the rest as much as FCM Rankings – Q1 2016 did. A relatively distant second was the story Opinion: Fighting the next global financial crisis instead of the last one. Rounding out the top three for the week is the story Hedge fund took out loan for private jet amid bribery inquiry

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Did You Know?

As CBOE Chairman Bill Brodsky announces his resignation, here are some interesting facts worth noting in today’s “Did You Know?”

From Brodsky’s MarketsWiki bio page:

  • Technically, Brodsky served as an executive in almost all of the leading U.S. exchanges (except Nasdaq). Most know that he was CEO of CME Group before leading CBOE for 16 years, but before that he served as an executive VP at Amex, which later became part of NYSE, which was, of course, acquired by ICE. So he can trace his roots back to all.
  • He began his career as an attorney, and kept his memberships to the Illinois and New York Bar Associations throughout his stints as CEO.
  • His civic activities include chairman of the board of directors at Northwestern Memorial Hospital, and in 2013 he was elected chairman of Navy Pier, Inc.
  • Brodsky has perhaps the finest collection of exchange memorabilia in the industry. His “museum” includes artwork of exchanges around the world and one of the original Quotron machines.
  • And, finally, Brodsky’s law school friend at Syracuse University was none other than vice president Joe Biden. They are still friends today.
“Did You Know?”
is brought to you by:
MarketsWiki

 

Lead Stories

Brodsky, CBOE Chairman Who Took Exchange Public, to Resign
Brian Louis – Bloomberg
Career includes CEO roles at two pillars of trading in Chicago; Oversaw launch of CME’s now-dominant Globex platform
William Brodsky, 72, will step down as chairman of CBOE Holdings Inc. next year, ending a two-decade run at the biggest U.S. options exchange that he took public in 2010.
goo.gl/ftG4OJ

Nasdaq Hints at Court Battle With SEC Over IEX’s Application
Annie Massa – Bloomberg
Exchange says courts would reject a recent move by regulators; Raises stakes in battle over IEX’s 350-microsecond speed bump
Nasdaq Inc. fired a warning shot at regulators considering IEX Group Inc.’s plan to convert into an official U.S. stock exchange, arguing that a legal challenge to an approval would probably succeed.
goo.gl/NjlclZ

Mt. Gox and the mother of all short squeezes
Izabella Kaminska – FT
When Mt. Gox, the Japan-based bitcoin exchange run by Mark Karpeles, stopped honouring redemptions on February 7, 2014, the company initially blamed the affair on an obscure tech fail known as a malleability issue. Many, however, were unconvinced by the explanation, suspecting foul play, a hack or an inside job.
goo.gl/IutFSW

Leaving Europe Is a Risk the U.K. Shouldn’t Take
By Michael R. Bloomberg – Bloomberg
The British electorate does not need Americans to tell them how to vote in the June 23 referendum, and I wouldn’t dare try. I have always had great admiration for the British people — and great respect for the country’s democratic traditions. But from across the Atlantic, we Yanks are watching the campaign closely — and many of us who have deep personal and business ties to the U.K. can’t help but take a close interest.
goo.gl/7lOuBR

Canada urges Britain to stay in the EU; Justin Trudeau shoots down Brexit campaigners’ suggestion that UK could follow ‘Canadian model’ on trade
Rowena Mason and agency – The Guardian
The prime minister of Canada has told the UK that striking trade deals from outside the EU is neither easy nor automatic, after leave campaigners argued his country was a potential model for Britain if it left the union.
goo.gl/pLaqiH

Top Democratic senator probes SWIFT, NY Fed about Bangladesh heist
BY DUSTIN VOLZ AND SWETA SINGH – Reuters
The Senate Homeland Security Committee’s top Democrat sought information Thursday from global financial network SWIFT and the Federal Reserve Bank of New York on steps being taken to bolster cyber security in the wake of the theft of $81 million from the central bank of Bangladesh.
goo.gl/3nVQXS

It hasn’t gotten any better on Wall Street, and that does not bode well
Matt Turner – Business Insider
Wall Street investment banks had a lousy January and February. That put a serious dent in revenues, as the first quarter of the year is usually responsible for a disproportionate fraction of annual revenues.
goo.gl/5jN9RW

How Wall Street Led LendingClub Into Crisis
Hugh Son, Noah Buhayar, Dakin Campbell – Bloomberg
John Mack helped online-loan venture as it sought more funding; His former bank, Morgan Stanley, oversees third-biggest stake
John Mack, a crisp, red windbreaker over his business suit, climbed the dais at the New York Stock Exchange to hail the coming revolution.
goo.gl/AstGUr

Money managers seek AI’s ‘deep learning’; As artificial intelligence techniques advance, the investment industry pays more attention
by: Robin Wigglesworth – FT
In 1957 Frank Rosenblatt and the eggheads of the Cornell Aeronautical Laboratory invented the Perceptron, a machine that the New York Times wrote could be “the embryo of an electronic computer that [the Navy] expects will be able to walk, talk, see, write, reproduce itself and be conscious of its existence”. In short, artificial intelligence.
/goo.gl/rvuvtE

Research uncovers new sources of financial model risk; Past performance of financial models is no guarantee of future success, two forthcoming papers suggest
Alexander Campbell – Risk.net
Investment managers will typically select financial models by looking at their past performance and using backtesting, but two academic studies forthcoming in Risk Journals suggest that approach may be mistaken.
goo.gl/17gDC9

Dudley joins chorus of Fed officials seeing rate hikes soon
BY LINDSAY DUNSMUIR AND RICHARD LEONG – Reuters
The U.S. economy could be strong enough to warrant an interest rate increase in June or July, New York Federal Reserve President William Dudley said on Thursday, cementing Wall Street’s view that the Fed will tighten policy soon.
goo.gl/YLwgpN

Regulatory

U.S. futures regulator targets cyber security, automated trading
BY LISA LAMBERT – Reuters
The U.S. Commodity Futures Trading Commission plans to finalize rules on cyber security, automated trading and position limits this year, as it tidies up final requirements related to the Dodd-Frank financial reform law, its chairman said on Thursday.
goo.gl/yOgX6C

Global FX market growth has been slowed by regulation and lack of Prime Brokers – says ADS Securities
FX-MM.com
Tighter regulation, reduced risk appetite and the decline in the number of Prime Brokers (PBs) are affecting growth in the global FX market, according to ADS Securities. An estimated 25 per cent drop in available FX trading lines is leading to wider spreads, higher prices and increased foreign currency exposure for many participants.
goo.gl/Qb7vTw

Och-Ziff bribery probe: what is at stake?; Hedge fund expects penalties of at least $200m
by: Lindsay Fortado and Miles Johnson – FT
Och-Ziff, one of the world’s largest hedge funds with about $42bn in assets under management, is being investigated over whether it paid bribes in Zimbabwe, Congo and Libya. It has set aside $200m to pay fines to US authorities. Its founder, Daniel Och, said the firm expected the penalties from the Department of Justice and Securities and Exchange Commission to exceed that amount. If a case is brought, it would be the first hedge fund to face a penalty for alleged violations of the 1977 US Foreign Corrupt Practices Act. DoJ officials have recently stepped up their efforts to eradicate overseas bribery and are aiming to prosecute individuals.
/goo.gl/7FgYXn

Greg Medcraft passes IOSCO leadership to Ashley Alder of the Hong Kong SFC
ASIC
ASIC Chairman Greg Medcraft has confirmed he has decided not to seek a further term as chairman of the board of the International Organization of Securities Commissions (IOSCO). The new IOSCO Chairman will be Ashley Alder, CEO of the Securities and Futures Commission (SFC) of Hong Kong and Vice Chair of the IOSCO Board.
goo.gl/f5h811

Exchanges & Trading Facilities

CBOE Chairman Bill Brodsky to exit board, company
By LYNNE MAREK – Crain’s Chicago Business
CBOE Holdings Chairman Bill Brodsky plans to leave the company’s board next year after having leadership roles at the Chicago Board Options Exchange parent since 1997.
goo.gl/fYUTl4

Go slow for LSE takeover as regulatory obstacles, Brexit and EU politics rear their ugly head
By ALEX BRUMMER -THE DAILY MAIL
The very idea that somehow the £21bn ‘merger of equals’ between the London Stock Exchange and Deutsche Boerse would be done and dusted before the Brexit referendum was always a fantasy.
goo.gl/ytpA3F

Settling grain exchange dispute better for both parties as NZX faces legal bill of up to $10M Bennett
By Paul McBeth – Scoop.co.nz
NZX chief executive Tim Bennett says settling the long-running dispute with the former owners of the Clear Grain Exchange would have been in both parties’ interests with 11-week long trial and its five-year lead-up likely to cost the stock market operator as much as $10 million.
goo.gl/5AWXFp

Nasdaq goes nuclear on the SEC
Matt Turner and Richard Feloni – Business Insider
In a letter to the US Securities and Exchange Commission, Nasdaq’s law firm, Gibson Dunn, said that the SEC could be sued if it approves IEX’s application to become an exchange.
goo.gl/qU24KL

Nasdaq raises the temperature in IEX battle; Warning that SEC could be open to lawsuits over start-up’s bid to become an exchange
By Nicole Bullock in New York
Nasdaq has turned up the heat in the ongoing battle over IEX, arguing that the Securities and Exchange Commission could leave itself open to lawsuits if an application by the start-up trading venue to become an exchange is approved.
/goo.gl/bLjfHC

Options on three-month EURIBOR Futures: Amendment of Annex C to the Contract Specifications for Futures Contracts and Options Contracts at Eurex Deutschland and Eurex Zürich for options on three-month EURIBOR Futures
Durex
The Management Board of Eurex Deutschland and the Executive Board of Eurex Zürich AG decided to amend Annex C to the Contract Specifications for Futures Contracts and Options Contracts at Eurex Deutschland and Eurex Zürich with respect to options on three-month EURIBOR Futures effective
24 May 2016.
/goo.gl/V7FXKG

A. Single Stock Futures: Introduction of seven Single Stock Futures; B. Single Stock Dividend Futures: Introduction of two Single Stock Dividend Futures
Eurex
The Management Board of Eurex Deutschland and the Executive Board of Eurex Zürich AG took the following decision with effect from 30 May 2016:
/goo.gl/Suoyqm

SGX welcomes Manulife US REIT to Mainboard
SGX
Singapore Exchange (SGX) today welcomed Manulife US REIT to Mainboard under the stock code “BTOU”
goo.gl/rKEHKK

Performance Bond Requirements: Agriculture, Refined Products, Equity, Interest Rates, Electricity, Natural Gas – Effective May 20
CME Group
goo.gl/xLjxoH

New Product Summary: NYISO Lower Hudson Valley Capacity Calendar-Month Futures
CME Group
goo.gl/lkwLAH

New Product Summary: Listing of Aluminum A380 Alloy (S&P Global Platts) Futures Contract
CME Group
goo.gl/Gcvo1r

Product Modification Summary: Reduction of the Block Trade Minimum Quantity Level for the E-mini Nifty 50 Index Futures and USD Denominated Ibovespa Futures Contracts – Effective June 6, 2016
CME Group
goo.gl/vESYSH

Parker Fitzgerald’s Quarterly Outlook (1st edition): Banking risk in the digital age
Eurex
This is the first in a regular series of forward-looking reports published by Parker Fitzgerald, examining some of the key challenges that the financial services sector faces as it continues to evolve in a world of rapid technological, operational and regulatory change.
goo.gl/741jKR

Tradeweb pushes new credit trading model in Europe
By Tim Cave – Financial News
Tradeweb, an operator of electronic fixed income trading platforms, has adopted a new approach to credit trading in Europe as it responds to increased competition and reduced liquidity in the sector.
goo.gl/jGXpLW

Technology

Bitcoin exchange Coinbase to add ether currency to trading platform
BY GERTRUDE CHAVEZ-DREYFUSS – Reuters
Bitcoin exchange Coinbase said on Thursday it will add digital currency ether on its trading platform next Tuesday.
goo.gl/WBqcJK

FinTech: The New World Order and Its 5 Pillars
By Oscar Jofre – Business.com
FinTech: The New World Order and Its 5 Pillars
Like most of you today, I spend a lot of time reading about FinTech.
goo.gl/GGdOjD

A brutal remark from a high-speed trader tells you everything you need to know about where Wall Street is headed
Matt Turner – Business Insider
A trade body set up by high-frequency-trading firms just released a video meant to highlight the benefits that these kinds of firms bring to financial markets.
goo.gl/L5RfBh

The high-speed traders that have been vilified on Wall Street want you to hear their side of the story
Matt Turner – Business Insider
Modern Markets Initiative (MMI), an industry body set to up to promote the benefits of high frequency trading, is making a new effort to demystify the firms.
goo.gl/FHI7nR

Fintech can’t disrupt Wall Street: Report; Fintech start-ups may have raised billions from investors, but Wall Street banks are still well-positioned, Moody’s says.
Jon Marino – CNBC
Wall Street banks’ defense system against a growing onslaught of start-ups is working, according to a Moody’s report, which says that while banks may lose some market share to financial technology competitors, industry incumbents will survive.
goo.gl/mHtmao

Next Money Launch The first Global Fintech Radar Challenge To The Open Source Developer Community
Mondovisione
Next Money, the world’s biggest and broadest fintech community platform, have today announced the Global Fintech Radar Challenge. The challenge asks Open Source developers and platforms to create and produce the world’s leading aggregation tool for fintech data, news, insights, social media interactions, startups and companies, industry trends and patents.
goo.gl/znNlKG

French free ‘school of the future’ heads for Silicon Valley; Billionaire Xavier Niel to open $100m Silicon Valley branch of his maverick computing university ’42’
by: Adam Thomson in Paris
Thibaut Noah sits at an oversized computer screen, eyes staring through yellow tinted glasses, his tattooed fingers furiously typing out strings of code at France’s strangest university.
/goo.gl/YMBFbS

Blockchain, Brexit and Libor
Alexander Campbell – Risk.net
Bitcoin’s architects (still anonymous) had hoped to revolutionise the world of currency by replacing conventional money with anonymous transactions registered using blockchain technology. This hasn’t happened, but there are signs that, in the more specialised area of securities dealing, the underlying blockchain technology could produce real improvements.
goo.gl/jh673z

Politics

UK could need interest rate cuts even if voters shun Brexit, admits Bank of England official
Szu Ping Chan, Peter Spence – The Telegraph
The Bank of England must stand ready to slash interest rates towards zero if the economy does not bounce back quickly from its current malaise, according to a top official.
goo.gl/JSkoyi

Wall Street Displeased With Trump’s Call To Denudate Dodd-Frank Law
Manikandan Raman , Benzinga
U.S. banking lobbyists disagree with presidential candidate Donald Trump’s call to scrap President Barack Obama’s Dodd-Frank law, despite Trump’s justification (and some shared sentiments) that the law is overly burdensome, according to a Reuters report.
goo.gl/IEguOD

Shadow Banks Clinton Flags as Risky Put Millions Into Her Run
Bill Allison – Bloomberg
Clinton targets shadow banking in Wall Street regulatory plan; Blackstone, Centerbridge Partners among Clinton donors
Hillary Clinton has vowed to be tougher on Wall Street than any other presidential candidate, but that hasn’t stopped the financial industry from sending a flood of cash to help elect her.
goo.gl/ip36r3

Hedge Funds & Managed Futures

Investor Steven Cohen Wins Dismissal of Suit Tied to Divorce
By REUTERS – NY TimesThe Fed Has Something to Prove to Wall Street
Ye Xie – Bloomberg
Central bank mentions possibililty of rate increase in June; Investors not convinced as economy lacks strength, HSBC says
It’s hard to fault investors for being complacent when the Federal Reserve says it’s on the brink of raising interest rates again.
goo.gl/h5OxXZ

Steven A. Cohen, the billionaire investor. His ex-wife Patricia Cohen had accused him and his brother of understating the value of a real estate investment. A judge said Ms. Cohen failed to prove the charges. Credit Lucy Nicholson/Reuters
The billionaire investor Steven A. Cohen on Thursday won the dismissal of a long-running lawsuit in which his former wife accused him of cheating her out of millions of dollars in their 1990 divorce.
goo.gl/nYS1QX

Billionaire Steven Cohen wins dismissal of ex-wife’s fraud case
BY JONATHAN STEMPEL – Reuters
Billionaire investor Steven A. Cohen on Thursday won the dismissal of a long-running lawsuit in which his former wife accused him of cheating her out of millions of dollars in their 1990 divorce.
goo.gl/juCHNd

The Irresistible Force That Dominates Currency Markets Is Back
Lukanyo Mnyanda – Bloomberg
Emerging-market currencies most tied to stocks since 2013; HSBC says it’s becoming harder for investors to stand out
The global currency market is no longer its own master.
goo.gl/HWnBhP

The bond market could be recreating the massacre of 1994
Akin Oyedele – Business Insider
Investors could be setting up a repeat of 1994’s bond-market chaos, according to Deutsche Bank’s Torsten Sløk.
goo.gl/JUxc9b

DoubleLine, BlackRock Say Rate Hike Near as Traders Take Pause
Susanne Walker Barton, John Gittelsohn – Bloomberg
Gundlach says Fed has changed conditions needed for rate rise; Rieder sees FOMC action more likely at July meeting than June
DoubleLine Capital LP and BlackRock Inc. say it’s time for bond traders to start pricing back in the Federal Reserve.
goo.gl/tjVIgR

Opinion: What if central banks were no longer independent?
By JOACHIM FELS
Here’s a secular question for you: What if central banks weren’t independent?
goo.gl/QwvpNK

Banks & Brokers

Deutsche Bank internally probes dubious trades: WSJ
Reuters
Deutsche Bank AG (DBKGn.DE) is investigating a series of trades that may have improperly generated millions of dollars in personal profits, the Wall Street Journal reported on Thursday, citing people familiar with the matter.
goo.gl/HA8NJs

OTC Markets Group’s OTC Compliance Data File Wins at 2016 Inside Market Data/Inside Reference Data Awards
Press Release
OTC Markets Group Inc. (OTCQX: OTCM), operator of the OTCQX, OTCQB and Pink markets for 10,000 U.S. and global securities, today announced it has received the award for “Best Real-time Market Data Initiative (vendor)” in the 2016 Inside Market Data/Inside Reference Data Awards.
goo.gl/pzy9DK

4.9 billion euros is suing them for 5.7 billion euros
Bob Bryan – Business Insider
The case between one of Europe’s largest banks and a trader who lost them almost $7 billion just took another bizarre turn. Litigation has been ongoing for eight years between Jerome Kerviel and his former employer, Societe Generale, over bad bets that Kerviel made on stock market futures, and now Kerviel is fighting back
goo.gl/kzWs76

Piper Jaffray Admits It Was Wrong On Regis Math
By PATRICK SHERIDAN – WSJ
Piper Jaffray has undone its downgrade of Regis after it incorrectly calculated the potential impact of overtime costs from new federal regulations on the parent of salon chains including Supercuts.
goo.gl/iyMFOf

Deutsche Bank investors vote against executive pay packages; AGM criticism follows years of poor returns and high legal costs
by: James Shotter in Frankfurt – FT
Deutsche Bank has become the latest big company to be hit by investor ire over executive pay after shareholders voted down its new remuneration plan for top managers.
/goo.gl/0vTZLm

Clearing & Settlement

The Many Points Of Failure In The OTC Derivatives Markets
Seeking Alpha
This post is the first of several that will focus on the many ways financial market failure would be magnified by poor regulations, laws, and products in markets for OTC derivatives.
goo.gl/sai749

Indexes & Products

MSCI’s Decision On China A-Shares Nears
ETF.com
Hong Kong (Reuters) – Last June, MSCI decided against including China’s so-called A-shares in the index, a benchmark for some $1.5 trillion of assets, due to investment restrictions.
Since then, China has addressed many of MSCI’s concerns by relaxing its $81 billion qualified foreign institutional investor (QFII) scheme, a quota-based foreign investment scheme, and clarifying foreign ownership rights, prompting MSCI to reconsider inclusion of the A-shares.
goo.gl/F0gzDM

MSCI’s Phase Two Inclusion is Coming
www.nasdaq.com
On Thursday, May 12, MSCI announced the exact stocks that will be included into their global indexes as part of the Phase Two inclusion of U.S.-listed Chinese companies (N-shares). This inclusion story has largely been ignored by the mainstream financial press, yet it has captivated a niche group of ETF experts who understand that billions of dollars will be set into motion on May 31st, 2016.
goo.gl/PvD3cZ

Smart Beta ETF Industry Gets Vote of Confidence from Central Bank
www.nasdaq.com
Smart-beta exchange traded funds are a quickly growing segment of the fund industry, combining actively managed investment styles with a passive index-based structure. Investors, financial advisors, institutions and even the Bank of Japan have turned to these alternative index-based strategies.
goo.gl/j2Zw4m

Enforcement

SEC Announces Insider Trading Charges in Case Involving Sports Gambler and Board Member
SEC.gov
The SEC alleges that the sports gambler, William “Billy” Walters of Las Vegas, was owed money by then-Dean Foods Company board member Thomas C. Davis. According to the SEC complaint, Davis regularly shared inside information about Dean Foods with Walters in advance of market-moving events, using prepaid cell phones and other methods in an effort to avoid detection. The SEC further alleges that while Walters made millions of dollars insider trading using the confidential information, he provided Davis with almost $1 million and other benefits to help Davis address his financial debts.
1.usa.gov/1NAIlem

***DA: This is the case that involved Phil Mickelson who, according to the story, disgorged nearly a million dollars in trading profits.

Mayor in Illinois Settles Muni Bond Fraud Charges
SEC.gov
The SEC alleges that Eric J. Kellogg was connected to a series of fraudulent bond offerings by the city. Investors were told that their money would be used to develop and construct a Holiday Inn hotel in Harvey, but instead city officials diverted at least $1.7 million in bond proceeds to fund the city’s payroll and other operational costs unrelated to the hotel project.
1.usa.gov/1NAHFG5

FMA orders Cambrian to change misleading materials
FMA
The Financial Markets Authority (FMA) has ordered a foreign exchange educator to change its marketing materials on the basis that they were misleading or deceptive, and it had made unsubstantiated statements about its services.
goo.gl/DihJ7u

Credit Suisse Equities (Australia) Limited pays $74,000
ASIC
Credit Suisse Equities (Australia) Limited (“Credit Suisse”) has paid a penalty of $74,000 to comply with an infringement notice given to it by the Markets Disciplinary Panel (“MDP”).
goo.gl/mCjCdk

Mickelson paid off gambling debt with $1M made on insider trading: SEC
By Kaja Whitehouse – NY Post
Phil Mickelson has swung himself into some major trouble.
goo.gl/J7iRXE

Preet Bharara lands high-profile insider trading case
By Kevin Dugan – NY Post
Severely hampered in his pursuit of insider trading on Wall Street by a 2014 court case, Manhattan US Attorney Preet Bharara on Thursday showed financial pros he still has game.Despite having to climb a steeper evidentiary mountain, the hard-charging prosecutor announced insider-trading charges against Las Vegas high roller Billy Walters and former Dean Foods Chairman Tom Davis.
goo.gl/uhvdHb

FINRA Files Complaint Charging Lawson Financial Corporation, CEO With Fraudulent Municipal Bond Sales, and Charging CEO With Misuse of Customer’s Charitable Trust Funds
FINRA
The Financial Industry Regulatory Authority (FINRA) announced today that it has filed a complaint against Phoenix-based firm, Lawson Financial Corporation, Inc. (LFC), and Robert Lawson, the firm’s President and Chief Executive Officer, charging them with securities fraud in connection with the sale of millions of dollars of municipal revenue bonds to customers. The complaint further charges Robert Lawson and Pamela Lawson, LFC’s Chief Operating Officer, with self-dealing by abusing their positions as co-trustees of a charitable remainder trust and improperly using the trust funds to indirectly prop up the struggling offerings. Based on the transfers of millions of dollars from the charitable remainder trust account, the complaint also charges Robert Lawson with misuse of customer funds.
goo.gl/KdeEAj

The real story behind Phil Mickelson’s insider trading case
Daniel Roberts – Yahoo Finance
Pro golfer Phil Mickelson is back in headlines about insider trading today—but this time he’s actually a defendant. And behind the insider trading story, there’s a detail that might be more important to Mickelson’s reputation in golf: a gambling story.
/goo.gl/m9BhFR

Environmental & Energy

Delays by Energy Transfer Could Scuttle Merger With Williams, Suit Says
By LESLIE PICKER – NY Times
With no other options, Energy Transfer Equity needs to run down the clock.
If the pipeline company can delay filing all the documents it needs to complete its merger with the Williams Companies, it might not have to close the deal and pay a chunk of cash to shareholders.
goo.gl/QB3yWq

Imagine the fate of a global climate treaty without the EU
By Andrew Simms – The Guardian
In 1972 the law was passed that allowed the UK to join what was then called the European Economic Community (EEC).
goo.gl/KJwk8r

France sets carbon price floor
Reuters
France will set a carbon price floor of about 30 euros ($33.95) a tonne in its 2017 finance bill as the government seeks to kickstart broader European action to cut emissions and drive forward last year’s landmark international climate accord.
goo.gl/A62CA3

Israel, Egypt Said Nearing Compromise on Natural Gas Dispute
By David Wainer, Yaacov Benmeleh and Jonathan Ferziger – Bloomberg News
Israel and Egypt are close to a compromise that would sweep away a major obstacle to a multibillion-dollar natural gas deal.
goo.gl/CqzC61

Hong Kong council to issue green finance proposals next week
Reuters
An advisory council to the Hong Kong government will unveil a series of recommendations to attract green finance investments to the city next week, the chairman of the council told Reuters.
“Green finance is absolutely new in Hong Kong and I think not many people are doing it in Asia and that is why we feel we should seize the opportunity,” said Laura Cha, chairman of Hong Kong’s Financial Services Development Council (FSDC).
goo.gl/TQm4SW

Asia-Pacific

China reopens securitised bad-debt market; Eight-year hiatus ends amid push to improve bank balance sheets
by Don Weinland in Hong Kong
China is reopening its securitised bad debt market with two deals worth Rmb534m ($81.6m) this month, eight years after regulators shuttered the market at the onset of the global financial crisis.
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Hong Kong kicks off talks to boost scrutiny on stock markets
The Fiscal Times
Hong Kong’s markets regulator has taken the first step to introduce rules that would force stock brokers to disclose the individual identities of investors making equities trades in the city, three sources familiar with the matter said.
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China reopens securitised bad-debt market
Financial Times
China is reopening its securitised bad debt market with two deals worth Rmb534m ($81.6m) this month, eight years after regulators shuttered the market at the onset of the global financial crisis.
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Japan, U.S. remain at loggerheads over yen policy
Reuters
Japan and the United States remained at loggerheads over exchange-rate policy on Friday with Washington saying yen moves continued to be “orderly,” signaling that Tokyo has no justification to intervene in the market to stem yen gains.
Japanese Finance Minister Taro Aso reiterated Tokyo’s view that excessive and disorderly currency moves were undesirable, making it clear authorities won’t hesitate to step into the market if they consider any yen spike as out of line with economic fundamentals.
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Hong Kong has high hopes for innovative ETF expansion
By Deborah Fuhr – Financial News
The Hong Kong ETF ecosystem is looking to the listing of a range of innovative products as the catalyst to grow the sector, following a February announcement by the Securities and Futures Commission permitting them on its exchange. This range is to include leverage ETFs and inverse products, which fall in value when an index rises and rise when an index falls.
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Frontier Markets

Risk premiums
The Economist
MERELY keeping up with fevered events in Brazil has proved a challenge of late. The president suspended from office pending impeachment over dodgy government accounting; a caretaker administration left to tackle the worst recession since the 1930s; all amid an operatic bribery scandal with twists and turns that make Brazil’s telenovelas (soap operas) look logical. Staying ahead, as investors and businesses often need to, can seem a forlorn hope.
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Fed hike prospects keep emerging markets lower
Reuters
Emerging market assets edged higher on Friday but currencies were softer over the week and stocks on track for a fifth week in the red, weighed down by expectations of an impending U.S. interest rate rise.
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‘Here’s some fruit: now pay up,’ say Thai debt collectors
Reuters
When Piya Pong-acha’s employees chase payments from Thai debtors there are no strong men pounding on doors or threatening letters from lawyers. A basket of fruit and a polite home visit does the trick.
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Miscellaneous

‘Money Monster’ originally looked more like Oscar-nominee ‘The Big Short’; The film was first meant to explain the current market landscape
By TREY WILLIAMS – MarketWatch
“Money Monster,” the Jodie Foster-directed film following a bombastic financial news personality, a corrupt Wall Street and the ensuant hostage situation, isn’t the story the screenwriters originally set out to tell.
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The wealthy ‘make mistakes’, the poor go to jail; I left my Wall Street trader job and began photographing drug addicts in NYC. These two worlds have entirely different rules
Chris Arnade – The Guardian
I knew him as “Mr one-glove”. The origins of his nickname were cloudy, but had to do with his legendary stinginess. He had just lost his company close to $1bn betting on mortgages. That company, facing massive losses from him and other traders, had only staved off bankruptcy because of the grace of the government.
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Yahoo Suitors Expected to Bid $2 Billion to $3 Billion, Below Past Indications; Most of previous bids for core business came in the range of $4 billion and $8 billion; bids are due first week of June
By DOUGLAS MACMILLAN and RYAN KNUTSON – WSJ
Verizon Communications Inc. and others are expected to bid around $2 billion to $3 billion in the auction for Yahoo Inc.’s core business, less than what the troubled Internet pioneer was expected to fetch, according to people familiar with the matter.
goo.gl/V5XjuK

Louis Dreyfus says former CEO no longer on board
Reuters
Global agricultural trading group Louis Dreyfus Company announced on Thursday changes to its supervisory board that will see board member and former chief executive Serge Schoen leave the group.
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