First Read

Immigrant Killed in Manhattan Crane Collapse Recalled as Decent and Humble
The life of David Wichs, the 38-year-old trading firm employee who was killed Friday morning when an enormous construction crane crashed onto a street in Lower Manhattan, was distinguished by the kinds of achievements that figure in many immigrant dreams. But those who knew Mr. Wichs, who immigrated to the United States from Czechoslovakia as a teenager, remembered a fundamentally humble and warmhearted man. “David was the nicest, most trustworthy person that I have known,” said Mark Gorton, the founder and managing director of Tower Research Capital, the trading firm where he worked. “I have worked with him for over 15 years, and in that whole time, he treated every person he dealt with in a nice and decent way.”

***** Condolences to the family, friends and colleagues of David Wichs of Tower Research Capital.


Blu Monday
CME Group Chief Economist Blu Putnam released three short videos, an outlook on three asset classes, FX, interest rates and energy. Have a look; each is about three minutes long but together they paint a pretty accurate if not bleak picture for 2016.
FX Markets May Take Their Cue From Event Risk
Will Anemic U.S. Growth Put the Fed on Hold?
Tech Advances Shaping Oil Supply and Demand


WFE Monthly FOCUS E-Zine – February 2016
World Federation of Exchanges
The new issue is available on the WFE site. Contents include an in-depth interview with Nasdaq’s Sandy Frucher on global exchange collaboration, NYSE breaks new ground in compliance training, plus a look at the development of Arab exchanges, and of course, monthly market analysis and insight from the WFE statistics team.


Feb. 29-Mar 2, 2016, Bonita Springs, FL
Now in its 32st year in the U.S., the annual CBOE Risk Management Conference (RMC) is the premiere financial industry conference designed for institutional users of equity derivatives and volatility products. Hosted by the Chicago Board Options Exchange (CBOE), RMC is an educational forum dedicated to exploring the latest products, trading strategies and tactics used to manage risk exposure and enhance yields. RMC brings together top traders, strategists and researchers, enabling participants to learn the state-of-the-art in investment risk management from true experts in the field. Learn more HERE and register for the event HERE

*****John Lothian News is a media sponsor for this event.


American Financial Exchange – January Market Update
AFX is proud to report the following Market Highlights:
Trading surpassed $500 million in loans executed on the platform since inception
Trading ranged between 0.28% – 0.54% since the Federal Reserve raised their target interest rate with a median rate of 0.52%
The number of participants have more than doubled since the exchanged launched in mid-December.
(via email)


Women leaders deliver boost to profitability
Emily Cadman – FT
Forget women on boards and focus on women in leadership: that is the message from a major study of more than 21,000 public companies in 91 countries that found increasing the number of women in top management positions notably boosts profitability.

***** Focus on the word “Leaders”


Survey Says – Give the readers what they want!
Time is running out for our 2016 survey campaign. Help us help you by giving us three minutes of your time and sharing your thoughts. Plus, we tried to make it fun and colorful. The final kicker? You could win an Apple Watch. Click HERE to get started.


Bridging the Week by Gary DeWaal: February 1 – 5 and 8, 2016 (Dark Pools; Manipulation; Position Limits; Wash Trades; Purposeful Regulation)
by Gary DeWaal, Katten Muchin Rosenman LLP
Last week, two broker-dealers agreed to pay substantial fines to resolve New York State and Securities and Exchange Commission allegations of wrongdoing by their dark pools. In addition, one futures exchange issued a helpful Frequently Asked Questions regarding its position limits’ requirements, while another published a FAQ regarding wash trades. Finally, both the heads of the Commodity Futures Trading Commission and UK Financial Conduct Authority spoke publicly about proposed new rules regarding position limits – but one strongly criticized her continent’s proposed rules as “not necessary.”


Friday’s Top Three
The click-count winner Friday was the FT story High-frequency trader warns of potential market ‘catastrophe’, in which Tower Research’s Mark Gorton expounds on key market structure issues. Second place also went to the FT, the one in which ICE’s Jeff Sprecher refers to upstart dark pool/exchange IEX‘s plan ‘un-American”. Filling out the top three was the latest development in the Navinder Sarao saga, Navinder Sarao sent millions of trade messages ahead of flash crash, prosecutors say

Lead Stories

CFTC Can’t Give Whistleblower Money Away
It turns out that setting aside hundreds of millions of dollars for whistleblowers isn’t enough to lure tipsters in the multitrillion-dollar futures and swaps markets. Since its Whistleblower Program was launched in 2011, the Commodity Futures Trading Commission has spent more on administrative costs than it has paid out in bounties, according to a Wall Street Journal analysis of the agency’s data.

Fining Bankers, Not Shareholders, for Banks’ Misconduct
Ho-hum, another week, another multimillion-dollar settlement between regulators and a behemoth bank acting badly. The most recent version involves two such financial institutions, Barclays and Credit Suisse. They agreed last Sunday to pay $154.3 million after regulators contended that their stock trading platforms, advertised as places where investors would not be preyed on by high-frequency traders, were actually precisely the opposite. On both banks’ systems, investors trying to execute their transactions fairly were harmed.

Bridgewater Heir Apparent in Talks to Give Up Co-CEO Role; Greg Jensen, presumed successor to Ray Dalio, may take on changed role
The presumed heir apparent to Bridgewater Associates founder Ray Dalio is discussing giving up his job as co-chief executive of the world’s biggest hedge fund, creating uncertainty about the future leadership of the firm.

Bridgewater Executives Deny Report of Rift at the Hedge Fund
For Ray Dalio, the billionaire founder of the world’s biggest hedge fund, Bridgewater Associates, transparency is a core principle. – Dealbook – NY Times
But what is now going on at the top of the firm — long popular with public pension funds and sovereign wealth funds — is something of a mystery.

A Dying Breed: Currency Traders Are Left Out of New Wall Street
Lananh Nguyen – Bloomberg
Recruiter has one key piece of advice: Take the pay cut; `It’s not easy to see they’ve been replaced by an algorithm’
Charlie Stenger, a currency-broker-turned-recruiter, has seen it all. One fired trader wept in his office. Another admitted he hadn’t told his wife he was unemployed, and left the house every day in a suit to sneak off to a coffee shop. Then there are the delusional guys, who carefully explain how they’re not interested in jobs that don’t pay as well as those they just lost.

Russian Hackers Moved Currency Rate With Malware, Group-IB Says
Jake Rudnitsky – Bloomberg
Hackers used malware to penetrate the defenses of a Russian regional bank and move the ruble-dollar rate more than 15 percent in minutes, according to a Moscow-based cyber-security firm hired to investigate the attack.

Obscure Chinese Firm Dives Into $22 Trillion U.S. Market
Fox Hu, Annie Massa – Bloomberg
Chongqing property firm is acquiring Chicago Stock Exchange
Exchange could become a venue to list Chinese companies
When Cromwell Coulson heard that an obscure Chinese real estate firm had agreed to buy the Chicago Stock Exchange, he was shocked.

CFTC’s Bowen wants ‘bad actors’ database to end ‘whack-a-mole’
Anjelica Tan, MLex
Regulators should consider forming a global disciplinary database and other ways to prevent financial professionals who have violated rules or laws from moving easily to other industry jobs, said US Commodity Futures Trading Commissioner Sharon Bowen.

Accused “flash crash” trader’s actions not a crime in UK, court hears
A London-based trader, accused by the U.S. of contributing to the 2010 Wall Street “flash crash”, should not be extradited because the offences he is accused of are not crimes in Britain, his lawyers said on Friday.

Prosecutors say most of trader Sarao’s victims are in the US
Jane Croft and Philip Stafford – FT
Navinder Singh Sarao, the UK futures trader accused of playing a key role in the so-called flash crash in 2010, should face his charges in the US because he used a Chicago market and most of his alleged victims were based there, prosecutors said on Friday.

CFTC Head Timothy Massad Says Swaps Industry Shares Blame for Lack of Clear Data; Commodity Futures Trading Commission still working on a more-efficient system to monitor the enormous market for that derivative
Data problems have long hindered the Commodity Futures Trading Commission’s ability to shed more light on the multitrillion-dollar swaps market, and on Friday, CFTC Chairman Timothy Massad said the swaps industry bears at least some of the blame.

French and German Central Bankers Want a Central Euro Finance Ministry
by Reuters
They say more integration is the way to make the Eurozone stable.
The euro zone needs to press ahead with structural reforms and closer integration, including a euro zone finance ministry, to deliver sustainable growth, the heads of the French and German central banks wrote in a German newspaper on Monday.

Goldman Sachs Says Defy ‘Mr. Market’ as Recession Risk Still Low; Bank sees a 25% risk of developed world recession in next year
Simon Kennedy – Bloomberg
Goldman Sachs Group Inc. is betting “Mr. Market” is wrong in its recession warnings.

Commodity Investors Search for Bargains in Miami
Despite a world quaking from plunging markets and recession fears, investors in sunny Miami this week are feeling bullish about commodities, eager to get cash out the door and looking to spread it around as much as possible. About 500 investors are spending two days shopping for new hedge funds to invest in at Context Summits Miami, essentially a speed-dating event to match hedge funds with investors. Many are hoping this is the time for bargains.

A Booming Market for Art That Imitates Life After the Financial Crisis
Americans are once again paying for the 2008 financial collapse.

Fears leveraged ETFs could amplify Japan equity swings; Huge inflows giving ETF sector outsized impact on cash markets
Viren Vaghela –
Concerns are mounting that large moves in Japanese equities are being driven by exchange-traded fund (ETF) providers seeking to match the daily close of their leveraged products to that of the underlying shares. Huge investor inflows in the past two years have led to record assets under management (AUM) for the products, with Japan’s ‘Abenomics’-inspired recovery spurring investment into equities and equity-linked investments. Assets under management in ETFs have grown 15-fold from $650 million…

Lehman Brothers Still With Us in Spirits, via Scotch Whisky; A new Scotch whisky carries the Lehman Brothers name, but the brand’s owner isn’t drinking to that
Lehman Brothers is gone, but anyone wanting to savor the distinct taste of financial ruin that its name evokes has ways to do so.

Bloodied, Not Broken: U.S. Bond Market’s Biggest Bears Die Hard
Susanne Walker Barton – Bloomberg
The biggest bears in the U.S. bond market are standing their ground.

Credit Suisse: The Fed Needs to Talk About How Foreign Banks Are Helping It Raise Rates
Tracy Alloway – Bloomberg
While much of the focus has been on the RRPs the Fed is undertaking with U.S. banks and money market funds in order to reverse years of easy monetary policy and raise benchmark interest rates, less attention has been paid to a similar program offered to foreign central banks. A new paper by Zoltan Pozsar, analyst at Credit Suisse Group AG, sheds light on the extent to which foreign central banks have been tapping the facility, largely at the expense of money funds.


CFTC Head Timothy Massad Says Swaps Industry Shares Blame for Lack of Clear Data
Data problems have long hindered the Commodity Futures Trading Commission’s ability to shed more light on the multitrillion-dollar swaps market, and on Friday, CFTC Chairman Timothy Massad said the swaps industry bears at least some of the blame.

?Asset managers found to pay higher clearing prices due to Basel leverage ratio
Neil Roland, MLex
?Asset managers are paying higher prices to derivatives clearing firms and losing access to clearing services as a result of leverage ratio standards that make banks hold extra capital against all assets on their books, a survey has found. The asset management group of the Securities Industry and Financial Markets Association, which did the survey, asked the Basel Committee on Banking Supervision to change how its leverage ratio is calculated.

German competition watchdog wants ‘big data’ hoards considered in merger probes: paper
The vast troves of consumer data held by big Internet companies should be scrutinized in merger probes because they have a big impact on competition, the president of the German antitrust watchdog told a newspaper.

Sebi firm on agent payout disclosure; AMFI develops cold feet; Sebi says such disclosures will help boost transparency as investors have a right to know what portion of their money the mutual fund was giving to the distributor as commission
Business Standard
Buckling under pressure from distributors, mutual fund industry body AMFI is lobbying hard to dispense with a proposed move to make it mandatory to disclose individual agent commission in the account statements sent to investors, but regulator Sebi is firm on its stand.

National Bank of Canada’s Regulatory Capital Hit by Maple Bank Probe; German unit of Maple Financial effectively closed as part of tax investigation
By RITA TRICHUR in Toronto and TODD BUELL in Frankfurt – WSJ
National Bank of Canada on Sunday warned that its regulatory-capital level would take a hit after Germany’s financial watchdog BaFin effectively shuttered one of its foreign investments, the German unit of Maple Financial Group.

Exchanges & Trading Facilities

CBOE Announces Alignment of VIX Index Administration with IOSCO Principles for Financial Benchmarks
CBOE Establishes VIX Index Administration Oversight Body; Further Strengthens Role of CBOE VIX Index As a Global Benchmark
CBOE Holdings, Inc. (NASDAQ: CBOE) today announced the administration of the CBOE Volatility Index® (VIX® Index), widely considered to be the world’s premier financial benchmark of future (30-day) stock market volatility, is in alignment with the Principles for Financial Benchmarks established by the International Organization of Securities Commissions (IOSCO).

Six metals firms pull LME Cat 5 membership
Futures & Options World
The London Metal Exchange said six category five members have already pulled the plug on their membership since the start of the year compared with just two withdrawals in all of 2015. In a client note released late on Friday, the exchange said six category five members have resigned with immediate effect: Cargill International; Enmetco; Lonconex; MetAlliance; Nyrstar Budel; and Rio Tinto (London).

CME Group’s Profit Drops, But it Still Beats Views; Futures-market operator attains lower fee revenue amid decline in trading volume
CME Group Inc. said its fourth-quarter profit declined as the world’s biggest futures-market operator generated less revenue from transaction and clearing fees amid lower trading volume.

IEX forms committee to advise on policy as it moves to become an exchange
Upstart stock trading venue IEX Group is forming a committee of outside brokerage executives to help advise it on market issues once it becomes a registered U.S. exchange, the company’s head of markets and sales said in an interview.

NSE pitches for self-listing; Sebi firm on cross-listing rule; However, BSE has said it has no problem with cross-listing and has already approached Sebi
Business Standard
Under pressure from shareholders to get listed, leading stock exchange NSE is pitching hard for self-listing but capital markets regulator Sebi is firm on its rule that only allows cross-listing of stock exchanges.

LSE Group’s joint venture CurveGlobal appoints Andrew Ross CEO
London Stock Exchange Group Plc’s (LSEG) interest rate derivatives joint venture, CurveGlobal, said it had appointed Andrew Ross as chief executive.

***DA: FOW first reported this last week, and we ran the story, though it had not yet been confirmed by LSEG. Now it has. Read the press release HERE


Donald Trump and Ted Cruz alarm corporate America
Barney Jopson in Washington and Gregory Meyer in Miami Beach – FT
Bemusement over the Republican presidential race is giving way to alarm in corporate America as the traditional party of business toys with nominating two candidates — Donald Trump and Ted Cruz — who many executives view as intolerable.

Sanders’s Wall Street Attacks Strike Home in New Hampshire Town
Margaret Newkirk, Esmé E Deprez – Bloomberg
In hardscrabble Rochester, economic anger seeks an outlet; `Not as many people went to jail as probably should have’
Five-dollar bills in the cash register at Tri-City Bicycles in Rochester, New Hampshire, send customers a message stamped in red ink: “Not 2 B used 2 bribe politicians.”

Hedge Funds & Managed Futures

Hedge funds post worst start to year since 2008: HFR
Global hedge funds lost so much money in January that the month marked the industry’s worst start to the year since the 2008 financial crisis, Hedge Fund Research (HFR) data released on Friday showed.

Fidelity unveils new pitchman, 18 years after Peter Lynch
Fidelity Investments plans to unveil a new pitchman on Sunday in television commercials that feature Will Danoff, the unassuming portfolio manager of its behemoth $103 billion Contrafund.

Vanguard, a Champion of Low Fees, Faces a Peculiar Tax Challenge
Vanguard may have committed a sin while pursuing a virtue. Its virtue — providing simple, diversified investments at very low cost — is well known. Its sin — if that’s what it deserves to be called — involves obscure details of tax accounting and corporate structure. It’s not easy stuff.

The Rich Are Already Using Robo-Advisers, and That Scares Banks
Hugh Son, Margaret Collins – Bloomberg
About 15% of Schwab’s robo-clients have at least $1 million; Morgan Stanley, Wells Fargo, BofA planning automated services
Banks are watching wealthy clients flirt with robo-advisers, and that’s one reason the lenders are racing to release their own versions of the automated investing technology this year, according to a consultant.

Guggenheim’s $240 Billion Man Says Nasdaq to Tumble Below 3,800
John Gittelsohn – Bloomberg
Scott Minerd predicts a bear market similar to 1987 or 1998; He sees the index, down 13% this year, falling that much again
Technology stocks will tumble further this year as investors flee to safety and buyers stay on the sidelines, according to Scott Minerd, chief investment officer for Guggenheim Partners LLC.

Pimco Has Biggest Flows in Europe From Yield-Hungry Insurers
Oliver Suess – Bloomberg
Insurance asset management is `one of the main opportunities’; Third-party EMEA insurance assets rose threefold over 5 years
While investors pulled funds from Pacific Investment Management Co. in the wake of co-founder Bill Gross’s departure, yield-hungry insurance companies kept faith with the company.

Fink backs new breed of shareholder activism
Ben McLannahan – FT
Larry Fink struck a blow this week for responsible shareholder activism.

In Search for Investors, Hedge Funds Try Speed-Dating
It might be harder than ever for hedge funds to raise money. Their market is crowded with competition and many clients aren’t interested any more. Others are demanding more specialization, and bigger staffs of financial and compliance executives, said several fund managers and marketers at Context Summits, an investor conference in Miami.

Banks & Brokers

BNP Paribas Admits Reality in Investment Banking; The French bank has finally decided to trim its investment bank and bolster its capital base
BNP Paribas has bitten the bullet. The French bank has finally conceded that it needs more capital and that it must cut back the size and scope of its investment bank.

Credit Suisse cherry picks hedge fund ideas
Mary Childs – FT
Credit Suisse Asset Management plans to cherry pick profitable concepts from hedge funds with the launch in Europe of a “best ideas” strategy.

Walt Bettinger of Charles Schwab: You’ve Got to Open Up to Move Up
This interview with Walt Bettinger, C.E.O. of the Charles Schwab Corporation, was conducted and condensed by Adam Bryant.

Credit Suisse adds derivatives contracts to ‘unwinding’ unit; The bank transferred the assets to the SRU in a bid to reduce its capital requirements and meet leverage ratio rules.
By Joe Parsons – The Trade News
Credit Suisse has added assets from its equity derivatives and prime services business into its “Strategic Resolution Unit” (SRU), a unit focused on the offloading of unwanted assets, as the new CEO continues to shrink the investment bank.

Allianz, Bank of America invest in U.S. wind farms
Allianz and Bank of America are investing in two onshore wind parks developed by French utility EDF, the German insurer said on Monday, marking the group’s first wind investment in the United States.

Wealth Adviser Daily Briefing: Short-Term Oil Notes A Black Hole for Investors
The plummeting price of oil over the past two years has crushed investors in the futures market, energy partnerships, high-yield corporate bonds and the shares of oil and gas companies. But it is also wreaking havoc on investors in certain short-term bonds issued by leading banks, writes Wall Street Journal columnist Jason Zweig. Last year, major banks like Bank of America Corp., Citigroup Inc.C -2.33% and J.P. Morgan Chase & Co. issued at least 300 so-called structured notes whose returns are linked to the price of oil or other energy-related assets.

Thomson Reuters spot FX volumes rebound in January to $123 bln
Daily spot trading volumes on currency trading platforms run by Thomson Reuters rebounded sharply in January from the previous month, according to figures published by the company late on Friday.

Geithner Gets JPMorgan Credit Line to Invest With Warburg Pincus
Miles Weiss, Kiel Porter – Bloomberg
Warburg, management pledged $800 million for $12 billion fund; Credit lines can help executives meet such commitments
Former U.S. Treasury Secretary Timothy Geithner is preparing to borrow from JPMorgan Chase & Co. to help fund his new career in private equity.

Clearing & Settlement

Banks explore spin-offs for cleared swaps desks; Non-bank dealers would escape Basel III; private equity seen as likely owners
Peter Madigan –
Large derivatives dealers in the US and Europe are exploring the spin-off of their cleared swaps desks, in a move that could slash the capital they consume – by more than a half, according to one estimate – and help them go toe-to-toe with aggressive new entrants such as Citadel Securities. Lawyers are now quietly helping the banks sketch out the terms of a divestment, answering questions about how big a stake the current owners could retain – US law sets the maximum at 24.9% – and how…

OTC Derivatives Clearing and Reporting Requirements Delayed for Hong Kong Firms
Finance Magnates
The Hong Kong Monetary Authority (HKMA) and Securities and Financial Commission (SFC) have published their conclusions to implementation of new clearing and reporting requirements for OTC Derivatives. The publication of rules is part of a larger movement among global financial regulators to introduce standards related to clearing and reporting of OTC derivatives to increase transparency and reduce counterparty risk. The HKMA and SFC rules are similar to those being enacted by the EU through the European Market Infrastructure Regulation (EMIR).

New York’s itBit is trying to bring the tech behind bitcoin to Wall Street – here’s why
Business Insider India
The world of finance is going nuts for blockchain, the technology first invented to underpin bitcoin. Blockchain uses decentralized record keeping and the scrutiny of the “crowd” to allow people to trade bitcoin over a public network without working through a trusted middle man like a bank or clearing house. Complex cryptography keeps the records from being tampered with once they’re signed off on.

Indexes & Products

Euribor administrator woos banks to revamp dwindling panel; Efforts to double number of contributing firms said to face strong resistance
Catherine Contiguglia, Tom Osborn –
The body responsible for administering Euribor has launched an ambitious campaign to double the number of banks on its thinning panel of rate submitters – but the lack of enthusiasm from many banks might force it to rely on proposed European legislation that could require mandatory contributions for critical benchmarks instead. The European Money Markets Institute (EMMI) is trying to boost the number of Euribor submitters to 40 banks from its current crop of 23 – down from a pre-crisis peak…

High level of bond fund leverage alarms IMF
Sophia Grene – FT
The International Monetary Fund is calling for fund managers to be more transparent about the amount of leverage they use in bond mutual funds, amid concerns those levels might be high enough to cause a crash.

Fidelity is the latest fund house to fall under the spell of ETFs
Chris Flood – FT
Fidelity International has begun to build a team in London in preparation for the launch of its first exchange traded funds, becoming the latest high-profile active manager to enter the rapidly expanding ETF market.

Fidelity plans ETF range after BlackRock product head hire; Team led by Nick King
LAURA DEW – InvestmentWeek
Fidelity is to become the latest active fund manager to explore the ETF space as it prepares to launch a new product range.

John Bogle dismisses index-fund ‘danger’
By Mitch Tuchman – MarketWatch
Retirement investors likely have read about active investment managers and hedge fund chiefs who warn of the growing “danger” of index fund investing.


More than half recs systems 5+ years old – report
Futures & Options World
More than half of buy- and sell-side firms are working with reconciliation platforms that are five or more years old, according to a new report issued by Aite Group. An additional third of reconciliation platforms, the report said, are nine or more years old and this technology is very unlikely to have been designed to cope with the volume and complexity of data firms are facing now.

Five UK fund houses explore blockchain technology
Attracta Mooney – FT
Five of the UK’s biggest fund houses have joined forces on a secret project to test if blockchain, the nascent technology underpinning bitcoin, the digital currency, can be used to save billions of pounds in trading costs.

Bitcoin stigma hobbles blockchain take-up
Attracta Mooney – FT
The asset management industry and a technology that has found favour with drug dealers do not seem like natural bedfellows. Yet blockchain, the technology that underpins bitcoin, the controversial digital currency, is being heralded as “revolutionary” for fund houses.

How Blockchain Tech is About to Transform Sharemarket Trading
Recently the Australian Securities Exchange (ASX) bought a $15m stake in Digital Asset Holdings, a developer of blockchain technology. One of the main reasons is to upgrade its share registry system by using blockchain or distributed ledger technology. And it’s been reported that JP Morgan Chase is also partnering with Digital Asset Holdings to trial the technology.

London fintech corporate finance firms merge as deals flow
By Anna Irrera – Financial News
FTCL, the fintech corporate finance firm founded by former UBS banker Alexis Thieriet, has merged with London-based fintech M&A house Novitas Partners, in response to growing demand for finance advisory from financial technology firms.


CFTC Charges Dania Beach, Florida Resident Rico Omar Cox with Commodity Trading Advisor Fraud
The Complaint charges that Cox created and distributed promotional materials to prospective clients that intentionally or recklessly contained materially false and misleading statements and failed to disclose material facts, including making false claims about his experience and success as a trader. After losing almost all of the investors’ funds trading, he provided some investors with false account statements to hide the losses, the Complaint also charges.

SEC Charges Company Executive With Insider Trading
The SEC alleges that Dennis Wayne Hamilton made more than $130,000 in illegal profits by trading on nonpublic information he learned on the job in advance of Harman’s release of its fiscal year 2014 first quarter earnings. In a parallel action, the U.S. Attorney’s Office for the District of Connecticut today announced criminal charges against Hamilton.

HSBC to pay $470m to settle US mortgage abuse allegations
Alistair Gray in New York – FT
HSBC, the UK bank, has agreed to pay $470m to settle allegations that it engaged in “abusive” practices before seizing the homes of Americans who defaulted in the wake of the financial crisis.

Alberta Securities Commission Finds John Rochard And Global Social Capital Partners Breached Alberta Securities Laws
The Alberta Securities Commission (ASC) has found that John Byron Rochard and Global Social Capital Partners, Inc. illegally traded in Global Social securities (before September 28, 2009), illegally distributed Global Social securities and made materially untrue statements to investors. An ASC panel also found that Global Social failed to file required exempt-distribution reports and that Rochard authorized, permitted or acquiesced in Global Social’s contraventions of Alberta securities laws.

Environmental & Energy

Oil price fall takes fizz out of traders’ bash
David Sheppard, Neil Hume and Anjli Raval – FT
When the world’s most powerful oil traders meet in London this week for the annual round of parties that dominate International Petroleum Week, they will have plenty on their minds.

Norway’s oil fund urges US banks to split CEO-chairman role
Richard Milne in Oslo – FT
The world’s largest sovereign wealth fund has warned the biggest US banks that time is running out for them to end the highly contentious practice of combining the roles of chief executive and chairman.

World’s largest concentrated solar plant switches on in the Sahara
By Phoebe Parke, for CNN
Morocco has switched on what will be the world’s largest concentrated solar power plant. The new site near the city of Ouarzazate — famous as a filming location for Hollywood blockbusters like “Lawrence of Arabia” and “Gladiator” — could produce enough energy to power over one million homes by 2018 and reduce carbon emissions by an estimated 760,000 tons per year, according to the Climate Investment Funds (CIF) finance group.

Wind generated 48% of Scotland’s power needs in Jan
by Plamena Tisheva –
Wind farms produced enough power to cover 48% of Scotland’s electricity needs in January 2016, although generation was lower than in the same month of 2015, WWF Scotland said on Monday.

World’s Largest Energy Trader Sees a Decade of Low Oil Prices
Javier Blas, Ryan Chilcote – Bloomberg
Vitol CEO says crude to stay between $40 and $60 for 10 years; China’s slowdown and U.S. shale trigger `fundamental shift’
Oil prices will stay low for as long as 10 years as Chinese economic growth slows and the U.S. shale industry acts as a cap on any rally, according to the world’s largest independent oil-trading house.

Built Up by Oil Boom, North Dakota Now Has an Emptier Feeling As the price of oil has skidded to $30 a barrel, new drilling has dried up, and the flood of wealth and workers is ebbing.
The “man camps” sprang up from the prairie, rows of trailers and modular steel boxes that housed thousands of workers chasing their fortunes in North Dakota’s oil fields. But these days, the man camps are missing something: men.


What stock market turmoil means for China’s economy
Yuan Yang – FT
China’s stock market tremors this year have shaken investors across the world. But there is some consolation from January’s 23 per cent fall in the Shanghai Composite index: the panic has little direct effect on the country’s economy.

Bank of Japan policymakers feared negative rates war, hit to bank profits
Leslie Shaffer – CNBC
Policymakers at theBank of Japan tussled over the decision to adopt negative interest rates, raising a slew of concerns ahead of a close vote, according to the official summary released Monday.

Japanese Bought Most Long-Term Treasuries on Record in MOF Data
Wes Goodman – Bloomberg
Japanese investors bought a record amount of long-term U.S. Treasuries last year, the Ministry of Finance reported, as record-low yields at home drove the hunt for bonds abroad.

Negative Rates Seen as Option for Fed as BOJ, ECB Pave the Way
Alexandra Scaggs – Bloomberg
Examples of five other central banks cited as U.S. precedent; Probability of negative Fed rate climbs to about 13%
Global central banks have opened the door to negative U.S. interest rates, in Wall Street’s view.

Holding Back China’s Capital Flight ‘Dam’ Is Key
Bloomberg News
Reserves fell more than $200 billion over last two months; Households have yet to show signs of rush to put money abroad
The decline in China’s foreign-currency reserves to a four-year low, even without evidence of widespread domestic capital flight, adds pressure on policy makers to strengthen the economy through fiscal easing and structural reforms.

China’s Forex Reserves Plunge to More-Than-Three-Year Low; The world’s largest stockpile of foreign currency fell by $99.5 billion last month
China’s foreign-exchange reserves fell to the lowest level in more than three years in January, raising questions about how long Beijing can keep burning through the rainy-day funds to defend the yuan without triggering a huge flight of capital.

Frontier Markets

Sebi scans Facebook accounts in insider trading case; This is the first time that ‘mutual friends on Facebook’ has been cited as evidence in insider trading case
Business Standard
To catch manipulators, markets regulator Securities and Exchange Board of India (Sebi) has begun looking into social media accounts of suspected persons, with ‘mutual friends on Facebook’ being cited as evidence for the first time in an insider trading case.

Russia plans first bond issuance since sanctions
Max Seddon and Elaine Moore – FT
Russia is exploring international bond issuance for the first time since the war in Ukraine sparked sanctions from the west, in a sign that the Kremlin is keen to find additional sources of revenue as the economy heads for a second year of recession.


Ground Shifts Under Wheat Export Market; Record harvests, the strong dollar and cheap oil combine to shake up the multibillion-dollar global wheat market
The global trade map in wheat is being redrawn by people like Greg Harvey.
For years, Singapore-based Mr. Harvey has used Australian wheat in the grain mills he manages throughout Southeast Asia. Last December, he turned to a different source: Argentina.

FanDuel, DraftKings Stung Again as Citigroup Blocks New Yorkers
Elizabeth Dexheimer, Joshua Brustein – Bloomberg
Bank’s ban on using cards in effect until courts rule on issue; Payments firm Vantiv stopped handling transactions this week
Fantasy sports sites FanDuel Inc. and DraftKings Inc., already facing mounting legal and regulatory scrutiny, ran into more trouble when Citigroup Inc. said it was blocking transactions by New York state residents.

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