First Read

Get Shorty: The Year Ferruzzi Spun A Soybean Tale
Doug Ashburn – JLN
Short crops, as the old saying goes, have long tails. In the case of the 1988-89 drought-shortened soybean crop, the other kind of tale also was told with Italians, a squeeze, lawsuits and a stuffed envelope.

Twenty-five years ago today, July 11, 1989, the Chicago Board of Trade issued an emergency liquidation order for its soon-to-expire July soybean contract. That order was tied to a large accumulation of July beans by Italian processor Ferruzzi Finanziaria, S.p.A. And that CBOT move led to a two-day freefall in prices at the front end of the soy complex.

And that was just the beginning.


World Of Opportunity Chicago 2014: Chris Hehmeyer (Promo)
Our MarketsWiki World of Opportunity Summer Intern Education Series in Chicago is quickly approaching. Chris Hehmeyer, CEO of HTG Capital Partners, will be discussing the future of pricing, and how it will be more accessible to the public.
For more information on the event and how to register, click here.

Watch the video »


Ex-Merrill Lynch Banker Uses Big Data to Save U.K. Pubs: Retail
By Matthew Boyle, Bloomberg
Noah Bulkin is not the man you’d expect to be pouring your next pint of ale. The Oxford-educated Bulkin, 37, spent 15 years cutting deals as a mergers & acquisitions banker for Merrill Lynch and Lazard Ltd. before leaving last year to start his own pub company, Hawthorn Leisure Ltd. He’s acquired hundreds of struggling pubs and plans to turn them around by tracking everything from the price charged for beer to daily sales fluctuations to customers’ drink preferences.

***** Now here is a banker doing God’s work.


Cynk Is a Joke, Not Proof of a Bubble
By Nick Summers, BloombergBusinessWeek
The financial world is obsessed this morning with Cynk Technology (CYNK), a “company” that traded for a few pennies for most of its existence before suddenly exploding more than 25,000 percent, giving it a market value of more than $5 billion. Cynk supposedly operates a social network—but one that would appear to have no members, no revenue, no assets, etc., and its public filings reveal a hilariously inept business plan and dubious personnel.

***** Even the name gives away the end of the story.


Cynk sinks after 36,000% climb
By Tracy Alloway in New York and Tim Bradshaw in San Francisco, FT
The meteoric rise of Cynk Technology, a former penny stock which appears to boast one employee and no reported revenues, stalled abruptly on Thursday when shares of the would-be social media company tumbled by as much as a third.
Cynk listed for 5 cents a share in May and then saw its shares multiply by 36,000 per cent to give the practically unknown company a market value of $6bn – more than Sina, the Chinese operator of Weibo, a microblog with more than 100m active users.

***** Nothing to see here, just keep walking.


Despite Exposure of Madoff Fraud, New Ponzi Schemes Emerge
By ELIZABETH OLSON, New York Times DealBook
When the money was rolling in from investors, Scott W. Rothstein, a lawyer in Fort Lauderdale, Fla., bought his wife, Kimberly, more than $1 million in jewelry, including an opulent 12-carat yellow diamond ring. He lived in a multimillion-dollar waterfront mansion and regularly wrote big checks to charities and politicians.
But the good life ended in 2009, when the government accused him of defrauding investors of up to $400 million with a Ponzi scheme based on selling stakes in legal settlements. Both Rothsteins went to jail.

***** Hey, we should have some laws against this kind of thing. That will eliminate it.


Vikram Pandit
By Tom Braithwaite, FT
Eighteen months after his shock departure from US banking giant Citigroup, the financier talks about life after Wall Street
This doesn’t immediately strike me as a Vikram Pandit joint. I am waiting for the deposed chief executive of Citigroup at Felidia, a restaurant on 58th street, just below the Upper East Side in Manhattan.

***** Catching up over ketchup.


Steven Cohen Writes a Big Check to the U.S. Government
Steven A. Cohen proved to be a stickler for the letter of the law when it came to paying the criminal penalty imposed on his former hedge fund as part of its guilty plea on insider trading charges.

***** Did he send a Happy Gilmore sized check?


As Gold and Gambling Lose Their Luster, Deadwood Seeks a Spark
DEADWOOD, S.D. — This old Western town of gunfights and gambling is going through an identity crisis. For more than a century, the promise of fortune has drawn outsiders to Deadwood, a gold rush settlement in the Black Hills of South Dakota. But where saloons and brothels once lined Main Street, storefronts today draw tourists with a different lure: blinking slot machines.

***** Gold and gambling never lose their luster.


Goldman Sachs’s World Cup Predictions Model: Successful?
Goldman Sachs’s World Cup predictions, outsmarted to some extent by an octopus, have been caught out by reality. A complicated model that predicted Brazil to win the tournament after facing down the Netherlands now looks wanting after both teams were knocked out. As you may remember, the bank’s economists crunched data on 14,000 past matches to arrive at a 67-page report that confidently calculated the outcomes of all matches, published May 30.

***** So the quants got it wrong? What is the world coming to?


It’s Easier This Way: Justin Llewellyn-Jones of Fidessa Maps A Compliance Path for Firms

Today, firms are dealing with three major issues: regulation, compliance and global economics. None of the three are friendly to firms and that’s where Justin Llewellyn-Jones, chief operating officer of Fidessa , believes there is opportunity.

Llewellyn-Jones spoke with JLN editor-in-chief Jim Kharouf last month at the IDX conference in London, about how Fidessa is developing new technology that will assist firms in making the trading, risk and account management, and compliance task easier.

Watch the video »



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Lead Stories

ICE at pains to take cotton global; Malaysia’s import requirements have become a sticking point
By Jeremy Grant in Singapore
Almost monthly, commodity exchanges announce plans for a new futures contract. Not all of them work. Some take forever to get off the ground. Why?

Fed explores overhaul of key rate
By Robin Hardin, FT
The US Federal Reserve is exploring an overhaul of the Federal funds rate – a benchmark that underlies almost every financial transaction in the world – as it prepares for an eventual rise in interest rates.

EBS announces new management structure
London and New York, 10 July 2014 – EBS, ICAP’s market-leading electronic FX business, announces today that Darryl Hooker has been appointed Head of EBS Market and Viral Tolat Global Head of Product for EBS. Both Darryl and Viral will report to Gil Mandelzis, CEO of EBS, and continue to be part of EBS’s Executive Management team.

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Canada needs a national stock market regulator: Editorial
The Star – Editorial
Prime Minister Stephen Harper’s government is creating much-needed “critical mass” toward a common national securities regulator.
More than $5 billion in wealth got swapped on the Toronto Stock Exchange on a lazy summer day this week, as some 300,000 shares changed hands. It’s a sign of just how active Canadians have become in the investment game. Directly or indirectly, most of us have a stake in the market.

UK regulator says it temporarily restricted short selling in BES
Britain’s financial regulator said on Friday that it has temporarily restricted short selling in shares of Portugal’s Banco Espirito Santo (BES).

Amsterdam, Brussels, Lisbon, Paris – 11 July 2014: Today Euronext launches new ‘Spotlight Options’ on six companies listed on its Amsterdam market: Telegraaf Media Groep NV, Sligro Food Group NV, Exact Holding NV, Accell Group NV, Altice SA and BE Semiconductor Industries NV.

British banks paying $2 billion for swaps mis-selling: regulator
Britain’s banks are in the process of paying out 1.2 billion pounds ($2 billion) to compensate small businesses that were mis-sold complex interest rate hedging products, data from the UK financial watchdog showed on Friday.

VIX Futures Volume In Non-U.S.Trading Hours Sets New Daily Record
CHICAGO, IL – July 10, 2014 — The CBOE Futures Exchange, LLC (CFE®) today announced record trading volume in CBOE Volatility Index® (VIX® index) futures during non-U.S. trading hours. An estimated 59,505 contracts traded from Wednesday afternoon to Thursday morning, surpassing the previous record in non-U.S. trading hours of 52,260 contracts set on January 31, 2014.

Rajaratnam acquittal shows indirect insider trading case challenge
The acquittal on Tuesday of the younger brother of convicted hedge fund titan Raj Rajaratnam suggests prosecutors will have a tougher time pursuing people accused of trading on inside information they received indirectly.

Temper tantrum, tempest, or teapot?
Dan McCrum, FT
Banco Espirito Santo, the Portugese lender which had a few problems earlier this week to do with its complicated corporate structure and then saw its shares temporarily suspended on Thursday, has become this week’s goat on which all scapes may be laid.


Alibaba Nears SEC Blessing as Biggest IPO Causes Few Ripples in Washington
By David J. Lynch and Robert Schmidt, Bloomberg
Alibaba Group Holding Ltd. (BABA)’s proposal for what could be the largest initial stock offering in U.S. history is sailing through Washington with few bumps.

Tullett Prebon wins $33.3m from BGC Partners in poaching dispute
By Philip Stafford in London, FT
A US arbitration panel has ruled that BGC Partners and some of its employees should pay a total of $33.3m in compensation to its rival Tullett Prebon in the dispute between the interdealer brokers over poaching staff.

Certified Gold Exchange Applauds CFTC Ruling, Recommends Physical Delivery Gold
The U.S. Commodity Futures Trading Commission (CFTC) recently won a fraud case against a Florida gold dealer who allegedly promised to buy gold for clients, but never followed through. Following a May 22 press release regarding Case No. 13-10993, which was heard by the U.S. Court of Appeals for the 11th Circuit, the Certified Gold Exchange has issued a public statement reminding investors that financed gold transactions carry the risk of loss, not only due to decreasing gold prices but because the gold is stored by a third party.

ESMA Publishes 10th Updated EMIR Q&A
The European Markets and Securities Authority has published today an update of its Questions & Answers (Q&A) document regarding the i

BoE mulls limits on cocos to meet leverage goal
The Bank of England has suggested that it may place limits on banks’ ability to use so-called cocos when they are attempting to meet tough new rules restricting their leverage.

Temporary restriction in short selling
The Financial Conduct Authority (“FCA”) notifies that it temporarily prohibits short selling in the following instrument under Articles 23 (1) and 26 (4) of Regulation (EU) No 236/2012 of the European Parliament and of the Council of 14 March 2012 on short selling and certain aspects of credit default swaps. This follows a decision made by another EU Competent Authority.

Dealing commission
Speech by Martin Wheatley, Chief Executive of the FCA, at the FCA conference on dealing commission in London.

Occasional Paper No. 4: Why has the FCAs market cleanliness statistic for takeover announcements decreased since 2009?
This paper investigates the possible explanations for the fall in the statistics in market cleanliness.

DP14/3 The use of dealing commission regime
We have carried out a review on whether further changes are needed to deliver a more transparent and efficient asset management sector for end investors.

Regulation Is ‘New Normal,’ Industry Shifts Focus Back to Growth
by Becca Limpan, WallStreet & Technology
Linedata surveys suggest the financial industry’s future challenges are less focused on regulation and more on improving client relationship and developing products.

Exchanges & Trading Facilities

Eurex To Launch Variance Futures Based On EURO STOXX 50 – Eurex Reaches Deal With DRW To Use U.S.-Patented Method For Listed Variance Futures
Eurex is set to extend its product range by introducing a listed variance future on September 22, 2014, based on the EURO STOXX 50, the most prominent equity index in Europe.

LME ring members shrink to 10 as Newedge, SocGen merge teams
The number of ring-dealing members on the London Metal Exchange will soon drop to ten as Newedge and Société Générale merge their floor teams, Metal Bulletin understands.

NLX shakes up rebates to tackle spikes
by Luke Jeffs, FOW
London-based market wants to boost liquidity in the face of strong competition
Nasdaq OMX NLX has shaken up its incentive schemes for clients in a bid to tackle the trading spikes that occur on the fledgling European interest rate trading platform.

Lead Database Administrator-Chicago
CME Group
The Lead Oracle Database Administrator provides DBA technical expertise across the DBA spectrum, including performance, backup and recovery based on
expert knowledge of high availability, clustering, database storage, and partitioning. This individual is responsible for collaborating with business owners to
translate business requirements to database design. The incumbent is also responsible for the creation of logical and physical database structures,
proposing optimal DR/HA architecture and implementing a reliable, optimized database design to meet required SLAs.

SGX welcomes Starburst Holdings to Catalist
Singapore Exchange (SGX) is pleased to welcome Starburst Holdings Limited to Catalist under the stock code of “40D”.

June 2014: positive half-year statistics
The statistical monthly report contains the latest trade and turnover figures for SIX Swiss Exchange.
After the first six months in 2014, SIX Swiss Exchange records positive figures regarding the trading activities. Compared to the same period in the previous year, the number of transactions rose by 6.0% to reach 18’887’593 at the end of June. The biggest increase was recorded in the segment International Bonds (+18.9%), followed by Equities incl. Funds and ETPs (+7.1%). Growth in turnover was even higher, increasing by 6.5% to a total of CHF 574’969 million. Again, the same two segments showed the biggest growth.

Voice Infrastructure Engineer-Belfast
CME Group
CME Technology and Support Services is relentlessly focused on developing the worlds most advanced electronic trading, post trade processing and risk management systems. As part of CME Group, we are the world’s leading and most diverse derivatives market place providing risk management solutions that help drive the global economy. Our customers include leading investment and commercial banks, hedge funds, proprietary trading firms, pension funds, sovereign wealth funds, asset managers, corporations, and individual traders.

SUBJECT: FECPlus Migration Phase 2: Electronic Trade Management (ETM) *UPDATE*

Hedge Funds & Managed Futures

BlackRock’s Aladdin: genie not included; Risk management technology is no substitute for investor instinct
By Tracy Alloway in New Yor, FT
In 1988, Ben Golub, one of the original founders of BlackRock, bought a Sun Microsystems workstation and stuck it between the refrigerator and coffee machine of the would-be asset manager’s brand new one-room office in Manhattan.

U.S. coffee traders face delays as suppliers haggle over price
By Marcy Nicholson, Reuters
U.S. coffee traders say they face months-long delays in getting shipments as suppliers from Central America to Asia push to revise contracts, the latest sign that the meteoric rally in arabica futures earlier in the year has disrupted trading.

Coffee Stockpiles Grow Older, Cheaper
Can coffee get better with age? (No scowling, specialty roasters). It can at the right price. Arabica-coffee beans in the certified stockpiles of ICE Futures U.S., the exchange that operates the world’s largest coffee-futures contract, are growing older, but that could make them an even hotter commodity.

Corn price wilts on bumper crop forecast
By Gregory Meyer in New York
The prospect of a colossal 1bn-tonne global corn crop has sent the price of the grain below $4 per bushel for the first time in almost four years.

Demand growth for agricultural products to slow
By Neil Hume, Commodities Editor, FT
Demand for agricultural products is set to increase at a slower pace over the next decade, but demand for protein-rich foods will rise substantially as consumers in the developing world adopt a more western diet.

Blackstone to Buy a Wealth Management Business
By CHAD BRAY, New York Times DealBook
LONDON – The insurer Friends Life Group said on Friday that it had agreed to sell its Luxembourg-based wealth management arm to the Blackstone Group for up to 356 million pounds, or about $610 million.

Banks & Brokers

Banks try to protect their young
Emma Jacobs, FT
Last summer, Goldman Sachs hired Adam Grant, an author, academic and consultant who has worked with Google and Merck, the drugmaker. His task? Not cost-cutting but finding how young bankers could get the most out of their jobs.


HMN Gashandel A/S, a leading Danish gas trading company, has selected SunGard’s Aligne for commodity trading and risk management, gas operations, invoicing and settlements. The solution will help HMN Gashandel to strengthen its trading and operations and carry out asset backed trading by bringing HMN Gashandel’s physical and financial transactions into a single system and providing automation, audit and security.

Data Quality Survey Reveals Gaps And Opportunities In Data Management
Financial services firms are in the early stages of implementing data quality programs focused on risk management and regulatory requirements as well as operational efficiency, according to a new survey sponsored by The Depository Trust & Clearing Corporation (DTCC).

Moving Beyond Buy-Side Cloud Computing Myths
By Kevin McPartland, WallStreet & Technology
Security and compliance are certainly concerns for buy-side firms looking to use the cloud, but it shouldn’t hold everyone back from cloud-based technology.

Wells Fargo CDO Charles Thomas Is A Data Diplomat
By Bryan Tucan, WallStreet & Technology
Thomas took over as chief data officer for Wells Fargo in March, after serving in the same capacity at USAA.


New Zealand’s Financial Markets Authority: Director Pays The Penalty For Failing To File Financial Statements On Time
Ross Anthony Collins, director, is to pay a fine of $30,000 for breaches of the Financial Reporting Act 1993 (FRA). Collins was sentenced yesterday in the Tauranga District Court, after pleading guilty in May 2014 to eight charges of failing to deliver financial statements to the Registrar of Companies.

Environmental & Energy

Arctic LNG Route Soon to Launch; China, Japan 1st Shippers
Esther Tanquintic-Misa, International Business Times
The Arctic Ocean will soon be seeing more and more liquefied natural gas (LNG) shipping carriers plying its waters.

***LB: Also in this story “Japan’s Mitsui O.S.K. Lines Ltd. on Wednesday announced it targets to use the unchartered territory to move its LNG Russia to its clientele in Europe and Asia.”

China Calls for Local Planning on Geothermal Energy Use
Bloomberg News
China, the world?s biggest carbon emitter, asked local authorities to draft plans for geothermal energy use by 2020 and submit them by the end of this year.

China’s Tianjin extends carbon deadline again
China’s Tianjin has extended the deadline for its biggest carbon producers to comply with the city’s emissions trading scheme a second time, giving companies two more weeks to hand over permits to the government.


China Labels iPhone a Security Threat
Report Cites Researchers Who Say Tracking App Could Expose ‘State Secrets’
China’s influential state broadcaster called a location-tracking function of Apple Inc.’s iPhone a “national security concern” on Friday, in the latest backlash against U.S. technology firms.

BofAML Appoints Credit Suisse Banker To Head Southeast Asia FIG Group
by P.R. VenkatWSJ MoneyBeat
The business of handling deals from mergers to share sales for financial institutions is seeing a bit of a merry-go-round in hiring bankers. Bank of America Merrill Lynch has appointed Mayank Saxena, a Credit Suisse AG banker, to head its financial institutions group or FIG for Southeast Asia, according to a memo seen by The Wall Street Journal. The announcement of Mr. Saxena’s hiring comes days after Credit Suisse said it had poached a Bank of America Merrill Lynch banker Sharhan Muhseen to head its FIG team in Southeast Asia.

Frontier Markets

Exclusive: UAE bourses merger shelved as terms not agreed – sources
A planned merger of the Dubai Financial Market and the Abu Dhabi Securities Exchange (ADX) has been shelved for the foreseeable future as terms for the politically sensitive move could not be agreed, sources told Reuters on Thursday.


Bitcoin by Bitcoin, the Winklevii ETF Inches Closer to Reality
By Eric Balchunas, Bloomberg
It looks increasingly that the Winklevoss Bitcoin Trust (COIN) will actually launch.

Thomson Reuters FX volumes inch up in June
Daily currency trading volumes on Thomson Reuters Matching rose on the month for the first time since January in June, while volumes for buyside platform FXAll hit a record high of $141 billion, the company said on Friday.

Cargill plans to build grain facility in West Memphis, Ark.
July 10, 2014 – Cargill will invest $45 million to build a grain handling and shipping facility in West Memphis that will become a key origination point in the south for soybeans, corn, milo and wheat.

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