First Read

The Voice: Green Key Technologies Is Turning Your Brokerage Voice Into Valuable Data

In today’s financial markets, the conversation is most often about electronic trading, high frequency trading, complex orders via algorithms and so forth. Yet, for the $492 trillion global OTC derivatives markets, firms still conduct business over the phone, person-to-person, a practice which is now availing itself to new technology in compelling ways.

Watch the video »


Notes from the first day of the STA 83rd Regulatory Conference
John Lothian in Washington, D.C., JLN

STA 2016 started off with a moment of silence for former STA chairmen and others who had passed away in the last year and then a bang with the singing of the national anthems of Canada and the USA performed by Jennifer Litwin, Greenwich Associates. She can belt them out worthy of a professional hockey game.

John Russell, STA chairman from Franklin Templeton out in San Mateo, CA, offered the opening remarks before the keynote address by SEC Chair Mary Jo White. He finished his comments urging the audience to find ways to show Wall Street in a more positive light.

Jim Toes, President and CEO of STA, followed with opening comments urging keeping our markets the most liquid and efficient in the world. He said the attendees for the conference were 25% women, up from about 11 percent last year. STA also had more women participate in the program.

He finished with comments about 9/11 and how to deal with the tragedy of that day and how to make some good come from it. He recommended visiting the 9/11 memorial and museum in New York City and spending time there. But he also suggested spending some time with the 9/11 “legacy children”, who are reaching their high teens now.

Read the rest of STA, Day One at HERE.


Americans’ Trust in Mass Media Sinks to New Low
Art Swift -Gallup
Americans’ trust and confidence in the mass media “to report the news fully, accurately and fairly” has dropped to its lowest level in Gallup polling history, with 32% saying they have a great deal or fair amount of trust in the media. This is down eight percentage points from last year.

***** There is no “Mass Media” anymore. Everything is mass media.


Greenspan Worries That ‘Crazies’ Will Undermine the U.S. System
Rich Miller – Bloomberg
Former Federal Reserve Chairman Alan Greenspan voiced concern that the U.S. economic and political system could be undermined by what he called “crazies.” “It is the worst economic and political environment that I’ve ever been remotely related to,” Greenspan, 90, told a conference in Washington Tuesday evening sponsored by Stanford University and the University of Chicago.

***** If the Washington Redskins ever change their name, the “Crazies” would be a good replacement.


Tayloe Draughon, Neurensic – Futures Industry AI and Machine Learning

“As you seek worlds of opportunity, look for areas in which there are problems, because if somebody is having problems, there are going to be opportunities.”

Recent advancements in technology have led to a monstrous spike in trades and trade messaging. Meanwhile, new regulations are requiring banks, brokers, dealers and futures commission merchants to not only store all of this new data, but also to conduct surveillance for trade infractions such as spoofing, layering or “banging the close.”

One particular challenge is that these new regulations require proof of intent, that is whether a trader or trade algorithm intentionally broke a rule. How does one sift through the billions of daily messages flowing through the pipes, flag anything suspicious, and prove intent at the same time?

According to Neurensic’s Tayloe Draughon, the answer is artificial intelligence, machine learning and pattern recognition. In other words, fight tech with tech. His message to the next generation? We have problems, and our problems become your opportunities.

Watch the video »

Chicago 2016 Video Releases to Date
Lisa Dunsky, OCC – Hit By A Brick: How Setbacks Shape Your Career
Kate Maehr, Greater Chicago Food Depository – Volunteerism: Good for the community and good for you!
Christian Domin, GlenStar Properties – Value Investing: Office Space and Associated Risks
Rob D’Arco, Rival Systems – Technology: the Center of the (Financial) World
Jeff Levoff, Partner, DRW – Make a Market: Proprietary Trading in the Modern Era
Walt Lukken, FIA – The New Normal and the Five Tips
Rumi Morales, CME Ventures – Investing in the Future of Fintech
Drew Shields, Trading Technologies – Next-Generation Product Development
Karen Wuertz, National Futures Association – Opportunity Behind Many Doors
Maureen Downs, Rosenthal Collins Group – Brutally Honest: The Role of the Mentor
Lanre Sarumi, RiskBone – Your Heart vs. Your Talents: Success Mindset for the Financial Industry
Tracy Raben, OCC – From Hire to Retire: Talent Management and Culture Transformation
Peter Nabicht, 12Sided Technology – The Implied Job Descriptions in Finance
JJ Kinahan, TD Ameritrade – Seeing Opportunity Everywhere in the Market


Deutsche Börse Group Happenings – an FIA Operations Americas Event
FIA Operations Americas
Please join us at Fino Wall Street in NY next Thursday, September 22, for an informative conversation with representatives from Clearstream, 360T, and Eurex. The presentation will cover a variety of Deutsche Börse Group initiatives and updates including collateral optimization for the futures market, the Börse’s solutions for accurate FX trade reporting and managing relevant regulations and risks, and Eurex’s new clearing segregation models and U.S. Clearing Access. A question & answer opportunity will follow the presentation.
***DA: We have gone to a couple of these FIA sessions, and the speakers have been surprisingly candid and welcoming. Considering the dearth of comment coming from Deutsche Boerse these days because of the impending LSE Group merger, this is a unique opportunity to get some quality time with Deutsche Boerse/Eurex. Some topics, however, may be verboten.


CME Group Announces Launch of First-Ever Precious Metals Spread and Ratio Futures Contracts
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced the launch of the first-ever, exchange-traded precious metals spread and ratio futures contracts. The three new contracts include Gold/Silver Ratio futures, Gold/Platinum Spread futures and Platinum/Palladium Spread futures and will begin trading on Monday, October 24, 2016, pending regulatory review.
***** I remember the old days when I would have to leg a spread.

***DA: Me too. My strategy was called the “leg-and-pray.”


Object Trading first vendor to conform to ASX’s New Trading Platform
Object Trading, a provider of global, multi-asset trading infrastructure, announced today that it is the first vendor providing market access to the ASX to have conformed to the upgraded ASX 24 (futures) New Trading Platform from Cinnober, due to go live in early 2017.

***DA: First mover advantage? We will hear more from Object CEO Steve Woodyatt when he speaks at our education event in London next month.


How Flexibility Helps Us Form Long-Term Client Relationships
Drew Mauck, 3Points Communications
It can be easy to see PR and Communications as a project-based field. Clients often come to us with a specific problem or objective in mind, and we help them solve that problem or hit that objective — otherwise, we wouldn’t be doing our jobs. But a project-based view, while useful for getting things done, can often lead to short-term engagements.

***DA: Words of wisdom from one of the strong supporters of MarketsWiki, and a shout-out to another one – Trading Technologies


Wednesday’s Top Three
Yesterday’s top clicked story was from the New York Times, A Dodd-Frank Rollback Bill Clears a House Committee. On the chopping block are things like the Volcker Rule, some of the more onerous hoops mega-banks must jump through, and a weakening of the already weakened Consumer Financial Protection Bureau. Welcome to the legislative sausage factory. In second place, FOW reports on an ongoing broker shakeup at ED&F Man. Musical chairs in the broker space, and chairs are being removed left and right. Fun fun. Rounding out the top three, from the Trade News, was Non-bank FCMs yet to win over the buy-side. The pullback from banks in the clearing space was supposed to open new doors for non-bank FCMs, but that is apparently not happening just yet.

Lead Stories

SEC Chair Concedes Reining in Flash Boys Is Harder Than Expected
Alexis Leondis – Bloomberg
Preventing flash traders from wreaking havoc is easier said than done. It’s been more than two years since U.S. Securities and Exchange Commission Chair Mary Jo White said her agency wanted to rein in aggressive, high-frequency trading that could have a destabilizing impact on markets. She said Wednesday that crafting a rule is proving difficult, and that the agency’s next step would be publishing its work on the issue and seeking public comment. That means it could be years before a rule is in place, and the job will probably fall to White’s successor.

Bankers Endorse Finding That Fed Stress Tests Likely Illegal; The Committee on Capital Markets report is the latest evidence some in the banking industry are contemplating a potential lawsuit
A group that represents executives from some of the largest U.S. banks concluded in a paper that the Federal Reserve likely acted illegally in adopting central parts of its annual stress tests, the latest evidence that some in the banking industry are contemplating a potential lawsuit.

Today’s Bond Market: Wrongly Priced for 30 Years of Wretched Existence; Government bonds have sold off aggressively in recent days, in what looks like a classic correction of overextended prices
Is the bond bubble bursting? Supposedly safe government bonds have sold off aggressively in recent days, in what looks like a classic correction of overextended prices. While investors watch every twitch from central bankers—with even the timing of a speech moving the market this week—the bond market’s lack of interest in the economy is worrying.

New Laws Haven’t Made Big Banks Safer, Paper by Lawrence Summers Says; Former Treasury secretary, co-author say stock prices don’t reflect decreased risk of failure
Big Wall Street banks are no safer today than they were before the 2008 financial crisis, despite a raft of new rules aimed at safeguarding the system, according to a new paper co-authored by former Treasury Secretary Lawrence Summers.

Fed minutes don’t always help predictability: ECB research paper
The U.S. Federal Reserve’s meeting minutes provide some assurances about future policy but do not necessarily improve the Fed’s predictability, a study published by the European Central Bank showed on Wednesday.

The Robin Hood Tax Is Dead. Just Say So.
Mark Gilbert – Bloomberg View
A handful of European Union nations is trying to maintain the fantasy that a tax on financial transactions makes sense. After five years of jawboning, negotiating and backtracking, they need to face up to the reality that the tax is unworkable, unwarranted and unwanted.

Study Reveals Investment Management Firms Face Costly Delays In Trading Due To Inefficient Client Data Acquisition, Maintenance And Distribution
Clarient Global LLC (“Clarient”), a joint venture established to transform client data and document management in the financial services industry, today announced the results of a comprehensive research report published by TABB Group, the international capital markets research and consulting firm. The new research report reveals that cumbersome client data acquisition and onboarding processes, along with trading delays due to missing or inaccurate client documentation, are top concerns for buy-side firms.

ISDA Appoints EBRD Treasurer to Board of Directors
The International Swaps and Derivatives Association, Inc. (ISDA) has announced the appointment of Axel van Nederveen, Treasurer of the European Bank for Reconstruction and Development (EBRD), to its Board of Directors. The appointment marks the first time a supranational institution has been appointed to the ISDA Board, and is the latest step in an initiative to further broaden its scope and perspective by appointing members from diverse sectors of the market.

Exchanges, OTC and Clearing

Oil Prices Are Impacting CME’s Energy Derivatives Trade Volumes
CME Group has seen a significant increase in its energy contract trading volume over the last two years, largely driven by the increased uncertainty in oil prices. Continued volatility in the oil market is likely to boost the exchange’s trading volumes further in the future. Below we take a look at how oil prices impact the exchange’s energy derivatives volumes.

The Big Interview: Mark Hemsley
Hayley McDowell – The Trade
Mark Hemsley, chief executive officer of Bats Europe, was quick off the mark to express concern about the impacts of the UK’s recent decision to leave the EU. He said that if necessary, Bats would open an operation in Dublin. The exchange recently announced the launch of its MiFID II compliant block trading platform Bats LIS, which incorporates technology from BIDS Trading in the US. Shortly after this, Euronext launched a similar initiative and became the latest European exchange to offer large-in-scale trading services.

London Stock Exchange Group Board Appointment
London Stock Exchange Group plc (LSEG) today announces that Andrea Munari will step down from the Board of London Stock Exchange Group plc ( “the Board”) and that Andrea Sironi will join the LSEG plc Board as a Non-Executive Director, on 1 October 2016

Shenzhen Stock Exchange Market Bulletin 12 September, 2016, Issue
According to a document published by the People’s Bank of China (PBOC) and State Administration of Foreign Exchange (SAFE), foreign investors in the country’s Renminbi Qualified Foreign Institutional Investor (RQFII) program will be granted quota limits based on their aggregate assets.

Nasdaq Included in Dow Jones Sustainability Index
By GlobeNewswire
Nasdaq (Nasdaq:NDAQ) today announced it has been selected to join the Dow Jones Sustainability Indices (DJSI). Nasdaq is one of 16 companies added to the Dow Jones Sustainability North America Index in 2016, which is comprised of 146 companies.

BNP Paribas Easy with 16 new ETFs launched on Xetra; Smart beta strategies, sustainability and regions of the MSCI index family in focus
Deutsche Boerse
Sixteen new exchange-listed equity index funds issued by BNP Paribas Easy can be traded since Wednesday on Xetra and Frankfurt Stock Exchange.

Barclays Signals Show VIX/VSTOXX Futures Spread Strategy To Continue Outperforming
by Georgia Reynolds, EMEA Reporter via Eurex
The Barclays VIX/VSTOXX volatility futures spread strategy, which has returned near 20% YTD, is expected to continue to produce positive returns over the next month as highlighted by the firm’s timing signals.

Margin Rules Reinforce European Variance Futures Necessity, CFTC Reprieve Questioned
by Georgia Reynolds, EMEA Reporter via Eurex
The decline in liquidity in over-the-counter variance swaps on Sept. 1 when the U.S. Commodity Futures Trading Commission’s uncleared swap margin rules came in to force are another indication that investors should look to variance futures to build a position in realised volatility, according to market participants.


Fiscal Policy Makes a Quiet Turn Toward Stimulus
Greg Ip – WSJ
For years, the world has looked to central banks to deploy whatever tools they had to prop up economic growth. Now, just as those tools reach their limits, governments are quietly stepping up. Fiscal policy across the developed world is collectively turning more stimulative for the first time since the end of the recession. This may be the most underappreciated economic development of the year. While the scale of the stimulus is modest in dollar terms, it signals a more profound shift in the political winds.

How the Trump Organization’s Foreign Business Ties Could Upend U.S. National Security
Kurt Eichenwald – Newsweek
If Donald Trump is elected president, will he and his family permanently sever all connections to the Trump Organization, a sprawling business empire that has spread a secretive financial web across the world? Or will Trump instead choose to be the most conflicted president in American history, one whose business interests will constantly jeopardize the security of the United States?

Donald Trump Wants Peter Thiel On The Supreme Court, Sources Say
Ben Walsh – Huffington Post
Donald Trump has made it clear he will nominate Peter Thiel to the Supreme Court if he wins the presidency, Thiel has told friends, according to a source close to the PayPal co-founder. Trump “deeply loves Peter Thiel,” and people in the real estate mogul’s inner circle are talking about Thiel as a Supreme Court nominee, a separate source close to Trump told The Huffington Post. That source, who has not spoken to Trump directly about Thiel being nominated to the Court, cautioned that Trump’s offers often fail to materialize in real life.

A conversation with Jill Stein: what the Green Party candidate believes
Jeff Stein – Vox
Why does Jill Stein want to be president? Usually, when reporters interview the long-shot Green Party presidential candidate, they ask about her low poll numbers, or about whether she’ll spoil the election for Hillary Clinton, and about how she plans to attract Bernie Sanders’s voters. I wanted to ask a different set of questions: Exactly what would Stein want to do if elected president? How does she think about America’s public policy problems? Does she have a detailed understanding of the trade-offs involved in governance — or does she rely on hand-waving and oversimplified panaceas?

****SD: Jeff Stein interviews Jill Stein. Coincidence? Yup.

Leaked documents reveal secretive influence of corporate cash on politics; Sealed Wisconsin court documents from Scott Walker investigation expose extent of corporate influence on democratic process rarely seen by the public
Ed Pilkington – The Guardian
The pervasive influence of corporate cash in the democratic process, and the extraordinary lengths to which politicians, lobbyists and even judges go to solicit money, are laid bare in sealed court documents leaked to the Guardian.

Investing and Trading

Volume in the Volatility Market Absolutely Exploded During Tuesday’s Rout
Lu Wang and Oliver Renick – Bloomberg
wo investor obsessions, volatility and exchange-traded notes, are being taken to increasingly extreme lengths in the U.S. stock market. For the first time on record, the iPath S&P 500 VIX Short-Term Futures ETN recorded more volume on Tuesday than any company in the S&P 500 Index, with a record 110 million shares changing hands. The closest was Bank of America Corp., with 89.3 million shares trading. The note fell 0.5 percent Wednesday, trimming a rout that topped 5 percent as the S&P 500 Index erased gains.

Fallen Oil Might Now Be Spilling Into Every Stock Sector
Jodie Gunzberg – Indexology
Something unusual happened in August in commodities where energy was the only sector that rose. Despite the negative non-energy performance, supply shocks created pockets of opportunity for some individual commodities within industrial metals and agriculture.

Stocks and Bond Yields Diverge Most Since 2007
Ben Eisen – WSJ
Bonds and stocks have both gotten clobbered in recent days, reversing the traditional relationship between the two in a way that’s only happened during shifts in Federal Reserve policy over the past decade. Many associate a rising stock market with falling bond prices, and vice versa, since an improving economy that boosts shares can lead investors to demand fewer safe bonds like U.S. Treasurys. But that flipped very sharply during this most recent selloff, with falling stocks coinciding with falling bonds.

U.S. public pensions turn to currency as returns sour
Gertrude Chavez-Dreyfuss – Reuters
U.S. public pension funds are embracing currency hedging to bolster returns that have soured in the past year and to prevent further buffeting from extreme market movements. With equities and bonds as the main stars of the pension investing world, currency funds, which hedge their assets, have been viewed as an afterthought for years. But their track records of stabilizing portfolios while adding modestly to returns have caused them to gain traction.


Wells Fargo CEO Defends Bank Culture, Lays Blame With Bad Employees; Says that at the bank, ‘There was no incentive to do bad things’
As public and congressional pressure mounted on Wells Fargo & Co. executives, its top two bankers had an explanation Tuesday for allegedly illegal sales practices across the company: It was employees’ fault.

KCG Completes Acquisition of Neonet
KCG Holdings, Inc. today announced that it has completed the acquisition of Neonet Securities AB, an independent agency broker and execution specialist based in Stockholm, Sweden. The Neonet business, which will operate as a subsidiary of KCG and be renamed KCG Neonet, will continue to be based in Stockholm and led by CEO Tim Wildenberg.

BlackRock Sides With Japan’s Central Bank Over ETF Buying
Anna Kitanaka and Toshiro Hasegawa – Bloomberg
The Bank of Japan has gained an influential ally in its effort to ease concern over central bank intervention in the nation’s $5 trillion stock market.

UBS Is the Latest Bank to Warn of a 10% Drop In the S&P 500
Julie Verhage, Blaise Robinson and Francesca Cinelli – Bloomberg
That 2 percent drop in the U.S. stock market on Friday might not be the last big pullback we see this year. Michael Riesner and Marc Muller, technical analysts at UBS AG, are calling for a top in the S&P 500 following the recent bond market sell-off that has pushed yields on the benchmark 10-year U.S. Treasury above 1.7 percent.

Legacy issues continue to plague Barclays
Caroline Binham – Financial Times
The details could have been lifted straight from the pages of a John Grisham novel: suppression of a damning dossier, anonymous whistleblower tip-offs and a denouement that involved the swift exit of key protagonists. For Barclays, however, the latest decision by the Financial Conduct Authority is all too real. The FCA said on Wednesday that it planned on banning the former chief operating officer of the UK bank’s wealth division for allegedly suppressing a “highly critical” report commissioned at the behest of US regulators just as the lender was negotiating a then-record £290m fine for its part in the Libor-rigging scandal.

Hedge Fund Industry Growth ‘Unwelcome,’ Says Caxton’s Law
Saijel Kishan – Bloomberg
Andrew Law said the hedge fund business is too big — and failing. Law, who runs Caxton Associates, said the growth in industry assets since the global financial crisis has been “both an exceptional and unwelcome development.” Managers now need to generate gains of $350 billion a year to satisfy investor expectations, he said. That’s an annual return of about 12 percent from the $2.9 trillion industry, which has returned an average of 2.2 percent in the past five years.

Activist says Wells Fargo to face critical shareholder resolutions
An activist investor said on Wednesday it is “inevitable” that Wells Fargo & Co (WFC.N) will face critical shareholder resolutions after the giant bank agreed to a $190 million settlement with regulators over fake consumer accounts.

Bank of America Official Likens Brexit to Nuclear Waste Move
Gavin Finch and Richard Partington – Bloomberg
Bank of America Corp.’s president for Europe, Alex Wilmot-Sitwell, said moving employees and derivatives trading activities from London after Brexit would be “fraught with risk” and require a long transition period after the end of the two-year renegotiation.

Monte dei Paschi appoints Marco Morelli as new CEO
Valentina Za and Andrea Mandala – Reuters
Italy’s Monte dei Paschi di Siena appointed Marco Morelli as its new chief executive on Wednesday, handing the 54-year-old banker the tough job of persuading investors to back a third cash call in as many years.

City’s born-again bullishness on flotations
Kate Burgess – Financial Times
nd?.?.?.?relax! The City’s sigh of relief is as noisy as any fitness instructor could wish for as bankers and bosses shrug off the post-referendum tension that paralysed initial public offerings this summer. Rebounding sentiment is emboldening them to revive plans for floats worth up to £20bn.

SS&C Acquires Wells Fargo’s Fund Admin Business
Anthony Malakian – WatersTechnology
GFS, which has $42 billion under administration, provides middle-office, operations and cash/collateral management services to alternative investment managers. GFS’s client base includes firms trading in fixed income, credit, distressed, structured credit, macro, equity, commodities, CDO, CLO, private equity, private debt, real estate and hybrid structures. It has offices in Hong Kong, London, New York, Minneapolis and Singapore.

****SD: The PR Newswire release here

Pimco Says Bill Gross Has ‘Sad Obsession’ With Former Firm
Justin Baer – WSJ
Pacific Investment Management Co. stepped up its defense against Bill Gross’s breach-of-contract lawsuit, alleging its former star manager leaked details on Pimco executives’ pay and withheld emails. Pimco asked a California court Tuesday to force Mr. Gross to turn over emails sent from a private account Pimco says he had used to discuss his 2014 Pimco departure with his new employer, Janus Capital Group. In Pimco’s filing, the firm’s lawyers also accused the bond investor of harboring a “sad obsession with attacking his former employer and colleagues.”

****SD: Also see Bloomberg’s Pimco Accuses Bill Gross of Leaking Confidential Bonuses


Blockchain can create financial sector jobs as well as kill them; Some roles will vanish, but new skills will create opportunities
by: Sarah Murray – FT
Some see it as the biggest change in technology since the advent of the internet. Others say claims for what blockchain can do are overblown. But those among the former group are now asking how the blockchain technology that underpins so-called cryptocurrencies, which include bitcoin, will affect jobs, particularly in the financial sector. Banks, clearing houses and exchanges are already eyeing the potential savings.

Juncker upsets Web firms with EU internet plan
Foo Yun Chee and Alissa de Carbonnel – Reuters
European Commission President Jean-Claude Juncker announced measures on Wednesday to rein in the world’s technology giants, improve broadband speeds and cut the cost of internet access, trying to rally popular support for an EU battered by Brexit. The reforms are likely to shift some wealth from internet services such as Google and Facebook to European telecom groups, which have largely missed out on the tech sector’s surging growth and have lobbied hard for more flexible rules that would give them more money to invest in faster broadband access.

360 TCS and Sunesys Partner to Provide End Users with Network Connectivity Solutions
60 TCS, LLC (360TCS), a premier provider of colocation and data center services in the greater Chicago area, announced today the establishment of increased capacity for connectivity solutions within their Lombard, IL data center via an enhanced partnership with Sunesys, LLC. A leading provider of premium bandwidth services and private fiber optic networks, Sunesys, has expanded their presence in the 360TCS data center, which will serve as a primary client access point as Sunesys continues to extend their high-density fiber optic network across the Chicago Metropolitan area.

DataArt Taps Former Nasdaq Director as Principal Consultant
John Brazier – WatersTechnology
Software vendor and consultancy DataArt has appointed Toby Bryans as a principal consultant of its finance practice. Bryans joins DataArt from Nasdaq NLX where he held the position of director of onboarding. He worked across a number of internal teams and with client projects for JPMorgan and ED&F Man. Prior to Nasdaq, Bryans was head strategic technologist at Schneider Trading Associates.


SEC Preparing to Finalize Transparency Rules for Dark Pools, Mary Jo White Says
Dave Michaels – WSJ
U.S. market regulators plan to finalize a rule proposal in the coming months that would require dark pools to disclose how they treat customers, a step that follows years of regulatory scrutiny of the opaque trading platforms. The Security and Exchange Commission’s 2015 proposal would require that dark pools, many of which are owned by large banks or broker-dealers, disclose their rules of operation, including whether they grant preferential treatment to any particular traders.

Federal Prosecutors Investigating Wells Fargo Over Sales Tactics
Emily Glazer and Christopher M. Matthews – WSJ
Federal prosecutors are in the early stages of an investigation into sales practices at Wells Fargo & Co. that led to the bank being hit last week with a $185 million fine, according to people familiar with the matter. The investigation is being conducted by the U.S. Attorney’s Offices for the Southern District of New York and the Northern District of California, these people said. Prosecutors have yet to decide if any case, should they decide to pursue one, would be along civil or criminal lines, the people said.

Law clerk in napkin-chewing insider case gets nearly 4 years prison
Jonathan Stempel – Reuters
The former law firm clerk whose tips about corporate mergers fueled an insider trading scheme in which one participant ate evidence written on napkins and Post-its in Grand Central Terminal was sentenced to nearly four years in prison on Wednesday. Steven Metro, a former managing clerk at Simpson Thacher & Bartlett, received his 46-month sentence from U.S. District Judge Michael Shipp in Trenton, New Jersey, after pleading guilty last November to securities fraud and conspiracy charges, prosecutors said.

Spitzer’s Trial Against Hank Greenberg Finally Begins
Leslie Scism – WSJ
Maurice R. “Hank” Greenberg, the prominent insurance executive who transformed American International Group Inc. into a global powerhouse, is finally on trial. Eleven years ago, Eliot Spitzer, New York Attorney General at the time, filed a financial-fraud civil-court lawsuit against Mr. Greenberg. What followed was a decade of delays, new attorneys general and a narrowing of the accusations. Starting Tuesday, the government began trying to prove Mr. Greenberg approved two financial maneuvers between 2000 and 2003 aimed at duping shareholders into believing AIG’s core insurance operating results were better than they were.

Former Barclays FX trader sues for unfair dismissal
Steve Slater – Reuters
A former Barclays foreign exchange trader is suing the British bank for unfair dismissal at a London employment tribunal, after several successful claims by traders fired by rival banks.

FINRA Fines Ameriprise Financial Services, Inc. $850,000 for Failing to Supervise the Transmittal of Funds From Customer Brokerage Accounts
The Financial Industry Regulatory Authority (FINRA) announced today that it has fined Ameriprise Financial Services, Inc. $850,000 for failing to detect the conversion of more than $370,000 from five customer brokerage accounts by one of its registered representatives.

CFTC Wins Jury Verdict in Commodity Pool Fraud Case
The U.S. Commodity Futures Trading Commission announced today that a jury in the U.S. District Court for the Northern District of Illinois found Grace Elizabeth Reisinger of Grand Island, Nebraska, liable for operating a fraudulent commodity pool scheme between 2005 and 2008. The CFTC charged that Reisinger and her company, ROF Consulting, LLC, fraudulently solicited and accepted at least $2.75 million from participants in the NCCN commodity pool, operated by Reisinger.

Och-Ziff says U.S. judge ignored own deadline in class action
Jonathan Stempel – Reuters
Lawyers for Och-Ziff Capital Management Group LLC said a federal judge ignored his own deadline by certifying a class-action lawsuit tied to a bribery probe on Wednesday without giving the largest publicly traded U.S. hedge fund company a chance to object.

CFTC Staff Announces that Yieldbroker Pty Limited Qualifies for No-Action Relief in Connection with CFTC No-Action Letter No. 15-29
The U.S. Commodity Futures Trading Commission’s (CFTC) Divisions of Market Oversight (DMO) and Swap and Intermediary Oversight (DSIO) today announced that Yieldbroker, a multilateral swaps trading facility that is licensed and regulated in Australia, has qualified for no-action relief in connection with CFTC No-Action Letter No. 15-29 (see Qualified Australian Licensed Market Letter or QALM Letter under Related Links). This makes Yieldbroker the first foreign-regulated, multilateral swap trading facility that permits direct access to U.S. persons to qualify for long-term no-action relief from the requirement to register as a swap execution facility (SEF) with the CFTC.

Danish watchdog asks audit office to investigate DONG Energy IPO
A Danish political watchdog on Wednesday asked the national audit office to investigate the role of key parties involved in the share market flotation of offshore wind farm developer DONG Energy. DONG Energy’s initial public offer (IPO) in June raised a gross 17 billion crowns ($2.6 billion) for the Danish state and a consortium of investors led by Goldman Sachs.

The SEC’s Whistleblower Program: The Successful Early Years, Andrew Ceresney, Director, Division Of Enforcement, Sixteenth Annual Taxpayers Against Fraud Conference, Washington, D.C., Sept. 14, 2016
I am pleased to have the opportunity this morning to speak about the Commission’s whistleblower program to an audience so integral to that program, whistleblowers and their counsel. Whistleblowers provide an invaluable public service, often at great personal and professional sacrifice and peril.


Brexit Gives Boost to U.K. Treasury’s Focus on Green Finance
Jessica Shankleman – Bloomberg
The U.K. Treasury is supporting efforts by London to become a global hub for green finance, seeking to build on the country’s strengths after June’s vote to leave the European Union.

S&P says capital rules at Brazil banks lag behind Latin rivals
Aluisio Alves – Reuters
The quality of capital regulatory standards for Brazilian banks lags behind that of other Latin American banking systems, partly because rules encourage an excessive use of tax credits as capital instruments, a senior analyst at Standard and Poor’s said on Wednesday.

China’s ambitious oil futures contract delayed; Burst of speculation in metals futures gives regulators cold feet about complex contract
by: Henry Sanderson – FT
The launch of China’s first oil futures contract has been put back by up to a year after a burst of speculative trading activity in commodities alarmed regulators and foreign traders raised concerns about its complexity.

Palm oil producers unite to tackle green concerns; Leading agribusinesses come together in attempt to improve environmental record
by: Jeevan Vasagar and Neil Hume in Singapore – FT
Some of the world’s largest agricultural businesses are forming an alliance to raise the status of a sector that faces mounting political scrutiny over environmental harm — particularly over its production of palm oil.

Oil Glut Set to Worsen as Nigeria and Libya Fields Restart
Laura Hurst, Elisha Bala-Gbogbo, Angelina Rascouet – Bloomberg
Exxon said to be on brink of resumption of top Nigeria grade; Libya lifts export restriction on ports halted for months
Amid the most enduring global oil glut in decades, two OPEC crude producers whose supplies have been crushed by domestic conflicts are preparing to add hundreds of thousands of barrels to world markets within weeks.


Back to School: Students “Ace” Financial Basics, but Continue to Give Themselves a “C” in Money Management
U.S. Bank
School is back and in session and when it comes to financial literacy, students have confidence in the basics, but continue to give themselves a “C” when it comes to money management. These are the overall findings of the 2016 U.S. Bank Student and Personal Finance Study which examines the attitudes and philosophies on financial education among high school and undergraduate college students ages 18 to 30 years old.

****SD: What current students have money to manage? A “D” in debt management would be more appropriate.

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