First Read

Drew Shields, Trading Technologies – Next-Generation Product Development
MarketsWikiEducation.com

“There will always be someone as smart or smarter than you and you have no control over that. The only thing you have control over is whether you have more drive, more passion than others.”

As chief technology officer at Trading Technologies, Drew Shields has been instrumental in the implementation of the software vendor’s new top-to-bottom makeover. The new architecture required lots of technical talent, to be sure, but it also required two additional attributes – hunger, and the ability to challenge the status quo.

In college Shields majored in theology, and he started in the business world with few discernible technical skills. But he had the drive and passion to succeed, and he was given a chance to prove himself. He says that, while some job opportunities at TT require specific expertise, in many cases the company places a higher priority on a candidate’s motivation and attitude.

That’s not just next-generation product development; that’s next-generation talent development.

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

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Wednesday’s Top Three
Doug Ashburn, JLN
The word of the day (which I invented and should consider copyrighting) is Trexit. Trexit refers to a possible reversal of the ICE-Trayport deal by the U.K. Competition and Markets Authority, and featured in yesterday’s top clicked story from the FT. A close second was Andrew Ackerman’s story in the Wall Street Journal about the “dysfunctional” CFTC, Only in Washington: Have Your Lawyer Tell My Lawyer to Tell Me What You Think. And in third place, from Bloomberg, was Woman Behind ‘Flash Boys’ Exchange Approval Preps for Next Fight. Sophia Lee, IEX’s general counsel, has fought through several rounds with regulators and rival exchanges and, going into Friday’s launch, she appears to be ahead on points. The true test, the market structure test, lies ahead.

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Intercontinental Exchange Statement On Trayport Acquisition
ICE
Intercontinental Exchange (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today provided further information to investors on its acquisition of Trayport following the UK’s Competition and Markets Authority’s (CMA) announcement of its provisional findings on August 16, 2016.
goo.gl/KpfD8x

***DA: To sum up, reports of a potential Trexit (Copyright Doug Ashburn, 2016 – see above), are a bit premature.

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The Wretched, Endless Cycle of Bitcoin Hacks; Proponents of digital currency are scrambling to find a solution
Yuji Nakamura – Bloomberg
It seemed bitcoin exchange Bitfinex was doing all the right things. In the end, that didn’t stop hackers from stealing $65 million.
goo.gl/tSTXIS

****JB: Someone managed to hack the NSA. Not sure what chance mere banks have.

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Fires, Floods, and Scorchers: Earth Destroys Yet Another Heat Record; July was the hottest on record, the 15th consecutive record-breaking month.
Tom Randall – Bloomberg
As more than 100,000 Americans flee destructive wildfires in California and floods in Louisiana, earth sends yet another reminder that the worst is yet to come: a new record for planet-wide heat.
goo.gl/DzJCBn

****JB: Eh…it’s all just a Chinese hoax. Nothing to see here. Move along.

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FCM Rankings – Q2 2016
Tod Skarecky, Clarus Financial Technology
It’s time to update our analysis of FCMs. The data from our last report showed a few things:
The number of FCMs reaching a 14-year low
Any growth in pledged collateral being in “Cleared Swaps”
A concentration of margins within the top firms, including 96% of swaps being cleared by the top 10 firms.
Let’s see what, if anything, has changed.
/goo.gl/4ESJJZ

***DA: Clarus’ quarterly FCM slice-and-dice.

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Quarterly Hedge Fund Tracker – Q2 2016
S&P Global
This quarter’s Hedge Fund Tracker shows the top funds managed approximately $150 billion in equity holdings, up from $141 billion in Q1 2016. These funds also decreased the number of positions from 408 in Q1 to 399 in Q2, breaking last quarter’s record as the fewest stock positions held since S&P Global Market Intelligence began tracking this data in 2014.
goo.gl/H6yRuw

***DA: Concentration squared – more AUM for the big boys, who hold less diversified positions.

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Lead Stories

Traders Plead With Regulator to Overhaul U.S. Options Auctions
Brian Louis – Bloomberg
Traders are urging U.S. regulators to fix a part of the options market that some blame for contributing to the last five years of stagnant trading. Auctions, which mainly match orders from individual investors, may have reduced competition during normal trading. The relative attractiveness of auctions could be reducing liquidity in the options market as market makers cut their efforts elsewhere during continuous trading.
bloom.bg/2byxx0h

Front-Running: A Thing of the Past
Dan DeFrancesco – WatersTechnology
Two UC Berkeley professors used microsecond timestamps to prove HFT firms haven’t been able to pick off liquidity-taking orders using stale quotes. This Friday, IEX will begin trading as an official exchange, marking the end of one chapter of its story and the beginning of another. “Story” is a fitting word, as it was a book by famed author and journalist Michael Lewis that initially pushed the firm into the spotlight. “Flash Boys” documented IEX CEO Brad Katsuyama’s frustration as a trader at the Royal Bank of Canada (RBC) in dealing with high-frequency trading (HFT) and his determination to change the way the markets operate by setting up his own trading venue.
goo.gl/jp2afI

CBOE gets MAS nod for VIX futures
Futures & Options World
The Chicago Board Option’s Exchange’s Futures market has gained regulatory approval from Singapore’s regulator to operate in the country. The CBOE Futures Exchange (CFE) has gained regulatory approval from the Monetary Authority in Singapore to be a Registered Market Operator (RMO), allowing the exchange to offer trading access to Singapore firms.
goo.gl/8IR6k0

Fed hard-fought debate on rate rise timing
Sam Fleming – Financial Times
A divided Federal Reserve left open the prospect of a further interest rate rise this year even as policymakers insisted they needed more evidence on the durability of the rebound before feeling confident enough to pull the trigger. Minutes to their latest July meeting revealed a hard-fought debate over when to move rates, with a couple of participants urging an immediate move, while others were urging caution amid questions over how rapidly inflation will return to target
on.ft.com/2byM5NL

The 100,000-Barrel Oil Output Increase That Didn’t Really Happen
Mark Shenk – Bloomberg
U.S. crude oil production is holding up better than the government previously thought. The output estimate jumped by 152,000 barrels a day for last week, the biggest increase since May 2015, according to the Energy Information Administration. Production didn’t actually increase by that amount but was modified to incorporate a “re-benchmarking” versus the agency’s Petroleum Supply Monthly, according to Jonathan Cogan, an EIA spokesman.
bloom.bg/2bI9cbM

The too-big-to-fail problem is getting even bigger
Jonathan Garber – Business Insider
The too-big-to-fail problem on Wall Street may now be even bigger. The Dodd-Frank Act was implemented in response to the financial crisis to make sure a bank’s failure didn’t risk bringing down the entire financial system. But according to Craig Donohue, the executive chairman of The Options Clearing Corporation and the former CEO of the Chicago Mercantile Exchange, the law may have made things worse.
read.bi/2bywBsM

A Physics Lesson for Central Bankers
By Mark Gilbert – Bloomberg
The world is braced for the discovery of a fifth fundamental force of nature — the four known ones being electromagnetism, gravity, and strong and weak nuclear forces — that subverts the so-called standard model of particle physics. Given the lackluster outlook for global growth, maybe economics needs a similar revolution.
/goo.gl/7Kv7TA

World’s Biggest Banks Still Pose Too-Big-to-Fail Risk, FSB Says
Silla Brush – Bloomberg
FSB releases report calling for additional oversight steps; FSB says industry has made progress despite challenges
The world’s biggest banks still can’t be wound down in an orderly manner nearly eight years after the financial crisis, the Financial Stability Board said, calling for renewed efforts to tackle the risks posed by too-big-to-fail firms.
goo.gl/1z5VP9

Brexit

Brexit wounds, part 1: what next for the UK?
Thomson Reuters, Inside Financial Risk Blog
What will the Brexit vote mean for UK growth, interest rates and the record current account deficit? Opening this two-part series – attempting to make sense of the uncertainty using Fathom Consulting’s charts.
tmsnrt.rs/2bItXUS

Brexit Lets Battered Brokers Lay Swiss Franc Ghosts to Rest
Marianna Duarte De Aragao – Bloomberg
FXCM cites 60% boost to its retail pound trades after EU vote; Increase suggests measures to reduce losses are working
It took them a year and a half, but retail currency brokers are finally winning back some of the credibility they lost when a shock decision by the Swiss central bank cost them millions of dollars.
goo.gl/vGr13F

Protesters Tell Bank of England Bond-Buying Plan Isn’t Working
Scott Hamilton – Bloomberg
Pressure group held demo outside central bank on Wednesday; Criticism of QE has grown since BOE restarted asset purchases
The Bank of England’s quantitative-easing program isn’t working and should be abandoned in favor of other stimulus measures, according to demonstrators who gathered outside the central bank on Wednesday.
goo.gl/TgkGto

London’s Other Financial Center Needs to Keep Banks Close
Jack Sidders – Bloomberg
U.K. commercial property market fell into recession in July; Canary Wharf pivots to residential and retail construction
Way up in One Canada Square, in the Canary Wharf financial district, a map of post-Brexit London is flashing.
goo.gl/NtyHml

Exchanges, OTC and Clearing

ICE bolsters data business with latest acquisition
Hayley McDowell – The Trade
Intercontinental Exchange (ICE) has confirmed the acquisition of S&P’s securities evaluation and credit market analysis units, following clearance from the US Department of Justice.
goo.gl/JUDYsz

CBOE Futures Exchange Receives Registered Market Operator Approval in Singapore
Press Release
CBOE Futures Exchange, LLC (CFE) today announced it recently received approval from the Monetary Authority of Singapore (MAS) to be a Registered Market Operator (RMO) in Singapore. With this designation, CFE may now allow professional investors, accredited investors and expert investors, as defined under Singaporean law, to become CFE Trading Privilege Holders (TPHs) and access CFE’s market directly.
goo.gl/JVO1wz

Euronext Enters into a Definitive Agreement for the Acquisition of a 20% Stake in EuroCCP
Euronext
Euronext (Paris:ENX) (Amsterdam:ENX) (Brussels:ENX) today announced it has signed a definitive agreement to acquire a 20% stake in EuroCCP, the leading CCP for pan-European equity markets, providing clearing and settlement services, for an amount of circa EUR14m. This follows the announcement of May 12th confirming Euronext was in exclusive talks to acquire 20% of EuroCCP.
/goo.gl/vTqEfx

Nasdaq’s Greifeld: Why We’ve Added ‘Extended Life’ Orders (VIDEO)
Bloomberg
Bob Greifeld, Nasdaq’s chief executive officer, explains why the exchange is adding “extended life” orders. He speaks with Bloomberg’s Betty Liu on “What’d You Miss?
bloom.bg/2byZFAw

Single Stock Dividend Futures: Designated Market-Making scheme: Extension and adjustment
Eurex
The Management Board of Eurex Deutschland and the Executive Board of Eurex Zürich AG took the following decisions effective 1 September 2016:
/goo.gl/MNpSxz

OneChicago Labor Day Holiday Trading Hours
Press Release
OneChicago, LLC (“OneChicago”) will be closed on Monday, September 5th, 2016 in observance of the upcoming Labor Day Holiday, which is consistent with U.S. equity markets. OneChicago will be open Tuesday, September 6th, 2016.
goo.gl/55Sgl8

ASX LIMITED FULL-YEAR RESULTS TO 30 JUNE 2016 (FY16)
ASX
Highlights relative to the prior corresponding period (FY15 pcp) based on the
Group’s segment reporting:
goo.gl/Ji2hHZ

***DA: Also see: Notice of Annual General Meeting – 28 September 2016

[[http://goo.gl/XQXGQM|Full-Year Analyst Presentation]]

TMX Group Welcomes JA Alumni To Innovation Challenge
TMX
JA Central Ontario and TMX Group will today launch the JA Alumni TMX Innovation Challenge, an exclusive, two-night event for students who have completed the 18-week entrepreneurial JA Company Program. Participants will be challenged to address evolving issues facing TMX Group and the broader capital markets industry in three areas: big data, social media and technology.
/goo.gl/2gNe6g

HKEX to Roll Out Volatility Control Mechanism for its Securities Market
HKEx
Hong Kong Exchanges and Clearing Limited (HKEX) is set to roll out its Volatility Control Mechanism (VCM) – a measure designed to protect market integrity by preventing extreme price volatility arising from major trading errors and other unusual incidents – in its securities market on Monday, 22 August 2016.
goo.gl/r28wQW

Politics

Trump’s New Team Brings Deep Ties to Major Donor
Zachary Mider – Bloomberg
When Donald Trump shook up his presidential campaign this week, he deepened his ties to Robert Mercer, a wealthy hedge-fund manager and conservative donor with a taste for bucking the Republican establishment.
bloom.bg/2bIlpx3

A $46 Billion Finnish Fund Manager Is Very Worried About Trump
Raine Tiessalo – Bloomberg
There’s at least one fund manager who’s very worried about the possibility of Donald Trump becoming the next U.S. president.
goo.gl/AVDeko

Investing and Trading

How La Niña could affect Asian currencies
Akin Oyedele – Business Insider
One of the biggest drivers of Asian currencies in the coming months could be the weather. In a note out Wednesday, strategists at Deutsche Bank examined how the climate pattern La Niña could affect Asian economies, and how a pass-through effect from the weather could ease a jump in inflation and eventually weaken currencies. The National Oceanic and Atmospheric Administration has confirmed that La Niña is coming. It will follow a record-setting El Niño, which is marked by unusually dry weather.
read.bi/2byLbAM

“Nothing Recedes Like Success”
The Reformed Broker
In the 1980’s and 1990’s, private equity and hedge fund strategies were new and novel. They were the province of only the most sophisticated investors and very little understood. They were small, relative to public equity mutual funds, and their methods for making money were unique. As such, they were incredible places to put money. The Yale Endowment’s David Swensen rode both “asset classes” to enormous gains and, as can be expected, the word got out. As Warren Buffett says, “Nothing recedes like success.” Swensen wrote a book about his “endowment model” and a revolution was triggered. Suddenly, every large pool of assets was on the hunt for alternative strategies and private funds.
goo.gl/U4f6ty

Central bankers are threatening the engine of the economy; Job cuts, reduced pensions, defaults — all can create a cycle of decay, writes Bill Gross
FT
You can pay me now?…” counsels the sensible mechanic promoting Fram oil filters in the old-time advert, “?…?Or pay me later,” interjects his pricier associate, as he tinkers with the broken engine of a customer who has ignored the advice. Central bankers should take heed. Dirty oil and artificially priced financial markets have much in common. Both can destroy engines eventually — and in the case of central banking it is the motor of the real economy that is at risk.
/goo.gl/CUjsvO

The Fix Is Out: Fannie and Freddie Heading for New Troubles
Joe Light – Bloomberg
Years after government bailouts, lawsuits but no solutions; ‘Inertia is driving the way’ with no long-term plan for GSEs
The hole at the corner of 15th and L streets, in downtown Washington, is deep — and getting deeper.
goo.gl/ibj5ya

Institutions

Why We’re Still Arguing Whether QE Worked
Barry Ritholtz – Bloomberg
How many times have you heard someone say that the Federal Reserve’s asset-purchase program known as quantitative easing was ineffective? At least, that’s what I keep hearing from the usual pundits arguing their case on television and in print.
bloom.bg/2bImlBI

People Are Getting Emotional About Fed’s ‘Schizophrenic’ Debate
Paul Vigna – WSJ
The market has no choice but to pay attention to what the Federal Reserve does, and says, and plans, and forecasts. The central bank is, after all, the prime mover in the monetary policy of the world’s reserve currency, the dollar. You can’t ignore the Fed. But you can get fed up with the Fed. We’re not just being caustic. Comments just this week from Fed officials have left long-time watchers completely vexed, unsure of what the central bank is really thinking or planning.
on.wsj.com/2bI7jfp

UBS: Don’t be Fooled by Emerging Markets’ Winning Streak
Alastair Marsh and Sid Verma – Bloomberg
The ‘great migration’ into emerging-markets assets should be seen for what it is — a straightforward yield grab, not a vote of confidence in the developing world’s growth story. That’s the view of UBS Group AG strategists Bhanu Baweja and Manik Narain, who say that even though emerging-market securities are gaining favor as developed markets get increasingly expensive, fundamentals won’t fulfill the hype. Investors rushing into riskier economies should take note, they warn, because when growth doesn’t follow through, cheap valuations might end up looking expensive very quickly
bloom.bg/2byIdML

BlackRock Gives This Acronym a Try
Lisa Abramowicz – Bloomberg
When people hear acronyms like CDO or CLO, they immediately think of the financial crisis that brought down Lehman Brothers and Bear Stearns. And perhaps it’s because of that impulse to recoil that firms such as BlackRock see opportunity in the securities. Even now, eight years after that epic credit seizure, collateralized loan obligations, or CLOs, are still treated with more skepticism than similarly rated high-yield bonds or loans. As a result, they offer higher yields.
bloom.bg/2bItL82

MD Simon Dove departs Sun Trading
Futures & Options World
High frequency trading firm Sun Trading has parted ways with its London-based managing director Simon Dove, after six years with the organisation. Dove joined the organisation in 2010 as director for European business development. In 2014 he was appointed managing director.
goo.gl/xVpKPK

Deutsche Bank retail boss proffers bonus ban for second year
James Shotter – Financial Times
deutsche Bank should debate scrapping bonuses for its management board for a second consecutive year if shareholders have to go without a dividend, the head of the German lender’s retail banking arm has said. Germany’s biggest bank scrapped bonuses for its top managers for 2015 after reporting a EUR6.8bn net loss last year, and warning that it was unlikely to pay a dividend to shareholders before 2017 at the earliest.
on.ft.com/2bI7l6I

Is Bank of America the Next Activist Target?
Christina Rexrode – WSJ
It could have been Bank of America Corp. Activist investor ValueAct Capital Management LP took Wall Street by surprise when it disclosed Monday that it had bought a stake in Morgan Stanley, flouting conventional wisdom that activists don’t engage in banking because there are too many regulations to make a big difference in a company’s strategy.
on.wsj.com/2bIkq04

German banks reignite debate on deposit fees
James Shotter – Financial Times
In late 2014, Skatbank, a small co-operative bank in the province of Thuringia, sent shockwaves through German finance by saying it would charge, rather than pay, interest on large deposits held on behalf of its private customers. No one followed suit. From September, however, Skatbank will have company. Last week, the Raiffeisen bank in Gmund am Tegernsee, a small, well-off municipality some 50km south of Munich, said that from next month it would charge customers a “custodian fee” of 0.4 per cent on deposits above EUR100,000.
on.ft.com/2bIl79q

Column: When hedge funds are paid to be too big
James Saft – Reuters
Combine the standard hedge fund compensation model with the reality of declining fund performance as assets under management increase and you have a whopping conflict of interest.
reut.rs/2bIpp0O

Fintech

Rethinking Speed in Financial Markets, Part 2
Donal Byrne, Corvil – TABB Forum
Assuming that trading via computers won’t be illegal any time soon, all attempts to regulate and artificially control speed in the financial markets likely will prove ineffective. Just as democracy allows for people with opposing views, beliefs and actions to coexist within its system, our market structure should allow for any expression of speed, fast or slow. This is Part 2 of a four-part blog series exploring the new role of speed in modern market structure.
goo.gl/7MLHr0

Blockchain Pitched as Way to Simplify FX Trading Databases
Declan Harty – Bloomberg
A year-old technology firm wants to simplify currency markets by streamlining the way trading data is stored using blockchain-based technology. Cobalt DL, a London-based firm created last year by former Traiana Inc. Chief Executive Officer Andy Coyne, announced Wednesday that it began beta testing on a distributed ledger network, which the firm hopes can cut post-trade costs and provide a singular database for foreign-exchange transactions. Set to launch in 2017, the network will create a single record for each trade.
bloom.bg/2bIkInK

****SD: From WatersTechnology: Cobalt Prepares for 2017 Distributed-Ledger Platform Release

Funding to fintech startups took a big hit in the second quarter of 2016
Ian Kar – Quartz
Funds aren’t flowing so easily to fintech startups anymore. Funding into the sector fell 49% globally in the second quarter of 2016 from the first quarter of the year, according to a new report from research firm CBInsights and KPMG. Global funding—from venture capital firms and corporates—fell 51% compared to the second quarter of 2015.
goo.gl/qSGJ2U

When a Tech Patent Is Neither; A Supreme Court decision slashes business-method filings.
Susan Decker – Bloomberg
Two years ago, when the U.S. Supreme Court invalidated Alice Corp.’s handful of patents on the concept of an electronic escrow arrangement, it ruled that taking abstract ideas—apparently including established methods of doing business like escrow—and implementing them on a computer doesn’t meet the standard of intellectual property. In its unanimous decision, written by Justice Clarence Thomas, the high court refused to precisely define what makes something an “abstract idea.” “We tread carefully,” Thomas wrote of the new standard for patents. Since then, however, lower courts, and the U.S. Patent and Trademark Office, have been using some pretty heavy boots.
goo.gl/218bZ6

The Quants Are Taking Over Wall Street
Forbes
Paul Tudor Jones helped define the rich hedge fund industry by placing big contrarian trades that made him a billionaire, like anticipating the 1987 stock market crash. But in 2001 he quietly made one of his best trades ever as the key investor backing the launch of a data-driven quantitative hedge fund called Two Sigma Investments.
goo.gl/ryFNqL

****SD: From Business Insider: Quant investing is the biggest new trend for hedge funds

Regulation

Modern Networks’ Quast Says Reg NMS Is “Lousy” Idea and Needs Reform
John D’Antona Jr. – Traders News
Regulation National Market Structure needs reform – and right now. But fixing it could take an act of the Almighty. That’s the bottom line for the governing piece of regulation that underpins the US equity market structure, according to ModernNetworks IR president and founder Tim Quast, formerly a market structure analyst at market consultancy Aite Group. In an interview with Markets Media on the heels of the August Equity Markets Structure Advisory Committee, Quast said that Reg NMS was a “lousy idea” in that making all public marketplaces (ie exchanges) be forced to offer a security at the same price was simply silly. In no other market does this unique Reg NMS-feature exist.
bit.ly/2bIr9qM

Experts dissect direct electronic access
Futures & Options World
The definitions of ‘fraction of a second’ as well as ‘discretion,’ remain unclear in the rules
The direct electronic access or direct market access provisions that were released in the final regulatory technical standards (RTS) under Mifid II last month have left market and legal experts with lingering questions. The first point of doubt concerns the definition of direct electronic access (DEA) itself.
goo.gl/9xSXQt

Bribery Arrest May Expose African Mining Rights Scandal Tied to Och-Ziff
Dealbook – NY Times
African officials say the arrest of a Gabonese man on bribery charges may help pull back the curtain on a long-running foreign corruption scandal that has ensnared the giant hedge fund founded by Daniel Och. United States authorities on Tuesday arrested Samuel Mebiame, a consultant who worked for a joint venture involving Och-Ziff Capital Management Group, on charges that he paid bribes to foreign officials to secure mineral concessions in at least three African countries.
nyti.ms/2byJK58

Penny Stock ‘Kingpin’ Gets 6 1/2 Years for Boiler Room Plot
Christie Smythe and Katherine Greifeld – Bloomberg
A globe-trotting securities dealer who set up boiler rooms throughout the world in what gave rise to one of the U.S. government’s largest penny stock fraud investigations was sentenced to 6 1/2 years in prison. Sandy Winick, a Canadian described as a “penny stock fraud kingpin,” was accused of masterminding two schemes that fleeced investors of $140 million. First, he and associates allegedly peddled dubious stocks at pumped-up values. Then he victimized buyers again by selling them a promise to help recoup their losses in exchange for a fee, the U.S. claimed.
bloom.bg/2bI8YBv

Ex-Wall Street banker convicted for giving father insider tips
Nate Raymond – Reuters
An ex-Wall Street investment banker was convicted on Wednesday of engaging in insider trading by tipping his father off to unannounced healthcare mergers, a victory for prosecutors after an appellate ruling made it harder to pursue such cases harder.
reut.rs/2byJeEt

CFTC Charges Mirko “Mick” Schacke and his Nevada-based Company TradeMasters USA, LLC with Fraud and Failing to Register with the CFTC
CFTC
The CFTC’s Complaint alleges that, from June 2013 to the present, Schacke and TradeMasters have fraudulently solicited and accepted at least $155,626 from at least 36 individuals to purchase TradeMasters’ automated futures trading software that Defendants sold for as little as $1,500 and as much as $20,000. According to the Complaint, the Defendants made numerous misrepresentations to investors, including on TradeMasters public website and on YouTube videos, to induce them to purchase the software. Schacke and TradeMasters allegedly made false statements to customers that they would make large profits from using the software. Specifically, the Complaint alleges, they claimed that at least one customer earned 300% in just three months, and that most users of the software generate a monthly income of $5,000 to $10,000.
goo.gl/Wkco7r

Penny-stock fraudster goes to federal prison
By Lia Eustachewich – NY Post
A Canadian crook who masterminded two multi-million dollar penny-stock fraud schemes was tossed in federal prison Wednesday for 6 ¹/2 years.
goo.gl/AzVx1m

Regions

Louisiana’s Sinking Coast Is a $100 Billion Nightmare for Big Oil
Catherine Traywick – Bloomberg
From 5,000 feet up, it’s difficult to make out where Louisiana’s coastline used to be. But follow the skeletal remains of decades-old oil canals, and you get an idea. Once, these lanes sliced through thick marshland, clearing a path for pipelines or ships. Now they’re surrounded by open water, green borders still visible as the sea swallows up the shore. The canals tell a story about the industry’s ubiquity in Louisiana history, but they also signal a grave future: $100 billion of energy infrastructure threatened by rising sea levels and erosion. As the coastline recedes, tangles of pipeline are exposed to corrosive seawater; refineries, tank farms and ports are at risk.
bloom.bg/2bIasvH

BOJ Cornered as Japanese Banks Running Out of Bonds to Sell
Gareth Allan, Shigeki Nozawa – Bloomberg
Banks cut almost half of holdings since Kuroda began easing; Japanese banks ‘losing capacity to cut’ JGBs: Bank of America
Japan’s biggest banks are running out of room to sell their government bond holdings, pushing the central bank closer to the limits of its record monetary easing.
goo.gl/KUl5Vw

Israel’s Second-Largest Investment House Conducting Sale Talks
Bloomberg
Meitav Dash Investments Ltd., Israel’s second-largest investment house, said it is in sale talks with an unnamed foreign fund. The shares soared. The company is negotiating a sale to London-based XIO Group, two people with knowledge of the matter said, asking not to be identified because the talks are private. TheMarker, a Hebrew daily, earlier reported the name of the fund.
bloom.bg/2bE2fHt

Oslo ruffles feathers as it taps Norway’s oil fund
Richard Milne – Financial Times
This year will prove to be a watershed for the world’s largest sovereign wealth fund as, for the first time in two decades, Norway’s $890bn oil fund will have money taken out by the government in Oslo. The withdrawals so far have been small compared with the size of the fund, which has grown rapidly to become one of the largest investors in the world on the back of surpluses made by Norway’s petroleum industry.
on.ft.com/2byMoId

China to create own version of forex code
Alessandro Aimone – Risk.net
China is creating its own version of the Global Code of Conduct for foreign exchange markets, in a move aimed at aligning the country’s rules with international standards outlined in May this year, Risk.net’s sister site FXWeek.com has learned. The code will apply to local and foreign banks operating in the Chinese onshore market, and it’s slated for publication within a year. The work on the code is led by the recently created Chinese Foreign Exchange Committee (CFXC), which operates under the guidance of the People’s Bank of China (PBoC) and the State Administration of Foreign Exchange (Safe).
goo.gl/7wa6bA

BlackRock’s largest mutual fund ups bet on Japan
Reuters
BlackRock Inc’s Global Allocation Fund has been adding to its bet on the Japanese stock market, a company note said on Wednesday, calling it one of the few markets to offer a bargain and warning that U.S. stocks may disappoint.
reut.rs/2bImAwG

Miscellaneous

GE Wants to Bring More Life to Coal
Ted Mann – WSJ
General Electric Co. has stopped trying to write coal’s obituary. The conglomerate—one the world’s biggest suppliers of power-plant equipment—for years played down coal’s future as challenged by environmental and cost issues. Instead, it has promoted natural gas as the fuel of the future.
on.wsj.com/2byKOX1

MOVES- Deutsche Bank, ING Group, Thoma Bravo
Reuters
The following financial services industry appointments were announced on Wednesday
reut.rs/2bIpJNa

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