John Lothian: What to Expect as FTX Debuts Biggest Crypto Chapter 11 in Court; Ethics Watchdog Group Seeks Probes Into Oversight of Officials’ Stock-Trading Conflicts

Nov 22, 2022

First Read

Hits & Takes
John Lothian & JLN Staff

CME Group Chairman and CEO Terry Duffy was interviewed by Danny Moses, Guy Adami and Dan Nathan for the “On the Tape” podcast in an episode titled “Cult of Personality with Terry Duffy of CME Group.”

FIA, Inc. shows its leadership in many ways. Supporting organizations that are making a difference for important issues of justice, equality and fairness is one of them. An example of this is their support of the Black Talent Charter, “an initiative aimed at improving the representation of talented Black professionals in the financial and professional services sectors in the UK and encouraging their progression to senior positions. Since its launch in 2020, the Black Talent Charter has galvanized support from some of the biggest names in the City.” You can read more about the Charter and sign up for it HERE.

Finally there is a story that gets to the center of how Sam Bankman-Fried was able to pull off the FTX caper. The story is from the Financial Times and is titled “Sam Bankman-Fried and the power of dressing badly; Looking attractive matters a lot less, for political or professional purposes, than telling your story.” Of course, the FT was not the only paper to pick up on this. The Wall Street Journal has a story titled “In Sam Bankman-Fried’s T-Shirts, a Soured Sign of Charm; The FTX founder embodied Silicon Valley’s disheveled-exec trope better than anyone. But as his crypto empire collapses, it all looks messier.”

Coinbase’s stock price hit an all-time new low on Monday, down 10% on the day and down 39% for November, according to CoinDesk. Certainly the FTX black hole saga has something to do with this, as investors are choosing to go to cold storage rather than hold assets on Coinbase.

I can remember when a mixer was something you added to bourbon, gin or vodka to make a drink, or perhaps a drum used to mix cement. Today a mixer is a crypto platform used to launder money and enable users to exchange cryptocurrencies with relative anonymity. The Wall Street Journal has the story titled, “Treasury Warns Crypto Industry of Money-Laundering Risks in ‘Mixers’; Senior official says sector needs to fall in line with anti-money-laundering and sanctions regulations to prevent these platforms from being abused.”

Ryan Wells is now head of business communications for BNY Mellon. Wells most recently was head of growth communications for Splunk, but spent 9 years with Nasdaq, leaving as a managing director of communications.

John Kerin, the former president and CEO of the Chicago Stock Exchange, is now the chief operating officer at IVAX LLC.

Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL

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Cboe Digital, the Rebranded ErisX, Leads With a Familiar Model
JohnLothianNews.com

John Palmer is the head of Cboe Digital, the rebranded ErisX. JLN caught up with Palmer at the recent FIA EXPO 2022 in Chicago to ask him about Cboe Digital and the general state of the crypto markets and industry, which were rocked by the implosion of FTX and related companies.

Watch the video »

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DraftKings Tumbles on Report of Unauthorized Money Withdrawals; Sports betting giant says no evidence systems were breached; Company says less than $300,000 in funds were affected
Janet Freund and Gerry Smith – Bloomberg
DraftKings Inc. tumbled on Monday after some customers reported that their accounts were compromised and money was withdrawn. The company believes customers’ login information was compromised on other websites then used to access their DraftKings accounts, DraftKings co-founder Paul Liberman said in a statement.
/jlne.ws/3U5FZaw

****** Is this the start of a trend for gambling sites?~JJL

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Amazon Alexa is a “colossal failure,” on pace to lose $10 billion this year
Ron Amadeo – Ars Technica
Amazon is going through the biggest layoffs in the company’s history right now, with a plan to eliminate some 10,000 jobs. One of the areas hit hardest is the Amazon Alexa voice assistant unit, which is apparently falling out of favor at the e-commerce giant. That’s according to a report from Business Insider, which details “the swift downfall of the voice assistant and Amazon’s larger hardware division.” Alexa has been around for 10 years and has been a trailblazing voice assistant that was copied quite a bit by Google and Apple. Alexa never managed to create an ongoing revenue stream, though, so Alexa doesn’t really make any money.
/jlne.ws/3i1V6o2

****** Alexa, where did my $10 billion go? Alexa: I don’t have an answer for that.

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Want to Know Where Crypto Is Headed? Remember 2008; The repercussions won’t be as dire as those of the financial crisis. But a comparison offers insights into what comes next.
Bill Dudley – Bloomberg
History may not repeat, but it certainly rhymes. Although the repercussions of the carnage in crypto markets won’t be as broad or dire as those of the 2008 financial crisis, the parallels between the two episodes offer insights into what went wrong, and what’s likely to come. All financial manias have some features in common. Strong beliefs feed into self-reinforcing feedback loops.
/jlne.ws/3i7ks3y

******Bill Dudley, do it right.~JJL

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Column: How Sam Bankman-Fried exploited the ‘effective altruism’ fad to get rich and con the world
Michael Hiltzik – Los Angeles Times
The most uplifting aspect of the Sam Bankman-Fried story was always that he guided his way to a putative cryptocurrency fortune of more than $16 billion by following a philosophy of charitable giving known as “effective altruism.” Interviewers were dazzled by Bankman-Fried’s account of the epiphany he experienced over a lunch with Will MacAskill, around the time he was graduating from the Massachusetts Institute of Technology.
/jlne.ws/3UWiHot

****** Sam Bankman-Fried’s effective altruism says “earn to give.” My effective altruism says giving of yourself is the richest gift you can give. As I wrote several years ago and put into this podcast, one of the richest men I knew did not have a big house and fancy car, but was rich because he gave of his time, his talents and his knowledge and never stopped giving. I believe in doing the most good, not earning the most dollars. The biggest impact does not have to have a dollar sign attached. That is effective altruism.

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Monday’s Top Three
Our top story Monday was John Lothian’s remembrance of his mother, Marjorie Jane (Knilans) Lothian, who died at the age of 92 on November 15. Tied for second place were the obituary for David Lerman from Salerno Funeral Home; Cigars, Booze, Money: How a Lobbying Blitz Made Sports Betting Ubiquitous, from The New York Times; and Stephen Diehl: Crypto is the ‘commoditisation of populist anger, gambling and crime’, from the Financial Times. Tied for third were FTX Says Top 50 Creditors Are Owed $3.1 Billion, from The Wall Street Journal, and Chuck Mackie’s News from the Futures: FIA Expo ’22 — Recap, via Medium.

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MarketsWiki Stats
27,088 pages; 241,834 edits
MarketsWiki Statistics

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Lead Stories

What to Expect as FTX Debuts Biggest Crypto Chapter 11 in Court; FTX’s new management will use a bankruptcy-court hearing Tuesday to bring the largest crypto failure in history into focus
Jonathan Randles, Alexander Saeedy and Becky Yerak – The Wall Street Journal
FTX is expected to make its debut appearance Tuesday in Delaware bankruptcy court, where its new management is expected to recount events leading up to the cryptocurrency platform’s sudden collapse and explain the steps it has since taken to secure customer funds and other assets. FTX’s lawyers are advancing an unprecedented chapter 11 case marked already by allegations of major failures against its former leadership and a budding jurisdictional dispute with the government of the Bahamas, where the firm’s inner circle ran its doomed crypto operation.
/jlne.ws/3gyCifs

Ethics Watchdog Group Seeks Probes Into Oversight of Officials’ Stock-Trading Conflicts; Campaign Legal Center files complaints with federal agencies following WSJ series
Brody Mullins and Rebecca Ballhaus – The Wall Street Journal
A nonpartisan group that monitors government ethics filed a series of legal complaints alleging the federal government is failing to adequately enforce conflict-of-interest rules. The Campaign Legal Center called on the executive-branch agency that oversees ethics rules to investigate what it called deficiencies in enforcement at several agencies. The group also requested that internal investigators at four federal agencies examine whether their ethics programs complied with federal rules. The legal filings were prompted by a series of articles in The Wall Street Journal revealing that thousands of federal employees at 50 federal agencies held stock in companies that were regulated by the agencies where those employees worked.
/jlne.ws/3TZ1Yj5

Hedge funds left with billions stranded on FTX; Crypto asset managers face long wait for the return of their assets
Laurence Fletcher and Joshua Oliver – Financial Times
Hedge funds have billions of dollars stuck on failed cryptocurrency exchange FTX and could face years of waiting to recover anything at all from a marketplace they once believed to be one of the industry’s most reliable bets. In a situation reminiscent of Lehman Brothers in 2008, which left billions of dollars of hedge funds’ assets trapped for years, investors who traded on the Bahamas-based exchange have found themselves among the thousands of creditors in a highly complex bankruptcy.
/jlne.ws/3ACM1sa

UK watchdog warns against gamification of trading apps; Features such as celebratory messages could lead amateur investors to take high-risk bets, says FCA
Joshua Oliver and Oliver Ralph – Financial Times
The UK’s financial watchdog has warned against the use of “game-like elements” in trading apps, saying that they risk leading consumers to take actions against their own interests. The Financial Conduct Authority on Monday said share trading apps were giving their customers “in-app points, badges and celebratory messages for making trades”, and that people using these features were more likely to “invest in products beyond their risk appetites”. It told operators of the apps to review their design.
/jlne.ws/3Er4OI6

Treasury Warns Crypto Industry of Money-Laundering Risks in ‘Mixers’; Senior official says sector needs to fall in line with anti-money-laundering and sanctions regulations to prevent these platforms from being abused
Mengqi Sun – The Wall Street Journal
The cryptocurrency industry must follow the U.S. Treasury Department’s anti-money-laundering and sanctions regulations to prevent bad actors from abusing platforms known as “mixers” to launder illicit funds, a senior official said. Mixers, which enable users to exchange cryptocurrencies with relative anonymity, can be a way for illicit actors to obfuscate the ownership and movement of funds while making it harder for law enforcement to have visibility into the transfers, Elizabeth Rosenberg, the Treasury assistant secretary for terrorist financing and financial crimes, said in a speech Friday.
/jlne.ws/3TZtDR8

U.S. Senate to hold FTX hearing on Dec. 1, CFTC chairman to testify
Reuters
The U.S. Senate Agriculture Committee on Thursday said it will hold a hearing on Dec. 1 to examine the sudden collapse of FTX, one of the world’s biggest crypto exchanges. FTX filed for bankruptcy on Nov. 11, leaving an estimated 1 million customers and other investors facing billions of dollars in total losses. The firm’s failure has created a liquidity crunch that has rippled across the industry and sent the prices of bitcoin and other digital assets plummeting.
/jlne.ws/3guJ3iE

Sunak’s Britain Is Starting to Have Second Thoughts About Brexit
Ellen Milligan, Alex Wickham and Philip Aldrick – Bloomberg
Even after years of division and vitriol, it seems like Britain still needs to talk about Brexit. More than six years after voting to leave the European Union, the UK is facing a prolonged recession, a deep cost-of-living crisis and a shortage of workers. Last week’s Autumn Statement heralded years of higher taxes and cuts to public spending.
/jlne.ws/3AF0YKb

Sam Bankman-Fried and the power of dressing badly
Looking attractive matters a lot less, for political or professional purposes, than telling your story
Robert Armstrong – Financial Times
One of the horrifying things we have recently learnt about Sam Bankman-Fried, founder of the crypto exchange/fraud/morality tale FTX, is that his clothes were not a power play. Running a multibillion-dollar business while wearing a T-shirt, rumpled shorts and beaten-up trainers appeared to be bog-standard techno-peacocking. I can dress like a failure-to-launch video-game addict because it’s all about meritocracy here at FTX, we’re too busy disrupting to care about clothes, and besides I’m richer than you.
/jlne.ws/3EmK8AI

In Sam Bankman-Fried’s T-Shirts, a Soured Sign of Charm; The FTX founder embodied Silicon Valley’s disheveled-exec trope better than anyone. But as his crypto empire collapses, it all looks messier.
Jacob Gallagher – The Wall Street Journal
As the rubble settles around Sam Bankman-Fried’s shattered crypto-empire, one fact is clear: The 30-year-old FTX founder wore some seriously ill-fitting T-shirts. Since he splashed into public several years ago, the erstwhile monetary whizkid was rarely seen in anything other than an oversize shirt and equally baggy khaki shorts. Slovenly attire was the centerpiece of the Sam Bankman-Fried brand.
/jlne.ws/3GCERI1

The Crypto Reaper comes calling for Genesis; Contagion spreads
Robin Wigglesworth – Financial Times
Life comes at you fast in crypto, as customers of FTX have discovered this month. It now looks like the latest frostbitten victim of the crypto winter is Genesis — basically the Goldman Sachs of magic beans.
/jlne.ws/3Owl3Z4

Crypto Lender Genesis Asks Binance and Apollo for Cash; Genesis told clients last week that it paused lending withdrawals while it shored up cash
Vicky Ge Huang, Patricia Kowsmann and Caitlin Ostroff – The Wall Street Journal
Cryptocurrency firm Genesis Global Capital is still trying to raise cash. The lender has approached crypto exchange Binance for an investment and to bid for its loan book, according to people familiar with the matter. Binance decided not to invest, fearful that some of Genesis’s business could create a conflict of interest down the line, according to one of the people familiar with the matter. The company also approached private equity giant Apollo Global Management for capital assistance, according to people familiar with the matter.
/jlne.ws/3grzNvv

Crypto Brokerage Genesis Is Said to Warn of Bankruptcy Without Funding; Genesis executives spent weekend seeking to line up financing; Genesis lending unit suspended withdrawals after FTX collapse
Lydia Beyoud, Sonali Basak, Vildana Hajric, and Muyao Shen – Bloomberg
Digital-asset brokerage Genesis is struggling to raise fresh cash for its lending unit, and it’s warning potential investors that it may need to file for bankruptcy if its efforts fail, according to people with knowledge of the matter. Genesis has spent the past several days seeking at least $1 billion in fresh capital, said the people, who asked not to be identified because discussions are private. That included talks over a potential investment from crypto exchange Binance, they said, but funding so far has failed to materialize.
/jlne.ws/3GyJJhl

Gemini Still Working With Genesis, Digital Currency Group to Unlock Earn User Withdrawals
Tim Hakki – Decrypt
There is still no word on when users of Gemini’s Earn service will be able to withdraw their funds, but this morning the exchange tweeted it’s continuing “to work with [lending partner] Genesis and its parent company Digital Currency Group (DCG) to find a solution.” Last week, Gemini warned of major delays for Earn users looking to withdraw their cash.
/jlne.ws/3gyAByC

Traders Flee Crypto Markets After FTX Collapse; Prices for identical assets are diverging as traders pull back; FTX, with its liquid derivatives, was popular among quants
Justina Lee – Bloomberg
The wild-west days of crypto markets are back again as the large trading houses that once thrived on arbitraging price gaps pull back in the wake of FTX’s collapse. That’s opening up profitable opportunities for anyone that still dares to trade. Prices for essentially identical assets on various platforms are diverging in a clear sign the dominoes are still falling across the crypto trading world. The gap between the funding rates of identical Bitcoin futures on Binance and OKX, for instance, has been as wide as an annualized 101 percentage points and remained at least 10, compared with mostly single-digit gaps last month.
/jlne.ws/3ErvhW0

Sam Bankman-Fried’s Crumbling FTX Empire Holds $1.2B Cash Reserves
Eliza Gkritsi – CoinDesk
The various divisions of Sam Bankman-Fried’s crumbling set of companies have $1.2 billion in cash as of Nov. 20, far below the $3.1 billion it owes its top 50 creditors, court documents show. About $751 million of that is held in debtor entities and the rest, $488 million, is in non-debtor entities, according to the document, filed on Monday by FTX’s proposed financial advisor, Alvarez & Marsal North America. About $514 million is unrestricted cash, $260 million is custodial and $465 million is restricted cash, which is earmarked for specific purposes like loan repayments and can’t be use for general business purposes.
/jlne.ws/3Xn38rC

These Banks Were Left Holding the Bag in Crypto Implosion; Small regulated lenders saw opportunity. Now they’re part of the cleanup crew.
Marc Rubinstein – Bloomberg
Banks go where the money is. So when a market overextends and subsequently collapses, it’s no surprise they’re sometimes left holding the bag. Crypto is no exception. While major banks stayed away from what Jamie Dimon called a “decentralized Ponzi scheme,” many small lenders saw a profitable niche in helping to service companies operating in the fledgling space. They include Silvergate Capital Corp., Provident Bancorp Inc., Metropolitan Commercial Bank, Signature Bank and Customers Bancorp Inc., among others. The recent collapse of FTX puts their business in the spotlight.
/jlne.ws/3XqBfyK

Exclusive-Bankman-Fried’s FTX, parents bought Bahamas property worth $121 million
Koh Gui Qing – Reuters
Sam Bankman-Fried’s FTX, his parents and senior executives of the failed cryptocurrency exchange bought at least 19 properties worth nearly $121 million in the Bahamas over the past two years, official property records show. Most of FTX’s purchases were luxury beachfront homes, including seven condominiums in an expensive resort community called Albany, costing almost $72 million. The deeds show these properties, bought by a unit of FTX, were to be used as “residence for key personnel” of the company. Reuters could not determine who lived in the apartments.
/jlne.ws/3gmczXP

Fallen Hedge Fund Three Arrows Capital’s Founder Says FTX Set Crypto Back Years
Ben Bartenstein – Bloomberg
A string of high-profile crypto crises could set the industry back by almost a decade, according to the co-founder of Three Arrows Capital, whose June implosion was one of the largest hedge-fund trading busts. “Some industry leaders have said the FTX collapse set the industry back by five years,” Su Zhu said in a rare in-person interview in Abu Dhabi. “I think it’s even longer than that — seven or eight years — maybe even longer, if the underlying issues aren’t solved.”
/jlne.ws/3i7Sgxu

FTX Bankruptcy Filing: ‘No Amounts’ Will Be Paid to SBF or His Inner Circle
Stacy Elliott – Decrypt
Former FTX CEO Sam Bankman-Fried was right about one thing: He and his inner circle won’t see any more money from the company. FTX spelled out in a court filing over the weekend that neither Bankman-Fried nor the three recently fired members of his inner circle (nor their family members) will see any compensation from the now-bankrupt company.
/jlne.ws/3VgauLJ

BNY Mellon’s Frankfurt Offices Raided in German Tax Scandal Probe; Cologne prosecutors started search on Tuesday morning; U.S. lender among half a dozen investment banks raided in 2022
Karin Matussek – Bloombeerg
Bank of New York Mellon’s Frankfurt offices are being raided by Cologne prosecutors as part of their vast investigation into the controversial Cum-Ex scandal that has increasingly ensnared Wall Street’s biggest banks. The raid began on Tuesday, people familiar with the process said. A spokesman for Cologne prosecutors said searches at two unidentified banks started and included the homes of employees who are suspects in the case. More than 120 officers are involved, including tax investigators from three German states. The investigators are also looking for evidence of deals similar to Cum-Ex, he said.
/jlne.ws/3UdDWkN

JP Morgan remains world’s biggest systemically important bank
Reuters
JP Morgan remains the world’s most systemically important bank according to the latest rankings from the G20’s Financial Stability Board published on Monday. The FSB began the annual rankings after the global financial crisis over a decade ago, requiring the world’s biggest lenders to hold an extra buffer of capital, calibrated across five ‘buckets’, and undergo tougher scrutiny of operations.
/jlne.ws/3Gy7lTq

From Temasek to Genesis, here’s the direct impact of FTX failure on other corporates
David Hollerith – Yahoo!Finance
Over the first two weeks of November, crypto exchange FTX went from leading crypto exchange to a $16 billion bankruptcy – this year’s largest so far. Insiders, customers, the press, and regulators are still piecing together what caused the largest corporate failure in crypto’s 14-year history and what such a fallout means as it ripples across the digital assets market.
/jlne.ws/3go42U4

Elizabeth Holmes and Sam Bankman-Fried: How wunderkinds go wild
Ernie Sadashige – FOX Business
Elizabeth Holmes and Sam Bankman-Fried are two former wunderkinds whose names will be remembered for scandal. How did they go from rising to fallen stars? One business leader and authority on executive coaching says the fluid nature of technology startups, along with the inexperience of young entrepreneurs, increases the risk of bad decision-making. “It’s lonely at the top, especially for leaders today who are facing a pile-on of challenges in a rapidly changing environment. This leaves little time for young leaders who are learning in real time to actually step back and reflect on the decisions they’re making,” says Nick Goldberg, founder and CEO of EZRA, a virtual leadership coaching firm.
/jlne.ws/3VdqaPS

FTX Exploiter Converts Millions in Ether to Alameda-Linked Ren Bitcoin Tokens
Shaurya Malwa – CoinDesk
Whoever was behind the $600 million exploit of crypto exchange FTX started exchanging millions of dollars worth of ether to Ren Bitcoin (renBTC), a token that represents bitcoin on other blockchains, early on Sunday. Funds stolen from FTX were steadily converted to ether over the past week, making the exploiter one of the largest holders of the token, as CoinDesk previously reported. The use of renBTC may surprise some in the crypto space: In 2021, Alameda Research – the Sam Bankman-Fried-owned trading arm at the center of a multibillion-dollar scandal – said Ren’s development team was “joining” Alameda and would work on expanding Ren’s usage to several blockchains.
/jlne.ws/3tTQTp3

FTX CEO Details Plans To Restructure Global Empire, Asks Stakeholders To ‘Be Patient’
Bibhu Pattnaik – Benzinga
The newly appointed CEO of bankrupt crypto exchange FTX, John Ray III, is in damage control mode, assuring FTX employees, vendors, customers, regulators, and government stakeholders to “be patient” after the collapse of the company. What Happened: In a Saturday statement, Ray said the company looks forward to selling or restructuring FTX’s global empire.
/jlne.ws/3EScLr7

NBA champion Golden State Warriors are sued over FTX collapse
Reuters
The Golden State Warriors were sued on Monday by an FTX customer who accused the reigning National Basketball Association champions of fraudulently promoting the now-bankrupt cryptocurrency exchange. Elliott Lam, a Canadian citizen and Hong Kong resident, filed his proposed class-action lawsuit in San Francisco federal court on behalf of “thousands, if not millions” of people outside the United States who traded on FTX’s platform. Other defendants include Sam Bankman-Fried, who founded FTX, and Caroline Ellison, who led Bankman-Fried’s trading firm Alameda Research.
/jlne.ws/3Ot9EsT

Two Estonian Citizens Charged With Running a Series of Crypto Scams Totaling $575M
Cheyenne Ligon – CoinDesk
Federal prosecutors in Washington state have charged two Estonian citizens with running a series of crypto scams that allegedly defrauded hundreds of thousands of investors around the world of a combined $575 million. According to the indictment released Monday, Sergei Potapenko and Ivan Turogin – both 37-year-old residents of Tallinn, Estonia – were partners in a series of interconnected fraudulent schemes using cryptocurrency. The two defendants allegedly used a variety of shell companies to launder the proceeds of their schemes, and spent investor funds on luxury cars and real estate in Estonia.
/jlne.ws/3tOibNt

First Mover Americas: FTX Faces Whopping Claims, Ackman’s Hot for Helium
Lyllah Ledesma and Omkar Godbole – CoinDesk
Bankrupt crypto exchange FTX owes its largest creditor $226 million, recently filed court documents show. The second-largest claim is for $203 million. The identities of the creditors weren’t named in the report, but collectively, the claims of the top 50 creditors are worth $3.1 billion. TradFi investor Bill Ackman, a billionaire who founded hedge fund Pershing Square Capital Management, said he likes Helium, a decentralized network that allows users to set up their own wireless network for low-power internet-of-things devices.
/jlne.ws/3EwdKMj

Bitpanda’s Local Unit Obtains German Crypto License
Sandali Handagama – CoinDesk
Austrian exchange Bitpanda has obtained a crypto license in Germany through its local unit, the company said Tuesday. With the license from the German Federal Financial Supervisory Authority (BaFin), Bitpanda Asset Management GmbH can independently offer crypto custody, as well as proprietary trading for crypto assets for German residents, the company said in a press release.
/jlne.ws/3Eo5fTo

‘We’re missing the bigger picture’: Industry experts call for urgent regulatory reform; In a recent panel, experts from across the industry urged the importance of regulatory reform, specifically around Mifid II and the Capital Markets Union (CMU), warning that we are in danger of “missing the wood for the trees” due to an over-emphasis on detail.
Laurie McAughtry – The Trade
Speaking on a regulatory panel at the Best Execution and Trading Summit Europe today, panellists including KPMG’s Kay Swinburne, CONSOB commissioner Carlo Comporti, European Banking Federation director of financing sustainable growth Burcek Inel, thinktank New Financial founder William Wright and co-head of BlackRock’s global public policy group Stephen Fisher came together to analyse the current gaps in regulatory policy as it relates to securities trading and the wider UK and EU capital markets – warning that a review is now urgently needed.
/jlne.ws/3OufhHh

Ukraine Invasion

Cold and dark: Kyiv readies for ‘worst winter of our lives’
Yuras Karmanau and John Leicester – Associated Press
When the power is out, as it so often is, the high-rise apartment overlooking Ukraine’s war-torn capital feels like a deathtrap. No lights, no water, no way to cook food. And the risk of not being able to escape from the 21st floor in time should a Russian missile strike. Even when electricity comes back, it’s never on for long. “Russian strikes are plunging Ukraine into the Stone Age,” says Anastasia Pyrozhenko. In a recent 24-hour spell, her 26-story high-rise only had power for half an hour. She says the “military living conditions” have driven her and her husband from their apartment.
/jlne.ws/3UZAiMv

Gazprom Threatens to Reduce Gas Flows to Europe Via Ukraine; Gas prices rise 2% as traders have been bracing for more cuts; Gazprom cites dispute over Moldova as reason for move
Bloomberg News
Gazprom PJSC threatened to cut its gas flows to Europe via Ukraine next week, just as cold winter temperatures prompt Europeans to start tapping their gas stores. The Ukraine route is the last remaining pipeline still bringing Russian gas to western Europe as Moscow has progressively squeezed supplies to the continent since before the war. Traders and policy makers have been bracing for flows on that line to be curbed too, and gas prices rose just 2% on the news.
/jlne.ws/3TWepfK

China Pauses Some Purchases of Russian Oil Ahead of Price Cap; Some ESPO crude remains unsold as Chinese buyers stay away; Market wary of paying above limit for sanctions exemption
Bloomberg News
China’s crude buyers have paused purchases of some Russian oil as they wait for details of a US-led cap to see if it presents a better price. Several cargoes of Russian ESPO crude for December-loading remain unsold and there’s hesitation among sellers and Chinese buyers to close deals before more clarity on the exact price cap level is known, according to traders with knowledge of the matter. More details on the measure are expected soon.
/jlne.ws/3tRsPD6

Exchanges, OTC and Clearing

Scott Bradley latest senior departure in LSEG re-structure; His departure follows news earlier this month that Dr. Robert Barnes, chief executive of LSEG’s Turquoise, would also be leaving the exchange at the end of this year.
Annabel Smith – The Trade
Scott Bradley has become the latest senior departure at the London Stock Exchange Group (LSEG) as the trading venue looks to simplify its leadership across asset classes, The TRADE can reveal. He will leave LSEG at the end of this year.
/jlne.ws/3tP0wW7

LSEG wins CMA clearance for Quantile acquisition; The deal was first announced in December 2021, but has been under investigation by the UK’s Competition and Markets Authority (CMA) for almost a year due to competition concerns.
Laurie McAughtry – The Trade
London Stock Exchange Group (LSEG) has finally been cleared to acquire portfolio optimisation services provider Quantile Group, following a 8-month long investigation by the UK’s Competition and Markets Authority (CMA) around competition concerns due to LSEG’s ownership of LCH.
/jlne.ws/3Vne3jr

Cult of Personality with Terry Duffy of CME Group
On The Tape Podcast
Guy and Danny discuss the FTX collapse (1:00), Walmart earnings (7:30), the yield curve inversion (9:20), energy stocks vs. crude oil (23:30), an update on cannabis (26:35), and Danny’s NFL picks of the week (31:30). The co-hosts interview Terry Duffy, Chairman and CEO of CME Group, and talk about the LPGA event in Naples (35:19), stock market volatility (40:50), Terry’s take on the FTX situation (44:04), risk management (47:45), the importance of mentors (58:24), the CME-Google deal one year later (59:30), interest rates (1:03:01), the politicization of the Federal Reserve (1:06:39), Elon Musk (1:13:24), the spotlight on the commodities market (1:15:15), and the future of CME Group (1:16:45).
/jlne.ws/3EtEXPI

CME Group’s CEO Called FTX’s Sam Bankman-Fried an ‘Absolute Fraud’ When They Met in March
Jamie Redman – Bitcoin.com News
Terry Duffy, the chief executive officer of CME Group, the world’s largest derivatives exchange, recently sat down with the hosts of the podcast “On The Tape” and discussed the recent FTX collapse. Duffy explained that last March he sat down with the former FTX CEO, Sam Bankman-Fried (SBF), and they discussed competition. Duffy asked the former FTX executive what his end goal was and SBF replied “well, I want to compete with you.” Duffy said he replied “Great, I’m all for competition, what do you want to do?”
/jlne.ws/3EP0qE6

CME eyes retail growth with new weekly FX options Exchange hopes to capture massive demand from the sector; New contracts will be available from December 5
Joe Parsons – Risk.net
CME Group is set to launch weekly foreign exchange options contracts that expire on Tuesdays and Thursdays, allowing traders to hedge volatility around specific market events. The new contracts – for G5 currencies – will be available on both CME’s electronic central limit order book (Clob) and off screen via bilateral block trades, from December 5. The move expands the exchange’s existing weekly FX options contracts that expire every Monday, Wednesday and Friday, giving traders the flexibility
/jlne.ws/3Esqfs3

JPMorgan Asset Management launches active ETFs in Australia; The vehicles are the US manager’s first Asia-Pacific exchange traded funds
Julienne Raven Lingat – Financial Times
JPMorgan Asset Management has become the latest global asset manager to move in to Australia’s growing exchange traded funds market after listing two actively managed ETFs on the Australian Securities Exchange.
/jlne.ws/3hYd7mZ

EEX warns about gas price caps
EEX
The European Energy Exchange (EEX) fully supports the call of the Association of European Energy Exchanges (Europex) against a gas price cap as outlined in the Commission’s informal policy paper dated 15 November 2022. In the letter, the association emphasises that energy derivatives such as the TTF front-month futures contract, are a crucial tool for producers and consumers to hedge against the risk of changes in future spot prices. Setting a maximum price ceiling to the TTF front-month contract undermines this function, while posing threats to financial stability and security of supply. Evaluation of these risks needs to take place prior to the application of a price cap.
/jlne.ws/3Esvt7q

Fintech

Currency Algo Made in Netherlands Takes on Wall Street Dealers; MN targets peers in currency savings plan; hires two quants; Pension fund algorithm could hit fee haul of dealers
Eva Szalay – Bloomberg
A new currency trading algorithm developed by a Dutch investor threatens to wrest away millions of euros of fees from investment banks if it gains traction in the pension industry. MN Investment Management, which developed the program and has been using it since the second quarter, wants to share the technology and pool its data with pension funds, as well as jointly develop an algo trading tool.
/jlne.ws/3guvFuL

Musk Fires More Twitter Sales Workers After ‘Hardcore’ Purge
Kurt Wagner, Kamaron Leach and Maxwell Adler – Bloomberg
Elon Musk laid off more Twitter Inc. workers from the sales side of the social network’s business beginning late on Sunday, further trimming a staff that had already been decimated by cuts and resignations. Last week, Musk had asked workers to commit to his more “hardcore” version of the company or leave. Sales employees signed on to his vision in greater numbers than workers on the technical side, which saw mass resignations, according to people familiar with the matter. Musk is using the cuts to balance out the remaining staff, said the people, who asked not to be identified discussing internal decisions.
/jlne.ws/3UPPFa9

US tech layoffs: India workers face painful exit from the US
BBC
Layoffs across the tech industry, including at firms like Twitter, Meta and Amazon, have affected a significant number of Indians working in the US who are on visas like the H-1B. California-based journalist Savita Patel speaks to workers who are facing the prospect of being forced to return to India if they don’t find another job.
/jlne.ws/3Ex4h7i

Exclusive-China set to fine Ant Group over $1 billion, signalling revamp nears end-sources
Julie Zhu – Reuters
Chinese authorities are poised to impose a fine of more than $1 billion on Jack Ma’s Ant Group, said six sources with direct knowledge of the matter, setting the stage for ending the fintech company’s two-year long regulatory overhaul. The People’s Bank of China (PBOC), which has been driving the revamp at Ant after the Chinese firm’s $37 billion IPO was scuttled at the last minute in 2020, is the regulator that is readying the fine, said five of the sources.
/jlne.ws/3XpOEHC

Elon Musk tells remaining Twitter employees no more layoffs ‘planned’ and HQ will not move to Texas
Kali Hays – Business Insider
Elon Musk is done with layoffs at Twitter, at least for now, and has no intention of moving the company’s headquarters from San Francisco. Musk gave remaining Twitter employees tidbits of good news during an all-hands meeting on Monday at Twitter’s San Francisco headquarters, according to two people present. It’s Musk’s second such meeting since last week when he told workers that bankruptcy was not out of the question for Twitter and first floated his “extremely hardcore” work expectations.
/jlne.ws/3gxyCKZ

Texas-based fintech firm GloriFi to shut down – WSJ
Reuters
Texas-based fintech firm GloriFi is shutting down and laid off most of its employees, the Wall Street Journal reported on Monday, citing people familiar with the matter. The company’s decision comes after it failed to secure funding needed to carry its operations through the first quarter, the report said, citing an email from GloriFi’s chief marketing and communications officer Cathy Landtroop to employees.
/jlne.ws/3EUSW2x

Elon Musk postpones Twitter Blue relaunch; Flagship subscription service was due to restart on November 29 but has been put on hold again
Ian Johnston – Financial Times
Elon Musk has postponed the relaunch of his flagship subscription service, Twitter Blue, in the latest sign of the challenges the billionaire is facing as he attempts to overhaul the social media platform. The billionaire entrepreneur, who bought Twitter for $44bn last month, said in a tweet on Monday evening that he was “holding off” from launching the product again until there was a “high confidence of stopping impersonation”.
/jlne.ws/3ADmVJz

Anti-Woke Bank GloriFi to Shut Down; Texas startup has laid off most employees after failing to secure more funding
AnnaMaria Andriotis and Rachel Louise Ensign – The Wall Street Journal
The Texas startup that sought to build a conservative banking alternative is shutting down. GloriFi has laid off most of its employees and told them that it is closing up shop, according to people familiar with the matter and emails to employees reviewed by The Wall Street Journal.
/jlne.ws/3ETgiW9

Cybersecurity

Ether falls as the FTX hacker dumps $74 million worth of the token and swaps it for bitcoin
Phil Rosen – Business Insider
The price of ether dropped as much as 7% Monday as the purported FTX hacker dumped millions of dollars worth of pilfered ethereum and swapped it for bitcoin. A week ago, the hacker had accumulated roughly $288 million of ether after raiding Sam Bankman-Fried’s ailing crypto exchange, making the looter the 35th-largest ether holder in the world, according to Bloomberg. Blockchain analytics company Elliptic estimated that, in total, FTX had about $477 million swiped amid its stunning collapse.
/jlne.ws/3XouAFh

Cryptocurrencies

FTX Fiasco Adds Wrinkle to Plan for Crypto Accounting Rules
Bloomberg Law
US accounting rulemakers were already considering tackling the thorny issue of accounting for freshly minted crypto tokens in their prolonged effort to write guidance for digital assets. Then came the collapse of crypto exchange FTX, and a new headache for accounting rulemakers. While questions about FTX’s self-generated tokens and their real worth are just a part of the company’s financial puzzle, there’s a narrow area where the Financial Accounting Standards Board could bring clarity to the market. The place: ensuring that businesses creating a crypto token don’t just assign it a value and report it on its balance sheet as an asset.
/jlne.ws/3OtqIid

Crypto: How to handle the losses, confidence collapse. Experts weigh in
Yahoo!Finance
The downfall of crypto exchange FTX and its founder Sam Bankman-Fried (SBF) has been described as the “Lehman Brothers” moment of cryptocurrency. Its demise is impacting other cryptocurrency platforms as investors and customers rush to retrieve their money. In continuation of our series, “What to do in a bear market,” Yahoo Finance spoke to crypto industry experts to put into perspective what happened, and how to handle the losses from fallen exchanges.
/jlne.ws/3GB0UPm

FTX’s Collapse a Wake-Up Call for Venture Capitalists, Dragonfly Partner Says
Fran Velasquez – CoinDesk
The fallout of bankrupt crypto exchange FTX’s collapse is a wake-up call for venture capitalists, Tom Schmidt, a partner at crypto-centered investment firm Dragonfly Capital, said Monday. Schmidt told CoinDesk TV’s “First Mover” program that in the case of FTX, the red flags that VCs missed may have in part been due to the “byproduct of the funding environment,” which made it easier for crypto startups to receive early-stage funding with “extremely low interests,” as “tons of capital” flooded into the VC market.
/jlne.ws/3TYRErx

Tiger Global’s Now-Worthless FTX Bet Had Bain’s Due Diligence
Hema Parmar – Bloomberg
Bain & Co. was among consulting firms that helped conduct due diligence for Tiger Global Management’s investment in now-defunct crypto exchange FTX, according to people familiar with the matter. Tiger Global, which pays Bain more than $100 million a year to research private companies, has now written down its $38 million FTX stake to zero, the people said. Sam Bankman-Fried’s oversight of a vast web of FTX-linked entities was one of the risks highlighted during the due-diligence process, but the money manager still believed it was a sound investment at the time, one of the people said.
/jlne.ws/3UWOplF

Sam Bankman-Fried tries to broker FTX bailout from his home in the Bahamas, despite being booted from the crypto company
Kate Rooney – CNBC
Despite being pushed out of the cryptocurrency giant he founded, Sam Bankman-Fried told CNBC he is trying to lock down a multibillion-dollar deal to bail out FTX, which filed for Chapter 11 bankruptcy protection earlier this month. In a brief interview with CNBC late Friday, the FTX founder declined to give details about the downfall of his crypto conglomerate, or what he knew beyond liabilities being “billions of dollars larger than I thought.” Bankman-Fried declined an on-camera interview or broader discussion on the record. He said he was focused on retrieving customer funds and is still on a quest to secure a deal.
/jlne.ws/3GBeLFn

Binance says it will hire 600 by year end, bring total employees to 8,000
Timmy Shen – Forkast
Binance, the world’s largest cryptocurrency exchange, wants to grow even bigger as it seeks to hire 600 more employees by the end of this year, its founder and chief executive officer said. Changpeng Zhao (known informally as CZ) tweeted on Monday that the company aims to have 8,000 people on staff by the end of this year.
/jlne.ws/3i4l4qX

FTX Must Pay Expenses Incurred by Bahamas Regulator for Holding the Exchange’s Digital Assets
Greg Ahlstrand – CoinDesk
FTX is responsible for all costs associated with the digital wallet that holds FTX Digital Markets’ assets and is being kept under the supervision of The Securities Commission of The Bahamas’s (the Commission), the country’s Supreme Court ruled on Monday.
/jlne.ws/3Gytlh3

My bad: The YouTube financial influencer network paid to pump FTX; YouTube finance gurus who had sponsorship deals with FTX have come under fierce criticism online. The gurus say they were duped like everyone else.
Lukas I. Alpert – MarketWatch
Erika Kullberg has been held up as a poster child of a millennial who quit a demanding career to make money as a financial influencer. Shortly after ditching her corporate law gig about three years ago, she started talking about “making $100,000 per year on YouTube.” As part of her work, Kullberg cofounded Creators Agency, a small talent management firm and digital ad network aimed at helping other “influencers scale their businesses and connect with relevant brands.” One of the brands Creators Agency helped promote was failed crypto exchange FTX.
/jlne.ws/3Oth1An

FTX Blowup Helped Enrich the Ethereum Validators Who Run the Blockchain
Margaux Nijkerk – CoinDesk
This month’s collapse of FTX drove a dramatic increase in the profitability of running the Ethereum network as the crypto industry ran into the nearly immutable law that when markets get chaotic, the best place to be is at the heart of the action. Ethereum validators – who, following the Merge in September, are responsible for running the blockchain – saw profits from MEV (maximal extractable value) spike as FTX faltered, according to data from Flashbots.
/jlne.ws/3GBBjWw

Crypto Financial Services Firm Eqonex Files for Voluntary Debt Restructuring in Singapore
Will Canny – CoinDesk
Eqonex (EQOS), a Nasdaq-listed crypto financial services firm, filed a voluntary application with the High Court in Singapore to place the company into judicial management. In a Monday filing with the U.S. Securities and Exchange Commission, Eqonex said its Hong Kong-based entity, Diginex, has been placed into creditors’ voluntary liquidation and Eqonex Capital in Singapore is also expected to enter voluntary liquidation. The company signed a strategic partnership with Bifinity, a payments technology firm owned by crypto exchange Binance, in March as it began preparing to focus on custody, brokerage and asset management. Bifinity agreed to provide a $36 million loan that could be converted into equity and Jonathan Farnell, former head of U.K. operations at Binance, became CEO. Due to technical breaches of the loan agreement, Bifinity withheld the fifth tranche of the loan.
/jlne.ws/3AwRS1V

Thai crypto exchange eyes Hong Kong for possible public share sale in 2024: report
Danny Park – Forkast
Bitkub, one of the largest crypto exchanges in Thailand, is aiming to list in Hong Kong as early as 2024 when it goes public, said chief executive officer (CEO) Jirayut Srupsrisopa in an interview with the South China Morning Post (SCMP).
/jlne.ws/3Vil4BX

Crypto exchange Bitget to expand workforce by 50%, registers in Seychelles
Pradipta Mukherjee – Forkast
Cryptocurrency exchange Bitget plans to hire about 400 more staff, taking its total workforce to 1,200 by the first quarter of 2023, the company said in a statement on Tuesday. In the same statement, the exchange also announced its registration in Seychelles because it views “Seychelles as a friendly region for the crypto community.” The new registration in Seychelles is under the 2016 International Business Companies Act, the statement said.
/jlne.ws/3EtBRLx

Crypto Fund Investors Bet the Hit From FTX Will Worsen
Eva Szalay – Bloomberg
Investors are piling into bearish cryptocurrency bets, wagering that the collapse of Sam Bankman-Fried’s crypto empire will further ravage one of this year’s worst-performing asset classes. Short-Ether and Bitcoin exchange-traded products dominated inflows into crypto ETPs in the past week, data compiled by Bloomberg show. At the same time, digital-asset ETPs’ total assets dropped to just under $22 billion, a two-year low.
/jlne.ws/3VgQngj

Should I pass on crypto to my family through my will? I am a US national and have been living in London for most of my life
Lucy Warwick-Ching – Financial Times
I am a US national and have been living in London for nearly 30 years. I hold a substantial amount of money in cryptocurrencies and I am starting to give some thought to how best to hand this on to my family and others I want to include in my will. What’s the best way to bequeath my crypto investments, and does my status as a US and UK taxpayer make a difference?
/jlne.ws/3gpDmm1

Tiny IPOs Return Even With Regulators Poised to Step Up Scrutiny; Finra, Nasdaq and NYSE issued coordinated warnings last week; Civil, criminal action seen for bad actors who ‘pump and dump’
Drew Singer – Bloomberg
More aggressive enforcement is looming after new warnings about unusual trading in small initial public offerings, which have returned in force this month. Last week’s public acknowledgment by regulators and exchanges of the year’s bizarre trading patterns signals a crackdown is ahead, lawyers said. “The next steps are likely to be from the SEC or the Department of Justice, which can pursue bad actors in civil or criminal proceedings,” said Erik Gordon, who teaches law and business at University of Michigan graduate schools. “The warning is unusually strong and unusually detailed.”
/jlne.ws/3OvlNNR

Binance Cites Conflict of Interest for Passing on Genesis Investment: Report
Andrew Asmakov – Decrypt
Binance has reportedly rejected an offer to invest in troubled crypto lending firm Genesis due to a potential conflict of interest some of its business could create down the road. Genesis reportedly offered Binance a bid for its loan book, but it’s not immediately clear whether the world’s largest crypto exchange is keen on pursuing this option, according to The Wall Street Journal, citing people close to the matter.
/jlne.ws/3tWM1zf

FTX processed billions monthly in Africa before going bust
Tage Kene-Okafor – Techcrunch
On November 14, Nestcoin, one of the startups leading crypto and web3 efforts in Africa, announced that it was laying off several employees. At least 30 employees across various departments were let go, while those who were left at the company had their salaries slashed by as much as 40%, according to people familiar with the matter. The news is, in part, connected to the downfall of crypto exchange FTX, according to chief executive officer Yele Bademosi.
/jlne.ws/3XlI6JT

FTX is ‘not idiosyncratic,’ investment advisory firm says
CNBC
Paul Gambles of MBMG Group says there are more shock waves to come for the cryptocurrency industry and warns that liquidity is drying up.
/jlne.ws/3UVEih5

The Metaverse: More Women Are ‘Power Users,’ but Women Have Less Power
Cam Thompson – CoinDesk
Real-world issues like gender inequality are beginning to present themselves in the metaverse, according to a report by consulting firm McKinsey published Monday. The report, which examines how “gender dynamics are playing out in the early-stage metaverse,” conducted a survey on metaverse habits in April in Western Europe and Northern Asia. Of the 1,928 respondents, 41% of women surveyed had used a “primary metaverse platform or participated in a digital world” for over a year, compared to only about 34% of men. These women also reported spending longer periods of time on these platforms, with 35% of them logging more than three hours per week – a categorization the report calls “power users.” In contrast, only 29% of men devoted the same amount of time to metaverse usage.
/jlne.ws/3EtlWgf

Politics

US senators urge Fidelity to drop BTC retirement plan after FTX collapse
Megha Chaddah – Forkast
U.S. Senators Elizabeth Warren, Dick Durbin and Tina Smith have asked Fidelity Investments, one of the country’s largest financial services providers, to rethink its decision to grant retirement plan participants exposure to Bitcoin in the aftermath of the FTX implosion, in a letter released on Monday.
/jlne.ws/3gmiJap

US Is Focused on Regulating Private Equity Like Never Before; An industry that has long escaped scrutiny in Washington has found agencies slow-walking deals and enforcing long-dormant competition laws.
Leah Nylen and Todd Shields – Bloomberg
Private equity could use a few friends in Washington. While buyout firms have been busy protecting their lucrative carried interest fee structure in Congress, Biden administration securities, antitrust and broadcast TV regulators have quietly been undermining the industry’s business model by proposing tough rules, slow-walking deals and scrutinizing acquisitions that would consolidate industries or result in job losses.
/jlne.ws/3ADjO4l

Sweden Is Rethinking What Makes It Great; The Nordic country is searching for a new balance between a commitment to globalization and a recognition of society’s needs for roots.
Adrian Wooldridge – Bloomberg
For the past three decades, Sweden has confused foreigners with its combination of a large welfare state and neoliberal policies such as abolishing the inheritance tax and applying market principles to the state. When Bernie Sanders, the American left’s presidential candidate, cited Sweden as an ideal of “democratic socialism,” he was not likely thinking of universal school vouchers and private pensions. Now Sweden is set to confuse observers again with a new combination of a globalized economy and restrictive policies toward immigration.
/jlne.ws/3gsaUQo

Russians Flock to Spain Despite European Union Flights Sanctions
Alonso Soto – Bloomberg
Russians are increasingly traveling back to Spain, despite restrictions imposed by the European Union on flights from Russia after its invasion of Ukraine. The number of short-term Schengen visas granted to Russian nationals by Spain so far this year has almost tripled to 108,862 from the same period a year ago, according to Spanish foreign ministry data obtained by Bloomberg. A ministry spokesperson declined to comment on the reasons for the increase.
/jlne.ws/3VfdHes

Germany Plans EUR54 Billion Package to Contain Energy Surge; Subsidies for gas and power bills to go into effect next year; Prices for bulk of usage to be capped under government plan
Arne Delfs, Kamil Kowalcze, and Vanessa Dezem – Bloomberg
Germany will introduce a cap on gas and electricity prices for companies and households next year as Europe’s largest economy seeks to contain the fallout from Russia’s moves to slash energy supplies. The package of measures, which will cost the government about EUR54 billion ($55.5 billion), will go into effect on March 1, according to government officials. The subsidies will be paid retroactively for January and February, and gas consumers will also receive a one-time state subsidy for December, said the officials, who asked not to be identified in line with briefing rules.
/jlne.ws/3hTkV9w

Russia Reiterates It Won’t Sell Oil to Nations That Cap Prices
Bloomberg
Russia doesn’t plan to supply crude or oil products to nations that implement a price cap, according to Deputy Prime Minister Alexander Novak. Instead, Russia will redirect its oil supply to “market-oriented partners” or will reduce production, Novak said in a statement. Novak’s reiteration of his country’s established position comes as the Group of Seven nations aims to announce this Wednesday at what level they will set a price cap on Russian crude oil.
/jlne.ws/3hSpH7c

Regulation

US Prosecutors Opened Probe of FTX Months Before Its Collapse; Sweeping inquiry examined crypto exchanges with offshore reach; Manhattan prosecutors recently changed tack as FTX unraveled
Ava Benny-Morrison – Bloomberg
Long before Sam Bankman-Fried’s FTX cryptocurrency empire collapsed this month, it already was on the radar of federal prosecutors in Manhattan. The US Attorney’s Office for the Southern District of New York, led by Damian Williams, spent several months working on a sweeping examination of crypto currency platforms with US and offshore arms and had started poking into FTX’s massive exchange operations, according to people familiar with the investigation.
/jlne.ws/3UZAGur

Infinity Q founder, once claiming $3 billion assets, pleads guilty to fraud
Jonathan Stempel and Jody Godoy – Reuters
The founder of Infinity Q Capital Management, a New York firm accused of inflating assets by over $1 billion to collect more fees, pleaded guilty on Monday to securities fraud. James Velissaris, 38, of Atlanta, entered his plea before U.S. District Judge Denise Cote in Manhattan, averting a scheduled Nov. 28 trial.
/jlne.ws/3XlXu9g

U.S. Supreme Court rebuffs RBS ex-banker’s whistleblower award bid
Andrew Chung – Reuters
The Supreme Court on Monday declined to hear former Royal Bank of Scotland managing director Victor Hong’s bid to collect a U.S. government whistleblower award of at least $490 million for reporting alleged misconduct related to the institution’s sales of mortgage-backed securities.
/jlne.ws/3VhoTXX

Golden State Warriors Face Class Action Lawsuit Over Partnership With Doomed FTX
Mack DeGeurin – Gizmodo
The Golden State Warriors are the latest business to find themselves on the receiving end of class action lawsuits alleging them of misleading FTX customers about the safety and reliability of the flailing cryptocurrency platform. The suit, first reported by Reuters, comes on the heels of another class action suit accusing prominent celebrities like Tom Brady and Larry David of engaging in fraudulent activity to help prop up an alleged FTX-led “Ponzi scheme.”
/jlne.ws/3ETac8j

China’s foreign exchange bureau urges stronger legislation to regulate crypto trade
Ningwei Qin – Forkast
China should integrate legislation on cryptocurrencies in order to better regulate crypto tradings, said Huang Hui, a deputy director of the Supervision and Inspection Department of State Administration of Foreign Exchange. Huang spoke at the 2022 Financial Street Forum in Beijing on Tuesday morning, saying that different crypto tradings should be sorted into different regulatory scopes, such as illegal payment settlement, illegal securities or illegal tokens, according to the crypto’s type and functions.
/jlne.ws/3V5mpfS

S. Korea mulls requirement for digital asset exchanges to compensate sudden withdrawal suspension?
Danny Park – Forkast
South Korea’s Financial Services Commission (FSC) is considering a requirement that digital asset exchanges offset investor losses and pay penalties for the sudden suspension of withdrawal services, Yonhap news agency reported Monday.
/jlne.ws/3GCgOcl

US Court Approves Deadline for Celsius Customers to File Proofs of Claim
Sandali Handagama – CoinDesk
A U.S. court has approved collapsed crypto lender Celsius Network’s request to set a deadline for customers to file proofs of claim in the ongoing bankruptcy proceedings. Celsius’ motion, approved by U.S. Bankruptcy Court of the Southern District of New York last week, requires customers to submit proofs of claim on or before Jan. 3, 2023. Any person or entity – including individuals, partnerships, corporations, joint ventures and trusts – are free to file a claim via mail, by hand or through the claims agent Stretto’s website.
/jlne.ws/3EM8p4O

US CFTC’s Behnam Will Testify at FTX Hearing in Senate
Jesse Hamilton – CoinDesk
Rostin Behnam, the chairman of the U.S. Commodity Futures Trading Commission (CFTC), will testify at a Senate hearing next week set to examine the “lessons learned from the FTX collapse,” according to a listing on the Senate Agriculture Committee’s website. The panel is set for a Dec. 1 hearing, though it’s unclear what company officials may be included on the final roster of witnesses. Behnam is the first witness posted online.
/jlne.ws/3tNrc9F

Former Montebello Unified School District Official Agrees to Pay $50,000 and Admit Wrongdoing in Connection with $100 Million Bond Offering
SEC
The SEC announced today that Ruben James Rojas, the former Chief Business Officer of Montebello Unified School District (“Montebello”), agreed to admit wrongdoing and pay a $50,000 penalty to resolve an SEC enforcement action involving the sale of $100 million of municipal bonds by Montebello in December 2016.
/jlne.ws/3TWH7gn

ASIC releases API for submitting reportable situations; ASIC has released the Reportable Situations Application Programming Interface (API) for submitting reports under the regime; The API will improve efficiency for high-volume users submitting notifications under the reportable situations regime; Licensees and third-party service providers should consider whether the API is appropriate for their business, including investment in the resources need to operationalise its use.
ASIC
ASIC’s Reportable Situations Application Programming Interface (API) is now available to licensees who submit a high volume of notifications under the reportable situations regime and third party providers who submit notifications on behalf of these licensees.
/jlne.ws/3i1PEBp

Interim stop orders placed on MPG Funds Management Limited’s property trusts
ASIC
ASIC has made interim stop orders preventing MPG Funds Management Limited (MPG) from offering or distributing two trusts to retail investors because of deficient target market determinations (TMDs). These trusts are:
MPG Bulky Goods Retail Trust; and
MPG Essential Services Property Trust (together, the Trusts)
/jlne.ws/3Oqp0hR

Code of Conduct for ESG data and ratings providers; The FCA announces the formation of a group to develop a Code of Conduct for Environmental Social and Governance (ESG) data and ratings providers.
UK FCA
As financial services firms integrate ESG into their activities and expand their ESG-focussed products, they are increasingly reliant on third party ESG data and ratings services.
/jlne.ws/3OzIpgo

SFC concludes consultation on the position limit regime and proposes further changes
SFC
The Securities and Futures Commission (SFC) today published consultation conclusions and began a further consultation on proposed changes to the position limit regime. Considering market feedback to the consultation (Note 1), the SFC concluded to proceed with some of the proposals to better align the position limit regime with the SFC’s regulatory policies and objectives in light of recent developments in Hong Kong’s derivatives market. These include expanding the list of specified contracts and introducing an excess position limit regime for clearing participants (Note 2).
/jlne.ws/3gpuqx1

Investing and Trading

‘Dr. Copper’ Is High and May Yet Go Higher; Soaring demand for the red metal means it’s no longer an effective gauge of booms or busts.
Javier Blas – Bloomberg
The world is obsessed with oil and natural gas. In the metals world, lithium and cobalt, used for batteries, garner most of the talk. Copper is receiving far less attention. The metal was the first that humankind used, probably as early as 8,000 BC, to make primitive tools. Millennia later, it remains one of the best conductors of electricity, second only to silver, which is much more expensive. That makes the red metal a critical cog in the energy transition.
/jlne.ws/3XkuNcK

Bond Market’s Inverted Yield Curve Has Something for Everyone; With inflation easing, the current upside-down nature of market rates support the idea of a soft landing for the economy as much as they do a downturn.
Conor Sen – Bloomberg
An inverted yield curve — when longer-term interest rates like the 10-year yield are lower than short-term interest rates like the 2-year yield — has historically been one of the most reliable indicators of a future recession. The theory is that an inverted yield curve shows that investors expect the Federal Reserve to cut interest rates in the future. And the usual reason the Fed cuts rates is because the economy is in recession. Indeed, there are many examples of inverted yield curves leading to recessions.
/jlne.ws/3OtOyul

Elon Musk’s 2022 Wealth Loss Exceeds $100 Billion for First Time; Tesla co-founder’s fortune has plunged as shares of the electric-car maker tumble.
Nur Dayana Mustak – Bloomberg
Elon Musk’s losses for 2022 topped $100 billion as shares of Tesla Inc. dropped to the lowest level in two years. The Tesla co-founder is still the world’s richest person with a fortune of $169.8 billion, according to the Bloomberg Billionaires Index, even after seeing his net worth shrink by $8.6 billion on Monday. He’s down $100.5 billion this year — the most of anyone on the wealth index — after peaking at $340 billion a little more than a year ago.
/jlne.ws/3VfDIui

Oil Freight at $100,000 Piles Pressure on Crude Markets; Freight rates in many routes surged to highest level this year; Not enough signs of Chinese spot crude buying getting active
Sherry Su, Sharon Cho, Bill Lehane, and Lucia Kassai – Bloomberg
Soaring shipping costs are piling pressure onto physical oil markets that are already being hit by uncertainty surrounding a cap on Russian crude prices and weak Chinese buying. Earnings on the industry’s benchmark trade route breached $100,000 a day on Monday, the highest since early 2020 when Covid-19 caused a surge in tankers storing cargoes. With sanctions on Russia now forcing ships to take longer routes — drying up the pool of available vessels — oil companies and traders are having to pay ever-higher prices to transport cargoes. That’s adding to the cost of crude.
/jlne.ws/3GCkPxr

Environmental, Social and Corporate Governance

The world can harness trade to save the planet
Hugo Dixon – Reuters
Trade is a major cause of global warming. Think of all those goods travelling from far away on polluting ships – and raw materials and components whizzing across the world in complex supply chains. But the right trade policies can also do a lot to save the planet. The solution is to tax trade in carbon-intensive goods and get rid of tariffs on clean ones – while also subsidising green technologies and stopping aid to dirty ones. And to do all this fairly.
/jlne.ws/3tS5mlk

Factbox: COP27: Counting the rising cost of climate disasters
Reuters
Climate change has raised the cost of natural disasters, as rising sea levels and drought increase the frequency and severity of flooding and wildfires, insurers and risk modelling experts say. The list of the 10 most expensive events of the last decade provided to Reuters by risk modelling firm RMS all took place over the last five years.
/jlne.ws/3UYAfk1

Analysis: Global financial system needs mosaic of reforms to fund climate needs; COP27 talks strike deal on helping poorer countries; Delegates seek broader reform of financial system; World Bank risk-taking in focus for many countries
Simon Jessop and Valerie Volcovici – Reuters
A deal struck at the COP27 climate talks in Egypt calls for an overhaul of the post-World War Two international financial architecture that has guided three generations of development aid but is struggling to fund the needs of a warmer planet. As the impacts of climate change worsen, delegates at the U.N. summit that ended at the weekend pressed for reform to speed up the flow of funding to developing countries – to help them cut emissions and cope with the floods or wildfires they are already experiencing.
/jlne.ws/3XzQRAm

Analysis: COP27 does little for next month’s global agenda: nature loss; U.N. biodiversity summit to take place Dec. 7-19; Campaigners want a ‘Paris Agreement for Nature’; Scientists flag extinction risks
Gloria Dickie – Reuters
The U.N. climate talks in Egypt closed on Sunday with a resolution to address the dual crises of climate change and nature loss, but did little to boost next month’s global meeting on biodiversity. Countries will gather in Montreal in two weeks’ time to seek a global deal to protect the world’s declining wildlife and degraded ecosystems.
/jlne.ws/3UQJItz

Explainer: How far has COP27 inched beyond past climate deals?
Jake Spring and Shadia Nasralla – Reuters
Beyond the headlines from the annual U.N. climate conference, progress in advancing the global climate agenda relies on the behind-the-scenes efforts of technocrats over years. Below are some of the steps forward at this year’s COP27 summit concluded at the weekend in Egypt:THE SHAPE OF CARBON MARKETS.
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What If Buying Used Clothes Was as Easy as Buying New? A new browser extension wants to make secondhand shopping easier by suggesting used options when a customer shops online for new clothes.
Zahra Hirji – Bloomberg
Finding exactly the type of clothing you want or need secondhand can be a slog. A new company called Beni aims to make the process easier by suggesting used items while a customer is shopping online for new ones. The goal, says Beni Co-Founder and Chief Executive Officer Sarah Pinner, is to make buying resale “as easy as buying new, so buying new isn’t just the default.” Beni was founded in May 2021, and its browser extension became available for public use in the US and UK in September. The startup has raised just over $1 million, with investors that include XYZ Venture Capital and Chingona Ventures.
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Mazda, Suppliers to Invest $11 Billion on Electric Vehicle Push
Masumi Suga – Bloomberg
Mazda Motor Corp. and its suppliers plan to invest 1.5 trillion yen ($10.6 billion) in an electric-vehicle expansion plan, with the automaker forecasting they’ll account for 25%-40% of its global sales in 2030. The investment includes spending on facilities by Mazda’s suppliers, senior managing executive Akira Koga said at a briefing Tuesday, without disclosing how much Mazda would be contributing. The company had previously said EVs could equal 25% of sales at the end of the decade.
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Letter: Britain requires a green taxonomy to hit net zero; From Ingrid Holmes, Executive Director, Green Finance Institute and Chair, Green Technical Advisory Group, London EC1, UK
Financial Times
While warning about the “claptrap” of net zero targets, Stuart Kirk’s representation of the immense task of decarbonising our economy will likely discourage readers who would like to see a liveable future on Earth (“The banking approach to net zero is just claptrap”, Opinion, November 12). Insufficient data, as noted, does present a challenge to companies and investors when translating net zero targets and commitments into action. One of the data gaps which has vexed investors in particular has been the availability of climate-related financial disclosures. The lack of hard financial data is one of the drivers of greenwashing accusations, leaving investors — as it does — to rely on more subjective proxies.
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Breaking new ground for SDG reporting in Colombia
GRI
Multi-stakeholder corporate initiative recognized by UNCTAD
An online platform in Colombia – designed to help businesses assess and report their contributions towards the Sustainable Development Goals (SDGs) – has received an award from the UN. The SDG Corporate Tracker Colombia – jointly developed by GRI, the Colombian Government’s National Planning Department, and UN Development Programme – was recognized as one of the top three national initiatives at the International Standards of Accounting and Reporting (ISAR) Honours 2022, by the UN Conference on Trade and Development (UNCTAD).
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Texas Just Had Its Biggest Earthquake in Decades, and Fracking Is a Prime Suspect
Angely Mercado – Gizmodo
The Railroad Commission Texas, which regulates the state’s oil and gas industry, is investigating a 5.4-magnitude earthquake that rocked communities in West Texas last Wednesday, The Texas Tribune reports. Hydraulic fracturing, or fracking, is a drilling technique common in the area that is known to cause earthquakes.
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An actual ESG success story?
Robin Wigglesworth – The Financial Times
Around here we’ve been sceptical of the asset management craze for hot air ESG, and intrigued (though not entirely convinced) by the “common ownership” theory that big broad investors could stunt competition. So it’s only fair that we highlight some intriguing work that shows that just maybe some of all this is actually having a clear, measurable and positive impact? From a working paper just published by the National Bureau of Economic Research.
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TNG upheaval a masterclass in shareholder activism; Never has one shareholder achieved so much with so few. That’s the message from Grant Wilson’s campaign against TNG, developer of the Mount Peake vanadium-titanium-iron Project in the Northern Territory.
Financial Review
If Mike Cannon-Brookes was a genius for getting four directors on the board of AGL Energy despite owning only 11.3 per cent of the company, then Grant Wilson is in another league altogether. Wilson, a former regular columnist at The Australian Financial Review, is within a week of completing a masterclass in shareholder activism against Perth-based titanium mining company TNG.
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Wharton ESG initiative explores social impact industry in speaker series event
Natalia Pallas – The Daily Pennsylvanian
The Wharton Environmental, Social and Governance initiative held an event as part of its speaker series, where Beautycounter founder Gregg Renfrew and Wharton graduate Bobby Turner advised students about the social impact industry. The ESG speakers series was endowed by Turner and his wife, Wharton graduate Lauren Golub Turner, with the purpose of educating the Penn community on impact investing, philanthropy, and education.
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ESG Foes in States, Congress Ready Attacks on ‘Woke’ Investing; McHenry poised to skewer ESG as House Financial Services Committee head; Republican attorneys general vow ‘to be on the front line pushing back’
Andrew Ramonas and Clara Hudson – Bloomberg Law
Republican lawmakers and state attorneys general are preparing to make their most aggressive assaults on environmental, social and governance investing to date after victories in the House and courts. Rep. Patrick McHenry of North Carolina, the likely chairman of the House Financial Services Committee, and Attorney General Patrick Morrisey of West Virginia are among several Republican officials with new ammunition to fight the Securities and Exchange Commission and investment firms on ESG.
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Institutions

Morgan Stanley’s top international executive to step down; Franck Petitgas retires after 30-year career at Wall Street bank
Stephen Morris – Financial Times
Morgan Stanley’s top international executive, Franck Petitgas, is retiring from the Wall Street bank after a 30-year career in capital markets and investment banking. Petitgas — born in France and 61 years old — announced his decision internally on Monday, according to a memo from chief executive James Gorman seen by the Financial Times. However, he will remain a senior adviser to the bank and continue to represent it at events such as the World Economic Forum in Davos.
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SocGen and AllianceBernstein agree equities merger; French bank will have option of buying joint venture outright five years after it launches
Owen Walker – Financial Times
French bank Société Générale has agreed to create a joint venture with US investment company AllianceBernstein, with the two financial groups merging their equities research and cash equities businesses. The deal, announced on Tuesday morning, will create a global player in equities services that SocGen will have the option of buying outright five years after it launches, which is expected to happen by late 2023.
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Credit Suisse lays off one-third of China-based investment bankers – sources
Summer Zhen and Selena Li – Reuters
Credit Suisse has laid off about one-third of its China-based investment banking team and nearly half of its research department, sources with knowledge of the matter told Reuters, as part of a global restructuring and as its China business slows. The sources declined to be identified as the information is confidential. Credit Suisse declined to make specific comments on the layoffs in China when contacted by Reuters. Two sources said that more than 20 China-based investment bankers have been notified about the job cuts at Credit Suisse Securities (China), the bank’s 51%-owned joint venture.
/jlne.ws/3Es4BV6

Wellness Exchange

The “Tripledemic” Explained; In the United States, three big respiratory viruses are competing for attention
The Daily Podcast – New York Times
This winter, three major respiratory viruses — respiratory syncytial virus or R.S.V., the flu and the coronavirus — are poised to collide in the United States in what some health officials are calling a “tripledemic.” What does this collision have to do with our response to the coronavirus pandemic, and why are children so far the worst affected?
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There is a deepening mental health recession; Many countries are struggling with a rise in the numbers of people reporting problems with anxiety and depression
Sarah O’Connor – Financial Times
Employee assistance programmes are usually pretty dull affairs. For a few decades now, employers have paid EAP providers to run phone lines their employees can call if they need support with personal problems. The idea is to provide some short-term support — a handful of counselling sessions, say — to help staff deal with mild problems before they get worse.
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China’s ‘Slow, Painful’ Reopening Threatens More Economic Strain; Beijing and Guangzhou subway usage slumps as cases rise; Pent-up demand will be lackluster into next year, Nomura says
Bloomberg News
China’s economy is bracing for major disruption into next year as coronavirus cases surge and challenge the government’s recent attempt to maintain Covid Zero but reduce the economic and social damage it causes. The country is in for a “protracted and costly” reopening, with any release of pent-up demand likely to be lackluster as many households have already depleted their savings, according to Nomura Holdings Inc. economists. Hao Hong, chief economist at GROW Investment Group, said productivity is being hit as cities force residents to get regularly tested.
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Regions

Chinese regulators warn IPOs of zero-Covid winners subject to tight checks; Listings of PCR testing companies and food delivery groups subject to strict reviews driven by business sustainability concerns
Cheng Leng and Nian Liu – Financial Times
Chinese regulators have warned that a wave of initial public offerings from companies claiming to be involved in China’s booming Covid-19 testing sector will be subject to added scrutiny over concerns that their high growth is unsustainable.
/jlne.ws/3AAQqMm

Hong Kong’s Stock Market Is on a Wild Ride; Is it a bear market or a bull market? The only certainty is volatility.
Cao Li, Rebecca Feng and Matthew Thomas – The Wall Street Journal
Hong Kong entered a bull market earlier this month—at least according to one common definition. The city’s benchmark Hang Seng Index surged 25% in the first half of November, clearing the 20% hurdle that is traditionally used to define a bull market. The sharp run-up from its trough on Oct. 31—when the index touched its lowest level since April 2009—was fueled by signs that China is starting to shift away from its strict zero-Covid policy that has hamstrung the world’s second-largest economy. Moves by the Chinese government to ease pressure on its limping property sector also gave investors reason for optimism.
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Turkish Stock Market’s 80% Rally Fuels World’s Top Gains in 2022; Investors have flocked to stocks as haven from inflation; Retail investor interest unlikely to ebb until 2023 elections
Tugce Ozsoy – Bloomberg
In a year when most of the world’s stock markets are flagging, Turkey’s is an outlier. The country’s stock market has soared to a record high in 2022 as domestic retail investors seek a refuge from runaway inflation. The benchmark Borsa Istanbul 100 Index is up 80% in dollar terms this year. In lira terms, the index is up more than 150%, its best performance since 1999.
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Danish Crown to build £100mn UK plant as bacon demand rebounds; Chief executive says investment comes despite ‘crazy’ post-Brexit red tape
Emiko Terazono – Financial Times
One of Europe’s leading meat companies is to build a £100mn production facility in the UK as the country’s appetite for bacon surges. Danish Crown will build the plant in Rochdale, north of Manchester, creating more than 300 jobs in the second half of next year, the company said. It comes in spite of the UK economy shrinking and “crazy” post-Brexit red tape, according to its chief executive.
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US Orange Juice Imports From Brazil Surge as Florida Suffers Setbacks; Brazil shipments at record after hurricane hit Florida groves; OJ shortfalls may drive up costs by 30% in the US, Europe
Dayanne Martins Sousa – Bloomberg
The US is stocking up on Brazilian orange juice after Hurricane Ian and disease devastated citrus groves in Florida, the top producing state for the popular breakfast beverage. Shipments to the US from the world’s top exporter are up 58% in the first four months of the season from a year ago, hitting a record 112,500 metric tons to the end of October, according to Brazil’s Secretariat of Foreign Trade.
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Third year of drought threatens Argentina’s grain exports; Farmers despair of dry conditions and lack of government support
David Feliba – Financial Times
Walter Malfatto, 59, lays back on his chair at his ranch, arms crossed as he stares out of the window. Clouds are forming in the sky, but the hopes of what they may bring grow fainter as the hours go by. “It’s not going to rain today,” he says, resigned to another dry day. Together with his wife, Malfatto farms 770 hectares in Bragado, 220 kilometres south-west of Buenos Aires in Argentina’s rural heartland. “This time of the year, I should be up in the air taking care of my crops,” he says, referring to his crop duster. But the operation is at a standstill. Harvesters and seeders are stowed, and the spray plane remains in the hangar.
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A New Theory of American Power; The United States can—and must—wield its power for good.
George Packer – The Atlantic
A national mood disorder afflicts America, causing wild swings between mania and despair, superhuman exertion and bruised withdrawal. We overdo our foreign crusades, and then we overdo our retrenchments, never pausing in between, where an ordinary country would try to reach a fine balance. American exceptionalism has two faces, equally transfixed with a sense of specialness—one radiant with the nation’s unique beneficence, the other sunk in its unrivaled malignity. These extremes, confounding friends as well as enemies, are unrealistic and unsustainable.
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Miscellaneous

Are New Yorkers Back in the Office? It Depends on Who’s Counting; Dueling — and sometimes conflicting — return-to-office data providers paint different pictures of who’s really back at their desks, so here’s a rundown that explains them all.
Matthew Boyle – Bloomberg
From security-badge swipes to cell-phone pings to lunchtime salad orders, there are many ways to track New York City’s return to the office. None of them are perfect, some are misunderstood, and a few are new to the game, so here’s a quick rundown of the return-to-office (RTO) data providers.
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Musk’s About-Face on Remote Work Latest Example of WFH Whiplash; Leaders on Wall Street, in Silicon Valley and everywhere in between have had to roll back strict RTO demands
Matthew Boyle – Bloomberg
Elon Musk has softened his tone on remote work to convince people to remain at Twitter Inc., joining a growing roster of business leaders who’ve realized the value of allowing more flexible arrangements — and the perils of forbidding them. Musk, who has often ridiculed working from home, had banned remote work in his first email to workers last week. But Twitter’s new owner sent a follow-up email Thursday softening his tone. “All that is required for approval is that your manager takes responsibility for ensuring that you are making an excellent contribution,” he wrote, adding that staffers should have in-person meetings with their colleagues at least once a month.
/jlne.ws/3tTr3l8

How Fidelity Investments Built America’s Biggest Charity; The philanthropy hands out a fortune each year. It also sits on a lot more.
Noah Buhayar, Annie Massa, and Sophie Alexander – Bloomberg
The tax return of America’s biggest charity runs more than 5,000 pages. It details $10 billion in donations to tens of thousands of ­nonprofits, including youth centers, theater companies and soup kitchens. At least 1,300 Baptist churches are listed, as are Planned Parenthood, the Environmental Defense Fund and Teach for America. Page 738 of Schedule I shows $100,000 flowing to Puppies & Golf Inc.
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