JPMorgan Traders Should Get Prison for Spoofing, US Says

Mar 22, 2023

First Read

Hits & Takes
John Lothian & JLN Staff

Cheryl and I made it home to Elmhurst late last night after driving straight through from Kennesaw, GA. Now after a day of work, we just have to go to Wisconsin and retrieve our furry beasts (2 dogs) from my brother’s home and we will be all set.

It was nice to be back in my own bed last night, though when I woke up, I was not sure where I was.

I have lots to catch up on and emails to return. If you have not heard from me about an email you sent in the last couple of days, feel free to resend it and I will get right on it.

The Wall Street Journal says the FAANG era is apparently over, as Apple and Microsoft are dominating the S&P 500 and have the highest combined weighting in history.

In a case of “It takes one to know one,” former rogue trader Nick Leeson has emerged as a private spy with the London-based firm Red Mist, Bloomberg reported. Red Mist helps people seek compensation when regulators are unable to help. Leeson will work in its market enforcement unit.

The CME has a paid content piece in The Wall Street Journal by Bruce Blythe titled “What Rugby Can Teach Us About the Power of Data.”

As the responsibility of paying for the Covid-19 vaccine shifts from the U.S. government to its citizens, Moderna has decided the list price of the vaccine should be $130 per dose instead of the $15 to $26 per dose the government was paying, The Wall Street Journal reported. I am sure this will go over well.

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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The End of Market Discipline for Banks; Janet Yellen essentially says all deposits are insured. From now on, moral hazard rules.
The Editorial Board – The Wall Street Journal
Financial regulators have ignored their post-2008 rule book to contain the latest banking panic. And on Tuesday Treasury Secretary Janet Yellen tore it up by announcing a de facto guarantee of all $17.6 trillion in U.S. bank deposits. Regional bank stocks rallied, but it’s important to understand what this moment means: the end of market discipline in U.S. banking.
/jlne.ws/3TwJzvz

****** Beware of the alligators in the moral hazards.~JJL

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What Gets Lost When You Rescue Markets; Throwing a lifeline to the financial system in times of crisis can have unintended consequences. Among them: Making the world feel safer can lull people into complacency and excessive risk-taking.
Jason Zweig – The Wall Street Journal
Don’t panic. That’s the message financial regulators are sending-and it is barely working. In the past week, U.S. authorities promised to back uninsured deposits at the failed Silicon Valley Bank and Signature Bank. They also created a new program to lend up to $25 billion to other banks with shaky balance sheets. In response to these efforts to stem a potential panic, financial markets panicked. From March 9, when Silicon Valley Bank’s stock collapsed and depositors yanked their money out en masse, through March 15, regional-bank stocks lost more than 22%. Before a consortium of rivals helped rescue it on March 16, First Republic Bank had fallen over 80% in under six trading days.
/jlne.ws/3lyoGDI

*****The question is whether the banks that were helped will fill the holes identified or dig bigger ones.~JJL

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UK regulator takes aim at index providers over greenwashing; Financial Conduct Authority criticises ‘widespread failings’ in ESG benchmarks
Chris Flood – Financial Times
The UK’s financial regulator has warned index providers that they are fuelling greenwashing after identifying “widespread failings” with environment, social and governance benchmarks that guide billions in sustainable investment. The Financial Conduct Authority said on Monday that the overall quality of ESG-related disclosures made by index providers was “poor” and repeated its determination to ensure that ESG ratings providers should be formally regulated.
/jlne.ws/3LKeSkM

****** I knew making The Hulk the ESG mascot was going to be a mistake.~JJL

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Trafigura chief says LME nickel contract is ‘not fit for purpose’; Jeremy Weir says sector needs ‘contracts to reflect the underlying business’
Leslie Hook and Harry Dempsey – Financial Times
The head of Trafigura, one of the world’s largest commodities traders, has warned that the London Metal Exchange’s global nickel benchmark is unfit for purpose and needs reform to reflect the rapid rise of the battery market. The warning comes just days after the LME said it discovered bags of stones instead of nickel in one of its warehouses, dealing a further blow to a contract that is already suffering from low liquidity levels.
/jlne.ws/3JFeTnc

***** If the contract is delivering bags of rocks, then he might have a point.~JJL

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Tuesday’s Top Three
Tuesday was an almost-all-Financial Times day. Our top story Tuesday was the Financial Times’ Nestle says less than half of its mainstream food and drinks are considered ‘healthy’. Second was IEX’s IEX Exchange’s Position on the SEC’s Proposed Changes to Regulation NMS. Third was a three-way tie among the Financial Times’ ‘Perhaps she will not spoil the atmosphere after all’: women mark 50 years trading at the LSE Some of the first female traders recount how they started on the floor of the exchange; SVB lessons in the forgotten history of the Bank of the United States, a Financial Times opinion piece; and FT’s Humbled ‘crypto bros’ don blazers for Boca Raton, which was in Monday’s top three as well.

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MarketsWiki Stats
27,260 pages; 243,799 edits
MarketsWiki Statistics

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Lead Stories

JPMorgan Traders Should Get Prison for Spoofing, US Says
Steve Stroth – Bloomberg
The former head of the JPMorgan Chase & Co. precious-metals business and his top gold trader should get multiyear prison terms after they were convicted of spoofing the market for years, the US government said in a court filing. Michael Nowak, who ran the precious-metals desk, should get five years, and Gregg Smith, the top trader, should get six years, prosecutors said Tuesday in a sentencing memo to the federal judge in Chicago who presided over their trial. The recommendation was for longer terms than traders at other banks convicted of spoofing.
/jlne.ws/3Z6KC6z

What the takeover of Credit Suisse means for UBS; Swiss banking group has plans for each unit of its defunct rival
Owen Walker – Financial Times
Two days after UBS agreed to spend $3.25bn to rescue its rival Credit Suisse, executives are trying to move past the risks and sell investors on the benefits of the shotgun marriage. Chief executive Ralph Hamers told the Financial Times that the deal was “not simply about bringing two companies together” but about “how we can build a bigger UBS”. The rescue, which will create the world’s fourth-largest bank by assets – with 120,000 staff and $5tn in assets under management – has raised concerns that it might be an unwelcome distraction for UBS executives.
/jlne.ws/3FEa24w

Credit Suisse fallout threatens to halt issuance of risky bank debt; Some of Asia’s largest lenders may pause sales of additional tier 1 bonds after $17bn wipeout at Swiss bank
Kana Inagaki and Leo Lewis, Mercedes Ruehl, Cheng Leng and Kaye Wiggins, and Harriet Clarfelt – Financial Times
The wipeout of $17bn of Credit Suisse bonds has thrown into question further issuance in the market for risky bank debt, with some of Asia’s biggest banks considering pausing sales. Major banks in Japan, Singapore and Hong Kong are placing new additional tier 1 (AT1) bond deals on hold until market conditions stabilise, according to people familiar with the plans.
/jlne.ws/3nbfwgS

EU banks face punitive charges as expiry of Indian clearing house permit nears; Securities regulator warns extra costs for trading in Indian stocks and bonds from May to hasten capital market exit
Laura Noonan – Financial Times
French and German banks are facing a 500-fold increase in capital requirements for trades in India from May after the European markets watchdog said there were no talks with Indian counterparts to resolve a dispute between the two sides. The punitive capital charges for European banks will come into effect when a permit that lets EU banks use Indian clearing houses to handle their securities and derivatives trades expires at the end of April.
/jlne.ws/406WSoZ

London Losing to Paris in Battle of Equity Markets; Paris bourse market cap exceeds London’s by $250 billion; UK market attractiveness is in question after listing setbacks
Michael Msika – Bloomberg
In the competition to be the biggest stock market in Europe, Paris is starting to leave London in its wake. After becoming the region’s largest center for trading equities for the first time in November last year, the French bourse has widened the gap against rival London. With a total market capitalization of $3.13 trillion, Paris now exceeds that of the UK’s capital by $250 billion, according to data compiled by Bloomberg.
/jlne.ws/3JYOxOo

Sustainable investors don’t need “green bleaching”; Stricter rules are welcome but let’s not go too far in cutting choice
Alice Ross – Financial Times
Get ready for another terrible metaphor courtesy of the fund management industry: it’s trying to make “green bleaching” happen. Most of us have reluctantly accepted that greenwashing, a play on whitewashing, where companies or funds pretend to be more environmentally friendly than they really are, has become a mainstream term in finance.
/jlne.ws/3lFYg2G

There Is a Cost to Moral Hazard; More deposit insurance-even if implied-means more regulation to contain the risks
James Mackintosh – The Wall Street Journal
Usually, bailouts of banks lead to widespread concerns about moral hazard, the idea that if you save someone from the consequences of their actions, they take even bigger risks. This time a popular view being expressed by many commentators is that bank depositors, even big sophisticated businesses with large uninsured deposits at risk, can’t be expected to police how their banks behave.
/jlne.ws/3Txw52H

How to spark up a Green Day revolution with no cash; UK’s best option may be as an aggressive regulator – something the government needs to come to terms with
Helen Thomas – FInancial Times
Green Day, the cult 90s band, was named after its members’ enjoyment of pot. A green day in California was apparently a day spent lazing around smoking dope. The UK government is planning its own Green Day. This involves less marijuana (presumably) and more details on the UK’s plans to get to net zero. But the lethargic pace of the UK’s climate action of late makes Green Day an entirely fitting name.
/jlne.ws/3K8FxXj

‘Greenwashing’ Targeted in Latest European Regulatory Push; Proposed rules require companies to provide scientific evidence to back up eco-friendly labels
Kim Mackrael – The Wall Street Journal
European officials rolled out proposals aimed at forcing companies to back up environmental and sustainability claims they make over consumer products with scientific evidence, part of a broad regulatory push that-like similar efforts in technology-could set precedents for corporate rules elsewhere.
/jlne.ws/3naHSaW

Yellen Says U.S. Could Move to Protect Deposits at Other Banks; Treasury Secretary’s statement is clearest sign yet that regulators could intervene again if needed
Andrew Duehren – The Wall Street Journal
Treasury Secretary Janet Yellen said Tuesday that the federal government could step in to protect depositors at additional banks if regulators see a risk of a run on the banking system. Ms. Yellen delivered remarks at a gathering of the American Bankers Association in Washington as she and other federal officials try to shore up confidence in the U.S. banking sector after the collapse of Silicon Valley Bank and Signature Bank. Ms. Yellen and other federal regulators used emergency powers to guarantee uninsured deposits at SVB and Signature, while also setting up a new Federal Reserve lending program to allow banks to meet withdrawal requests.
/jlne.ws/40vENAN

Bank Failures Train Spotlight on Shortcomings in Risk Management; Bank boards have risk committees tasked with forestalling problems. But the members of those committees don’t always have the skills or stature to make themselves heard
Richard Vanderford – The Wall Street Journal
As banks and regulators scurry to respond to the most perilous industry conditions since the 2007-08 financial crisis, experts say one persistent issue needs attention: risk oversight that’s not always up to the job. Board-level risk committees at many banks have neither the clout nor the expertise to push back against corporate leadership, risk professionals say, a weakness that should be addressed in the wake of the recent bank collapses.
/jlne.ws/40qT5m1

Silicon Valley Bank’s former owner, FDIC bracing for fight over $2 billion
Dietrich Knauth and Tom Hals – Reuters
SVB Financial Group and the federal regulator that closed its Silicon Valley Bank unit indicated at a bankruptcy court hearing on Tuesday that a fight is looming over $2 billion of the former parent company’s cash that was seized along with the lender.
/jlne.ws/3JAL7A3

First Republic Rescue May Rely on US Backing to Reach a Deal; Talks have floated a variety of measures and are continuing; Aim is to make bank attractive to potential investors, buyer
Jennifer Surane, Sridhar Natarajan, Lydia Beyoud and Katherine Doherty – Bloomberg
Wall Street leaders and US officials discussing an intervention at First Republic Bank are exploring the possibility of government backing to encourage a deal that would shore up the lender, people with knowledge of the situation said. The shares fell in post-market trading. The group has floated a variety of measures to make the company more attractive to potential investors or a buyer, part of an effort to ensure there isn’t another US bank failure, the people said, asking not to be named describing confidential talks.
/jlne.ws/3TyXz7T

Elon Musk’s Global Empire Has Made Him a Burning Problem for Washington; Between Twitter, Starlink, SpaceX and Tesla, the CEO’s clout – and unilateral decision making – has made him a big headache for Biden.
Saleha Mohsin, Daniel Flatley and Jennifer Jacobs – Bloomberg
Argentina was headed toward its thrilling victory over France at the World Cup in Qatar, and Elon Musk, the Tesla Inc. CEO and Twitter owner, stood in the stands, laughing and holding a wine glass. A woman approached and asked for a selfie. He obliged and smiled. She briefly spoke to him and departed, according to a short video clip of the encounter posted on TikTok.
/jlne.ws/3LKYccH

Bomb Cyclone Slams Into San Francisco With Hurricane-Like Force; Strong gusts break windows, knock down trees, derail train; About 260,000 customers without power across California
David R Baker, Mark Chediak and Karen Breslau – Bloomberg
A bomb cyclone slammed into Northern California, packing hurricane-like winds that knocked down power lines, shattered windows in downtown San Francisco and caused a big rig to overturn on the Bay Bridge to Oakland. The system led to at least one death in San Mateo County, south of San Francisco, and grounded flights at San Francisco International Airport. And a train between Oakland and Sacramento derailed after contact with a tree, shutting service just before the evening commute.
/jlne.ws/3JtbB6k

SVB Financial clashes with FDIC over fate of $2bn in bankruptcy hearing; Creditors believe cash under banking regulator’s control could be used to repay them
Eric Platt and Sujeet Indap – Financial Times
Lawyers for the part of Silicon Valley Bank that has been put into bankruptcy protection accused US bank regulators of having “drained” roughly $2bn of cash from the institution, setting the stage for a fight that will decide how much investors, including Appaloosa and Pimco, recoup in the restructuring. The remarks on Tuesday came at an opening hearing in the bankruptcy of SVB Financial – the unit of SVB that includes its investment banking and venture investing businesses – which filed for Chapter 11 protection last Friday.
/jlne.ws/42HoliO

Biden Vetoes Anti-ESG Resolution for Retirement Plans
Shanny Basar – Markets Media
President Biden vetoed a House resolution that would have struck down a new U.S. Department of Labor rule that allows retirement plan fiduciaries to consider all financially relevant factors in investment decisions, including environmental, social, and governance considerations. The President said in a statement that there is extensive evidence showing that ESG factors can have a material impact on markets, industries, and businesses but the resolution would force retirement managers to ignore these relevant risk factors.
/jlne.ws/3TDxMf4

Judge Denies Archegos Founder’s Request to Toss Criminal Charges; Lawyers say prosecutors have wrongly alleged legal trading to be criminal
James Fanelli – The Wall Street Journal
A federal judge on Tuesday denied a request by lawyers for Archegos Capital Management founder Bill Hwang to throw out criminal charges tied to the meltdown of the investment firm. Mr. Hwang’s lawyers argued at a hearing in New York that federal prosecutors have mischaracterized legal trading as criminal market manipulation. U.S. District Judge Alvin Hellerstein acknowledged Mr. Hwang’s lawyers had raised legitimate questions but said it would be a mistake for him to dismiss the indictment before a trial.
/jlne.ws/42ylade

A New Chapter of Capitalism Emerges From the Banking Crisis; The idea that finance is an arm of the state is back – and global banking is likely to be reshaped by it.
John Micklethwait and Adrian Wooldridge – Bloomberg
There are few better places to consider the past few days of banking chaos than a small room hidden away in Edinburgh’s financial district – not far from where the godfather of free markets, Adam Smith, once lived. The Library of Mistakes is devoted to capitalism’s disasters: You can see a shirt signed by Nick Leeson, the rogue trader who brought down Barings Bank, and a portrait of the legendary American fraudster Charles Ponzi. Old newspapers proclaim government bailouts of long ago while the shelves groan with tomes like “Where Are the Customers’ Yachts?”
/jlne.ws/40tZM6K

No, Taxpayers Should Not Underwrite the Banking System; The US rescue of Silicon Valley Bank’s customers undermined the idea that deposit guarantees have limits.
Chris Hughes – Bloomberg
The US decision to protect all the depositors of Silicon Valley Bank and Signature Bank rendered the official ceilings on deposit insurance meaningless and put the public purse on the front line of defending the financial system.
/jlne.ws/3lAaFVS

Nick Leeson, Former Rogue Trader, Reemerges as a Private Spy; Leeson joins London firm run by former Black Cube operative; Red Mist helps clients pursue corporations through the courts
William Shaw – Bloomberg
Nick Leeson, the former derivatives trader who brought down Barings Bank, has joined a corporate intelligence firm run by ex-Black Cube operative Seth Freedman. Leeson, 56, will investigate financial misconduct with the London-based Red Mist Market Enforcement Unit to help investors seek compensation in court when regulators are unable to help, he said in an interview.
/jlne.ws/3JYtvzj

Watch episode two of The TRADE’s dark trading documentary series now! In the second of two episodes, participants from across the industry unpack the global regulatory debate around dark trading and how dark pools could be made more innovative.
Annabel Smith – The Trade
Episode two of The TRADE’s dark trading documentary series, in partnership with Liquidnet, is now available to watch below.mIn the second of two episodes The TRADE sits down with participants from Ninety One, Schroders, Invesco, SIX and Liquidnet to explore the global regulatory debate around dark trading.
/jlne.ws/42zj10E

Ukraine Invasion

Ukraine clinches $15.6bn IMF loan; Agreement marks financial lifeline for Kyiv as it looks to shore up economy following Russia’s invasion
James Politi – Financial Times
The IMF has struck a deal with Ukraine to provide a $15.6bn loan and a long-awaited financial lifeline to Kyiv as it tries to shore up its economy in the face of Russia’s full-blown invasion of the country. The multilateral lender announced the agreement on Tuesday after a series of talks with Ukrainian authorities in Warsaw held this month. It still needs to be approved by the IMF board, which is expected to happen in the coming weeks.
/jlne.ws/407k5aA

Saving Ukraine’s economy: the grain giant fighting for survival; Nibulon helped turn the country into the ‘breadbasket of the world’. The Russian invasion has brought it to its knees
John Paul Rathbone and Ben Hall – Financial Times
Before they were pushed out by Ukrainian troops, the Russian soldiers scrawled “BOOM” in garish red lipstick across the laboratory table in the Nibulon grain terminal. They ransacked offices at the company’s partially destroyed Kozatske facility, which lies on the west bank of the Dnipro river in southern Ukraine. They even destroyed the flower beds planted outside.
/jlne.ws/3n6POKh

Ukraine hit by drone attacks as Russia accuses Kyiv of targeting Crimea; Strikes on infrastructure come hours after Vladimir Putin’s endorsement of Chinese peace plan
Roman Olearchyk – Financial Times
Ukraine said seven people were killed in a town south of the capital Kyiv in overnight drone attacks by Russian forces, while Moscow accused its neighbour of using unmanned sea and air drones to target its navy based in the occupied peninsula of Crimea.
/jlne.ws/3Z17bti

Russia alters oil taxes to capture bigger share of trades above price cap; Kremlin overhaul targets $8bn of additional annual revenue by reducing market ‘discount’ on crude sales
Anastasia Stognei – Financial Times
Russia is overhauling how oil companies are taxed, aiming to bolster state revenues by capturing a bigger share of crude sales that often exceed the G7-imposed price cap on the country’s exports. The Kremlin will from April shift to an indicator pegged to Brent, the international crude benchmark, for calculating taxes on oil exports, a move it expects to generate an additional Rbs600bn ($8bn) of annual revenue by reducing the market “discount” on Russian oil.
/jlne.ws/3FDvrL1

Russia-Ukraine War Threatens to Trigger New Nuclear Arms Race; The international arms-control architecture is falling apart, and proliferation concerns are growing
Laurence Norman – The Wall Street Journal
The war in Ukraine has accelerated the unraveling of the international arms-control architecture painstakingly constructed from the Cold War onward, heightening concern among experts that a new nuclear arms race could emerge as decades of restraint on the numbers of nuclear weapons collapses.
/jlne.ws/3yWhNyT

Finally, a Serious Offer to Take Putin Off Russia’s Hands; The International Criminal Court just made it easier for any successor to get rid of the dictator and his shadow.
Leonid Bershidsky – Bloomberg
Dmitry Kiselyov, the Russian propagandist-in-chief who rarely misses a chance to lash out at the “Russophobic” West, spent the nearly three hours of his regular state TV Sunday broadcast avoiding the subject of the arrest order for Vladimir Putin, issued by the International Criminal Court in the Hague. That’s no oversight on his part: For all the bluster heard from other pro-Putin figures, the court’s move can have more than purely symbolic consequences.
/jlne.ws/42xn4KX

Exchanges, OTC and Clearing

Eurex is the first European exchange to launch Bitcoin index futures
Eurex
Launch of futures on FTSE Bitcoin Index in USD and EUR; Trusted access to cryptocurrencies in a regulated market with Eurex; Robust index methodology and governance framework of FTSE Russell; Rigorous digital asset exchange vetting process from Digital Asset Research (DAR). Eurex is the first exchange in Europe to offer Bitcoin index futures. Start of trading is scheduled for 17 April 2023. The leading European derivatives exchange has developed the new contract in partnership with FTSE Russell, a leading global index provider, and Digital Asset Research (DAR), its provider of institutional-grade digital asset data.
/jlne.ws/42tMsRU

Eurex becomes first European exchange to launch Bitcoin index futures; New futures will be traded in EUR and USD, providing trusted access to cryptocurrencies in a regulated market through Eurex.
Wesley Bray – The Trade
Derivatives exchange Eurex will become the first exchange in Europe to offer Bitcoin index futures, with a start of trading scheduled for 17 April. The new contract has been developed by Eurex in partnership with global index provider FTSE Russel and institutional-grade digital asset data provider Digital Asset Research (DAR).
/jlne.ws/40JAVML

DTCC’s MF Info Xchange Service Builds Momentum, With 55% Growth In Distributed Event Notifications
DTCC
The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services, today announced that its MF Info Xchange service, the first offering of its kind to standardize communications for the mutual fund industry, has reached new milestones. In 2022, the service successfully delivered over 6,000 event notifications to over 648,000 recipients in real time, the highest volumes ever, including consolidated Dividend/Capital Gain schedules, Interval/Tender Fund transaction schedules, Fund Mergers, Large Trade notifications, and other critical announcements.
/jlne.ws/40sq4GQ

Notice of Revisions to Earnings Forecast and Dividend Forecast
Japan Exchange Group
Japan Exchange Group, Inc. (JPX) has decided to revise its consolidated earnings forecast and year-end dividend forecast for the fiscal year ending March 31, 2023, which were released on January 30, 2023. 1. Revised Consolidated Earnings Forecast for Fiscal Year from April 1, 2022 to March 31, 2023
/jlne.ws/3lvorsU

Weekly OTC Position Reporting – Changes To Reporting Method And Format
LME
Summary 1. This Notice informs market participants that the London Metal Exchange (“LME”) is making changes to the method and format by which Members are required to submit weekly OTC position reports to the LME, which can be summarised as follows:(a) changing the method by which Members submit weekly OTC position reports to the LME from the current method of encrypted email, to submission through the LME’s Universal Data Gateway (“UDG”).
/www.lme.com/en/News

1.1 million private investors made transactions on the stock market on the Moscow Exchange in one trading day
MOEX
On March 20, the maximum activity of private investors since the beginning of 2023 was recorded on the Moscow Exchange stock market. Deals during the day concluded 1.1 million private investors. For comparison, the average daily number of active clients who closed deals in 2022 was 625,000 people.
/jlne.ws/3FHEkDn

Fintech

Google launches Bard chatbot to rival OpenAI’s ChatGPT; Tech giant seeks to make up lost ground in race to commercialise generative AI technology
Madhumita Murgia – Financial Times
Google has launched its Bard chatbot in a bid to rival OpenAI’s popular ChatGPT, as it seeks to make up lost ground in the race to commercialise generative artificial intelligence technology. The tech giant began rolling out the chatbot, its first standalone consumer AI product, on Tuesday. Google said that Bard, which provides answers to text-based questions, will be run separately from its Google Search engine.
/jlne.ws/3Z8XoBF

Google’s New AI Chatbot Is a Pretty Bad Fed Pundit So Far; Let’s give “Bard” a spin.
Joe Weisenthal – Bloomberg
Google has unveiled its own ChatGPT competitor, which it calls Bard. One nice thing about it is that unlike ChatGPT, it has internet access, and can talk about things that happened post-2021. The downside, at least according to my simple test this morning, is that it’s still got a lot of work to do. Of course, now that the AI wars are full on, this is likely to improve extremely quickly. But at least in its current iteration, it wasn’t good at previewing ttoday’s Federal Reserve decision.
/jlne.ws/40sydeo

Nigeria Digital Currency Transactions Jump 63% on Cash Shortages; Government adopts eNaira for its cash intervention schemes; Citizens unable to access banknotes as regulator rations cash
Emele Onu – Bloomberg
Nigeria’s once faltering digital currency is seeing its fortunes revived by the country’s demonetization policy that has left many citizens scrambling for alternative payment channels. The value of eNaira transactions is up 63% to 22 billion naira ($47.7 million) since its introduction while the number of wallets jumped by more than 12 times to 13 million when compared with the data in October, Godwin Emefiele, governor of the Central Bank of Nigeria said on Tuesday.
/jlne.ws/3lxCP3T

World’s Top Fintechs: Nominate your company to be considered by CNBC
Ryan Browne – CNBC
CNBC and independent research firm Statista are working together to identify the world’s top fintech companies, to be named in a published CNBC report in August. The research will identify fintechs disrupting the giants of finance with services that are faster, cheaper and more accessible – from established firms in payments and digital banking, to rising stars in emerging fields like cryptocurrency.
/jlne.ws/3JWimiK

State of the Fintech M&A Landscape: Market Trends and Regulatory and Enforcement Considerations
Morgan Lewis – JDSupra
Three months into 2023 and the fintech landscape looks wildly different than this time one year ago. Global economic uncertainty clouds the fintech industry, with it facing challenges from rising interest rates, significant layoffs in the tech space, and high visibility of cryptocurrency bankruptcy.
/jlne.ws/3TxktwD

Cybersecurity

End of BreachForums could take a bite out of cybercrime
Tim Starks – The Washington Post
Days after news broke about the arrest of its alleged operator, the notorious cybercriminal forum BreachForums says it’s shutting down. Cyber experts say its demise will be a blow to the cybercrime underworld, but it’s not clear how long the reprieve will last.
/jlne.ws/40jjZMU

Ferrari Says Ransomware Hack Exposed Clients’ Names, Email
Daniele Lepido – Bloomberg
Ferrari NV said it was hit by a ransomware attack that exposed information on the Italian sports car maker’s customers. “Certain data relating to our clients was exposed, including names, addresses, email addresses and telephone numbers,” Chief Executive Officer Benedetto Vigna said Monday in a message to clients that was seen by Bloomberg News.
/jlne.ws/3n29IGg

Credit ratings increasingly looking at cybersecurity
David DiMolfetta – The Washington Post
U.S. companies face a wide array of issues potentially impacting their ability to borrow money. In recent months, a banking crisis and high interest rates have stretched some companies thin, leading to layoffs and decreases in spending. At the same time, credit rating agencies, which assess companies’ ability to pay back borrowed money, are increasingly factoring in cybersecurity as part of their credit assessment criteria as they try to get a handle on the risks companies face.
/jlne.ws/3JB5Vaz

Cybersecurity Skills Shortage, Recession Fears Drive ‘Upskilling’ Training Trend
Robert Lemos – DarkReading
Companies continue to value cybersecurity skills, but many have moved their focus from hiring cybersecurity professionals to training up in-house staff on needed cybersecurity skills. The monthly number of cybersecurity-related job postings plummeted by nearly a third (31%) in the last month, compared with its peak a year ago, according to employment services firm Indeed.com. Yet cybersecurity is the No. 1 desired skill set that companies would like their employees to learn, with 59% of technology leaders rating cybersecurity as a top-three topic for training, ahead of both data science and cloud skills, according to training firm Pluralsight.
/jlne.ws/3JCoivH

Cryptocurrencies

SEC vs. Ripple verdict could come at pivotal time for crypto industry
Eleanor Terrett – Fox Business
As commuters rush through the arrivals hall at Washington D.C.’s iconic Union Station, they are greeted with a phalanx of fast-food restaurants, coffee vendors and the occasional retail store. Around 100,000 people pass through each day, many of them Wall Street types taking the Amtrak from New York City to do government business. Others are local commuters scrambling to work from the DC suburbs and, of course, tourists visiting the nation’s capital.
/jlne.ws/42ywwh2

Miami and New York’s Crypto CityCoins Meet Quiet Demise; Okcoin cited low liquidity and concerns of price manipulation; Miami’s Suarez saw token as new way to generate revenue
yCarly Wanna – Bloomberg
A crypto exchange has suspended trading of cryptocurrencies dedicated to New York City and Miami, citing limited liquidity for the tokens. Both coins earlier received support from the cities’ respective mayors, New York City’s Eric Adams and Miami’s Francis Suarez, who touted the digital assets as benefiting the community. Like any other proof-of-work token, users could mine the coins, but MIA and NYC came with a twist: 30% of the money spent on mining would be donated to the city, according to Okcoin.
/jlne.ws/42x6MSb

Crypto influencer allegedly threatened attorney behind FTX class action suit
Eric Revell – Fox Business
A cryptocurrency influencer who is a defendant in a class action lawsuit targeting promoters of failed crypto exchange FTX is facing new legal scrutiny after allegedly sending threatening messages to the attorneys leading the lawsuit. Ben Armstrong – known as “BitBoy Crypto” – is one of several influencers who have been named defendants in a class action lawsuit over their promotion of FTX accounts to their YouTube and social media followers. For example, Armstrong’s BitBoy Crypto channel on YouTube has 1.45 million subscribers. Plaintiffs allege the influencers didn’t disclose that they were paid to endorse or sponsor FTX or conduct adequate due diligence.
/jlne.ws/3JDvV5i

Nomura’s Laser Digital invests in ClearToken to enhance institutional engagement with digital assets; The startup will build a central counterparty for digital assets which will allow for more streamlined transactions, an increase in capital efficiency and a reduction of risk for all participants.
Wesley Bray – The Trade
Laser Digital, the digital assets subsidiary of Nomura, has made a strategic investment in ClearToken, a startup aiming to provide the scale and structure required for mass institutional engagement with digital assets.
/jlne.ws/3JVQ4Ur

Coinbase No Longer Supporting Signature Bank’s Signet Network: WSJ
Nelson Wang – CoinDesk
Coinbase Global (COIN) told clients on Monday it’s no longer supporting Signet, the real-time payments network of failed Signature Bank, according to a Wall Street Journal report. Coinbase users who used Signet for U.S. dollar deposits or withdrawals won’t be able to send funds outside of the usual banking hours, but Coinbase said it was looking for a new technology partner, according to the report.
/jlne.ws/40tUZT9

Tether Stability Made It the Safest Stablecoin Bet Amid U.S. Banking Crisis, Analysts Say
Shaurya Malwa – CoinDesk
The often-controversial tether (USDT) stablecoins emerged as the best bet for traders looking for a stable haven earlier this month following a series of banking troubles in the U.S. The USD coin (USDC) fell under 90 cents on March 11 after the collapse of Silicon Valley Bank (SVB) revealed some of the industry’s major players had exposure to the bank.
/jlne.ws/3lxW4KJ

Crypto Exchange BitMEX’s Acting CEO: We Have Gone Through the ‘Valley of Death’
Fran Velasquez – CoinDesk
Crypto exchange BitMEX was built to weather the current market turmoil caused, in part, by the failure of three U.S. crypto-friendly banks within a week, said Stephan Lutz, acting CEO and group chief financial officer. “The current market situation is actually what BitMEX originally was built for by our founders,” he told CoinDesk TV’s “First Mover” on Tuesday.
/jlne.ws/3THjNVy

Indian crypto exchange WazirX blocks over 2,400 accounts in 6 months
Pradipta Mukherjee – CoinDesk
WazirX, India’s largest crypto exchange by trade volume, has blacklisted over 2,431 accounts between October 2022 and March 2023, based on its internal monitoring process as well as under the direction of law enforcement agencies (LEA).
/jlne.ws/3lA0qRq

Crypto Exchange GMX Proposes Deployment on Coinbase’s Base Blockchain
Oliver Knight – CoinDesk
Decentralized derivatives exchange GMX has the support of its community to deploy the protocol on crypto exchange Coinbase’s (COIN) recently announced layer 2 blockchain, Base. Several members of the GMX community are in favor of expanding the platform to another blockchain, according to a post on the GMX governance forum.
/jlne.ws/3JtFOlK

Coinbase Win Streak Hits Record as Bitcoin Holds $28,000 Level
Maxwell Zeff – BNN Bloomberg
Coinbase Global Inc. rose for the seventh consecutive session on Tuesday, the cryptocurrency exchange’s longest streak of gains ever as Bitcoin climbed to its highest since June. Shares rose 12% to hit their highest since August, bringing their seven-day rally to 57%. The California-based exchange is now trading at $84 a share, up 137% from the start of 2023.
/jlne.ws/408fQvg

Miami and New York’s Crypto CityCoins Meet Quiet Demise; Okcoin cited low liquidity and concerns of price manipulation; Miami’s Suarez saw token as new way to generate revenue
Carly Wanna – Bloomberg
A crypto exchange has suspended trading of cryptocurrencies dedicated to New York City and Miami, citing limited liquidity for the tokens. Both coins earlier received support from the cities’ respective mayors, New York City’s Eric Adams and Miami’s Francis Suarez, who touted the digital assets as benefiting the community.
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Politics

White House Takes Aim at Crypto in Scathing Economic Report
Nikhilesh De – CoinDesk
The White House took aim at cryptocurrencies in a new report arguing that many aspects of the digital asset ecosystem are creating issues for consumers, the financial system and the environment. The Economic Report of the President, published on Monday, is an annual publication by the Council of Economic Advisers aimed at explaining the President’s economic priorities and policies. The March 2023 issue included an entire chapter on digital assets and “economic principles.”
/jlne.ws/3FHjCDM

National security is teaching the US to love tech controls; America once shied away from ‘the r-word’ but tech now faces a regulation revolution
Marietje Schaake – Financial Times
Three years ago, Donald Trump’s proposal to ban TikTok barely got off the ground, but the tide has turned. Earlier this month, Christopher Wray, the FBI’s director, added his voice to growing US national security concerns about the video sharing app. Intelligence suggests that the Chinese government could use its access to data held by companies there to collect information on hundreds of millions of people, including Americans. It might then use apps for operations to influence the public and control the algorithms recommending content to users. Bipartisan legislation, recently introduced, seeks to mitigate these concerns by mandating the commerce department to identify and address threats from foreign tech products.
/jlne.ws/3ZYoixb

You’re Facing a Big Tax Bill If You Hold These Mutual Funds; Even if the investments declined in value last year, you might still be on the hook for capital gains.
Claire Ballentine – Bloomberg
What’s worse than watching your mutual fund investments decline in value? Getting hit with a big tax bill too. That’s the reality some Americans are facing this year as the deadline to file taxes approaches. It’s largely a function of how actively managed mutual funds operate: Portfolio managers buy and sell securities within the fund to reposition their strategies, and many did so in 2022’s volatile market.
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Regulation

Bulgarian Woman Charged in $4B Crypto Fraud Case, Extradited to U.S.
Jamie Crawley – CoinDesk
Irina Dilkinska, a Bulgarian woman involved in the allegedly fraudulent crypto scheme OneCoin, has been extradited to the U.S. to face charges of conspiracy to commit wire fraud and money laundering. Dilkinska was OneCoin’s “supposed head of legal and compliance for the OneCoin cryptocurrency pyramid scheme,” U.S. Attorney Damien Williams said in a Department of Justice announcement on Tuesday.
/jlne.ws/40ctdL1

Statement of Commissioner Kristin N. Johnson regarding the CFTC’s Notice and Order Imposing a Statutory Disqualification against Allianz Global Investors US LLC
CFTC
The Commodity Futures Trading Commission (CFTC) today issued a Notice of Intent to Revoke the Registrations of Allianz Global Investors US LLC (AGI US) and simultaneously issued an Opinion and Order accepting AGI US’s offer of settlement. In the settlement, the Commission revokes AGI US’s registration as a commodity trading advisor and a commodity pool operator.
/jlne.ws/3Twu46V

CFTC Revokes Registrations of Allianz Global Investors US LLC
CFTC
The Commodity Futures Trading Commission today announced it has filed a Notice of Intent to Revoke the Registrations of Allianz Global Investors US LLC (AGI US), a Delaware limited liability company. The CFTC simultaneously issued an Opinion and Order accepting the settlement offer from AGI US and settling the action. The order revokes AGI US’s registrations with the CFTC as a commodity trading advisor and commodity pool operator.
/jlne.ws/3ZbhJGe

CFTC Orders Puerto Rico Commodity Pool Operator to Pay $150,000 for Supervision and Reporting Violations
CFTC
The Commodity Futures Trading Commission today issued an order simultaneously filing and settling charges against DARMA, LLC, a registered commodity pool operator and commodity trading advisor located in Puerto Rico, for violating CFTC regulations for supervision and reporting.
/jlne.ws/3FJGjap

SEC Obtains Final Judgment Against Former CFO Charged with Fraud and Lying to Auditors
SEC
On March 17, 2023, the U.S. District Court for the District of Maryland entered a final consent judgment against Philip R. Jacoby, a former Chief Financial Officer of biotech company Osiris Therapeutics, Inc., for his role in Osiris’s fraudulent conduct.
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Court reaffirms SFC’s power of issuing restriction notices
Securities & Futures Commission of Hong Kong
The Court of First Instance has dismissed a judicial review application against the Securities and Futures Commission (SFC) relating to restriction notices issued in an ongoing investigation into a suspected “ramp-and-dump” scheme (Notes 1 & 2). The judicial review application, brought by Mr Chen Wencan and Ms Su Jiaqi, sought to challenge the restriction notices issued on 9 February 2021 by the SFC under sections 204(1)(a) and 205(1) of the Securities and Futures Ordinance (SFO) to freeze their assets in various trading accounts held with certain licensed corporations.
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Hong Kong Regulator Reassures Creditors on Resolution Hierarchy; HKMA says shareholders will be the first ones to absorb losses; Move follows Canada, Europe after Credit Suisse action
Alice Huang – Bloomberg
The Hong Kong Monetary Authority reassured investors that subordinated debt holders have priority over shareholders when banks are being wound up, in a response to media inquiries regarding creditor hierarchy in the Asian financial hub.
/jlne.ws/40aw9bc

Investing and Trading

Commodity profits hit record in 2022, say trading house finance chiefs; Companies set high-water mark unlikely to be repeated in 2023
Leslie Hook, David Sheppard and Harry Dempsey – Financial Times
The finance heads of the world’s largest commodity trading houses said 2022 was a record year for profits, setting a high-water mark for the industry that is unlikely to be repeated in 2023. Trafigura, Vitol, Gunvor, Mercuria and CCI told the FT Commodities Global Summit profitability would probably be lower this year as commodity markets have returned closer to normal levels of volatility.
/jlne.ws/40amEJ4

Bank Crisis Could Cast Pall Over Commercial Real Estate Market; The market hadn’t fully rebounded from the pandemic. Some worry that another slowdown could add to fears of a recession.
Matthew Goldstein – The New York Times
The fallout from the recent banking crisis spurred by the collapse of two banks – and concerns about the health of a third – is bubbling up in the market for commercial real estate lending, as borrowers fear that banks will pull back. That could slow down construction activity and increase the likelihood of a recession, analysts and real estate experts said.
/jlne.ws/3TxhBji

Anxiety Strikes $8 Trillion Mortgage-Debt Market After SVB Collapse; Investors fear other banks will sell mortgage-backed securities, pushing down prices
Matt Wirz – The Wall Street Journal
Strains in the banking sector are roiling a roughly $8 trillion bond market considered almost as safe as U.S. government bonds. So-called agency mortgage bonds are widely held by banks, insurers and bond funds because they are backed by the mortgage loans from government-owned lenders Fannie Mae and Freddie Mac. The bonds are far less likely to default than most debt and are easy to buy and sell quickly, a crucial reason they were Silicon Valley Bank’s biggest investment before it foundered.
/jlne.ws/3LLKUN4

PIMCO lost $340 mln with Credit Suisse AT1 bonds write-off – source
Davide Barbuscia – Reuters
Bond giant PIMCO lost about $340 million on a category of Credit Suisse bonds that were wiped out by the takeover by UBS (UBSG.S), with the American investment manager’s overall exposure to the Swiss lender running into billions, a source familiar with the situation said.
/jlne.ws/3JDRAKD

Global commodity traders open to increasing Russian oil volumes; Trafigura and Vitol bosses say they would increase activity if governments and banks give approval
Tom Wilson and David Sheppard – Financial times
Commodity traders Trafigura and Vitol have said they would consider trading more Russian oil this year if they received clear guidance that governments and banks would accept them doing so. The world’s two largest independent energy traders both wound down their large oil businesses with Russia following President Vladimir Putin’s invasion of Ukraine last year.
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Swiss Commodity Traders Worry About Impact of Credit Suisse Deal
Archie Hunter – Bloomberg
Trading houses in Switzerland are worried that UBS Group AG’s takeover of Credit Suisse Group AG could have a negative impact on their industry. Major Swiss banks played a key role in establishing the country as one of the world’s biggest commodities hubs, providing firms with the credit needed to procure, store and transport oil, metals and agricultural products. Recent financial turmoil and the combination of the nation’s two largest banks could restrict those vital services.
/jlne.ws/3JWl9bG

Apple, Microsoft Dominate U.S. Markets After FAANG Trade Fizzles; The combined weighting of Apple and Microsoft in the S&P 500 has risen to the highest level on record
Hardika Singh – The Wall Street Journal
The FAANG era is apparently over. The U.S. market is dominated by just two stocks now. The combined weighting of Apple Inc. and Microsoft Corp. in the S&P 500 has risen to 13.3%, the highest level on record, while the influence of other big technology stocks has waned of late. That is according to Strategas Securities data going back to 1990.
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JPMorgan Says Treasuries Coping Amid Worst Liquidity Since 2020; Market depth worst since 2020, price impact is less: JPMorgan; Fed path uncertainty is driving wild yield swings across curve
Garfield Reynolds – Bloomberg
The Federal Reserve can look past low liquidity in the Treasuries market and continue with its rate hikes, according to strategists at JPMorgan Chase & Co. While the world’s biggest bond market endured some illiquidity recently, the impact on prices isn’t as severe as during the onset of the pandemic, according to a note Tuesday from a team including Jay Barry. As such, it’s not affecting financial stability and the Fed will make that distinction when deciding on its rate hikes, they said.
/jlne.ws/3lwiHiC

JPMorgan Had Some Fake Nickel; Also the Credit Suisse rescue, AT1s, CCAs, First Boston, Signature Bank’s bad deposits Silicon Valley Bank’s disputed deposits.
Matt Levine – Bloomberg
If you want to make batteries or cars, you might need nickel. If you buy some nickel from a nickel merchant, and she delivers it to you, and you open the box, and the box is full of rocks painted to look like nickel, you will be disappointed. You will not be able to make a battery or a car with a box of rocks.
/jlne.ws/3n8L5bd

Environmental, Social and Corporate Governance

Average People Have the Power to Impact Climate, EIB Survey Says; Governments should impose stricter measures to change consumer behavior in ways that improve the planet, the European Investment Bank’s annual climate survey found.
Laura Millan – Bloomberg
People say their individual behavior can make a difference and want governments to impose stricter measures on consumer behavior to tackle climate change, according to an annual survey by the European Investment Bank. More than 70% of people surveyed in the US, European Union, UK and China said governments are too slow in acting against climate change and environmental degradation.
/jlne.ws/408ot95

The one UN climate report graphic you need to see
Andrew Freedman – Axios
Climate change data visualization showing warming to date, future projected warming depending on our choices, and different human generations’ levels of warming. A new graphic released Monday from the UN climate panel conveys the most important scientific findings about climate change – and breaks new ground. Why it matters: From the depths of the UN’s Intergovernmental Panel on Climate Change (IPCC) assessments comes a unique global warming data visualization.
/jlne.ws/3K0zUdi

‘Greenwashing’ Targeted in Latest European Regulatory Push; Proposed rules require companies to provide scientific evidence to back up eco-friendly labels; Scrutiny over environmental labeling in the EU is increasing.
Kim Mackrael – The Wall Street Journal
European officials rolled out proposals aimed at forcing companies to back up environmental and sustainability claims they make over consumer products with scientific evidence, part of a broad regulatory push that-like similar efforts in technology-could set precedents for corporate rules elsewhere.
/jlne.ws/3naHSaW

EU Takes Its Greenwashing Fight to T-Shirts, Milk and Airline Travel; Bloc seeks to curb misleading green claims on everyday goods; Companies to face possibility of fines, products off market
John Ainger – Bloomberg
The European Union is cracking down on greenwashing everywhere from the supermarket to the skies. The European Commission, the bloc’s executive arm, proposed rules to tackle misleading environmental claims on everyday goods ranging from a carton of milk to T-shirts and flight tickets. Companies will need to back up with science any labeling such as “climate neutral” or “biodegradable.”
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Years of climate scepticism have done untold damage; Erroneous claims, scientific caution and poor media coverage held back policymaking on global warming
Pilita Clark – Financial Times (opinion)
Switzerland is generally feeble at making global headlines. But it grabbed the world’s attention twice over on Monday when an emergency bank rescue unfolded in Zurich while scientists unveiled a jolting UN climate report down in the resort of Interlaken. We still don’t know if UBS’s takeover of Credit Suisse will stave off a wider banking meltdown. But the scientists in Interlaken showed we have manifestly failed to do what is needed to thwart the gathering climate crisis.
/jlne.ws/40qKIH7

UBS Is Buying Credit Suisse’s Emissions Burden, Too; The Swiss lending giant had a better climate profile than its troubled rival. Now it has another problem to clean up.
Alastair Marsh – Bloomberg
During the final week that Credit Suisse Group AG existed as an independent entity, its chairman and chief executive took some time to pen remarks for the embattled bank’s sustainability report. Axel Lehmann and Ulrich Körner provided their expectations for what Credit Suisse would look like in 2050. It would be-in their words-a cleaner, greener, more sustainable bank after having traversed the choppy waters of the energy transition and eliminated carbon emissions from its operations and financing activities.
/jlne.ws/3TybJq2

Record San Francisco Storm Leaves Flood Risk, Thousands in Dark; Bomb cyclone pummeled Bay Area with hurricane-like force; Storm set strength records for March as it came ashore
Brian K Sullivan – Bloomberg
A historic storm that rattled San Francisco with hurricane-force gusts is winding down, leaving behind the threat of flooded streets and highways across the Bay Area. Showers will continue along the California coast from San Francisco to San Diego through the day as the system moves inland, said Ashton Robinson Cook, a meteorologist with the US Weather Prediction Center. Skies should be clear by Thursday.
/jlne.ws/4091ESN

Time to Break the EV Bottleneck
Emmy Hawker – ESG Investor
The world’s natural stores of minerals and metals are critical for battery-powered electric vehicles, but these reserves must be used responsibly. With the transport sector responsible for over 30% of global emissions, the case for transitioning from emission-intensive internal combustion engine (ICE) vehicles to electric vehicles (EVs) is clear for any corporate, government or investor focused on meeting their net zero targets. “The regulatory direction is clearly pointing towards zero-emission vehicles,” says Matthias Heck, Senior Credit Officer at ratings agency Moody’s, noting that many governments have committed to the phase-out of ICE vehicles by 2035, which has already had a positive impact on EV production and sales.
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US regulator vows ‘aggressive’ crackdown on oil and gas methane leaks; EPA head Michael Regan prepares tough new rules on emissions of potent greenhouse hydrocarbon
Myles McCormick – Financial Times
The US’s top environmental enforcer vowed that no oil and gas systems would be “getting out of jail free” as the Biden administration strengthens a clampdown on methane pollution despite pushback from energy companies and Republican allies in Congress.
/jlne.ws/3yYHTS2

UK urged to approve hydrogen blending in domestic gas network; Report recommends use of element as a greener alternative to fossil fuels
Jim Pickard – Financial Times
Ministers should give the go-ahead this year for the blending of hydrogen into the UK gas network so long as it is demonstrably safe, according to the government’s adviser on the low-carbon gas. The recommendation is one of the main findings of a report published on Wednesday by Jane Toogood, who was appointed the UK’s “hydrogen champion” last July.
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Institutions

Swiss Suspend Some Credit Suisse Bonuses After UBS Takeover; Federal Council invokes law allowing it to impose pay curbs; Move may add to staff exodus as headhunters see deluge
Hugo Miller – Bloomberg
The Swiss government said it’s temporarily suspending certain kinds of bonus pay for Credit Suisse Group AG staff following the state-brokered takeover of the bank by rival UBS Group AG. The nation’s governing federal council said in a statement it’s invoking the Swiss Banking Act which allows it to impose remuneration-related measures “if a systemically important bank is granted direct or indirect state aid from federal funds.”
/jlne.ws/42qRkr3

SVB’s Greg Becker Was Silicon Valley’s Money Man for 30 Years, Until Suddenly He Wasn’t
Lizette Chapman and Jennifer Surane – Bloomberg
Early on March 9, as SVB Financial Group’s stock began its death spiral, Chief Executive Officer Greg Becker picked up the phone. Becker started contacting friends, hoping that some of the goodwill he’d spent decades accruing as head of the startup community’s go-to bank could be repaid. Among the venture investors he spoke with was Alex Rampell, a general partner at Andreessen Horowitz.
/jlne.ws/3FLzpkX

Ex-Goldman Banker Ng Seeks Celebrity Prison for 1MDB Fraud; Roger Ng asks judge to recommend Danbury prison in Connecticut; Low-Security prison inspired ‘Orange is the New Black’
Patricia Hurtado – Bloomberg
Roger Ng, the only Goldman Sachs Group Inc. banker tried and convicted in the global 1MDB scandal, asked a judge to let him serve his 10-year prison term in Danbury, Connecticut – the same facility where hotel magnate Leona Helmsley was imprisoned for tax evasion in the early 1990s. Ng’s lawyer, Marc Agnifilo asked US District Judge Margo Brodie in a letter that she recommend the “lowest-possible designation” at the low-security federal prison for his client.
/jlne.ws/3TCnFXW

UBS Aims to Boost Its Dealmaker Ranks, Not Spin Out First Boston; Executives are said to have little interest in carveout plan; Still, some Credit Suisse bankers hold out hope for a deal
Dinesh Nair, Gillian Tan, Marion Halftermeyer and Michelle F Davis – Bloomberg
UBS Group AG wants to cherry pick top dealmakers from Credit Suisse Group AG’s investment bank instead of supporting Michael Klein’s plan to build a new independent firm, according to people familiar with the discussions. UBS executives have told their Credit Suisse counterparts that they prefer selectively bolstering their own investment bank while dumping the riskier operations, the people said, asking for anonymity because the review has just begun and no final decisions have been made.
/jlne.ws/3LHEbnj

Credit Suisse Shareholder Says Override of Vote ‘Unprecedented’; Ethos calling for a possible split and listing of Swiss unit; Government used emergency laws to block shareholder vote
Myriam Balezou and Hugo Miller – Bloomberg
One of Credit Suisse Group AG’s biggest shareholder groups says the rushed merger of its bank with UBS Group AG over the weekend is an unprecedented breach of shareholder rights that may scare off institutional investors. Ethos Foundation, which acts as a proxy adviser for pension funds and other members holding between 3% and 5% of the bank’s stock and $400 billion in assets, said on Monday that it’s weighing the possibility of legal action over the sale. Options through the courts are currently limited however.
/jlne.ws/3yUQDJ1

Who Is Stuck With Credit Suisse’s Worthless AT1 Bonds?; Big asset managers hold some of the notes. But the owners of the bulk of the $17 billion of these highly risky instruments remain a mystery.
Shuli Ren – Bloomberg
Credit Suisse Group AG’s junior bond holders are not happy. The UBS Group AG takeover, orchestrated by the Swiss government without the blessings of shareholders on both sides, will trigger a complete write-down of their $17.3 billion worth of Additional Tier 1 notes. Some are considering legal action. Losses of this magnitude are unsettling to markets already shaken by the latest banking crisis. As such, it is of public interest to ask who are the owners of these risky bonds, introduced after the global financial crisis?
/jlne.ws/3LLh638

China’s Own Version of a Banking Problem; Xi Jinping wants more SMEs to help the country meet its 5% growth target. That is placing a strain on lenders.
Anjani Trivedi – Bloomberg
For all the talk of China’s post-Covid economic revival and sweeping changes at the top, Beijing’s biggest problems are (still) its small and medium companies. As China walks a fine line with its 5% growth target, these firms have a big role to play: They make up large swathes of the manufacturing and industrial complex, contribute around 60% of gross domestic product, and account for a significant chunk of exports.
/jlne.ws/404HxVL

New Zealand Dollar Emerges as Best FX Hedge for Economic Gloom; Kiwi tends to trail G-10, EM peers during recessions: JPMorgan; Currency could revisit pandemic low if bank crises worsen: CBA
George Lei – Bloomberg
The New Zealand dollar, one of this year’s worst-performing major currencies, is emerging as a prime choice to hedge against potential US dollar strength should the global economic outlook darken. The kiwi has lost about 2.6% in 2023, beating only the Norwegian krone among Group-of-10 currencies. The slide took place in the context of a modestly weaker greenback, with the Bloomberg Dollar Spot Index dropping 0.4% this year.
/jlne.ws/405JNMJ

UBS to enter talks with Michael Klein to terminate First Boston deal
Stephen Morris, Arash Massoudi and Owen Walker – Bloomberg
UBS is set to enter talks with Michael Klein to unwind a deal that would have seen the Wall Street dealmaker take control of much of Credit Suisse’s investment bank, according to people with direct knowledge of the matter. The negotiations, coming days after UBS was forced to buy its Swiss rival for $3.25bn, underline the view among UBS executives that Klein secured terms that were too favourable. UBS also sees some value in keeping parts of the now defunct Credit Suisse’s investment banking unit.
/jlne.ws/3JXTpmN

Wry humour, grief and Bear Grylls all on show at Credit Suisse conference
Kaye Wiggins and Cheng Leng – Financial Times
As Credit Suisse entered weekend crisis talks that would end in its forced takeover, a group of its bankers embarked on a different sort of survival challenge: an outdoor adventure trip that they were filming for Bear Grylls. The executives spent Friday night on a camping retreat in Sai Kung, a picturesque district of Hong Kong known for its hiking trails, said three people with knowledge of the matter.
/jlne.ws/3K07sIS

Banker accountability is easier to demand than deliver; Better financial conditions made it possible to believe that problems had been fixed – until the last two weeks
Brooke Masters – Financial Times
Hours after Swiss authorities pushed Credit Suisse into merging with its local rival UBS, CS leaders emailed staff. Don’t worry, previously scheduled bonuses and raises will go ahead, chair Axel Lehmann and chief executive Ulrich Körner wrote. This comes on top of news that Silicon Valley Bank CEO Greg Becker sold nearly $30mn in shares over the past two years, including a $3.6mn chunk just days before the bank sparked a deposit run by revealing big losses on securities sales. The Federal Deposit Insurance Corporation had to bail out the California lender.
/jlne.ws/3lxTgNK

The Banking Panic Could Hit Corporate Profits Broadly
Jacob Sonenshine – Barron’s
The bank problem is likely to hit corporate profits of all types. The big risk is that weakened banks will lend less, weakening the broader economy. It started with Silicon Valley Bank experiencing depositors pulling money, prompting the bank to sell fixed-income assets at losses to shore up liquidity. Other similar banks might have the same type of issue, as clients look to money-market funds for higher yields, forcing banks to either accept depositors outflows-which would cause them to lend less-our pay higher interest on those deposits, squeezing profit margins.
/jlne.ws/3ndpnTv

Big investor in Credit Suisse bonds says ‘bail-in’ system worked
Herbert Lash – Reuters
One of the largest investors of the Credit Suisse bonds that were wiped out in the UBS takeover of the troubled Swiss bank still believes in the value of the debt class and the “bail-in” system designed to save banks seen as too big to fail.
/jlne.ws/40jx09e

Work & Management

Global Layoffs Extend Far Beyond Big Tech
Mathieu Benhamou, Jennah Haque, Phil Kuntz and Jo Constantz – Bloomberg
The collapse of Silicon Valley Bank has sent shockwaves through an economy already shaken by mass layoffs and under pressure from central banks locked in a high-stakes battle with inflation – sharpening the risk of recession and even greater job losses. While the US economy has so far remained strong, adding 311,000 jobs in February after adding more than half a million jobs in January, central banks’ increasingly aggressive campaign of rate hikes may expose more vulnerabilities in banks with interest-rate risk, like SVB, and startups that rely heavily on venture capital funding to maintain operations and payrolls.
/jlne.ws/404dtd9

Bill Gates Sees GPT’s AI as Revolutionary Tech Breakthrough; Philanthropist sees huge potential for reducing inequalities but also wants to balance inherent risks
Dina Bass – Bloomberg
Microsoft Corp. co-founder Bill Gates said OpenAI’s language generation artificial intelligence tools are one of two revolutionary technologies he’s come across in his lifetime. The 67-year-old billionaire and philanthropist sees the promise of the new technology as the “most important advance in technology since the graphical user interface,” which allowed people to more easily interact with computers by using icons, menus and windows, and set the standard for modern operating systems.
/jlne.ws/3JVMLO8

Switzerland bans deferred bonuses for Credit Suisse staff; Finance ministry halts awards as demoralised bankers say ‘we thought it couldn’t get any worse’
Sam Jones, James Fontanella-Khan, Stephen Morris and Owen Walker – Financial Times
The Swiss government has banned Credit Suisse from paying deferred bonuses awarded before 2022 in a move that sparked more upset from staff at the failed bank. The federal finance ministry said on Tuesday it had imposed “remuneration-related measures” on Credit Suisse as a result of the use of taxpayer funds to facilitate its $3.25bn takeover by rival UBS.
/jlne.ws/3navvvD

The Unraveling of the U.S. News College Rankings; The revolt against the survey, started by Yale Law School, was decades in the making
Melissa Korn – The Wall Street Journal
Yale Law School Dean Heather Gerken floated the idea past a small circle of colleagues. She had a sleepless night and queasy morning. And then, on Nov. 16, she started the revolt. Like many university administrators, Ms. Gerken had tried for years to get U.S. News & World Report to rethink its law-school rankings. The problem for Ms. Gerken wasn’t Yale Law’s score-it had been No. 1 for more than 30 years straight. She worried about the broader effect on schools and their priorities.
/jlne.ws/3JXO66T

It’s time to get intentional about what day of the week you hold meetings
Stephanie Vozza – Fast Company
After reviewing his calendar from 2022, the CEO of Owl Labs decided to get more strategic about why and when he held meetings. Here’s why it matters. Each year, Frank Weishaupt, CEO of the AI-powered video conferencing solution provider Owl Labs, reviews last year’s calendar to see how he spent his time. The exercise can uncover areas that need improvement so you can be proactive with your priorities, he says.
/jlne.ws/3yXojWd

Wellness Exchange

Avian bird flu outbreak: Symptoms, vaccines, and what’s being done to curb the spread; Since the start of the outbreak, nearly 59 million domestic poultry have died from the virus or been culled to stop its spread.
Adam Bluestein – Fast Company
Since early 2022, a highly pathogenic strain of avian influenza has been decimating wild bird populations and wreaking havoc on North American poultry farms (you’ve probably noticed the resulting rise in egg prices). In the past year, this strain of H5N1 has also been detected in mammals ranging from raccoons to seals and-for the first time ever in the U.S.-people.
/jlne.ws/3LI4kCp

You Don’t Need to Disinfect So Much; Our use of antimicrobial cleaners spiked during the pandemic. Given the potential long-term health risks, it might be worth cutting back again.
Dana G. Smith – The New York Times
The cleaning industry experienced a boom during the first years of the pandemic. Covid-19 cleaning protocols in schools, stores and other public spaces ratcheted up, with a spray and a wipe-down becoming de rigueur on every surface after every use. Fear of the coronavirus also prompted people to use more disinfectant wipes and sprays in their homes, and consumer spending on cleaning products increased 12 percent between 2019 and 2021. (The New York Times admittedly contributed to this disinfecting frenzy.)
/jlne.ws/3Z9innA

Regions

Who Blew Up Nord Stream? Investigators Focus on Six Mysterious Passengers on a Yacht; A boat rented in Germany sailed close to the spots in the Baltic Sea where explosions sabotaged the gas pipeline from Russia
Bojan Pancevski, William Boston and Sune Engel Rasmussen – The Wall Street Journal
The small marina on the edge of this north German city is a popular summertime spot for recreational sailors. German intelligence believes it was also the jumping-off point for the sabotage of the Nord Stream gas pipelines, an assault on Europe’s civilian energy infrastructure unprecedented since World War II. On Sept. 6, a small group set out from Rostock aboard a rented yacht, the Andromeda, a slender 50-foot-long, single-masted sloop, ostensibly on a pleasure cruise around Baltic Sea ports. Within two weeks, the group returned the boat and disappeared.
/jlne.ws/3lAx0Tp

In drought-stricken Kenya, dead livestock tell of livelihoods lost; The pastoralists of Wajir county have been forced to abandon their itinerant lifestyle for lack of fresh pasture
David Pilling – Financial Times
It looked like a particularly macabre Damien Hirst exhibition. The taut carcasses of animals and half animals, skin parched and twisted in varying forms of agony, scattered across the sand: cattle, goats and even the remains of a camel, an erstwhile “ship of the desert”, rib cage bleached white by the scorching sun.
/jlne.ws/42AnWOT

Shortage of Cooking Oil Looms as Biofuels Gain Global Appeal; US, Europe, Brazil and Indonesia are driving the biofuel boom; Palm oil will benefit, but IEA sees impending feedstock crunch
Anuradha Raghu – Bloomberg
A global biofuel boom is set to drive a shortage of vegetable oils – used for cooking and now increasingly to power trucks and planes – intensifying a debate over food versus fuel. From the US to Brazil and Indonesia, governments are embracing energy made from plants like soybeans or canola, or even animal fat, to move away from fossil fuels and cut emissions. This has created opportunities for vegetable oils, especially palm oil, an ubiquitous but controversial ingredient found in products like pizza dough, instant noodles, chocolate and shampoo.
/jlne.ws/40e5kD2

Miscellaneous

From $2.5 million yachts to $400,000 in DoorDash bills, here are Sam Bankman-Fried and other execs’ wildest purchases with FTX and Alameda funds
Pete Syme – Business Insider
Since the dramatic implosion of crypto exchange FTX last November, court filings and other reports have revealed the extent of executives’ lavish spending habits. Bankruptcy lawyers said Alameda “bought planes, houses, threw parties, made political donations” with a $65 billion line of credit at FTX.
/jlne.ws/3lvloB9

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Wildfires rage in Canada’s oil hub

Wildfires rage in Canada’s oil hub

First Read Hits & Takes John Lothian & JLN Staff Trading Technologies (TT) celebrated its 30th anniversary yesterday, marking three decades of pioneering advancements in electronic futures trading. Founded in 1994, TT initially revolutionized the industry with its...