John Lothian Newsletter: Rate probe turns to four major banks; US regulators warn of tri-party repo risk; Singapore Exchange tightens listing rules

Jul 19, 2012

As expected, the baleful eye of the regulators swings toward four more banks that may have engaging in LIBOR shenanigans with Barclays.  As if the current crop of regulatory train wrecks were not enough, the tri-party repo market is flagged as having been systemically vulnerable to trouble for years.  Singapore Exchange toughens requirements for listing companies, hoping to reform its roll of titles and attract more interest from around the world.  In the top box, take a look at a MarketsWiki.tv interview with Cinnober CEO Javier Tordable; and if you haven’t seen the MW.tv interview with Kevin Cook of Autumn Capital Partners, you’ve got another chance today.

First Read

Comment: Futures market requires reset
By Nicolas Breteau, Newedge | Financial Times
While financial market regulators were still dealing with the failure of futures broker MF Global another has occurred with Peregrine Financial Group. Investigations are under way in both cases. Nevertheless, the outside world can be forgiven for thinking that there is something structurally wrong with the futures industry. How could another US broker collapse with all the attention regulators and lawmakers are now heaping on this business?
http://jlne.ws/NzJvp3

**** Nicolas Breteau is the CEO of Newedge Group.

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Futures Industry Outlines Response to Peregrine Collapse
By Jacob Bunge – Dow Jones
The U.S. futures industry’s method of regulating itself needs rethinking after a second scandal rocked the sector in less than a year, the head of the business’s main lobby group said Wednesday. Walter Lukken, head of the Futures Industry Association, also said auditors must be able to electronically confirm balances of accounts that hold futures traders’ funds “at any time,” to provide stronger safeguards against client losses.
http://jlne.ws/NzJtxq

Trade group chief tells futures industry to restore confidence
Chicago Tribune
Lukken calls for ‘soul-searching’ after ‘appalling’ Peregrine collapse The head of the Futures Industry Association told local members Wednesday that customer confidence in futures trading must be restored in the wake of Peregrine Financial Group’s collapse and the arrest of its CEO.
http://jlne.ws/NzJvp7

**** Before you can restore it, you must find it.  Having been called a bunch of “wusses” by Suntimes David Roeder, it might take awhile.

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Libor Alternative Trades Briskly in Debut
BY KATY BURNE – Dow Jones
A futures contract tied to a rate that some see as an alternative to the London interbank offered rate made its debut Monday, with investors trading more than 2,600 contracts that day and over 3,500 Tuesday, according to the companies behind the launch.
http://jlne.ws/NzJtxv

****GCF, GCF, GCF!!!!

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Prosecutor Bharara Tells Hedge Funds Cases Build Trust
Bloomberg
Preet Bharara, the top federal prosecutor in Manhattan whose office has sent inside traders and terrorists to prison, told attendees at a hedge fund conference that prosecutions foster confidence in the market.
http://jlne.ws/NzJtxw

***** Foster is a good word.  Can we foster a little confidence over to the futures markets.

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Behind Credit Default Swaps Market, a Cartel Left Open to Collusion
By JESSE EISINGER, ProPublica
The rate-manipulation scandal has demonstrated that banks will collude with one another for their own benefit. Banks didn’t report the rate at which they were borrowing from other institutions. They could report a made-up rate that, not surprisingly, turned out to serve their economic interests at the time.
http://jlne.ws/NzJvpa

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Peregrine’s Struggle to Stay Airborne
BY JACOB BUNGE, IANTHE JEANNE DUGAN AND JULIE STEINBERG – Dow Jones
When the end came for Russell Wasendorf Sr.‘s futures brokerage last week, it was quick. But interviews with current and former employees, regulators and others close to the situation, point to increasing signs of strain in Peregrine Financial Group Inc. and Mr. Wasendorf, its founder and chief executive, in the months leading up to the firm’s collapse. The company cut back on perks, cut salaries and defaulted on the terms of state loans used to build its $18 million headquarters in Cedar Falls, Iowa.
http://jlne.ws/NzJtxB

**** Nice headline.

MarketsWiki.tv

Cinnober CEO Javier Tordable Discusses the Company’s Recent Partnerships
MarketsWiki.tv
Javier Tordable, who took the CEO post at Cinnober in March, has inked notable trading platform, clearing and surveillance technology deals with the Dubai Gold & Commodities Exchange (DGCX) and The Stock Exchange of Thailand (SET). This week, the firm announced a deal to provide clearing technology for the London Metal Exchange (LME). In our recent interview during the FIA-FOA International Derivatives Expo in London, Tordable talks about the DGCX deal, the acquisition of Nomura’s Swedish technology development center in Umeå, Sweden, as well as where technology is heading.  Interview by John Lothian News editor-in-chief Jim Kharouf.
http://jlne.ws/Omy2IN

Kevin Cook of Autumn Capital Partners Discusses Common Pitfalls for Emerging Managers
MarketsWiki.tv
Kevin Cook, partner at Autumn Capital Partners, a UK-based consulting firm for hedge funds and CTAs, discusses common pitfalls for emerging managers and the outlook for the managed futures space at the Emerging Manager Forum in London. Cook presented “The Top 10 Reasons Emerging Managers Fail” at the conference.  Interview by John Lothian News editor-in-chief Jim Kharouf. **Special thanks to Bucky Isaacson and Frank Pusateri for their help and to the May Fair Hotel, for use of their facilities
http://jlne.ws/MAJXjc

JLN Options

Lessons from last summer’s volatility
David K. Randall, Reuters
The major events likely to affect financial markets over the next six months include everything from the outcome of the U.S. presidential election to slowing growth in China.
http://jlne.ws/OaDPj6

Traders fall in love with Bank Nifty (India)
Palak Shah, Business Standard
India’s derivatives market for equity indices is growing. While the S&P CNX Nifty index of the National Stock Exchange (NSE) has hogged the limelight for nearly a decade, another index, the Bank Nifty, is gaining traction.
http://jlne.ws/NFYXky

Options market looking more to Canadian dollar
Julie Haviv, Reuters
The Bank of Canada is widely expected to hold interest rates steady this week, but with an increase expected in less than a year, investors in the options market have become less bullish on the U.S. dollar’s upside versus the Canadian currency.
http://jlne.ws/MvcMTw

** Just saw a Time Magazine article that the average Canadian is now wealthier than the average American. Guess stories like this should be expected. –JB

MarketsWiki

MarketsWiki Page of the Day
Attain Capital Management
http://jlne.ws/OZuUjy

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MarketsWiki Recent Updates

People

Javier Tordable; Russell R. Wasendorf Sr.; Walter L. Lukken; Per Sjöberg; David Silverman; Alan Donoghue; Mark A. Esposito

Companies, Organizations and Groups

Cinnober Financial Technology; TriOptima; NYSE Liffe U.S.; Attain Capital Management; OneChicago LLC; BATS Global Markets

Products

GCF Repo Index futures

Miscellaneous

Single stock futures

Statistics

26,264,607 pages viewed, 6,963 articles, 144,736 edits
MarketsWiki Statistics

Lead Stories

Rate probe turns to four major banks
Financial Times
Regulators are focusing on at least four of Europe’s biggest banks as they investigate the attempted manipulation of the region’s benchmark interest rate, suspecting that Barclays’ traders were the ringleaders of a circle that included Crédit Agricole, HSBC, Deutsche Bank and Société Générale. Evidence of links between traders at all four banks and Barclays’ former euroswaps trader Philippe Moryoussef is under scrutiny, people involved in the process have told the Financial Times.
http://jlne.ws/NzJvFr

US regulators warn of tri-party repo risk
By Shahien Nasiripour in Washington – Financial Times
US financial regulators have taken aim at a key bank funding market, warning of “structural vulnerabilities” that could aggravate systemic risk. The so-called tri-party repo market, in which banks pledge securities as collateral for mostly overnight loans from investors, has concerned regulators for years. The Federal Reserve Bank of New York has been working to reform the system.
http://jlne.ws/NzJtNR

Singapore Exchange tightens listing rules
By Jeremy Grant in Singapore – Financial Times
The Singapore Exchange is strengthening its listing standards by requiring that any company wanting to go public must show it has been significantly more profitable for longer than under the bourse’s previous rules. The move is a sign that some Asian exchanges are starting to respond to criticism that lax rules have allowed the listing of companies with questionable financial and corporate governance track records.
http://jlne.ws/NzJtNT

Interest Rates From Sweden to South Korea Under Fresh Scrutiny
Bloomberg
Regulators from Stockholm to Seoul are re-examining how benchmark borrowing costs are set amid concern they are just as vulnerable to manipulation as the London interbank offered rate.
http://jlne.ws/NzJtNX

Eight Financial Utilities Tagged ‘Systemically Important’
By Jeffrey Sparshott and Alan Zibel – Dow Jones
Top U.S. regulators said eight payment and clearing firms could pose a risk to the economy if they fail, a designation that subjects them to heightened regulatory scrutiny.
http://jlne.ws/NzJvFw

Central bankers eyeing whether Libor needs scrapping
Reuters via Yahoo! News
Central bankers and regulators will hold talks in September on whether the troubled global Libor interest rate can be reformed or whether it is so damaged that the benchmark of borrowing costs should be scrapped.
http://jlne.ws/NzJvFy

Geithner defends U.S. response to 2008 Libor concerns
Reuters via Yahoo! News
U.S. Treasury Secretary Timothy Geithner defended himself against criticisms that regulators should have taken bigger steps to address concerns over the credibility of the benchmark Libor interest rate, saying on Wednesday that U.S. authorities had pushed early and forcefully for reforms.
http://jlne.ws/NzJu4m

Senators take market regulators to woodshed over Peregrine
Victor Epstein | Des Moines Register
The head of the Commodity Futures Trading Commission admitted that regulators failed investors Tuesday as U.S. senators grilled him about oversight failures that allegedly allowed Russell R. Wasendorf Sr. to pilfer more than $200 million from customer funds at Peregrine Financial Group.
http://jlne.ws/NzJu4q

Peregrine CEO court hearing delayed as jet, wine, condo go up for sale
Ann Saphir, Reuters
Peregrine Financial Group Chief Executive Russell Wasendorf Sr., who last week confessed to bilking futures customers of more than US$100-million, will remain in custody after a Wednesday bail hearing was delayed. As a receiver prepares to sell his jet, extensive wine collection and other assets that may have been bought with stolen money, Wasendorf asked a federal court in Cedar Rapids, Iowa, to delay the hearing until July 27 to give him more time to work with his newly appointed public defender.
http://jlne.ws/NzJvFJ

Peregrine’s Wasendorf Will Have Public Defender
By Jacob Bunge – Dow Jones
The chief executive of collapsed brokerage firm Peregrine Financial Group Inc. will be represented by a public defender when he appears in an Iowa court Wednesday.
http://jlne.ws/NzJu4t

Bernanke calls Ron Paul audit plan ‘nightmare’ for Fed
MSNBC
U.S. Federal Reserve Chairman Ben Bernanke on Wednesday rebutted Republican lawmakers pushing a bill that would give Congress the ability to review monetary policy decisions, saying it could compromise central bank independence.
http://jlne.ws/NzJu4w

Demand for Spanish Debt Continues to Evaporate
By CHARLES FORELLE – WSJ
Spain, the euro zone’s most precarious country, raised just under E3 billion in a bond auction Thursday morning, but it paid handsomely to do so amid signs of rapidly evaporating demand for its debt.
http://jlne.ws/NzJu4B

Nasdaq, BATS, Direct Edge Developing Retail Price Programs
Nina Mehta, Bloomberg News
Nasdaq OMX Group Inc., Bats Global Markets Inc. and Direct Edge Holdings LLC are working on plans to compete with the New York Stock Exchange’s initiative to attract individual investors through superior stock prices.
Like what you see? Click here to sign up for Securities Technology Monitor’s weekly newsletter to get the latest news and analysis that matters to the effective operation of capital markets.
http://jlne.ws/MxIKP7

Regulatory

CFTC’s Division of Market Oversight Issues Temporary No-Action Relief to Non-Clearing Swap Dealers to Comply with Large Trader Reporting Requirements for Physical Commodity Swaps and Swaptions
Swap Dealers that are Not Clearing Members Must be Fully Compliant with the Commission’s Reporting Requirements no later than 60 Days after the Commission’s Deadline for Entities to Apply to be Registered as Swap Dealers
http://jlne.ws/Oa8e15

NFA Notice to Members
Effective Date of NFA Financial Requirements Section 16 and the Related Interpretive Notice – FCM Financial Practices and Excess Segregated Funds/Secured Amount Disbursements
http://jlne.ws/NzJukR

Financial Stability Oversight Council Makes First Designations In Effort To Protect Against Future Financial Crises
Action Names Eight Financial Market Utilities as Systemically Important, Subjects Firms to Heightened Risk Management Standards – Council Submits Second Annual Report to Congress
http://jlne.ws/NzJukT

Remarks By U.S. Treasury Secretary Tim Geithner At The Financial Stability Oversight Council (FSOC) Meeting
http://jlne.ws/NzJukW

AMF and ACP warn the public about websites and entities proposing forex investments
http://jlne.ws/NzJul1

Exchanges & Trading Facilities

MGEX Announces Exchange Fee Incentives for New AJC Contract
MGEX, a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO), announced the following exchange fees for the new Apple Juice Concentrate (AJC) futures and options contracts:
http://jlne.ws/NzJwcs

[TMX] Top 20 Largest Consolidated Short Position Report – July 15, 2012
http://jlne.ws/NzJul7

SIX Swiss Exchange’s Bonds Quarterly Statistics: 2nd Quarter 2012
http://jlne.ws/NzJuBn

BME: Overview Of Mercado Alternativo Bursatil’s Third Year – MAB Companies Are Expanding And Making Profits
http://jlne.ws/NzJuBs

Cyprus Stock Exchange’s E-Briefing – June 2012
http://jlne.ws/NzJuBv

Hedge Funds & Managed Futures

New Asia hedge funds raise $2 bln in H1 2012
Reuters via Yahoo! Finance
New Asian hedge funds raised $2 billion in the first half of the year, an increase of 50 percent over the capital they raised in the previous six months, a survey released on Thursday by industry tracker AsiaHedge showed.
http://jlne.ws/NzJuBy

Blackstone-Backed Senrigan Hedge Fund Said to Lose 15% in 1H
Bloomberg
Senrigan Capital Group Ltd., an Asia-focused event-driven fund backed by Blackstone Group LP , lost almost 15 percent in the first six months of this year, according to a performance estimate sent to investors.
http://jlne.ws/NzJwcC

Joe Baratta to Head Global Private Equity For Blackstone
Business Wire via Yahoo! Finance
Blackstone today announced that Joe Baratta will become head of global private equity for the firm. Joe currently heads the private equity team in Europe and is a member of the firm’s Executive Committee.
http://jlne.ws/NzJwcD

Chasing Temasek, China’s CIC explores broader investing role
Reuters via Yahoo! Finance
China Investment Corp is pumping billions of dollars into private equity firms in a move meant to boost returns at the sovereign wealth fund, with an eye on taking a more active role on dealmaking.
http://jlne.ws/NzJuRW

BlackRock test skips banks
The Wall Street Journal
BlackRock recently tested its new bond-trading platform without telling the Wall Street securities dealers that dominate that business, a move that miffed some traders at the banks in the latest sign of tension over who ultimately will control securities trading.
http://jlne.ws/NzJuS0

BlackRock Reports Second Quarter Diluted EPS of $3.08, or $3.10 as adjusted
Business Wire via Yahoo! Finance
BlackRock, Inc. today reported second quarter 2012 diluted EPS of $3.08 compared with $3.21 in second quarter 2011. Second quarter 2012 net income totaled $554 million compared with $572 million in first quarter 2012 and $619 million from a year ago.
http://jlne.ws/NzJwcJ

Hedge Fund Titan Bill Ackman’s Essential Financial Reading List
Forbes
In the latest issue of Forbes, I wrote a story about Oliver White, a fishing guide whom hedge fund titan met at a lodge, then subsequently hired to become one of the analysts at his firm, Pershing Square Capital Management. It is an unlikely story, one of serendipity and one of how good luck really is only what you make of it.
http://jlne.ws/NzJwsZ

Muddy Waters Deals Blow to a Reeling Chinese Education Company
By MICHAEL J. DE LA MERCED – NY Times
It has surely been one of the roughest weeks that New Oriental Education & Technology Group has ever experienced. Shares in the Chinese educational company, which are listed in the United States, plunged 35 percent on Wednesday after a critical analyst note by the Muddy Waters research firm accused it of being a fraud.
http://jlne.ws/NzJuS7

Banks & Brokers

Traders at Deutsche Bank and HSBC Investigated in Libor Probe
Bloomberg
Regulators are investigating the possible roles of Michael Zrihen at Credit Agricole, Didier Sander at HSBC and Christian Bittar at Deutsche Bank, the person said on condition of anonymity because the investigation is ongoing.
http://jlne.ws/NzJwt8

Deutsche Bank to cut 1,000 jobs: sources
Reuters via Yahoo! News
Deutsche Bank aims to cut around 1,000 investment banking jobs in response to tough conditions in capital markets spooked by the euro zone debt crisis, sources familiar with the plans said on Thursday. The move is a shift in policy for Germany’s flagship lender which in April said it saw no need for job cuts at its investment bank, one of the main profit drivers.
http://jlne.ws/NzJxNG

RBS Head CDO Trader Alex Mallinson Said to Have Left Bank
Bloomberg
Alex Mallinson has left Royal Bank of Scotland Group Plc in London, where he was the head trader for collateralized debt obligations, three people with knowledge of the matter said.
http://jlne.ws/NzJxNH

Libor issue undermines system: Goldman’s Blankfein
Market Watch
Goldman Sachs CEO Lloyd Blankfein says the recent scandal involving the manipulation of the Libor interest rate hurts the integrity of the already-damaged financial system.
http://jlne.ws/NzJxNM

Credit Suisse counters critics with $15.6 billion capital plan
Reuters via Yahoo! News
Credit Suisse unveiled measures to boost its capital base by 15.3 billion Swiss francs, a move that was welcomed by a previously critical central bank and left some investors skeptical.
http://jlne.ws/NzJwJJ

Merrill Lynch’s key broker force shrinks in second quarter
Reuters via Yahoo! News
Merrill Lynch’s main broker force shrank during the second quarter, even as Bank of America on Wednesday trumpeted a steady rise in its overall financial adviser count.
http://jlne.ws/NzJy47

BNY Mellon profit falls 37 percent on litigation charge
Reuters via Yahoo! News
Bank of New York Mellon Corp said on Wednesday that second-quarter net income had fallen 37 percent on lower foreign exchange revenue and after it paid $212 million to settle an investor lawsuit.
http://jlne.ws/NzJwJM

Knight Capital Group Announces Consolidated Earnings Of $0.04 Per Diluted Share For The Second Quarter 2012
http://jlne.ws/NzJy4e

Knight Capital Weighing Legal Options In Facebook Losses
By Jacob Bunge and Saabira Chaudhuri – Dow Jones
The top executive of Knight Capital Group Inc. (KCG) said the trading firm continues to weigh its legal options after it lost $35.4 million due to Nasdaq OMX Group Inc.’s (NDAQ) bungling of the Facebook Inc. (FB) initial public offering.
http://jlne.ws/NzJy4l

Goldman’s Blankfein: Libor Issue Undermines System
Dow Jones
Goldman Sachs CEO Lloyd Blankfein on Wednesday said that the recent scandal involving the manipulation of the Libor interest rate is undermining the integrity of the financial system that has already been undermined so substantially.
http://jlne.ws/NzJy4n

In the JPMorgan scandal, a rush to hire lawyers
Reuters via Yahoo! News
The two-month-old investigation by U.S. authorities into how a group of traders in London caused a nearly $6 billion trading loss at JPMorgan Chase & Co. is leading some players who were connected to the unit involved in the scandal to hire lawyers.
http://jlne.ws/NzJx0d

JPMorgan Hires Neimann for Insurance Asset Management
Bloomberg
JPMorgan Chase & Co. , the largest U.S. bank by assets, hired Douglas Niemann to be a managing director as it builds a group to oversee about $39.5 billion in general account assets for insurance clients.
http://jlne.ws/NzJykE

Morgan Stanley Names Eric Heaton President of Its Institutional and Retail Bank -Memo
Dow Jones
Morgan Stanley has named Deutsche Bank AG banker Eric Heaton president of its institutional and retail bank, reflecting the securities firm’s latest efforts to build out its banking capabilities.
http://jlne.ws/NzJykF

ICAP Retail Bond – Close Of Offer Period
http://jlne.ws/NzJxgy

Saxo Bank to Open Branch in Poland
Saxo Bank A/S, the Copenhagen-based online trading and investment specialist, will open a branch in Warsaw in Q4 2012 to facilitate access to international financial markets and other solutions offered by Saxo Bank for Polish investors. The CEO of the new Saxo Bank branch in Poland will be Maciej Jedrzejak.
http://jlne.ws/NzJykI

Clearing & Settlement

Crédit Agricole CIB Joins the Chicago Mercantile Exchange Inc. (CME) as Derivatives Clearing Member
Business Wire
Crédit Agricole Corporate and Investment Bank, Crédit Agricole Group’s corporate and investment banking arm, announced today that it has joined the CME as an OTC Derivatives Clearing Member Firm for Interest Rate Swaps.
http://jlne.ws/NzJxgD

LCH.Clearnet ups margin for NYSE Liffe ag futures
Market Watch
LCH.Clearnet said Wednesday it will raise initial margins for commodity derivatives contracts on the NYSE Liffe exchange from July 19. The clearing house said the regular initial margin will be 950 euros per lot of 50 metric tons for milling wheat, EUR1,400 for rapeseed, EUR700 for corn and EUR1,500 for malting barley.
http://jlne.ws/NzJxgF

DTCC Welcomes Trading On NYSE Liffe U.S. In Futures Contracts Based On The DTCC GCF Repo Index – DTCC GCF Repo Index Offers A Broad, Accurate Benchmark For Short-Term Interest Rates By Measuring Real Trades
http://jlne.ws/NzJyB6

CME Group Clearing Advisory
NYMEX Options Expiration Operational Procedures for the Trading Floor and Clearing Members (CH, RX, W) Effective Thursday, July 19, 2012
http://jlne.ws/NzJxgL

CME Group Clearing Advisory
SERIAL EXPANSION FOR 4 YEAR EURODOLLAR MIDCURVE OPTIONS
http://jlne.ws/NzJyBd

Indexes & Products

Gross return to form as flagship ETF doubles
By Dan McCrum in New York – Financial Times
Pimco has doubled the size of its flagship exchange traded fund in less than two months, hitting $2bn in assets as performance of the Total Return Fund ETF outpaces the far larger mutual fund on which it is based.
http://jlne.ws/NzJxxa

Hong Kong’s A-Share ETF Raises Six Times Synthetic Rival
Bloomberg
Demand for the first Hong Kong exchange-traded fund backed by stocks listed in mainland China pushed the security’s market value to six times that of a similar ETF that uses derivatives.
http://jlne.ws/NzJxxh

Mutual Funds are Using ETFs as Cash Pit Stops
ETF Trends via Yahoo! Finance
Everybody uses exchange traded funds: the average retail investor, the advisor and institutional investors. And even mutual funds?
http://jlne.ws/NzJxxk

Technology

SunGard’s Valdi Solution Adds SaaS Access to the SIX Swiss Exchange Liquidnet Service
SunGard has extended its Software-as-a-Service (SaaS)*-based Valdi to connect to the SIX Swiss Exchange Liquidnet Service (SLS).
http://jlne.ws/NzJAsJ

SWIFT AND REGIS-TR COOPERATE ON TRADE REPOSITORY PROJECT
The European trade repository REGIS-TR announced today that it has teamed up with global provider of secure financial messaging services SWIFT to support their customers in preparing for future derivatives regulation in Europe. In the framework of the joint initiative, REGIS-TR customers will be able to access the derivatives trade repository and report directly to it using SWIFT.
http://jlne.ws/PhjWJQ

Mark Loader to head ITRS Sales across Asia
The leading global provider of specialist Application Performance Monitoring (APM) technology to the world’s financial community, ITRS Group Ltd, has appointed Mark Loader as Head of Sales for the Asia-Pacific region.
http://jlne.ws/NzJyRG

Third Party Technology Is Crucial To Deliver Competitive Low Latency Infrastructure In Fragmented APAC Markets, According To GreySpark Partners
http://jlne.ws/NzJyRL

Annalisa Sarasini Joins smartTrade Technologies
http://jlne.ws/NzJyRO

Enforcement

SEC Charges Mizuho Securities USA with Misleading Investors by Obtaining False Credit Ratings for CDO
The Securities and Exchange Commission today charged the U.S. investment banking subsidiary of Japan-based Mizuho Financial Group and three former employees with misleading investors in a collateralized debt obligation (CDO) by using “dummy assets” to inflate the deal’s credit ratings. The SEC also charged the firm that served as the deal’s collateral manager and the person who was its portfolio manager.
http://jlne.ws/NzJyRR

SEC Announces Deferred Prosecution Agreement with Amish Fund
The Securities and Exchange Commission today announced that a non-profit corporation that offers securities to fund mortgage and construction loans to young Amish families in Ohio will ensure that its investors receive more timely and accurate information under an agreement reached with the SEC.
http://jlne.ws/NzJAJf

CFTC Orders LMC Asset Management, Inc. to Pay $140,000 Civil Penalty for Forex Registration Violations
The U.S. Commodity Futures Trading Commission (CFTC) today issued an order settling charges that LMC Asset Management, Inc. (LMC) of Deerfield Beach, Fla., exercised discretionary trading authority over customers’ accounts in retail, leveraged foreign currency (forex) transactions, without being registered with the CFTC as a Commodity Trading Advisor (CTA).
http://jlne.ws/NzJz8c

Federal Court In Missouri Orders Randall L. Stuckey And His Business Entities To Pay A $250,000 Penalty To Settle CFTC Forex Futures Fraud Action – In Related Criminal Action, Stuckey Sentenced To 36 Months Imprisonment
http://jlne.ws/NzJAJk

Capital One to Pay $210 Million in First CFPB Enforcement Case
Bloomberg
Capital One Financial Corp. will pay a total of $210 million to settle charges of deceptive marketing of credit card “add-on” products such as payment protection and credit monitoring.
http://jlne.ws/NzJz8i

Ex-JPMorgan banker admits role in municipal bid-rigging scheme
Reuters via Yahoo! News
A former JPMorgan Chase & Co banker pleaded guilty on Wednesday to fraudulently rigging a municipal finance contract 10 years ago. Alexander Wright, 45, pleaded guilty in Manhattan federal court to one count of conspiracy to commit wire fraud for manipulating the bidding process for a June 2002 contract.
http://jlne.ws/NzJAJn

[ASIC] RHG customers refunded over $3.3 million
http://jlne.ws/NzJAJq

BCSC panel finds that three B.C. men illegally traded and distributed securities
http://jlne.ws/NzJAJs

Environmental & Energy

Record Heat Wave Pushes U.S. Belief in Climate Change to 70%
Bloomberg
A record heat wave, drought and catastrophic wildfires are accomplishing what climate scientists could not: convincing a wide swath of Americans that global temperatures are rising.
http://jlne.ws/MJBdGA

**RKB — Find Brookings survey here.

The Power Grid: From Rickety to Resilient
Time
August 14, 2003 was a brutally hot day in much of the northeastern U.S. The high temperatures prompted people in cities like Pittsburgh and New York to crank up the fans and the air conditioning. The electricity those appliances consumed put unusually high demands on the transmission grid, forcing power plants to work overtime. The summer heat also caused local power lines in northern Ohio to expand and physically sag, which brought them into contact with nearby trees. Sparks ensued, and the resulting short circuit shut down power locally.
http://jlne.ws/NiMLqf

**RKB – Article features author Andrew Zolli who in his new book Resilience, writes about a “swarming grid,” a smart system that’s operated more like the redundant infrastructure of the Internet — initially designed in part by the military, after all, to emphasize robustness and survivability. That means a grid capable of real-time monitoring and reaction that can create a holistic picture of what’s happening throughout the transmission lines.

Why The World Is Coming For America’s Oil
Forbes
Norway’s national oil company is betting $20 billion that the future of the energy business lies under the U.S. They’re not alone.
http://jlne.ws/NA7HoD

Asia-Pacific

China Proposes to Launch Interbank Trading for Precious Metals -Source
Dow Jones Newswires
China has proposed to expand trading of precious metals from designated exchanges to the country’s vast interbank market soon, a move that is set to increase liquidity and help Beijing gain stronger global pricing power for key commodities like gold, a person familiar with the situation told Dow Jones Newswires Wednesday.
http://jlne.ws/OG5p5X

SGX Steps Up Singapore Stock Market Transformation
Singapore Exchange (“SGX”) today introduced higher Mainboard admission standards as it continues the transformation of the Singapore stock market, ensuring SGX remains a competitive and relevant global exchange. The new criteria extend market transformation to the quality of the primary (IPO) market, making it attractive for larger companies seeking to list.
http://jlne.ws/NzJAJw

China’s Forex Regulator to Buy Some Private Equity Fund Stakes From GM Pension Plan -FT
Dow Jones
China’s foreign exchange regulator has agreed to pay $1.5 billion to $2 billion for some private equity fund interests held by General Motors Co.’s pension plan, the Financial Times reported Wednesday, citing people familiar with the transaction.
http://jlne.ws/NzJAZL

Japan foreign-currency bond issues surge: report
Market Watch
LOS ANGELES — Japanese businesses have already issued more foreign-currency bonds this year than they did in all of 2011, taking advantage of funding costs that are sometimes lower than those in Japan, the Nikkei business daily reported Thursday.
http://jlne.ws/NzJAZM

StanChart Korea: Antitrust Agency Visited Wednesday Over CD Rate Collusion Allegation
Dow Jones
Standard Chartered Bank Korea was visited by anti-trust agency officials Wednesday as part of an investigation into possible collusion on certificate of deposit rates by brokerages or banks, a spokeswoman for the company said Thursday.
http://jlne.ws/NzJAZT

Press Conference By Tadahiro Matsushita, Japan’s Minister For Financial Services – Insider Trading – Regulator’s Surveillance Capabilities – Tokyo Stock Exchange Merger With Osaka Securities Exchange
http://jlne.ws/NzJAZU

Dalian Commodity Exchange: Notice On Launch Of The Trading Of New Contracts
http://jlne.ws/NzJAZX

Dalian Commodity Exchange – Maturity Of The Futures Market: Steady Operation Under Huge Volume Of Soybean Pulp Transactions
http://jlne.ws/NzJAZZ

Frontier Markets

Government To Set Up Trading Platform For Unlisted Securities & Mercantile Exchange
Bernama
The government will promote the establishment of a trading venue for unlisted companies in a move that will further strengthen the capital market, says Prime Minister Datuk Seri Najib Tun Razak.
http://jlne.ws/NzJBgj

UAE Central Bank Seeks International Bank to Replace Barclays on Eibor Panel – Source
Dow Jones
The central bank of the United Arab Emirates is looking for an international bank to replace Barclays PLC on the 12-lender panel that sets benchmark interbank interest rates in the country, but may face difficulties in finding a suitable candidate, according to a person familiar with the matter.
http://jlne.ws/NzJzFd

Islamic Financial Services on Rise, but Private Banks Lag
New York Times
Retail banks are responding to demand for financial services that comply with Islamic law, tailoring a range of Shariah-compliant products.
http://jlne.ws/NzJBgu

Securities Commission Malaysia Names New Shariah Advisory Council Line-Up
The Securities Commission Malaysia (SC) today announced the members of its Shariah Advisory Council (SAC) who will serve for a two-year period commencing 1 July 2012. The SAC is the central authority responsible for determining the Shariah principles of the Islamic capital market in Malaysia.
http://jlne.ws/NzJzFg

The Egyptian Exchange Chooses ULLINK Technology To Establish Its FIX HUB And Facilitate Local And International Order Flow
http://jlne.ws/NzJzFi

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