Ken Griffin Has Another Money Machine to Rival His Hedge Fund; Three Men Are Charged in $722 Million Cryptocurrency Fraud

Dec 11, 2019

First Read

Hits & Takes
By JLN Staff

My former Price Group colleague and friend Martin Hollander and his family are among those reported missing from the volcano explosion in Whakaari/White Island. I am beyond devastated by the news.~JJL

Jitesh Thakkar was back in federal district court on Tuesday. Thakkar and his attorney Renato Mariotti are aggressively pursuing a motion for summary judgment for dismissal of the CFTC’s civil case against Thakkar. The CFTC has been provided the opportunity to conduct discovery in order to argue against the motion. According to the lawyers’ statements in court, Mariotti has already provided the CFTC 800,000 pages of evidence from the first trial. The CFTC, undaunted, wants to depose four former employees of Thakkar’s Edge Financial, although they have not explained to the court how that helps their case against the judgment. Anyway, the court gave both parties a week to come up with an agreed plan for depositions, including one of Thakkar. The CFTC’s case against Thakkar is continuing in parallel and factual discovery in that case is to be completed by February 28. Stay tuned as the CFTC keeps searching for evidence in a case that the Department of Justice already gave up on.~Thom Thompson

This Thursday, Nasdaq, EQT and the Nordic Securities Association will host the third annual Nordic Financial Ecosystem Forum in Brussels. The event gathers European policy makers, listed companies, finance industry representatives and other stakeholders to share best practices and discuss how access to public market financing across Europe can be improved.
More information can be found here.~SR

B3 was elected Global Exchange of the Year at this year’s FOW Awards, organized by the Futures and Options World (FOW) magazine and hosted by the UK’s Global Investor Group. This is the first time since the creation of the awards in 2009 that a Latin American stock exchange has won the award’s main category.~SR

Here is Tradeweb’s 2019 year in review.~JJL


Swaps Proficiency Requirements and Other Initiatives: The NFA’s Tom Sexton

The National Futures Association (NFA)’s swaps proficiency requirements will be implemented in January 2020. Tom Sexton, NFA’s president and CEO, spoke with JLN at FIA Expo 2019 about the work that went into finalizing those requirements, as well as other regulatory initiatives for the financial industry, data management, and cybersecurity.

Watch the video »


This Is What Racism Sounds Like in the Banking Industry
Emily Flitter – NY Times
Jimmy Kennedy earned $13 million during his nine-year career as a player in the National Football League. He was the kind of person most banks would be happy to have as a client.

*****It is not pretty.~JJL


The Arctic may have crossed a key threshold, emitting billions of tons of carbon into the air, in a long-dreaded climate feedback
Andrew Freedman – The Washington Post
The Arctic is undergoing a profound, rapid and unmitigated shift into a new climate state, one that is greener, features far less ice and emits greenhouse gas emissions from melting permafrost, according to a major new federal assessment of the region released Tuesday.
The consequences of these climate shifts will be felt far outside the Arctic in the form of altered weather patterns, increased greenhouse gas emissions and rising sea levels from the melting Greenland ice sheet and mountain glaciers.

***** How can you help?~JJL


R.J. O’Brien Wins 2019 FOW International Award for Non-Bank FCM of the Year, Taking Category for Fourth Consecutive Year
Chicago-based R.J. O’Brien & Associates (RJO), the oldest and largest independent futures brokerage and clearing firm in the United States, last night won the global 2019 FOW International Award for Non-Bank Futures Commission Merchant (FCM) of the Year. The win marks the fourth consecutive year RJO took the category. FOW, part of the Global Investor Group, presented the award at the FOW International Awards Gala Dinner in London.

*****Repeat winner, but getting better all the time.~JJL


Eventus Systems Receives 2019 FOW International Award for Best New Technology Product: Market Surveillance
PR Newswire
Eventus Systems, Inc., a leading global trade surveillance and market risk platform provider, has just won the 2019 FOW International Award for Best New Technology Product: Market Surveillance. Officials from FOW, part of the Global Investor Group, announced the recognition for the firm’s Validus platform at the FOW International Awards Gala Dinner last night in London.

***** Can’t repeat in this category even if you get better.~JJL


Cost of the 12 Days of Christmas

****NOTE: The cost of lords and ladies (lords leaping and ladies dancing) is based on hiring a ballet group for an hour to pose as lords and ladies since there is no real market for them. (Click on the picture for a larger image) ~JB


Tuesday’s Top Three
Our most-read story on Tuesday was John Lothian News’ Turbulence at the #1 Bitcoin SEF in the World by Thom Thompson, about a couple of heads rolling at LedgerX. Second was a repeat top three story, Bloomberg’s (via LinkedIn) It’s Ken Griffin’s World, We Just Live in It. In third was another story about the LedgerX shakeup, Bloomberg’s Crypto Exchange LedgerX Places Twitter-Raging CEO Chou on Leave.


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Lead Stories

Ken Griffin Has Another Money Machine to Rival His Hedge Fund
Tom Maloney – Bloomberg
Citadel Securities generated $3.5 billion of revenue in 2018; It handles more than 1 of 5 shares traded in U.S. each year
Citadel Securities is sometimes dismissively referred to as “Citadel’s trading arm” — seen as a forgotten backwater of Ken Griffin’s hedge fund empire, where quants toil on complex algorithms to arbitrage tiny differences in stock prices or calculate bid-ask spreads for Treasuries.

Three Men Are Charged in $722 Million Cryptocurrency Fraud
Bob Van Voris – Bloomberg
BitClub Network allegedly sold shares in phony mining pools; Defendant called customers ‘sheep’ and ‘dumb,’ U.S. claims
Three men were charged by U.S. prosecutors with helping run a $722 million cryptocurrency fraud that amounted to a “high-tech Ponzi scheme.” From 2014 until this month, the men operated BitClub Network, which solicited money from investors in exchange for shares in purported cryptocurrency mining pools and rewarded them for recruiting new investors, according to prosecutors.

Traders Buy Hedges ‘Like World Is About to End’
Luke Kawa – Bloomberg
Demand for puts versus calls surges with volatility still low; Fed, ECB, U.K. election and trade could shatter market calm
U.S. stocks have barely budged this week, but the calm in equities contrasts with a frenzied bout of hedging in options markets.

EU derivatives markets highly concentrated
Louie Woodall –
Five financial institutions accounted for almost half of notional credit and currency derivatives amounts in the European Union in 2018.

CBOE Europe to acquire Dutch clearing house EuroCCP; Deal will enable Chicago-based group to diversify into index derivatives trading
Philip Stafford – FT
CBOE Europe, the region’s largest equities exchange, has agreed to purchase the 80 per cent of EuroCCP it does not own for about EUR36m in a move that secures the future of the Dutch clearing house.

Nasdaq Set to Beat NYSE in IPOs for First Time Since Facebook Debacle; It has taken Nasdaq years to get past the fallout from Facebook’s bungled listing
Alexander Osipovich – WSJ
Companies are on track to raise more money through initial public offerings on Nasdaq Inc. NDAQ -0.03% this year than on the New York Stock Exchange, the first time that has happened since 2012’s bungled Facebook Inc. FB -0.23% offering.

Winner-takes-all digital economy poses risk for capital markets; Concentration of business among small number of players presents significant challenge
Philip Stafford – FT
The trend of human tasks being replaced by algorithms is a perennial and understandable focus for the debate about how technology is changing capital markets.

Germany’s tech scene lacks lure of stock options; Stakes in start-ups are much more than a nice benefit — they’re the principal currency
Tobias Buck – FT
Germany’s start-up scene has plenty of reasons to feel good about itself. While the country at large has flirted with recession, and corporate stalwarts from Daimler to Deutsche Bank are in trouble, the technology sector has had another good year. There have been headline-grabbing funding rounds, conferring $1bn-plus “unicorn” status on the likes of challenger bank N26 and travel start-up GetYourGuide. Software group TeamViewer pulled off the biggest stock market listing in Europe this year. Shares in online fashion retailer Zalando — the biggest business to emerge from Berlin’s start-up hothouse to date — have almost doubled in value since the start of the year.

The legacy and lessons of Paul Volcker; Do the right thing, do not put your trust in unbridled finance, and have courage
Martin Wolf – FT
“Paul Volcker is the greatest man I have known. He is endowed to the highest degree with what the Romans called virtus (virtue): moral courage, integrity, sagacity, prudence and devotion to the service of country.” Thus did I open my review of his memoir, Keeping At It: The Quest for Sound Money and Good Government, published last year. As Hamlet said of his father, “He was a man, take him for all in all. I shall not look upon his like again.”

Morgan Stanley Funds Step Away From Exceptionally Dull FX Market
Katherine Greifeld and Charlotte Ryan – Bloomberg
MSIM’s Caron says he’s pared exposure amid tumbling volatility; Amundi finds value in Scandinavia; for Russell it’s in EM
The unprecedented level of calm pervading global currencies is pushing investors to rethink their approach to the $6.6 trillion-a-day market.

Turkey Wants the World’s Gold, With Few Questions Asked
Cagan Koc and Ercan Ersoy – Bloomberg
Treasury said to ready plan to loosen rules for import of gold; Demand rising at one of precious metal’s biggest consumers
Turkey is putting the finishing touches on a plan to loosen rules that govern the import of gold to one of the world’s biggest consumers of the precious metal.

Sweden Poised to End Negative Rates After Inflation Accelerates
Rafaela Lindeberg – Bloomberg
Sweden’s central bank is likely to reverse half a decade of negative interest rates next week after November consumer prices rose more than economists had forecast.

Not Everyone’s Buying What Saudis Are Selling
Rosalind Mathieson – Bloomberg
It was a strong debut today for the world’s biggest initial public offering. Shares of Saudi Aramco jumped 10%, the daily limit, in Riyadh. Its market value is a whopping $1.88 trillion.

Germany draws up draft law for financial transaction tax: Sueddeutsche
German finance minister has drawn up a draft law that envisages introducing a financial transaction tax in 10 European Union countries, the Sueddeutsche Zeitung reported on Monday.

Exchanges, OTC and Clearing

Cboe confirms acquisition of equities clearing house EuroCCP; Cboe Global Markets will develop clearing and equity derivatives trading in Europe with its acquisition of EuroCCP.
Hayley McDowell – The Trade
Cboe Global Markets has confirmed it will acquire equities clearing house EuroCCP, in a move that would open doors for the exchange group to pursue clearing and equity derivatives trading in Europe.

Cboe buys European clearinghouse; The Chicago Board Options Exchange parent will take full ownership of EuroCCP, buying out its rivals to gain a bigger foothold in the European stock-trading arena.
Lynne Marek – Crain’s Chicago Business
Cboe Global Markets has entered into an agreement to purchase the 80 percent of European clearinghouse EuroCCP it doesn’t already own.

EquiLend looks to automate total return swaps trading with new platform; The EquiLend Swaptimization platform uses a proprietary algorithm to match natural pairs in the total return swaps market.
Hayley McDowell – The Trade
Securities finance trading provider EquiLend has confirmed the launch of a new platform aimed at automating processes in total return swaps trading.

HKEX Stock Connect Awards 2019 Celebrates Achievements of Market Participants
Record year on Northbound Stock Connect celebrated by Hong Kong trading community; New award in 2019 for top-performing brokers contributing to A-share index inclusions
Hong Kong Exchanges and Clearing Limited (HKEX) today (Wednesday) was delighted to present its Stock Connect Awards 2019 to recognise the achievements of top-performing market participants. During 2019 these organisations helped accelerate trade volumes on Northbound Stock Connect, making this another record year for the landmark mutual market access programme linking Hong Kong and Mainland China’s equity markets.

LSEG Technology to provide post trade technology for the Securities Clearing Corporation of the Philippines
London Stock Exchange Group
LSEG Technology today announced that Securities Clearing Corporation of the Philippines (SCCP), a wholly-owned subsidiary of The Philippine Stock Exchange, Inc. (PSE), has selected LSEG Technology’s Millennium Post Trade solution to improve its post trade processes. As part of the agreement, LSEG Technology will implement Millennium Clearing and Millennium Risk products, enhancing SCCP’s clearing, settlement, risk and collateral management capabilities.

SGX named “Exchange of the Year – Asia Pacific” at FOW International Awards 2019
Singapore Exchange (SGX) has been named “Exchange of the Year – Asia Pacific” for the fourth time in five years at the annual Futures & Options World (FOW) International Awards. The awards recognise the best in growth and innovation across the global derivatives market.

DGCX Wins ‘Exchange of the Year – Middle East and Africa at FOW International Awards
Press Release via Menafn
The Dubai Gold & Commodities Exchange (DGCX) has been awarded ‘Exchange of the Year – Middle East and Africa’ at the Future and Options World (FOW) International Awards 2019 for the second year in a row.

London Stock Exchange opens the floor to shorter trading day; The stock exchange has set out a series of options for shortening the market’s 8.00-16.30 hours of operation
Mark Cobley – Financial News
The London Stock Exchange has kicked off a formal consultation with its members on shortening Europe’s trading day, as called for earlier this year by the trade bodies for fund managers and bankers in the region.

Nasdaq offers fund managers a green bonds beauty parade; US stock exchange wants to give fund managers more information when they invest
Samuel Agini – Financial News
Nasdaq, the US stock exchange group, has launched a public platform for companies and governments to publish details about the sustainable bonds they issue in order to give fund managers more information when they invest.

Nasdaq launches sustainable bond platform for all
Hazel Bradford – Pionline
Investors interested in sustainable bonds can now use the Nasdaq Sustainable Bond Network, a global, publicly available web-based platform where issuers publish key information and data about their bonds.


State Street hires AI and machine learning expert for CIO role; Brian Franz has been appointed chief information officer at State Street, bringing extensive knowledge of AI, machine learning and robotics to the bank.
Hayley McDowell – The Trade
Boston-based bank State Street has appointed an expert in artificial intelligence (AI) and machine learning as chief information officer, as the institution looks to implement its wider digitisation strategy.

Apple CEO Tim Cook says monopolies aren’t bad if they aren’t abused
Charlie Wood – Business Insider
Apple CEO Tim Cook has defended the existence of monopolies in business while also denying that Apple has a monopoly in any sector.

New fintechs are rediscovering the old lesson that service matters; We are seeing a return to competition that differentiates on quality rather than just price
Izabella Kaminska – FT
Many of the new challenger banks and fintech companies boast that what differentiates them from the big incumbent lenders is that they are “customer obsessed”.


US Arrests 3 in Alleged Crypto Mining Pool Fraud Scheme
Nikhilesh De – Coindesk
U.S. authorities arrested three alleged scammers attached to the BitClub Network Tuesday who successfully defrauded investors of $722 million through a mining pool Ponzi scheme.

Another bitcoin fund tied to CME’s cash-settled futures gets launched
Yogita Khatri – The Block
French asset management firm Napoleon has launched a new fund, tied to cash-settled bitcoin futures by derivatives exchange giant CME Group.

Regal Assets Launches Partnership Platform for Financial Professionals to Facilitate Alternative Asset Allocation in Client Portfolios
Regal Assets, a leader in helping investors and retirees invest in precious metals, cryptocurrencies, and other alternative assets, is launching RA Wealth Partners, its official partnership platform for financial advisors, retirement planners, wealth managers and other financial professionals who help advise and/or manage client portfolios.

This Year Proved Asia Is Ahead in Crypto-Blockchain Adoption
Michael Ou – Coindesk
In 2019, it became clear that Asia was moving ahead in cryptocurrency and blockchain adoption and application. Because of internal and external drivers, Asia has been setting the pace in turning ideas in the blockchain space into reality. Investors in China, Japan, and South Korea are being driven into crypto markets by global and regional trade wars, currency devaluation, and tight government control of individual assets. Global trading platform, eToro, has found consistent spikes in bitcoin activity during key moments of the US-China trade war.

China’s SEC May Soon Have a Crypto-Savvy Department Chief: Report
Wolfie Zhao – Coindesk
China’s securities watchdog is reportedly setting up a technology regulation bureau and may soon appoint Yao Qian, the former head of China’s central bank digital currency initiative, as its new department chief. According to a report from Chinese business publication Caijing on Wednesday, the China Securities Regulatory Commission (CSRC) has announced Yao’s appointment on its internal bulletin.

BitPay now lets merchants accept three stablecoins, including Gemini dollar
Yogita Khatri – The Block
Blockchain payments processor BitPay has added support for three stablecoins – Circle’s USD coin (USDC), the Gemini dollar (GUSD) and Paxos Standard token (PAX). The rollout allows BitPay’s over 30,000 merchants, including Microsoft and Avnet, to accept payments in the three stablecoins from consumers. In other words, BitPay’s wallet users, as well as its prepaid cardholders, will be able to spend USDC, GUSD and PAX via supported merchants.

BME Launches A New Blockchain-Based Collateral Pledge Management Service
The time for the constitution of a pledge is reduced from 24 hours to less than 10 minutes
BME has successfully launched the process for the digitisation of the certification of collateral pledge using Blockchain technology, eliminating the need to use and exchange physical certificates.

Elliptic builds a solution for banks to help them decide which crypto exchanges to do business with
Yogita Khatri – The Block
Banks have since long been known to remain reluctant to provide services to cryptocurrency firms, including exchanges. Blockchain analytics firm Elliptic is hoping to improve the situation with its new solution. Dubbed “Discovery,” Elliptic’s solution, purpose-built for banks, is a database of 200 global cryptocurrency exchanges, including information about their corporate entities, jurisdiction, regulatory status, and compliance policies. It also includes blockchain insights into the provenance of the cryptocurrencies they hold.

Canaan’s IPO is “more symbolic” than substantial to the crypto industry, says expert
Celia Wan – The Block Crypto
Cryptocurrency mining machine manufacturer Canaan made the headline last month by being one of the first cryptocurrency companies to tap into the public markets, but an expert said its initial public offering (IPO) may be “more symbolic” than substantial. In a recent The Scoop podcast, Iterative Capital Management principal Leo Zhang acknowledged the firm’s IPO as a “big milestone” for the industry overall, but also noted that its influence in the cryptocurrency industry might eventually wade.

Crypto’s Crown Prince Survived ‘The Craziest Bubble Ever.’ Now He’s Ready For a Second Act
Jeff John Roberts – Fortune
Olaf Carlson-Wee appears to have it all. He has a comfortable fortune, thanks to a payout from his cryptocurrency firm Polychain Capital that netted him $60 million. He also enjoys one of the finest views of San Francisco from his firm’s luxury office, which looks out over the ocean and the city far below. At just 30 years old, he has youth and good health—two attributes no amount of money can buy.

SEC Taking ‘Measured’ Approach to Digital Asset Regulation, Jay Clayton Tells Senate Committee
Daniel Palmer – Coindesk
The chairman of the U.S. Securities and Exchange Commission (SEC), Jay Clayton, says his agency is taking a “measured” regulatory stance on “promising” blockchain tech. Giving testimony on the oversight of his agency before the Senate Committee on Banking, Housing, and Urban Affairs on Tuesday, Clayton honed in on its regulation of the crypto and blockchain space, saying the SEC has been dedicating “a significant amount of attention and resources on digital assets.”

Mark Cuban says there’s ‘no chance’ bitcoin can become a reliable currency
Theron Mohamed – Business Insider
Mark Cuban says there’s “no chance” that bitcoin can become a reliable currency. “Not because it can’t work technically,” the Shark Tank star and owner of the Dallas Mavericks said in an email to Forbes. “But rather because it’s too difficult to use, too easy to hack, way too easy to lose, too hard to understand, too hard to assess a value.”

Blockchain Faces Big Challenges But the Opportunity Is Enormous
Don Tapscott – Coindesk
This post is part of CoinDesk’s 2019 Year in Review, a collection of 100 op-eds, interviews and takes on the state of blockchain and the world. Don Tapscott is the author of 16 books, most recently with his son Alex, Blockchain Revolution. He is Executive Chairman of the Blockchain Research Institute.


Trump Pays $2 Million to 8 Charities for Misuse of Foundation; Under a settlement, the president admitted he had used his charity to bolster his campaign and settle business debts.
Luis Ferré-Sadurní – NY Times
President Trump has paid $2 million to eight charities as part of a settlement in which the president admitted he misused funds raised by the Donald J. Trump Foundation to promote his presidential bid and pay off business debts, the New York State attorney general said on Tuesday.

House Democrats Announce Two Articles of Impeachment Against Trump; First article addresses abuse of power, second relates to obstruction of Congress
Siobhan Hughes and Natalie Andrews – WSJ
The House Judiciary Committee will pursue two articles of impeachment against President Trump, a narrower approach than some Democrats had hoped, as the Republican-led Senate outlined plans for a trial early in the new year.

A Solid Impeachment Case Meets Magical Thinking; Do facts matter? We’re about to find out.
Mark Gongloff – Bloomberg
Democrats have done everything they can to lead Republicans to the impeachment trough, but they cannot make them drink.

Political commentators and market wizards
Jamie Powell – FT
On Thursday there’s a general election in the UK, haven’t you heard? In case you are still undecided on who to vote for — given the choices this year are so fantastic — how about checking on what the great British dogecoin pound is doing in reaction to the latest polls? After all, there is no one more right about anything than the market. Or so we’re told.

Czechs Protest as Billionaire Premier Faces Renewed Fraud Probe
Peter Laca – Bloomberg
Thousands march through Prague as demonstrations continue; Premier Babis has vowed not to resign despite public pressure
Tens of thousands of Czech marched in renewed protests against the country’s billionaire prime minister, Andrej Babis, who’s embroiled in an investigation into alleged fraud.

What’s Worse Than World Leaders Laughing at the U.S.? New polls suggest they represent a growing share of global opinion.
James Gibney – Bloomberg
That viral video of the leaders of Canada, France and the U.K. laughing about their U.S. counterpart at last week’s NATO summit was vivid yet anecdotal evidence of what the rest of the world thinks of President Donald Trump. Now comes some hard data showing America’s declining global reputation.

Trump’s China Tariffs Boomerang on America; Thanks to trade wars, companies are skimping on new U.S. plants and equipment.
Matthew A. Winkler – Bloomberg
As resilient as the U.S. is with unemployment at a 50-year low of 3.5% and personal income up 15% since 2017, cracks are widening in the longest expansion in modern times. Deteriorating business investment, manufacturing, shipping, trucking, logistics and the historically robust trade surplus can all be attributed to the tariffs threatened and imposed by Donald Trump since he became president.

Loeffler to face ‘minefield’ of potential ethical issues in Senate
Greg Bluestein, The Atlanta Journal-Constitution
Republican Kelly Loeffler’s immense wealth and top financial industry private-sector position helped entice Gov. Brian Kemp to appoint her to an open U.S. Senate seat, but they also pose challenges for the political newcomer.


HSBC Swiss Unit to Pay $192 Million to Settle U.S. Tax Case; Private bank admits helping Americans evade taxes and agrees to settle criminal charges
Dave Michaels – WSJ
A Switzerland-based subsidiary of HSBC Holdings PLC on Tuesday admitted helping Americans evade taxes over a decade and agreed to pay $192 million to settle criminal charges.

ASIC’s assessment of ASX Limited’s AQUA market
ASIC has today made recommendations to improve ASX Limited’s (ASX) compliance with its market licence obligations, following an assessment of the AQUA market for exchange traded products (ETPs) operated by ASX.

Outcomes of review into internal market making for quoted managed funds
ASIC has concluded a review of internal market making practices of non-transparent actively managed funds that are traded on exchange markets.

ESMA issues briefing on benchmark recognition
The European Securities and Markets Authority (ESMA) has issued today a briefing on the recognition regime under the Benchmark Regulation (BMR).

A Career Highlight: Exam and Risk Monitoring Program Transformation Update
In 2018, FINRA embarked on a large-scale transformation of its examination and risk monitoring program to make FINRA a more effective, agile and risk-focused regulator. A lot of progress has been made in the last year. The group is in the process of realigning around the business models of FINRA member firms, introducing a new single point of accountability and installing a new senior leadership team.

2020 Holiday Margin Extensions Schedule
FINRA is publishing this Notice to assist firms with making accurate submissions in connection with requests for Federal Reserve Board Regulation T, SEA Rule 15c3-3 and FINRA Rule 4210 extensions of time around holidays when exchanges or banks are closed. The schedule included in this Notice specifies the due dates for filing requests of extensions of time prior to and after a holiday when the exchanges or banks are closed in 2020.

CFTC Charges New Mexico Resident with Fraud in Long-Running Ponzi Scheme
The U.S. Commodity Futures Trading Commission today announced it has filed a civil enforcement action in the District of New Mexico against defendant Douglas Lien (d/b/a Westend Investments) of Santa Fe, New Mexico, charging him with fraud and failing to register with the CFTC.

CFTC Approves One Final, Two Proposed Rules at December 10 Open Meeting
CFTCAt an open meeting today, the U.S. Commodity Futures Trading Commission approved one final rule and two proposed rules.

CFTC increases transparency, reopens comment on capital requirements for swap dealers
The U.S. Commodity Futures Trading Commission acted on Dec. 10 to reopen the comment period on a 2016 proposal regarding capital requirements for swap dealers. Two of the CFTC’s five commissioners opposed the move, however, calling instead for a more thorough rulemaking process.

Statement of Chairman Heath P. Tarbert Before the December 10, 2019 Open Meeting
Tripling Down On Transparency – As regulators, we must be mindful not only of what we do, but how we do it. Our shared vision for the CFTC is to be the global standard for sound derivatives regulation.[1] Soundness is built on transparency: we serve our markets best when we act with the benefit of public input and dialogue. We also owe it to those who rely on our derivatives markets to regulate in the open. With this in mind, our agency recently adopted Clarity—which we describe as “[p]roviding transparency to market participants about our rules and processes”—as one of the four core values of the CFTC.[2]

Opening Statement of Commissioner Brian Quintenz before the Open Commission Meeting
December 10, 2019
Good morning. Mr. Chairman, thank you for calling this meeting. I support all three rulemakings before the Commission today.

Statement of Dissent by Commissioner Rostin Behnam
Capital Requirements of Swap Dealers and Major Swap Participants: Proposed rule; reopening of comment period; request for additional comment

Statement of Concurrence by Commissioner Rostin Behnam
Amendments to the Exemption from the Swap Clearing Requirement for Certain Affiliated Entities

Statement of Commissioner Dawn D. Stump for CFTC Open Meeting
Proposed Rule: Capital Requirements for Swap Dealers and Major Swap Participants – Reopening the Comment Period and Requesting Additional Comment

Cash FX Group
We believe this firm has been providing financial services or products in the UK without our authorisation. Find out why to be especially wary of dealing with this unauthorised firm and how to protect yourself from scammers.

Investing and Trading

Chevron, Facing Fossil Fuels Glut, Takes $10 Billion Charge; Oil giant cuts the value of its holdings, including shale, citing low prices caused by oversupply
Christopher M. Matthews and Rebecca Elliott – WSU
Chevron Corp. CVX 0.50% is writing down the value of its assets by more than $10 billion, a concession that in an age of abundant oil and gas some of its holdings won’t be profitable anytime soon.

Barrick sells 90% stake in Senegalese gold mine to Teranga Gold; Gold producer to get up to $430m as it pushes ahead with asset sales
Harry Dempsey – FT
Barrick Gold, the world’s second largest gold producer, sold its 90 per cent stake in the Massawa project in Senegal to Teranga Gold for up to $430m, as it makes further headway on plans to sell over $1.5bn of assets.

Moral Money: Al Gore blasts BlackRock, Brussels breakdown, rewild the UK; ‘Do they want to continue to finance the destruction of human civilisation, or not?’
Gillian Tett, Billy Nauman, Patrick Temple-West, Leslie Hook, Mehreen Khan, Anna Gross, Tamami Shimizuishi and Andrew Edgecliffe-Johnson – FT
Reading the words “Brussels” and “regulation” in the same sentence usually provokes a yawn. But it’s time to drink a shot of espresso and wake up: sustainable investing rules are looming that will have a big effect on the business world.

Wall Street expects bull run to continue in 2020; Most forecasters see modest gains for S&P 500, but Morgan Stanley is a bear
Matthew Rocco and Jennifer Ablan – FT
Wall Street is predicting that the record-setting US stock market rally will continue next year, supported by the Federal Reserve’s accommodative interest-rate policy and a resilient domestic economy.

Conflicting ESG Ratings Are Confusing Sustainable Investors; There are many ways to score a company on environmental, social, and governance criteria, making the results difficult to compare.
Jacqueline Poh – Bloomberg
Environmental, social, and governance investing is gaining popularity not only for its “feel-good” factor but also for its potential to spot financial risks that often cannot be identified in a company’s quarterly results. The threats that climate change poses to a supply chain or the scandals that could arise from a discriminatory workplace may have a dramatic impact on a company’s future performance. The trouble is these risks are hard to measure and rarely disclosed.

Constellation exec becomes CEO of weed company Canopy. Is a buyout ahead? Constellation, the liquor giant that runs its beer business out of Chicago, owns approximately 35% of Canopy, the world’s most valuable cannabis company. The exec move today boosts speculation Constellation will buy Canopy outright.
Canopy Growth Corp., the world’s most valuable cannabis company, has appointed Constellation Brands Inc.’s finance head as its chief executive officer, raising the odds that the alcohol giant will buy Canopy outright.


Edinburgh Investment Trust sacks Invesco’s Mark Barnett; Former star stockpicker had suffered prolonged investment underperformance
Siobhan Riding – FT
Invesco stockpicker Mark Barnett has been sacked as the manager of Edinburgh Investment Trust following poor performance, dealing an embarrassing blow to the former Neil Woodford protégé.

Credit Suisse cuts targets after investment banking loss; Swiss lender readies cost reductions as environment deteriorates
Stephen Morris – FT
Credit Suisse has softened its full-year financial targets and targeted hundreds of millions of fresh cost-saving measures, making it the latest European bank to back away from its goals.

BlackRock strives for moral high ground with Wiseman firing; Larry Fink champions company’s culture even if it means losing a potential successor
Richard Henderson – FT
For years BlackRock’s Mark Wiseman was among a handful of senior managers tipped as potential successors to Larry Fink, chief executive of the world’s largest asset manager.

JPMorgan Says Climate Change Funds Will Pay Off, Eventually
Eric Lam – Bloomberg
Investors in climate change-related products have been largely disappointed with their returns over the past decade. Yet there is still reason for optimism the investments will ultimately pay off, according to strategists with JPMorgan Chase & Co.

Credit Suisse Stumbles After Restructuring
Patrick Winters and Marion Halftermeyer – Bloomberg
Bank lowers return on tangible equity targets for next year; Sees improved fourth quarter performance from last year
At the end of his first year after a grueling restructuring, Tidjane Thiam is once again confronting missed targets and losses at businesses.

Michael Kennedy Joins Coquest Inc. as Manager of Trade Services Group
Coquest Inc. has announced that Michael Kennedy, a 25-year veteran of the investment management and managed futures industry, has joined Coquest Inc. as Manager, Coquest Trade Services Group (TSG).


Who Keeps Europe’s Farm Billions Flowing? Often, Those Who Benefit; Conflict-of-interest rules are uneven. Influence-peddling is murky. The enormous E.U. subsidy program is built to keep the money moving.
Matt Apuzzo and Selam Gebrekidan – NY Times
One morning this spring, lawmakers crowded into a committee room filled with staffers, lobbyists and environmentalists to vote on a flurry of bills that would set the course for the European Union’s $65-billion-a-year farm policy.

Why China’s Big Bank Listing Didn’t Pop; An arcane rule prevents the country’s state-owned companies from pricing their stock below book value, stifling the IPO market
Jacky Wong – WSJ
Mainland China’s biggest stock-market listing this year has gotten an unusually tepid reception, adding to the funding challenges faced by the country’s beleaguered banking system.

Brazilian brokerage XP prices shares above projected range; Near-$2bn IPO set to make company fourth-biggest US offering of the year
Richard Henderson – FT
XP, the Brazilian brokerage whose listing on Wednesday will be one of the year’s biggest, has priced its shares above the range initially set by investment banks, running counter to a recent chill in new listings.

$500 Million Joint Venture With Hog Producer Aims to Boost China’s Herds
Bloomberg News
Venture with state fund follows an even bigger deal last month; Hog numbers have only just begun to recover from swine fever
Major Chinese hog producer Muyuan Foodstuff Co. is joining with state-backed poverty-relief funds to help restore the domestic pig herd after the ravages of African swine fever.

Aramco Soars in Debut to Hit Market Value of $1.88 Trillion
Filipe Pacheco, Matthew Martin, and Will Kennedy – Bloomberg
Company is world’s largest after $25.6 billion stock sale; Aramco’s value may surge to $2 trillion in secondary trading
Saudi Aramco shares surged after the oil producer’s initial public offering, valuing the company at a record $1.88 trillion in the culmination of a four-year effort by the kingdom to list its crown jewel.


Would ‘getting Brexit done’ bring lots of new investment?
Richard Partington – The Guardian
Claim The chancellor of the exchequer, Sajid Javid, said that flatlining economic growth in October showed that Britain must “get Brexit done with our deal” to give businesses and families certainty to spend. He said that after parliament passed the prime minister’s deal this would “unleash a tidal wave of funds that are waiting to be invested in Britain once we end the uncertainty”.

The EU Hopes Boris Johnson Wins Big to Get Brexit Over With
Ian Wishart – Bloomberg
Here’s something European officials are loath to admit in public: They would quite like Boris Johnson to triumph in U.K. elections. Despite personal and political differences, and a lingering lack of trust, those close to EU chiefs privately acknowledge that a strong Johnson victory on Dec. 12 will mean the U.K.’s long-drawn-out departure from the European Union will finally happen, according to more than half a dozen EU officials speaking on condition of anonymity because the issue is delicate.

EU ready to start talks on future with Britain immediately after Brexit: EU official
Jan Strupczewski – Reuters
The European Union is ready to start negotiations on its future relationship with Britain as soon as Britain leaves the bloc, a senior EU official said on Wednesday, ahead of a meeting of EU leaders on Brexit on Friday. Britain will hold parliamentary elections on Thursday after years of negotiations on the terms of its withdrawal from the EU did not produce a result that would get sufficient support in the British parliament. The British election results are likely to be known early on Friday.


Blankfein Wins Laughs With WASP Joke at UJA Wall Street Dinner
Amanda L Gordon – Bloomberg
Event raises $31 million for Jewish programs in NYC, Israel; BlackRock’s Barbara Novick receives Gustave L. Levy Award
The job of entertaining 2,000 guests at Monday’s Wall Street Dinner benefitting UJA-Federation fell to former Goldman Sachs CEO, serial tweeter and Elizabeth Warren target Lloyd Blankfein.

Columbia Helps Robin Hood Foundation Offer Better Support to the City’s Poor; An expanded poverty tracking survey will now look at early childhood poverty and the experiences of Asian-American New Yorkers.
Sonia Huq and Georgette Jasen –
Someone putting three green apples in a blue bag for someone else. What’s it like to be poor in New York? What does it take to get out of poverty and stay out? Which government programs make a difference? What is the effect of poverty on children?

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