LME hit by $450mn lawsuit from Elliott Management over nickel market chaos

Jun 6, 2022

First Read

Hits & Takes
John Lothian & JLN Staff

How things have changed in London, and not. There is still lots of construction going on. Back in 2004, my wife Cheryl and I stopped in London on the way to Switzerland to attend the Swiss Futures and Options Assocation’s Burgenstock Conference.

Our first night in London we went out for dinner and I tried to order a non-alcoholic beer. The response I received was “A WHAT?” It was as if the bartender had never heard of the concept. Well today, sales of low alcohol or no-alcohol beers have doubled in the last five years, according to a story in the Financial Times.

All has gone well so far on this trip to London, except my dinner plans for Sunday were canceled because my dinner companion never left the United States, having been diagnosed with Covid-19.

FIA IDX looks like a great program, the weather is properly British, and this might not be the best week for Boris Johnson.

The Greenwood Project is back in person today with a live event at DePaul University in Chicago, with their college scholars coming from all over to attend the event. Greenwood Project Founder Bevon Joseph is one happy man today.

Dan Bucsa is moving from the CFTC, where he is a deputy director of the Division of Data, to Morgan Stanley, where he will be an executive director, head of swap dealer & security-based swap dealer compliance.

RJ O’Brien is looking for a senior attorney in Chicago for a hybrid position. Here are the details.

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


The Cboe opened its new options trading floor in the Chicago Board of Trade Building today. The new trading floor looks great and modern. It also has that iconic view north along LaSalle Street. It is nice to see open outcry make a comeback. I’m also willing to bet Ceres restaurant is happy to see the traders return. You can watch Ed Tilly’s speech and see the opening bell rung here. (shot from my cell phone so the quality is not great) ~JB


Cboe’s Arianne Adams Brings The Outside Experience Into Cboe

Arianne Adams, formerly Arianne Criqui, came to Cboe Global Markets after spending more than eight years at Goldman Sachs, so JLN asked her, How did watching the Cboe from the outside help you with your job?

Watch the video »


XFA’s Bill Looney Talks Pandemic Changes In Markets To JLN At OIC 2022

Bill Looney of broker XFA was interviewed by JLN at the 2022 Options Conference in San Antonio, Texas about how the firm responded to the pandemic and changes in the markets since March 2020.

Watch the video »


$1 billion has been lost in cryptocurrency scams since 2021, FTC warns
Ramishah Maruf – CNN
Cryptocurrency scammers have stolen over $1 billion from 46,000 people since the start of 2021, a new Federal Trade Commission report says. The FTC rang the alarm bells on Friday, saying crypto-related crimes amount to about one out of every four dollars reported lost to fraud — more than any other payment method. The median individual reported loss was $2,600.

***** One in four dollars reported lost to fraud coming from crypto. Just WOW!~JJL


The great Tokyo exodus; A record number of companies have moved out of the capital to the countryside in the past year, reversing age-old working practices
Eri Sugiura – FT
When Akiteru Teraoka, 37, was working as a sales manager at the Tokyo headquarters of one of Japan’s largest employment companies, Pasona Group, he would leave home at 7am. Five days a week he endured an hour’s journey on a jam-packed train. Now, since moving last October to a remote resort island 600km away, he enjoys sea views on his 10-minute drive along the coast to work, after a relaxed breakfast with his wife and two sons.

****** The faster and more reliable the internet connectivity, the farther away you can live.~JJL


Misinformation, disinformation and hoaxes: What’s the difference?
Michael J. O’Brien – The Conversation
Sorting through the vast amount of information created and shared online is challenging, even for the experts. Just talking about this ever-shifting landscape is confusing, with terms like “misinformation,” “disinformation” and “hoax” getting mixed up with buzzwords like “fake news.” Misinformation is perhaps the most innocent of the terms – it’s misleading information created or shared without the intent to manipulate people. An example would be sharing a rumor that a celebrity died, before finding out it’s false.

*****At least some former floor traders have found jobs in the misinformation business, but then they were pros at it on the trading floor. It was all part of the game.~JJL


‘This Pride Month I’m Partnering With’ Memes Are Coming Out Strong
Shane O’Neill – NY Times
June 1 marked the beginning of Pride month, when parades pop up in cities around the world and rainbows start appearing in ads for liquor, banks, makeup and big-box department stores. These events and campaigns are visible shows of support for the LGBTQ community. They’re also good for business. Sometimes lumped under the label of “rainbow capitalism,” pride ads and merchandise are often the subject of jokes and memes that question the sincerity of corporate marketing and the influencers who help boost such messages. This year, the online ribbing started right away.

****** I fully support Pride Month as a way to raise awareness, but I try to live that way the whole year long. Before Covid canceled Boca 2020, I was going to give away heart-shaped rainbow pins that said “Love is Love.” My church turned that pin into an ongoing theme and gives the pins away. ~JJL


Ken Griffin Decries Remote Work, Sees Too Many Distractions at Home
Annie Massa and Katherine Doherty – Bloomberg
Citadel founder Ken Griffin said his employees are back to the office full time, advocating for an in-person approach because innovation and creativity can falter in a remote-work environment. “Having everybody back together has been really powerful in driving forward our business,” the billionaire said in a wide-ranging interview Thursday at Bloomberg Intelligence’s Market Structure conference. He said people have told him “it’s nice to be in a room and not have to deal with 25 different distractions.”

******There are no more distractions at home than there are in the off…look squirrel!~JJL


Chicago’s $20 Million Club packs ’em in as pay soars for local CEOs; It’s that time of year again: Time to tote up which local CEOs are bringing home $20 million or more. Powered by big cash payments, raises for local chief execs this year have surged past the national median.
Joe Cahill – Crain’s Chicago Business
Big raises lifted a record number of Chicago-area CEOs into the $20 Million Club last year. Led by Walgreens CEO Roz Brewer, 10 local bosses crossed the magic pay threshold, eclipsing the previous record of seven set in 2020. Brewer pocketed $28.3 million in total compensation for her first year as CEO of the Deerfield-based drugstore chain.

***** See how CME’s Terry Duffy measures up in the Chicago CEO Club.~JJL


Friday’s Top Three
Our top story Friday was the one with the longest title: 8 Wall Street quants who quit lucrative trading careers at Citadel, Jump Trading, and Renaissance Technologies to build startups instead; Like Jeff Bezos did in 1994, these ‘quantreprenuers’ ditched Wall Street to apply their skills to real-life problems — from reducing greenhouse gases to developing safer eye surgery, from Business Insider. Second was Gemini Crypto Exchange Operator Sued on Role in Bitcoin Futures Product, from The Wall Street Journal. Third was Citigroup’s Fat-Finger Trade Seen Costing Bank More Than $50 Million, from Bloomberg.


MarketsWiki Stats
26,846 pages; 238,687 edits
MarketsWiki Statistics


Lead Stories

LME hit by $450mn lawsuit from Elliott Management over nickel market chaos; UK regulators are probing trading suspension that took place in March
William Langley and Neil Hume – FT
US hedge fund Elliott Management is suing the London Metal Exchange for more than $456mn over its decision to cancel nickel trades in March after an unprecedented surge in the price of the metal. Elliott filed the suit through two vehicles against the LME and LME Clear, the exchange’s clearing house, on June 1 in England’s High Court of Justice, said LME’s owner Hong Kong Exchanges and Clearing on Monday. The suit by the Florida-based group, which was founded by billionaire Paul Singer, alleged that the cancellation of nickel contract trades on March 8 was “unlawful on public law grounds and/or constituted a violation of the claimants’ human rights”.

***** Here is the WSJ version of this story.

Why Regulators Are Worried About Stablecoins; These cryptocurrencies account for about $160 billion in market value, up from about $11 billion two years ago
Caitlin Ostroff – WSJ
The recent collapse of a cryptocurrency from its $1 level has heightened regulators’ concerns that other dollar-pegged assets could crumble. Deemed stablecoins for their supposed lack of volatility, these assets have become a larger part of the digital-asset ecosystem over the last two years. Stablecoins account for about $160 billion in market value, up from almost $11 billion in June 2020. That exponential growth has worried regulators in large part because the biggest so-called stablecoins are backed by traditional assets, such as short-dated Treasury notes, the U.S. dollar and commercial paper—short-term IOUs issued by companies. If holders of these stablecoins sell them in bulk, the companies backing them would have to sell traditional assets to give clients their money back, potentially sparking a fire sale that could bleed into other parts of the financial system.

Elliott Seeks $456 Million From LME Over Nickel Chaos; Two Elliott units file lawsuit in UK against exchange; HKEX says claim is without merit and the LME will contest it
Alfred Cang – Bloomberg
Paul Singer’s Elliott Investment Management is seeking $456 million in damages from the London Metal Exchange over its move in March to cancel nickel trades after a massive short squeeze.

Search Continues for Source of TerraUSD Crypto Bank Run; In decentralized finance, it isn’t easy to understand who provides money for loans, where the money flows or how easy it is to trigger currency meltdowns
Paul Vigna – WSJ
Cryptocurrency investors are still trying to figure out what led to May’s spectacular meltdown of a pair of digital tokens that were worth more than $40 billion earlier in the month. Last week, analytics firm Nansen pointed to lending firm Celsius as one of a handful of users that contributed to the collapse of the luna and terraUSD cryptocurrencies. While Celsius disputes the account, the search for information about the cause of the wreckage highlights the opacity of the world of decentralized finance. In DeFi, it isn’t easy to understand who provides money for loans, where the money flows or how easy it is to trigger currency meltdowns. This is one reason regulators are concerned about the impact of DeFi on investors and the broader financial system.

Citigroup Trader Went Through Several Alerts on ‘Fat Finger’ Trade; Bank faces about $50 million in losses after the May trading error
David Benoit – WSJ
A Citigroup Inc. C -2.10% trader who sent European stock indexes into free fall last month was working from home and went through several alerts before his order went live, people familiar with the matter said. The bank was able to quickly cancel some trades, but is facing about $50 million in losses, one of the people said. On May 2, the trader in London, working at home on a bank holiday, entered a wrong figure while trying to place an order for a client, the people said. Chaos ensued. Trading was halted momentarily in several markets after major stock indexes plunged for a few minutes in Europe.

The Great Pandemic Wealth Migration; The latest IRS data shows the movement of taxpayers and income from high-tax states is accelerating.
The Editorial Board – WSJ
House Democrats haven’t given up on repealing the 2017 tax reform’s cap on deducting state-and-local taxes. And if you want to know why, take a look at the latest Internal Revenue Service data showing a huge wealth exodus from high- to low-tax states. Each year the IRS publishes data on the migration of taxpayers and aggregate adjusted gross income between states. Its latest release for 2020 shows that migration from high- to low-tax states surged amid pandemic lockdowns and a shift to remote work.

Mike Novogratz’s Crypto Comeback Faces a Trial by Fire; The Wall Street star became so enamored with cryptocurrencies he had one of them tattooed to his arm. Then the market crashed. ‘I’m arguing the system is gonna hold.’
Gregory Zuckerman and Justin Baer – WSJ
Seven years after heavy losses shuttered his hedge fund, Mike Novogratz was in his SoHo office watching his computer screen flicker prices of cryptocurrencies, his new favorite investments. They were all collapsing. The former college wrestler who once worked for Goldman Sachs Group Inc. and Fortress Investment Group had reinvented himself as one of Wall Street’s biggest digital-currency proponents, a cult figure for thousands of amateur investors who followed his appearances on television, social media and the conference circuit. His new venture, Galaxy Digital Holdings Ltd., sells crypto-investment funds, handles trades for other big investors and advises digital-asset companies on acquisitions.

Welcome to the Great Reinfection; A repeat encounter with Covid used to be a rarity. But now that Omicron has changed the game, expect reinfections to be the new normal.
Grace Browne – WIRED
If you’re unfortunate enough to have had an intimate encounter with the dreaded Sars-CoV-2 virus, I’m afraid your dalliance with it might not have been your last. Get ready for round two (and three, and maybe four—maybe ad infinitum). Welcome to the Great Reinfection. In the early months of the pandemic, reinfections were a remarkable rarity, even making global news when discovered. “When the pandemic first started, everybody assumed that once you got it, you were done,” says Juliet Pulliam, director of the South African DSI-NRF Centre for Epidemiological Modelling and Analysis at Stellenbosch University.

Demand ‘falls off cliff’ for CFA financial analyst qualification; Number of applicants for ‘hardest exam in finance’ remains well below pre-Covid levels
Attracta Mooney and Chris Flood – FT
A professional qualification known as the “hardest exam in finance” is falling out of fashion, with applicants for the chartered financial analyst programme running well below pre-coronavirus pandemic levels for a third consecutive year. Qualifying as a CFA, which requires about 1,000 hours of study, has long been considered essential for many careers in finance. But Margaret Franklin, head of the CFA Institute, which provides the qualification, said the pandemic was dragging down demand. “Candidate numbers are lower than they have been, as a result of the pandemic. It has been more challenging as students want to be assured that they will be able to sit the exams,” she said.

Switzerland revises liquidity rules for systemically important banks
The Swiss government on Friday announced new rules for the nation’s five major banks, requiring that they boost their liquidity in order to better weather events such as the COVID-19 pandemic in future. “The revision is intended to ensure that systemically important banks (SIBs) hold sufficient liquidity to absorb liquidity shocks and cover their needs in the event of restructuring or liquidation,” the Swiss Federal Council said in a statement announcing the adoption of the ordinance.

US May Allow More Iran Oil to Flow Even Without Deal, Says Vitol; Washington might turn ‘blind eye’ to help lower prices: Vitol; Market opinions on direction of oil have ‘never been wider’
Paul Wallace – Bloomberg
The US may allow more sanctioned Iranian oil onto global markets even without a revival of the 2015 nuclear accord, according to the biggest independent crude trader. While a new agreement would limit Iran’s atomic activities and ease US sanctions on its energy exports, talks between Tehran and world powers have stalled since March. Oil traders are increasingly pessimistic that negotiators will strike a deal. Still, US President Joe Biden could decide that the need to bring down record-high pump prices ahead of November’s midterm elections outweighs the benefit of strictly enforcing sanctions, including by seizing more Iranian oil tankers.

Crypto scams are on the rise, draining more than $1 billion in last year; More than 46,000 Americans have been taken in, a new FTC report finds
Tory Newmyer – The Washington Post
Americans have lost more than $1 billion to cryptocurrency scams since the start of last year, as criminals exploit rising popular interest in scoring quick digital riches, according to a new analysis by the Federal Trade Commission. Crypto-based con jobs now account for a fourth of all dollars lost to such fraud, taking in more than 46,000 people from the beginning of 2021 through March, the report found. The losses in crypto last year were almost 60 times what they were in 2018.

When machine learning goes awry, here’s how to do better next time; Executives from JP Morgan, Morgan Stanley, and BNY Mellon discuss the lessons learned through experimenting with machine learning at their firms.
Rebecca Natale – WatersTechnology
At this year’s North American Financial Information Summit, held on May 17 in Manhattan, machine-learning engineers from JPMorgan, BNY Mellon, and Morgan Stanley discussed where they’ve seen machine-learning (ML) projects go wrong. While some of the lessons learned from failures may seem obvious, inexplicable, opaque ML implementations still plague the industry. Financial professionals want to use ML as a magic bullet, but without a thought-out process and a plan, the end results often

Jim Chanos defends short sellers, sounds the alarm on crypto fraud, and warns against investing in China. Here are his 12 best quotes from a new interview.
Theron Mohamed – Markets Insider
Jim Chanos defended short sellers, warned of widespread fraud in the cryptocurrency space, and compared crypto speculators to gamblers during a recent episode of the Crypto Critics’ Corner podcast. The Kynikos Associates boss is best known for sniffing out fraud at companies such as Enron and WorldCom, then placing lucrative wagers on their stocks to fall. During the interview, he balked at the massive scale of the SPAC craze, advised against investing in China, and cautioned against directly shorting crypto.

Former Trader Turns High School Math Team Into Wall Street Pipeline; Will Frazer left finance to teach at Florida public school; One alum is at Citadel Securities, another at Canaan Partners
Scott Carpenter – Bloomberg
A former bond trader who called it quits at 28 has created a pipeline to the Ivy League and Wall Street’s top rungs from an unexpected place: A public high school in Gainesville, Florida. One former math team alum is now a trader at Citadel Securities. Another became the youngest-ever partner at venture capital firm Canaan Partners. Scores of others also work in finance.

Adam Neumann’s ‘Goddess Nature Token’ Is the Future of Crypto—for Better or Worse; Falling prices for cryptocurrencies test the logic of the ‘tokenomics’ behind Web3 startups, but true believers think the real problem is existing securities regulations
Christopher Mims – WSJ
To understand the current state of Web3—that future version of the internet that proponents promise will be decentralized and better—it helps to take a look at Adam Neumann and the “Goddess Nature Token.”

Ukraine Invasion

Russia Seeks Buyers for Plundered Ukraine Grain, U.S. Warns
Declan Walsh and Valerie Hopkins – NY Times
American diplomats have alerted 14 countries, most in Africa, that Russian ships filled with stolen Ukrainian grain could be headed their way, posing a dilemma to countries facing dire food shortages.
NAIROBI, Kenya — Russia has bombed, blockaded and plundered the grain production capacity of Ukraine, which accounts for one-tenth of global wheat exports, resulting in dire forecasts of increased hunger and of spiking food prices around the world.

Western ‘Unity’ Is Making the Ukraine War Worse; Achieving a kumbaya moment of synchronized purpose and identity appears to have become more vital to the US and Europe than averting a humanitarian catastrophe.
Pankaj Mishra – Bloomberg
More than 100 days of war in Ukraine have not only unleashed multiple political, economic and environmental crises; Vladimir Putin’s invasion has also revived dangerous delusions in the West. A few months ago, acute divisions plagued the United States, the European Union and ties between them. Germany, Europe’s leading nation, had developed a mutually profitable relationship with Russia. Poland, a frontline state now aligned against Russia, was descending deeper into autocracy, inviting punitive measures from its EU partners. A mendacious Tory prime minister led the United Kingdom. The US, damaged by Trumpism, a mismanaged pandemic and a military debacle in Afghanistan, was debating the likelihood of civil war. French President Emmanuel Macron had declared NATO was experiencing “brain death.”

Putin warns United States against supplying Ukraine longer range missiles
Guy Faulconbridge – Reuters
President Vladimir Putin warned the United States in an interview broadcast on Sunday that Russia would strike new targets if the West supplied longer-range missiles to Ukraine for use in high-precision mobile rocket systems. The United States has ruled out sending its own or NATO forces to Ukraine but Washington and its European allies have supplied weapons to Kyiv such as drones, Howitzer heavy artillery, anti-aircraft Stinger and anti-tank Javelin missiles. President Joe Biden last week said Washington would supply Ukraine with M142 High Mobility Artillery Rocket Systems, or HIMARS, after he received assurances from Kyiv that it would not be used to target Russia

Sanctions Fatigue Is Next Obstacle in Confronting Putin; Western unity will fray without tackling economic pain.
Lionel Laurent – Bloomberg
The momentum behind Western sanctions against Vladimir Putin is flagging. Even as the European Union toasts its toughest restrictions yet against the Russian war machine — including a partial ban on oil imports — concessions are mounting, from exempting pipeline crude to removing Putin’s favorite cleric from the sanctions list.

Putin Can’t Keep Russian Mothers Silent Forever; Families’ anger over mounting casualties is hard to contain once it bubbles over, as it has before.
Clara Ferreira Marques – Bloomberg
Vladimir Putin’s propaganda machine has built up the image of a powerful nation with an indomitable leader and a disciplined army, encircled by enemies and fighting for the future of the motherland. Never mind that it was Russia that invaded Ukraine, that there has been plentiful evidence of Russian soldiers looting and raping, or that what was supposed to be a bloodless blitzkrieg has turned into a costly war of attrition. Roadside billboards with portraits of fallen soldiers carry the tagline “hero of victory,” though there’s no actual triumph. A popular slogan roughly translates as “we leave none of our people behind,” though the armed forces routinely do just that, abandoning bodies in the mud or in makeshift Ukrainian morgues.

Ukraine’s Tactics Are Showing Smaller Countries How to Fight Back; The basic lesson: Make yourself too prickly for a superpower to swallow.
Peter Martin, Cindy Wang, and Aaron Eglitis – Bloomberg
Before Vladimir Putin launched his invasion of Ukraine, top US military and intelligence officials were nearly unanimous in judging that Russian forces would overrun Kyiv in weeks, if not days. More than three months in, Kyiv is still standing, and Ukrainian forces have killed more Russian soldiers than died during the USSR’s nine-year war in Afghanistan.

Exchanges, OTC and Clearing

Attached is a copy of the ASX Group Monthly Activity Report for May 2022.

Cboe Global Markets Reports Trading Volume for May 2022
Cboe Global Markets, Inc. (Cboe: CBOE), a leading provider of global market infrastructure and tradable products, today reported May monthly trading volume statistics across its global business lines.

CME Group Reports May 2022 Monthly Market Statistics
CME Group
– Highest-ever May ADV
– 18% increase in ADV year-over-year
– 49% growth in Equity Index ADV, driven by record Micro E-mini S&P 500 futures volume
– Record SOFR options ADV and OI, and record SOFR futures OI

New Product: Initial Listing of the Micro NY Harbor ULSD Futures and Micro RBOB Gasoline Futures Contracts – Effective June 27, 2022
CME Group
Initial Listing of the Micro NY Harbor ULSD Futures and Micro RBOB Gasoline Futures Contracts

May 2022 figures at Eurex
Interest rate derivatives showing strongest growth among listed derivatives (up 21 percent);m Repo volumes increasing by 68 percent y-o-y; Notional outstanding in long-dated OTC interest rate swaps up 25 percent

Re-appointment of Chairman Approved
Reference is made to the announcement of Hong Kong Exchanges and Clearing Limited dated 27 April 2022 in relation to the re-appointment of Mrs Laura May-Lung Cha (“Mrs Cha”) as
the Chairman of the Board of Directors of HKEX (“Chairman”).

Reminder on Payment Obligations of Clearing Participants – Official Launch of VaR Platform
Reference is made to the circular dated 25 May 2022 (Reference: CD/CDCRM/142/2022). In view of the coming official launch of VaR Platform on 13 June 2022, Hong Kong Securities Clearing Company Limited (HKSCC) considers it appropriate to remind all participants of the importance of having proper risk management and robust funding arrangements in place to adequately monitor their exposures and fulfill their payment obligations to HKSCC on time to ensure the smooth operations of Hong Kong and China Connect markets.

Official Launch of VaR Platform – Reminder
Reference is made to the circular dated 25 May 2022 (Reference: CD/CDCRM/142/2022). Hong Kong Securities Clearing Company Limited (HKSCC) will officially launch the VaR Platform on 13 June 2022 (Monday), and the new risk model (i.e. Value-at-Risk model) will become effective, on the same day.

Default Fund Threshold and Tier-N Margin Rate upon Official Launch of VaR Platform
Please be advised that the following risk management arrangements will become effective upon the official launch of VaR Platform on 13 June 2022 (Monday)

Intercontinental Exchange Reports May 2022 Statistics
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of data, technology and market infrastructure, today reported May 2022 trading volume and related revenue statistics, which can be viewed on the company’s investor relations website at https://ir.theice.com/ir-resources/supplemental-information in the Monthly Statistics Tracking spreadsheet.

Update of ETF Market Making Incentive Scheme Version 2.0
Tokyo Stock Exchange, Inc. (TSE) introduced an ETF Market Making Incentive Scheme in order to improve liquidity in the ETF market in July 2018. Thereafter, TSE launched ETF Market Making Scheme Version 2.0 (Ver.2.0) in April 2019 and will now be updating said scheme on June 7, 2022.

Disciplinary action: StoneX Financial Ltd
This Notice records a settlement between the London Metal Exchange (the “LME”) and Category 1 Member, StoneX Financial Ltd (“IFC”) which includes a financial penalty of £55,000.

The number of IIS on the Moscow Exchange exceeded 5.5 million
At the end of May 2022, the number of individuals with brokerage accounts on the Moscow Exchange amounted to 19.8 million (+482 thousand in May), they opened 33.2 million accounts.

NSE warns stock brokers against executing non-genuine trades
News Track
The National Stock Exchange of India Ltd (NSE), India’s largest stock exchange, has warned stock brokers against fulfilling orders that appear to be non-genuine, causing a deviation in the regular price discovery process. This comes after a ‘fat finger’ trade on Thursday on the National Stock Exchange’s (NSE) futures segment, which may have resulted in a loss of Rs 200-250 crore to a brokerage company. This could be the largest trading blunder in the history of the home market. A ‘fat finger’ trade is an erroneous action caused by hitting the wrong key in the market. The NSE issued a circular asking its trading members to refrain from entering or executing transactions that appear to be nongenuine on their own account or on behalf of their clients, as well as from engaging in practises that cause order book anomalies.

TMX Group Consolidated Trading Statistics – May 2022
TMX Group Limited today announced May 2022 trading statistics for its marketplaces – Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange and Montréal Exchange.


What Sheryl Sandberg’s Exit Reveals About Women’s Progress in Tech; Silicon Valley is losing one of its most visible, outspoken and powerful women. Any gains have been incremental at best.
Cecilia Kang and Erin Griffith – NY Times
When Sheryl Sandberg said this week that she was resigning as chief operating officer of Meta, she also reflected on her legacy as a woman in tech. “I’m especially proud that this is a company where many, many exceptional women and people from diverse backgrounds have risen through our ranks and become leaders — both in our company and in leadership roles elsewhere,” she wrote in an announcement posted on her Facebook and Instagram pages. Yet even as Ms. Sandberg lauded the progress of women at Meta, the broader reality for female leaders at the top of the tech industry has been far more disappointing. And with her exit this fall, Silicon Valley is losing one of its most visible and outspoken female executives, leaving few — some would say zero — similar peers in her wake.

Mark Zuckerberg Is Blowing Up Instagram to Try and Catch TikTok; The CEO of Meta Platforms needs Reels—his short-form video feature—to fund his metaverse, and you can smell his desperation from Beijing.
Sarah Frier and Brad Stone – Bloomberg
Last year an Instagram representative contacted Justina Sharp, a 24-year-old with 93,000 followers, and asked for a meeting to discuss ways she could expand her audience. Sharp thought it was strange to hear from an actual human there, but knew better than to say no. The conversation felt, she says, like the “Facebook gods” coming down from on high to Instagramsplain. The employee “talked at me for exactly half an hour, because that’s how corporate and precise they are,” she recalls. “They gave me all these generic tips that anyone who’s been on social media for five seconds would know how to do.” How to use hashtags, what time of day to post, that sort of thing.

Twitter Says Antitrust Waiting Period for Elon Musk Deal Has Passed; Deal still has to go to social-media company’s shareholders for a vote
Dean Seal – WSJ
Twitter Inc. said Friday the window has closed for federal antitrust regulators to block Elon Musk’s proposed $44 billion acquisition of the social-media company, removing another barrier to the transaction. The company said the 30-day waiting period established under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, which gives the Federal Trade Commission and Justice Department time to review a transaction for potential antitrust violations, expired for the deal Thursday night. Mr. Musk’s proposed $54.20-a-share acquisition is still far from final, after the Tesla Inc. CEO said the deal was on hold last month until he could get a handle on the number of fake accounts operating on the platform. He added later that he remained committed to the acquisition.

Elon Musk accuses Twitter of breaching contract over spam bots
Theo Wayt – NY Post
Attorneys for Musk wrote that Twitter has refused to provide information that would “facilitate his evaluation of spam and fake accounts on the company’s platform,” according to a stern letter to Twitter that was filed with the Securities and Exchange Commission.
Musk’s lawyers argued that Twitter’s alleged stonewalling amounts to “a clear material breach of Twitter’s obligations under the merger agreement.”

Banks and Tech Giants Are Losing Skilled Staff to Flexible Fintechs; The attraction of remote work and a scramble for talent is luring highly skilled people away from places like Goldman Sachs and Facebook.
William Shaw – Bloomberg
Staff at major banks and some of the world’s biggest technology giants are increasingly leaving for fintech startups, new analysis shows. Bankers, engineers, data scientists and sales staff from Wall Street, the City of London and Silicon Valley are among those joining an exodus that picked up speed during the pandemic, according to data compiled by Revelio Labs, a workplace intelligence company.

UK to unveil new digital strategy to nurture technology sector; Ministers preparing to publish document focused on AI, quantum computing and health
Daniel Thomas and Jim Pickard – FT
The UK is preparing to unveil a set of technology-focused policies this month covering artificial intelligence, quantum computing and digital health, as the government tries to bolster London’s start-up scene following Brexit and the coronavirus pandemic.


Engineer Who Fled Charges of Stealing Chip Technology in US Now Thrives in China
ASML has pressed IP theft allegations against two firms created by ‘flagbearer’ for China’s semiconductor industry
Jordan Robertson and Michael Riley – Bloomberg
Few companies are better positioned to benefit from the crippling shortage of computer chips than ASML Holding NV, a Dutch manufacturer whose equipment plays an integral role in making the world’s most advanced semiconductors.

Synack expands executive team, adds top cybersecurity talent as business surges
The premier on-demand security testing platform is experiencing record growth as organizations globally seek its help to bridge the cybersecurity skills shortage.
Cision via YahooFinance
Synack, the premier on-demand security platform for continuous penetration testing and vulnerability management, is expanding its executive team and bringing on top industry talent to meet growing demands from organizations globally seeking to solve their cybersecurity skills shortage.

To better manage cybersecurity risk, extend zero-trust principles to third parties
Saket Modi – TechCrunch
Today’s cybersecurity landscape requires an agile and data-driven risk management strategy to deal with the ever-expanding third-party attack surface.


Thefts, Fraud and Lawsuits at the World’s Biggest NFT Marketplace
David Yaffe-Bellany – NY Times
Chris Chapman used to own one of the most valuable commodities in the crypto world: a unique digital image of a spiky-haired ape dressed in a spacesuit.
Mr. Chapman bought the nonfungible token last year, as a widely hyped series of digital collectibles called the Bored Ape Yacht Club became a phenomenon. In December, he listed his Bored Ape for sale on OpenSea, the largest NFT marketplace, setting the price at about $1 million. Two months later, as he got ready to take his daughters to the zoo, OpenSea sent him a notification: The ape had been sold for roughly $300,000.

Let’s Use the Crypto Craze as a Springboard into Better Financial Literacy
Brad Hearn – Kiplinger
From Super Bowl advertisements to big city mayors taking payment in crypto, it’s become impossible to ignore the rise of cryptocurrencies, the digital assets hailed by some as the future of finance. One in five Americans has traded in, invested in, or used cryptocurrency, according to a recent NBC News poll. Cryptocurrencies, the decentralized financial assets built on the blockchain, are generating excitement and activity with new investors, from Baby Boomers to Gen Z. It’s also helped shine a much-needed spotlight on the general public’s need for finance knowledge.

Lunatics See Meager Gains Since Relaunch of Failed Crypto Token; Luna 2.0 tokens were distributed to previous UST, Luna holders; Airdrop had spurred optimism about recouping losses
Muyao Shen – Bloomberg
Results aren’t living up to expectations for a quick recovery held by many of the investors who received new Luna tokens following last month’s collapse of the cryptocurrencies tied to the failed Terra blockchain. The average price of the Luna 2.0 token has remained below $11 in the week since they were distributed by Terra, according to data complied by tracker Kaiko. Just a day before the TerraUSD (UST) stablecoin began to lose its 1-to-1 peg to the dollar on May 7, its affiliated token Luna was trading at about $86.

Tron Modifies USDD Stablecoin to Avoid Woes of TerraUSD; Terra/Luna issue accelerated the planned move, Justin Sun said; Tron DAO Reserve will be ‘very active in the market’: Sun
Joanna Ossinger – Bloomberg
Tron, which debuted the USDD algorithmic stablecoin last month, is looking to avoid the trouble its fellow token TerraUSD ran into by boosting transparency and adding collateral. Total USDD supply stands at about $668 million, the Tron DAO Reserve website and CoinGecko indicate. USDD had a collateralization ratio of 218% as of Monday morning Asia time, according to the TDR website, while a statement from the company on Sunday said a guaranteed minimum collateral ratio of 130% will be maintained.

Bitcoin Miners Are Selling Tokens as Prices Linger Near Lows; Flow from miners to exchanges seen as indicative of more sales; New miners that counted on higher prices may face liquidations
Jialiang David Pan – Bloomberg
Bitcoin miners are beginning to sell tokens they’ve hoarded to cover burgeoning costs with the prospects for industry growth slowing and the price of the largest cryptocurrency showing few signs of rebounding following the recent collapse from record highs. Miners transferred about 195,663 coins to exchanges in May, the biggest monthly increase since January, according to data from Coin Metrics compiled by Compass Mining. Based on Bitcoin’s average price of around $32,000 in May, the total value of the tokens was about $6.3 billion.

New York Legislature Approves Bill to Limit Cryptocurrency Mining; The bill, which has attracted lobbying from both environmental and cryptocurrency groups, moves to Gov. Kathy Hochul’s desk?
Jimmy Vielkind – WSJ
New York could become the first state in the nation to curtail cryptocurrency mining after state lawmakers approved a two-year moratorium early Friday. The measure—which attracted intense lobbying from both environmental and cryptocurrency groups—now heads to Gov. Kathy Hochul’s desk. The Democratic governor hasn’t said if she would sign the bill, and said last month that she wanted to balance protecting the environment and new job opportunities. The bill would place a two-year moratorium on reactivating fossil-fuel power plants for off-the-grid cryptocurrency mining. Cryptocurrency miners earn digital cash by solving mathematical equations with computers that require large amounts of energy to power. Mining that taps into the electrical grid would still be allowed under the bill.

Terra Investors in India Lost Big. Now They Face the Taxman; Holders of Luna 2.0 token could face tax of as much as 30%; Dilemma reflects Indian government’s ambivalence over crypto
Sidhartha Shukla – Bloomberg
Terra investors around the world lost billions of dollars when the algorithmic-stablecoin project crashed but they recovered a small part of their bets when a new token was distributed as compensation. Investors in India aren’t as fortunate.

Crypto Bridges, Staking, Yield Farming: An Audio Crypto Glossary; GM! On this episode of the Bloomberg Crypto podcast, we’re defining our terms.
Victoria Vergolina – Bloomberg
You might already consider crypto to be synonymous with the word volatility. But what about all the other words that get thrown around by enthusiasts? What’s staking all about? How are bridges created and used? And why are so many folks on Twitter sending messages that just say, “GM”? Never fear: Bloomberg reporters Hannah Miller and Vildana Hajric are here to help with a crypto glossary. Because it’s good to define our terms.

Tech and Crypto in Peril as Fed Ends Liquidity Binge, Survey Shows; Survey respondents spell out the cross-asset challenges ahead; The US central bank has started shrinking its balance sheet
Benjamin Purvis and Tatiana Darie – Bloomberg
The speculative darlings of the easy-money era — technology stocks and cryptocurrencies — are acutely vulnerable now that the Federal Reserve is shrinking its nearly $9 trillion balance sheet.


EPA Trims Ethanol Fuel Mandate for 2020-21 But Raises It for 2022; Biden administration says changes are aimed at helping boost domestic fuel supplies
Katy Stech Ferek and Timothy Puko – WSJ
The Biden administration on Friday retroactively reduced the amount of ethanol that must be blended into gasoline for 2020 and 2021 but raised the level for 2022, saying the changes are aimed at helping boost domestic fuel supplies. Environmental Protection Agency Administrator Michael S. Regan said that the decision will reduce U.S. reliance on oil and that the administration is “laser-focused on providing more options for consumers at the pump.” The final decision, which will implement a proposal introduced late last year, comes at a time when the administration is trying to curtail soaring prices for consumer goods and commodities, especially gasoline and food.

Biden Has ‘Only Bad Options’ for Bringing Down Oil Prices; The president’s trip to Saudi Arabia is unlikely to reduce oil and gasoline prices, and it is not clear that anything else he might do would work, either.
Clifford Krauss – NY Times
When President Biden meets Crown Prince Mohammed bin Salman in Saudi Arabia, he will be following in the footsteps of presidents like Jimmy Carter, who flew to Tehran in 1977 to exchange toasts with the shah of Iran on New Year’s Eve. Like the prince, the shah was an unelected monarch with a tarnished human rights record. But Mr. Carter was obliged to celebrate with him for a cause that was of great concern to people back home: cheaper gasoline and secure oil supplies.

Biden to pause new solar tariffs as White House aims to boost installation.
Ana Swanson – NY Times
WASHINGTON — The Biden administration on Monday is set to announce a two-year pause on imposing any new tariffs on the solar industry, following an outcry from importers who have complained the levies are threatening broader adoption of solar energy in the United States.

Digital currencies flow to campaigns, but state rules vary
Andrew Selsky and Steve Leblanc – The Associated Press
For congressional candidate Shrina Kurani, cryptocurrency is not only the future of money, it’s a transformative technology that could revolutionize campaign funding and attract a new generation of voters. She is among a vanguard of candidates courting campaign contributions in digital currencies such as Bitcoin. “We are a campaign that is speaking to a large part of the population, especially younger people,” said the American-born daughter of Indian immigrants, who is on Tuesday’s primary ballot as she seeks the Democratic nomination for a congressional seat east of Los Angeles.

Republican Cheney warns U.S. democracy remains under threat
Katharine Jackson – Reuters
Republican U.S. Representative Liz Cheney warned that the nation’s democratic system is threatened by ongoing efforts to deny the legitimacy of Donald Trump’s 2020 election loss. “People must pay attention. People must watch, and they must understand how easily our democratic system can unravel if we don’t defend it,” Cheney said during an interview broadcast on CBS Sunday Morning, days before Congress’ official probe of the Jan. 6, 2021, assault on the Capitol begins public hearings.

Polish Finance Minister Expects EU Fund Approval to Boost Zloty
Maciej Onoszko – Bloomberg
The European Union’s approval of 35.4 billion euros ($38 billion) in post-pandemic aid for Poland and other inflows of funds would help boost the zloty, according to the country’s finance minister.

LNG revolution: Germany’s plan to wean itself off Russian gas takes shape; Three terminals could be built but the plants rub up against tight global market and Berlin’s long-term energy strategy
Guy Chazan – FT
A small orchard on the banks of the Elbe River in northern Germany, overgrown and circled by seagulls, holds the key to the country’s Russia-free energy future. The orchard, close to the city of Stade, will soon be cleared to make way for a EUR1bn liquefied natural gas terminal, one of three planned that should help Germany cut its dependence on Russian gas.


SEC ‘Investomania’ Satire on Memes, Crypto Sparks Outrage Online; The agency was criticized on social media over its educational ‘Investomania’ campaign meant to encourage caution.
Paulina Cachero – Bloomberg
A new public-service campaign custom made for investing during these meme-filled times is sparking outrage from some on social media who say it pokes fun at the very people it’s meant to educate. The pushback is less about the spot, which features a satirical TV game show called “Investomania,” than it is about who’s behind it: the US Securities and Exchange Commission.

‘Tiger King’ Star Doc Antle to Face Money Laundering Charges
The Associated Press
“Tiger King” star Bhagavan “Doc” Antle was arrested by the FBI and expected to appear in court Monday to face federal money laundering charges, a person familiar with the matter told The Associated Press. Federal agents arrested the controversial wild animal trainer Friday and he has been in custody at the J. Reuben Long Detention Center in Conway, South Carolina throughout the weekend.

CFTC Commissioner Caroline D. Pham Seeks Nominations for Global Markets Advisory Committee Membership and Public Comment on Committee Priorities by June 17
Commodity Futures Trading Commission Commissioner Caroline D. Pham, sponsor of the CFTC’s Global Markets Advisory Committee (GMAC), is seeking nominations for GMAC membership and public input on the GMAC’s priorities and potential subcommittees through a formal request for submissions in the Federal Register. The deadline for submissions is June 17, 2022.

CFTC Commissioner Kristin N. Johnson Seeks Nominations for Market Risk Advisory Committee Membership and Public Comment on Topics for Discussion
Commodity Futures Trading Commission Commissioner Kristin N. Johnson, sponsor of the CFTC’s Market Risk Advisory Committee (MRAC or Committee), is seeking nominations for membership on MRAC and also inviting the submission of potential topics for discussion at future Committee meetings. The deadline for submissions is June 17, 2022.

Commissioner Pham to Deliver a Keynote Address at the Trading Evolved US Trading and Best Execution Summit
Commissioner Caroline D. Pham will be featured in a keynote address with FIA President and CEO Walt Lukken on developments in the derivatives and futures markets at the Trading Evolved US Trading and Best Execution Summit.

Cybersecurity Alert – FINRA Notifies Member Firms of Microsoft Alert (CVE-2022-30190)
FINRA’s National Cause and Financial Crimes Detection (NCFC) Cyber and Analytics Unit (CAU) has noted a recent alert issued by Microsoft on May 30, 2022. The Microsoft alert describes a remote code execution vulnerability, named “Follina” by security analysts, related to the Microsoft Support Diagnostic Tool (MSDT) that can be used by a threat actor to run malicious code. As a result, a threat actor could install programs; view, change, or delete data; or create new accounts on the network.

SEC Updates Electronic Filing Requirements; Amendments Will Help Modernize How Information Is Submitted to Commission
The Securities and Exchange Commission today announced that it adopted amendments to require certain forms that currently are permitted to be filed or submitted in paper format to be filed or submitted electronically. The amendments also amend certain forms to require structured data reporting and remove outdated references. The amendments are intended to promote efficiency, transparency, and operational resiliency by modernizing how information is filed or submitted to the Commission and disclosed to the public. Furthermore, to benefit investors and the public, electronic filings will be more readily accessible to the public and available on the SEC website in easily searchable formats.

Statement on Final Rule Amendments to Electronic Filing Requirements
Gary Gensler – SEC
The Commission voted unanimously to finalize rule amendments that require several additional issuer (and certain affiliate) filings to be submitted electronically to our Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system. I was pleased to support these amendments because they will modernize and increase the efficiency of the filing process — for filers, investors, and the SEC.

ASIC releases draft Cost Recovery Implementation Statement 2021-22
ASIC today published its draft Cost Recovery Implementation Statement (CRIS) for 2021-22. The draft CRIS outlines ASIC’s estimated regulatory costs for 2021-22 and how it is proposed these will be recovered as levies under the industry funding model. The indicative levies are based on our planned regulatory work and associated costs for the 2021 – 22 financial year.

ESMA Proposes Eur 1 Billion Increase Of The Commodity Derivatives Emir Clearing Threshold
The European Securities and Markets Authority (ESMA), the EU securities markets regulator, today publishes its Final Report on the increase of the commodity derivatives EMIR clearing threshold (CT), and proposes to increase the CT from EUR 3 billion to EUR 4 billion.

ESMA postpones buy-in regime under CSDR by three years
Industry gets clarity on buy-in timeline after regulators had previously warned they could be introduced if fail rates didn’t improve.
Jonathan Watkins – The Trade
The European Securities and Markets Authority (ESMA) has announced it will postpone the application of the CSDR mandatory buy-in regime by three years.
The controversial rules obliging trading parties to execute buy-ins against any counterparties who are unable to settle their trades within a certain timeframe have been the source of much contention.

The Council of Experts Concerning the Follow-up of Japan’s Stewardship Code and Japan’s Corporate Governance Code
FSA Japan

Investing and Trading

Are Stocks Undervalued Yet?; Eight valuation models suggest that even after recent declines, the stock market isn’t a good value
Mark Hulbert – WSJ
Everyone wants to know when the stock market, after its recent declines, will be a good value again. The sobering news is that even at its lowest point in mid-May, the S&P 500 index wasn’t even close to being undervalued according to any of eight valuation models that my research shows have the best long-term track records. The recent bounce in the S&P 500—up 5.3% since May 19—could be just a passing bear-market rally, or it could be a new bull-market leg.

Reddit Is the King of Bad Timing; The birthplace of the meme-stock frenzy failed to cash in on its popularity, and it wasn’t the first time
Laura Forman – WSJ
In “King Richard,” the 2021 drama depicting the budding tennis careers of the Williams sisters, Will Smith’s character Richard Williams turns down so many huge opportunities for his daughter Venus that it makes your jaw drop. That worked out pretty well for her and her sister, Serena, in the end. If only social-media platform Reddit—co-founded by Serena Williams’s now husband, Alexis Ohanian —had that kind of nerve and timing. Redditors took the market by storm last year, fueling a retail frenzy in meme stocks such as GameStop that turned investing fundamentals on their head, briefly making the WallStreetBets forum the center of the financial universe. Founded in 2005 in a dorm room, much like Facebook had been a year earlier, Reddit today is one of the most visited websites in the world with more than 50 million daily active unique users as of January.

U.S.-Stock Funds Avoided the Bear; After a month punctuated by market drops, a late-May advance kept stocks, and funds that invest in them, on even footing
William Power – WSJ
That was a lot of angst, but not much result. Last month was a good example of the old advice that long-term investors should avoid worrying about day-to-day moves in the market. Stocks slid for most of May, as companies issued profit warnings, reacting to the impact of inflation. The S&P 500 was close to slumping into a bear market, defined as a drop of 20% from the high. But bargain-hunting investors swooped in as the month ended, rescuing the performance of major indexes—which ended largely unchanged for the month. The average U.S.-stock fund fell a scant 0.02% in the month, according to Refinitiv Lipper data, to leave the year-to-date average decline at 13.9%. (Stocks have resumed their jittery path so far in June, with the market slumping on Friday.)

The Tech Rout Isn’t Just Cyclical—It’s Well-Earned, and Overdue; The market collapse isn’t just the inevitable result of macroeconomic forces like high interest rates and inflation. It’s also the best opportunity in more than a decade to reckon with the tech industry’s excess.
Brad Stone and Lizette Chapman – Bloomberg
Over the past half-century, Silicon Valley has toggled between two similar-sounding pursuits that are often in conflict: wealth creation and moneymaking. Wealth creation is the act of invention and patient, long-term business building. It’s the rising tide that lifts the boats of employees, shareholders, and everyone else. Moneymaking is the baser impulse: the hunt for a quick buck. The technology industry and its risk-happy patrons have learned, time and again, what happens when short-term profiteering takes precedence over the development of stable companies that can create cool stuff. And yet, here we are again. Years of wildly inflated valuations, crypto-flavored pyramid schemes, and all manner of naked opportunism have led us to the Bust of 2022.

Value of US and European IPOs tumbles 90% this year; First-quarter drought extends into second quarter as Ukraine war and volatility deter companies from listing
Owen Walker – FT
The value of initial public offerings in the US and Europe has fallen 90 per cent this year as the Ukraine war and rising inflation and interest rates have forced businesses to shelve plans to go public. Just 157 companies raised a total of $17.9bn in the first five months of 2022, compared with 628 that raised $192bn in the same period last year, according to data from Dealogic.

Environmental, Social and Corporate Governance

Saudis Raise Oil Prices More Than Expected Amid Asia Rebound; Aramco increases Arab Light grade for Asia by $2.10 a barrel; State producer keeps US prices unchanged for a second month
Alfred Cang and Anthony Di Paola – Bloomberg
Saudi Arabia raised oil prices for its biggest market of Asia by more than expected as the region’s main economies ease coronavirus restrictions, helping boost demand. The increase for July shipments resumes a streak of hikes that started in February and was only broken when state producer Saudi Aramco cut prices from record levels a month ago. Aramco raised its key Arab Light crude grade for Asian customers by $2.10 a barrel from June to $6.50 above the benchmark it uses. The market was expecting a boost of $1.50, according to a Bloomberg survey of refiners and traders.

How ESG investing came to a reckoning; With allegations of greenwashing at the highest levels, does it still make sense for funds to package together environmental, social and governance factors?
Harriet Agnew, Adrienne Klasa and Simon Mundy – FT
The term ESG is less than two decades old, but it may already be coming to the end of its useful life. The acronym dates back to 2004, when a report commissioned by the UN called for “better inclusion of environmental, social and corporate governance (ESG) factors in investment decisions”. In the wake of corporate scandals such as Enron and WorldCom, and the Exxon Valdez oil spill, financial institutions eagerly signed on to the “global compact”.

Efforts to protect the environment may soon be required to do business overseas
More corporations are embracing the need to protect the environment during their production process.
David Rose – Jamaica Observer
Environmental, social and governance (ESG) criteria have continued to emerge in various markets as more investors consider the impact companies have on the world, and their role in the sustainable development of where they operate. While no major stock exchange in the region has mandated ESG disclosures, the Jamaica Observer’s Sunday Finance will be exploring the topic and how it has impacted various companies in their own pursuits.

ESG And Impact Investing At War
Seeking Alpha
Our interview with five ESG & Impact asset managers on how Russian aggression has incited new debates on key socially responsible issues including defense stocks, authoritarian regimes, and corporate actions.


FTSE Russell begins 34th annual Russell US Indexes Reconstitution
FTSE Russell announces
Today, FTSE Russell, a leading global index provider, posted its preliminary lists of companies set to enter or leave the US broad market Russell 3000 Index and the Russell Microcap Index, marking the start of its 34th annual Russell US Indexes Reconstitution. This year’s changes will take place after US equity markets close Friday, June 24. The lists of projected additions and deletions for the Russell US Indexes and other information regarding the annual rebalancing process is available on the FTSE Russell website.

Woodford Fund Administrator Faces Lawsuit, Financial Times Says
Colin Keatinge – Bloomberg
The administrator of a collapsed fund run by once-feted investor Neil Woodford is facing a multi-million pound lawsuit, the Financial Times reported, citing the claim. London law firm Harcus Parker is bringing an initial claim against Link Fund Solutions on behalf of 1,500 investors in the Woodford Equity Income Fund, according to the newspaper. The total value of the claim may reach £100 million ($125 million), the FT reported.

Quant hedge funds reap windfall during 2022 market ructions; Computer-driven managers post biggest gains since financial crisis after ‘dead decade’
Laurence Fletcher – FT
Hedge funds that use powerful computers to run their portfolios are making huge profits in this year’s market turmoil, marking a resurgence for a sector trying to recover from a long stretch of weak performance. Trend-following hedge funds, which use mathematical models to try to predict market movements, had struggled for years in an era dominated by central bank bond-buying — a stimulus tool that suppressed much of the volatility on which they thrive. But the $337bn industry is now making its biggest gains since the 2008 financial crisis, according to data provider HFR.

Black Swan Investor Is Watching for ‘Greatest Credit Bubble’ to Pop; Corporate-bond breakdown may cause ‘failure,’ Spitznagel says; Hedge fund Universa protects against the biggest market risks
Sonali Basak – Bloomberg
Mark Spitznagel is paid to be prepared for when the market’s weakest links are exposed in a big way. Right now, the Universa Investments founder, whose fund aims to protect clients during black swan events, says the financial system is most vulnerable to “the greatest credit bubble of human history… If this credit bubble ever pops, it’s going to be the most catastrophic market failure that anyone has ever read about — but let’s hope that doesn’t happen,” Spitznagel, Miami-based Universa’s chief investment officer, said Thursday in a telephone interview. “We’ve gotten ourselves into a tough spot.”

Wellness Exchange

More Than Two-Thirds of People Have Covid Antibodies, WHO Says; Blood sample studies indicates big surge in antibodies in 2021; Studies show vaccines help against severe Covid, WHO says
Thomas Mulier – Bloomberg
More than two-thirds of the world’s population probably have significant levels of Covid-19 antibodies, meaning they have either been infected or were vaccinated, the World Health Organization said. So-called seroprevalence rates surged to 67% in October from 16% in February of 2021, the WHO said, in a summary of studies from around the globe. Given the emergence of the fast-spreading omicron variant, the figure is probably even higher now.

Even a Diehard Covid Test Advocate Says China Going Too Far; China is setting up tens of thousands of Covid testing booths; Some cities require negative test to use public transit, work
Bloomberg News
Michael Mina has long pushed for widespread testing as a way to stop Covid-19 outbreaks in their tracks. But what China is doing, he says, is going too far. Wedded to a pandemic strategy that still seeks to eliminate every coronavirus case, the world’s most populous country is rolling out a vast network of testing booths in urban areas so that millions of people are within a 15-minute walk of getting swabbed at all times. Cities like Beijing, Shanghai, Shenzhen and Hangzhou are requiring tests as often as every 48 hours to access public transit, entertainment venues — and even workplaces.

COVID-19 cases are rising in many states. What experts say makes this summer different.
Adrianna Rodriguez – USA Today
Shortly before the start of the third summer of the pandemic, the USA is undergoing a sixth wave of COVID-19 cases. Compared with previous surges, this one looks more like a swell, health experts said. The rise in cases reported in the Northeast in recent weeks appears to have peaked, but upward trends continue in at least 21 states, according to a USA TODAY analysis of Johns Hopkins University data. Health experts said cases are likely higher because of underreported home tests.

Doctors Are Still Flying Blind With Paxlovid; As more Covid patients take the antivirals, US researchers should take the opportunity to find out exactly who benefits.
Lisa Jarvis – Bloomberg
In the month since I last wrote about the dearth of data on Paxlovid’s benefit for vaccinated and younger Covid-19 patients, infections have soared and prescriptions of the antiviral have skyrocketed. As of June 1, more than 1 million courses of the drug have been administered in the US. Roughly one-third of these pill packs have been prescribed just since May 17. At this point, nearly half of all Covid patients are taking antivirals, mostly Pfizer’s Paxlovid, Evercore ISI analyst Umer Raffat estimates.

People, Get Your Booster Shots Already; Most Americans still haven’t gotten their third shot of the Covid vaccine, but the benefits of a booster are increasingly compelling.
Faye Flam – Bloomberg
Fewer than half of eligible Americans have received a third Covid vaccine shot despite clear evidence of its benefit. That booster shot improves your odds of avoiding even mild omicron. So why haven’t more people gotten it? One reason may be that we’re all over map in our risk of getting infected. That variability could be causing confusion over who should get how many booster shots and when. “I’m confused, and I’m on the FDA advisory committee”, said Paul Offit, director of the vaccine education center at the Children’s Hospital of Philadelphia, on a recent video conference.

What This Money Manager Learned Traveling in Covid-Zero China; The US trade war and the pandemic have boosted small domestic brands, says Wenting Shen of Harding Loevner.
Michael P. Regan – Bloomberg
Wenting Shen, an analyst and portfolio manager at Harding Loevner, is traveling through China while navigating the country’s strict Covid-zero policies, visiting executives at the companies she covers to see how they’re faring in the pandemic. She joins the latest episode of “What Goes Up” to discuss what she’s learned on her trip, and how Covid-19 and the trade war begun by Donald Trump have altered China’s economy.

People With Certain Allergies 50 Percent Less Likely to Get COVID: Study
Nick Mordowanec – Newsweek
Food allergies are actually a good thing when it comes to the risk of contracting COVID-19, according to a new study funded by the National Institutes of Health (NIH). The Human Epidemiology and Response to SARS-CoV-2 (HEROS) study was published in May in the Journal of Allergy and Clinical Immunology and reported that a self-reported doctor-diagnosed food allergy was associated with a 50-percent lower infection risk. The initial intent of the study was to determine whether self-reported asthma and/or other allergic diseases are associated with SARS-CoV-2 infection and household transmission. It was reported that doctor-diagnosed asthma was not a risk factor for infection, nor was upper respiratory allergy or eczema.

COVID-19 cases are on the rise. Does it matter anymore?
Peter Sullivan – The Hill
COVID-19 cases have risen in the U.S. to around 100,000 per day, and the real number could be as much as five times that, given many go unreported. But the situation is far different from the early months of the pandemic. There are now vaccines and booster shots, and new treatments that dramatically cut the risk of the virus. So how much do cases alone still matter? That question has prompted debate among experts, even as much of America goes on with their lives, despite the recent surge in cases. How much concern high case numbers alone should prompt is “the trillion-dollar question,” said Bob Wachter, chair of the department of medicine at the University of California-San Francisco.

Severe Covid cases ‘more likely in highly polluted areas’; Air pollutant nitrogen dioxide may contribute to intensive care admissions, German study finds
Robin McKie – The Guardian
People who contract Covid-19 are more likely to suffer severe symptoms if they have been exposed to air pollution for long periods. A study found that people who live in places where there are high levels of the atmospheric pollutant nitrogen dioxide had higher chances of ending up in intensive care units (ICUs) or of needing mechanical ventilation after they had caught Covid. Nitrogen dioxide is released into the atmosphere when fossil fuels are burned, and the gas is known to have harmful effects on people’s lungs. In particular, endothelial cells – which form a thin membrane lining the inside of the heart and blood vessels – become damaged, and this inhibits the transfer of oxygen from inhaled breath to a person’s blood.

Just How Wildly Are Covid Cases Undercounted?
Carey Goldberg – Bloomberg
Feel like your local Covid case counts are gaslighting you? Like the numbers seem piddling compared with your sense that nearly everyone you know has tested positive lately? You’re not wrong. Epidemiologists agree that mass home testing, with few positives reported to health authorities, leads to a dramatic undercount of cases. But just how dramatic? How much should we multiply the official case counts by to get a good sense of local levels?


How China Is Reviving Tools for Hedging Credit Risk
Bloomberg News
As regulators have cracked down on excessive borrowing by China’s property developers, the fallout from a resulting liquidity squeeze has weighed on an economy already struggling due to pandemic lockdowns and other disruptions. So regulators have returned to a tool they used to try to restore domestic investor confidence the last time the onshore credit market ran into trouble: derivatives that hedge risks against default. The response has been limited, however, with bond issuance by private-sector builders as of June off to its slowest annual start since 2015 — illustrating the extent of the challenge to reassure markets this time.

Singapore’s Chicken Supply Assured Via Many Sources: Minister
Chester Yung – Bloomberg
Singapore expects to receive more chicken imports from several countries in the coming weeks, a minister said, helping the city-state maintain supply even after Malaysia halted exports at the start of the month. “We will be expecting more supplies of both chilled chicken from Australia and Thailand, and frozen chicken from sources such as Brazil and the US in the coming weeks,” Desmond Tan, minister of state for home affairs and sustainability and the environment, said in a Facebook post on Saturday. “Rest assured, there is adequate supply of chicken for everyone if we continue to do our purchase normally.”

Ukraine Is Struggling to Export Its Grain, and Here’s Why; After Russia’s blockade of Black Sea routes, Ukraine looks for alternative shipping options to help stave off global food shortages
Roque Ruiz and Will Horner – WSJ
Before Russia’s invasion, around 98% of Ukraine’s prodigious grain exports would flow from ports on the Black Sea. But those ports have been shut by a Russian naval blockade, and warehouses, rail yards and other key export infrastructure have been targeted and damaged by Russian attacks. Despite the war, Ukraine’s farms are expected to produce around 30 million tons of wheat, corn and other food commodities this year. Traders and farmers, with the support of the Ukrainian government and neighboring nations, are seeking alternative routes to export those grains to stave off global food shortages and relieve soaring prices. The endeavor, however, is far from straightforward. The new routes are longer, often backlogged and more expensive. The challenge is complicated by stretched infrastructure and continued Russian attacks on bridges and railways.

Saudi Wealth Fund to Take $185 Million Jordanian Bank Stake
Matthew Martin – Bloomberg
Saudi Arabia’s sovereign wealth fund will take a $185 million stake in Capital Bank of Jordan as part of deal to help the lender expand. The Public Investment Fund signed a subscription agreement that would involve it buying 63 million newly issued shares to give it a 23.97% stake in the Jordanian bank, according to a statement. The deal would raise Capital Bank’s shareholders’ equity to about $846 million, helping to fund an expansion strategy in Jordan, Saudi Arabia and Iraq, and to grow its investment arm.

Another ship sent to take metal to Russia arrives in Mariupol, TASS reports
A ship sent to load metal and ship it to Russia has entered the Ukrainian port of Mariupol, TASS news agency reported on Saturday, the second vessel to arrive in the southeastern city since Russia completed its capture last month. “The ship has arrived and is in the port,” TASS cited a port authority representative as saying, adding that it was to be loaded with metal. Earlier this week, a ship left Mariupol for Russia with a cargo of metal. Ukraine said the shipment from the port, whose capture gave Moscow an overland bridge linking mainland Russia and pro-Russian separatist territory to annexed Crimea, amounted to looting.

Chevron CEO Sees Russian Oil Output Falling After Exit of Western Firms; Russia still has buyers for its oil, but will face difficulty overcoming loss of western technology and capital, Mike Wirth says
Collin Eaton – WSJ
Russia is still finding a home for much of its oil despite expanding sanctions, but its production likely will diminish following the departure of western oil companies, Chevron Corp. Chief Executive Mike Wirth said. In a meeting with Wall Street Journal reporters and editors this week, Mr. Wirth noted that many countries continued to buy crude from Russia, one of the world’s top oil producers along with the U.S. and Saudi Arabia. But he said that it would be difficult for Russia to overcome the loss of western technology and capital, noting that other once-large oil producers have seen output fall after sanctions and the pullout of international oil companies.

Russian Investors Have Quit Zimbabwe Platinum Project
Felix Njini – Bloomberg
Russia’s Vi Holding has quit its involvement in Zimbabwe’s Great Dyke Investments platinum company. The Russian company has ceded its 50% stake in the company to Zimbabwe’s Kuvimba Mining House Ltd., according to an email from Great Dyke, which didn’t give a reason for the change in shareholding. Igor Higer, who had served as Great Dyke chairman and is a represenative of Vi, said his company has exited the arrangement.

Fuel shortages across Africa hit motorists, airlines and radio stations; Continent’s lack of refining capacity compounds effect of turmoil in international markets
Joseph Cotterill – FT
South African motorists are complaining about record pump prices, Nigerian radio stations have warned that they will go off air because of the cost of diesel generators and airlines across the region are clubbing together to buy jet fuel. Africa produces about 8 per cent of the world’s crude oil, but a lack of refining capacity means it imports almost all of its fuel. As a result, it has been the continent hardest hit by the turmoil in international markets triggered by the war in Ukraine and the partial European embargo on Russian crude.


The Office Monsters Are Trying to Claw Their Way Back to 2019
Vivian Giang – NY Times
As long as work has existed, employers have tried to size up their employees’ commitment to their jobs. Are you on the fast track? The mommy track? The leadership track? Now, if some corporate leaders have their way, there will be a new test for workplace devotion — and anyone who opts for remote work gets a failing grade. But can CEOs really claw their way back to 2019?

The Internet Used to be Smaller and Nicer. Let’s Get It Back.
When ‘Star Trek’ alum Wil Wheaton started blogging over 20 years ago, he found a friendly, collaborative internet. He hasn’t lost hope it could exist again.
Wil Wheaton – WSJ
MY FIRST exposure to the internet was in two novels I read as a teenager: “Snowcrash” (1992) and “Neuromancer” (1984). They are set in dystopian visions of the future, where the power of technology has been co-opted to mostly control the population. But both feature independent, compelling protagonists who use their talents as hackers, digital natives, to save themselves, and a select group of those they care about. It was not hard to see myself as one of these cypherpunks, someone who cared about the privacy of everyone that wanted to use the internet. Someone who worried that corporations, if left unchecked, would turn us into digital serfs, just as authors Neal Stephenson and William Gibson had described.

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Bears Picked Right Stocks to Short With Declines Twice the S&P’s

Observations & Insight Editor's Note: The JLN Options Newsletter will not be published on Monday, July 4 in observation of the Independence Day holiday. Have a great weekend! Lead Stories Bears Picked Right Stocks to Short With Declines Twice the S&P's Lu Wang...

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Crypto: ‘Blockchain is hype’ – MPs warned

Crypto: ‘Blockchain is hype’ – MPs warned

First Read Hits & Takes John Lothian & JLN Staff Today we have two videos from my coverage of FIA's IDX in London, which I conducted in the Eurex branded lounge area outside The Brewery's doors. The first is with FIA Europe Head Bruce Savage, whom I literally...

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