Main Street investors pressure SEC, confront Wall Street on stock plan

Mar 10, 2023

First Read

Hits & Takes
John Lothian & JLN Staff

A letter sent by John Vassallo and Dennis Weinmann of Coquest arrived in my email box with the following message to be shared with you readers:

“As you may know, Coquest has been involved in litigation with the CFTC for several years over our previous practice of sometimes having entities in which we have an ownership interest take the other side of customers’ OTC block trades in certain energy derivatives without disclosing that fact to its customers. Yesterday, we consented to a motion by the CFTC to settle the litigation. This settlement, made on a neither admit nor deny basis, includes the company’s representation (at paragraph 33) that the conduct in question began after the Dodd-Frank legislation changed the rules governing certain disclosures and stopped in 2019 when Coquest learned that it had been misinterpreting the relevant disclosure rule. To ensure that the company has full understanding of its compliance obligations going forward, Coquest has hired a compliance consulting firm to advise us on compliance and reporting related issues.

We are pleased to put this dispute behind us and look forward to continuing to provide excellent service as we have for the last 33 years.

China’s President, Xi Jinping, has been confirmed for an unprecedented third term. He was sworn in as head of state for another five years.

I just turned 62 years old on Saturday, theoretically making me eligible to start taking Social Security. According to The Wall Street Journal, some people are starting to take Social Security early because they are concerned the program will run out of money, and they want to get money out while they can. Social Security is supposedly going to be depleted in 2034. In 2031, I will turn 70 and be eligible for the full Social Security payment. I can understand why some people might want to take the money and run now as they are depending on Congress to come up with a fix for Social Security and be fair to them. Since I am going to keep working until I am at least 70, I am going to put off collecting Social Security until then and put my faith in Congress to figure it out.

Speaking of Congress and old age, a story about the U.S. Senate pointed out that the average age of a U.S. Senator is currently 64 years old. It is good to know there are things I could still do and bring down the average age, if only by a little.

My wife Cheryl and I are staying in a retirement community where you have to be 55 or older to live here, which we both qualify for. My parents bought a place here in 1989, the year we married, and they spent their retirement winters down here. We are going to buy it from my brothers from the estate of my mother. It appears my younger brother Dave is going to buy the Williams Bay home from my mother’s estate, something I thought I was also going to have to buy. Dave moved to the Lake Geneva, Wisconsin area and bought a townhouse 18 months ago, so I thought he was settled. But he wants a home by the lake, and our family home meets the requirement.

I guess when you spend time in Florida, you start thinking of things like retirement, Social Security and the like. Florida is called “God’s waiting room,” after all.

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 Sustainable Stock Exchange Initiative (SSE) has shared videos of its TCFD 101 and TCFD 102 webinars on YouTube. The videos provide an overview of what climate-related reporting is and why it is important. They also provide participants with the global context and focus on the initial steps of how to address the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD.) Imminent ISSB standards are also discussed. You can view the videos here. ~ SAED


Rush Limbaugh’s Longtime Palm Beach Home Sells for $155 Million; The roughly 2.7-acre waterfront property was being shopped for $150 million to $175 million
E.B. Solomont – The Wall Street Journal
The longtime Palm Beach, Fla., home of the late conservative commentator Rush Limbaugh has sold for $155 million, according to property records. The roughly 2.7-acre waterfront property was quietly on the market last year, asking $150 million to $175 million, The Wall Street Journal reported. The sale is a record deal for Palm Beach, according to property records and real-estate appraisal firm Miller Samuel. In 2013, hedge-funder Ken Griffin paid $129.6 million for four parcels.

****** How much karma cleaner do you need for a $155 million property that belonged to Rush Limbaugh? ~JJL


Smartphones and social media are destroying children’s mental health; Evidence of the catastrophic effects of increased screen-time is now overwhelming
John Burn-Murdoch – Financial Times
Something is going very wrong for teenagers. Between 1994 and 2010, the share of British teens who do not consider themselves likeable fell slightly from 6 per cent to 4 per cent; since 2010 it has more than doubled. The share who think of themselves as a failure, who worry a lot and who are dissatisfied with their lives also kicked up sharply. The same trends are visible across the Atlantic. The number of US high school students who say their life often feels meaningless has rocketed in the past 12 years. And it’s not just the anglosphere. In France, rates of depression among 15- to 24-year-olds have quadrupled in the past decade.

****** Terry Duffy may be on to something with his “Social media is the black plague” of our current society.~JJL


The financial markets go down the rabbit hole; Investors and the Fed need to keep an eye on speculative positioning and generational bias
Gillian Tett – Financial Times (opinion)
Just when you might have thought that financial markets could not turn any funkier – they have. On Tuesday, Jay Powell, US Federal Reserve chair, indicated that the Fed may raise rates further than expected in order to combat inflation. Two-year Treasury yields duly jumped above 5 per cent for the first time since 2007. But 10-year yields barely moved. This pushed the yield curve deeper into an Alice-in-Wonderland state known as “inversion”, in which it costs more to borrow money short term than long term. By Wednesday, the gap had expanded to a negative 107 basis points – an extreme pattern only seen once before, in 1980 – when Paul Volcker, then Fed chair, was unleashing shock therapy.

***** We need the CFTC to fire up its fax machines and get its data flowing again, evidently.~JJL


Former SEC Commissioner Allison Herren Lee Joins Whistleblower Law Firm; Ms. Lee, who was the acting SEC chair in early 2021, has joined Kohn, Kohn & Colapinto
Mengqi Sun – The Wall Street Journal
Allison Herren Lee, a former commissioner of the U.S. Securities and Exchange Commission, has joined a whistleblower law firm. Ms. Lee is joining Kohn, Kohn & Colapinto LLP, a Washington-based law firm representing whistleblowers, the firm said late Wednesday. She will help represent whistleblowers, including those in cases related to securities, commodities and anti-money-laundering laws, as well as those involving problems related to environmental, social and corporate governance, according to Stephen M. Kohn, a founding partner of the law firm.

****** How does she know if the whistleblower is not just a catcaller?~JJL


Thursday’s Top Three
There was a glitch on our website yesterday due to some malicious code, so some of the links in the top three may not have worked for some. The links should be working now. Our top clicked story Thursday was ICE’s “Inside the ICE House” podcast, CME’s Terry Duffy Visits the NYSE, Reflecting on Trading Futures and the Future of Trading. Second was John Lothian’s commentary on that podcast, CME Group’s Terry Duffy Gets Warm Reception from Josh King’s Inside the ICE House Podcast, from JLN. Third was The Hack That Upended Derivatives Trading Spurs Calls for Action, from Bloomberg.


MarketsWiki Stats
27,231 pages; 243,395 edits
MarketsWiki Statistics


Lead Stories

Main Street investors pressure SEC, confront Wall Street on stock plan
John McCrank – Reuters
Main Street investors are facing off against Wall Street in an attempt to sway the U.S. Securities and Exchange Commission in its proposed revamp of stock trading. Individuals coordinating online have flooded the SEC with more than 1,300 comment letters, mostly voicing their support, on rules the regulator proposed in December that represent the biggest changes to equities trading in nearly two decades.

Regulators Sue to Stop ICE-Black Knight Deal. Traders Don’t Care; ICE has “reasonable good chance” winning in court: Jefferies; Spread implies market pricing in roughly 40% deal odds: survey
Yiqin Shen – Bloomberg
The Federal Trade Commission is suing to block Intercontinental Exchange Inc’s $13 billion acquisition of Black Knight Inc., but some traders are still betting that the companies will get the deal done. Black Knight shares dropped 2.6% to $59.42 on Thursday, remaining below ICE’s $75 offer but higher than its estimated standalone value, which is around $50, according to a Bloomberg News survey of merger arbitrage specialists and analysts. That means, the market is still pricing in a roughly 40% chance that the troubled merger, which is now expected to head to the court, will succeed.

US Banking System Can Weather SVB Contagion Risk, El-Erian Says
Gabriela Mello – Bloomberg
US banks can contain contagion risk and system stress stemming from the turmoil unleashed by Silicon Valley Bank, Mohamed El-Erian said. “Contagion risk and the systemic threat can be easily contained by careful balance sheet management and avoiding more policy mistakes,” El-Erian, the chairman of Gramercy Funds and a Bloomberg Opinion columnist, said in a tweet on Friday.

SVB Shares Drop 60% on Cash Crunch Concerns
Katie Roof, Hannah Miller, Gillian Tan and Priya Anand – Bloomberg
Unease is spreading across the financial world as concerns about the stability of Silicon Valley Bank prompt prominent venture capitalists including Peter Thiel’s Founders Fund to advise startups to withdraw their money. The turmoil followed a surprise announcement from Santa Clara, California-based SVB that it was issuing $2.25 billion of shares to bolster its capital position after a significant loss on its investment portfolio. The stock plunged 45% in premarket trading in New York on Friday, after a 60% decline the day before. Its bonds posted record declines, igniting a broad selloff in bank shares around the world.

The US Is Nabbing Europe’s Stock Listings. Are Headquarters Next? Where companies choose to locate their head offices is more than a matter of national pride.
Chris Hughes – Bloomberg
The uproar in the City of London surrounding the drift of stock-market listings to New York is a storm in a British teacup compared with the fury in Spain over the US ambitions of Ferrovial SA. The Madrid-based owner of Heathrow Airport wants to add a US listing – and move its headquarters to the Netherlands. The link between where a company’s shares trade and where its head office is located may be indirect, but it exists and deserves increased scrutiny.

‘Sheer panic’ has gripped Silicon Valley VCs and founders amid worries that the startup industry’s most important bank is in trouble
Anne Sraders, Jessica Mathews, Kylie Robison – Fortune
Silicon’s Valley’s clubby world of venture capital investors and entrepreneurs plunged into panic on Thursday amid fast-spreading reports of financial trouble at one the startup industry’s most important banks.

‘Too big to fail’ is back as Bill Ackman says government should consider a Silicon Valley Bank bailout
Nicholas Gordon – Fortune
It’s looking like 2008 for some investors in the private markets. Venture investors and tech founders are in “sheer panic” after Silicon Valley Bank, a prolific lender and important banking institution for the sector, said that it was taking steps, including a share sale, to cover large losses on its balance sheet.

One Bank Folds, Another Wobbles and Wall Street Asks If It’s a Crisis
Jenny Surane, Max Reyes and Hannah Levitt – Bloomberg
Silvergate Capital Corp.’s abrupt shutdown and SVB Financial Group’s hasty fundraising have sent US bank stocks diving and tongues wagging across the industry: Could this be the start of a much bigger problem?

SVB is not a canary in the banking coal mine; All we have to fear is fear itself, and that’s plenty
Robert Armstrong – Financial Times
Silicon Valley Bank
Shares in Silicon Valley Bank fell 60 per cent yesterday, after the company said it had made major changes to its balance sheet and would raise new equity. That is a big move but not – in the context of markets broadly – a particularly big story. After Thursday’s whipping, SVB’s market cap is just $6bn.

Ex-Goldman Banker’s Prison Term Previews What Former Boss Faces; Ng was only Goldman banker to face trial in global scheme; His supervisor who helped US stands to get shorter sentence
Patricia Hurtado – Bloomberg
The 10-year prison sentence handed down to former Goldman Sachs Group Inc. banker Roger Ng shows the enormous risk he took by going to trial to fight charges that he helped carry out the massive 1MDB fraud. It also raises a question about how much prison time a US judge will impose on Ng’s former boss, Tim Leissner, who pleaded guilty and testified against him as the government’s star witness, when Leissner is sentenced in September.

Silicon Valley Bank scrambles to reassure clients after 60% stock wipe-out
Krystal Hu, Anna Tong and Ananya Mariam Rajesh – Reuters
SVB Financial Group scrambled on Thursday to reassure its venture capital clients their money was safe after a capital raise led to its stock collapsing 60% and contributed to wiping out over $80 billion in value from bank shares. SVB, which does business as Silicon Valley Bank, on Wednesday to shore up its balance sheet. It said in an investor prospectus it needed the proceeds to plug a $1.8 billion hole caused by the sale of a $21 billion loss-making bond portfolio consisting mostly of U.S. Treasuries. The portfolio was yielding it an average 1.79% return, far below the current 10-year Treasury yield of around 3.9%.

Move Over Stablecoin. A New Token Is Coming; Bank deposits always covert to currency at face value. Or that’s what people believe. So why not put these liabilities on the blockchain?
Andy Mukherjee – Bloomberg (opinion)
The world of digital cash is divided into two camps. The traditionalists want a public authority to remain in charge of providing a safe medium of exchange for people to settle claims against one another. Or else, they say, private money could become as unreliable as in the pre-US-Civil-War era of wildcat banking, when notes issued by a lender in Tennessee would be discounted by 20% in Philadelphia.

SEC Is Focusing on Earnings Manipulation by Companies; Watchdog scrutinizes financial reports to sniff out accounting tricks
Jean Eaglesham – The Wall Street Journal
Regulators are scrutinizing whether companies are manipulating financial results to meet Wall Street targets, as a profit-squeeze amps up pressure on executives to “make the numbers.” This earnings season has been marked by falls in both reported profits and expectations of future returns. With more than 99% of S&P 500 companies having reported, fourth-quarter earnings are down 4.65%, according to FactSet. That is the first year-over-year decline since fall 2020, at the height of the pandemic.

Fed’s Michael Barr Calls for Stablecoin Regulation in Crypto Oversight; The central bank will release more guidance to banks and enhance supervision, says the vice chair
Hannah Miao and David Harrison – The Wall Street Journal
The Federal Reserve’s top banking regulator spotlighted stablecoins as a priority in Washington’s efforts to rein in crypto. Widespread adoption of stablecoins without regulation could be a threat to financial stability, Michael Barr, the Fed’s vice chair for supervision, said Thursday. He called on lawmakers to create legislation addressing the cryptocurrencies.

Fireside Friday with… LSEG’s Murray Roos; The group head of capital markets for London Stock Exchange Group (LSEG), Murray Roos, sits down with The TRADE to discuss his ambitions for the year and the growth opportunities he sees in the market.
Laurie McAughtry – The Trade
How is LSEG structured now, and how did you perform last year?
Broadly speaking, we organise ourselves into three asset classes: fixed income, FX and equities. The FX business was formally part of Refinitiv. We have been investing in the businesses that underly it, FX Matching and FXall, including re-platforming our FX Matching platform onto LSEG’s world-class technology. In Q3 this year, we will take the next step to harness the power of LSEG when we launch NDF Matching, which brings together FXall, our data and analytics, and our post-trade capabilities. We have also restructured our sales organisation and started to see increases in market share, as well as improving growth and revenues in our Matching business.

Ukraine Invasion

Russian Cyberwar in Ukraine Stumbles Just Like Conventional One
William Turton and Andrew Martin – Bloomberg
Even before Russia invaded Ukraine, its hacking offensive was well under way. Suspected Russian hackers targeted Ukrainian government and financial websites with so-called distributed denial-of-service attacks aimed at creating chaos; they bombarded government, nonprofit and IT organizations with malicious software designed to render computers inoperable; and, in a broadside widely blamed on Russia, they zeroed in on Viasat Inc.’s commercial satellite network, causing major disruptions in Ukrainian communications, including for military units, at a crucial early stage in the war.

Russia kills civilians in first huge missile wave for weeks
Pavel Polityuk and Andriy Perun – Reuters
Russia fired a huge wave of missiles across Ukraine on Thursday as people slept, killing at least nine civilians and knocking out power in an attack Kyiv said included six Kinzhal hypersonic cruise missiles, one of Moscow’s most valuable weapons. The mass strikes on targets far from the front were the first such wave since mid-February and shattered the longest calm since Moscow began an air campaign against Ukraine’s civil infrastructure five months ago.

Russia Tycoons to Unload Alfa-Bank Stake to Escape Sanctions; Fridman, Aven hope that sale would help ease EU restrictions; Billionaires to sell stakes to partner who’s not sanctioned
Bloomberg News
Russian billionaires Mikhail Fridman and Petr Aven have reached a deal to offload their stakes in Alfa-Bank, the country’s biggest privately owned lender, as they seek to ease European sanctions. Under the agreement, which is subject to regulatory approval, the two would sell their stakes to longtime partner Andrei Kosogov, who hasn’t been sanctioned, for 178 billion rubles ($2.3 billion), according to people familiar with the situation. It wasn’t immediately clear where Kosogov, a lower-profile executive who had the smallest stake in the bank before the other partners were sanctioned amid the war, would get the money.

Drunk Drivers’ Cars Are Being Sent to Ukraine by Latvia
Aaron Eglitis – Bloomberg
Cars seized by Latvian authorities as part of drunk-driving violations are being shipped to Ukraine in an act of solidarity with the war-battered country. Authorities in the Baltic nation, which began confiscating cars from motorists driving under the influence of alcohol in November, transported eight vehicles this week, the state revenue service said. They’ll be used for the Ukrainian military and hospitals. As many as 200 more are awaiting transportation, it said.

Military briefing: Russian hypersonic missiles bring new menace to Ukraine; Barrage of high-velocity projectiles reinforces need for better Ukrainian air defences
Ben Hall and Roman Olearchyk – Financial Times
Ukrainians were beginning to think they had won their “winter war” after riding out Russia’s repeated bombardment of their country’s power and heating system. A devastating missile strike early on Thursday – in which Moscow used several of its formidable hypersonic Kinzhal missiles – sent a brutal reminder that the threat is far from over.

Fight for Bakhmut Becomes Moment of Truth for Wagner Founder; Tensions rise between Kremlin elite and paramilitary force’s Yevgeny Prigozhin
Thomas Grove, Evan Gershkovich and Benoit Faucon – The Wall Street Journal
As forces from Russian paramilitary group Wagner fight to expel Ukrainian troops from the eastern city of Bakhmut, the group’s founder, Yevgeny Prigozhin, faces a defining moment. Mr. Prigozhin’s star rose as Wagner fighters gained ground in the war on Ukraine. He was allowed to recruit convicts from Russia’s vast prison system and was supplied with weapons by the government. This gave him a 50,000-strong fighting force and a new, heavily armed power base.

Exchanges, OTC and Clearing

ICE Benchmark Administration Announces Intention to Launch SOFR Spread-Adjusted ICE Swap Rate as a Benchmark
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of data, technology, and market infrastructure, today announced that ICE Benchmark Administration Limited (IBA) plans to launch U.S. dollar (USD) SOFR Spread-Adjusted ICE Swap Rate for use as a benchmark in financial contracts and financial instruments by licensees on July 3, 2023. IBA has been publishing USD SOFR Spread-Adjusted ICE Swap Rate settings on an indicative, ‘Beta’ basis for an initial testing period since October 2021. The settings are determined in line with the methodology suggested by the Alternative Reference Rates Committee (ARRC) in its paper “Suggested Fallback Formula for the USD LIBOR ICE Swap Rate”. USD SOFR Spread-Adjusted ICE Swap Rate ‘Beta’ settings are available here.

Euronext announces March 2023 quarterly review results of the MIB ESG
Euronext today announced the results of the quarterly review for the MIB ESG index, which will be implemented after markets close on Friday 17 March 2023 and will be effective from Monday 20 March 2023. MIB ESG Index No changes in the composition of the index.Euronext retains the right to change the published selection, for instance in the case of a removal due to a takeover, until the publication of the final data after close of Wednesday 15 March 2023.

JSE Rings the Bell for Gender Equality marking International Women’s Day
Johannesburg Stock Exchange
On 8 March 2023, International Women’s Day (IWD) was celebrated across the globe. The day aims to honour the many social, economic, cultural and political achievements of women, raise awareness about and accelerate women’s equality and be a call-to-action for realising gender parity. To champion a gender-equal world under the 2023 theme that calls for digital integration and transformation, the Johannesburg Stock Exchange (JSE) once again participated in the Ring the Bell for Gender Equality campaign this year. Now in its ninth year, this global initiative is a partnership between the International Finance Corporation (IFC), the World Federation of Exchanges (WFE), the Sustainable Stock Exchanges (SSE) initiative, the UN Global Compact and UN Women to foster gender equality, sustainable development, and women’s empowerment in the workplace.

LME Asia Week 2023: Dinner And Sponsorship Announcement
London Metal Exchange
1. This notice provides an update on LME Asia Week 2023, including the process for table bookings for the LME Asia Dinner and sponsorship packages. 2. As part of LME Asia Week 2023, the London Metal Exchange (LME) is hosting the LME Asia Metals Seminar and LME Asia Dinner on Tuesday 16 May 2023 in Hong Kong SAR. 3. LME Asia Week brings together leading voices in the commodities industry globally, to discuss opportunities and challenges facing the industry today.

Nasdaq Announces End of Month Open Short Interest Positions in Nasdaq Stocks as of Settlement Date February 28, 2023
At the end of the settlement date of February 28, 2023, short interest in 3,441 Nasdaq Global MarketSM securities totaled 10,071,117,158 shares compared with 9,937,951,277 shares in 3,455 Global Market issues reported for the prior settlement date of February 15, 2023. The end of February short interest represents 2.78 days average daily Nasdaq Global Market share volume for the reporting period, compared with 2.68 days for the prior reporting period.

NSE Indices launches Nifty SDL Plus G-Sec June 2027 40:60 Index
NSE’s index services subsidiary, NSE Indices Limited today launched a new target maturity index namely, Nifty SDL Plus G-Sec June 2027 40:60 Index. The Nifty SDL Plus G-Sec June 2027 40:60 Index follows a target maturity structure with maturity date of June 30, 2027. It includes State Development Loans (SDLs) and government securities (G-Secs) maturing during the six month period ending June 30, 2027 with investment into SDLs & G-Secs in the 40:60 ratio.

TAIFEX Chairman Wu to Attend FIA Boca, Meet Exchange Leaders and Expand International Cooperation
Chairman Tzu-Hsin Wu will lead the delegation of Taiwan Futures Exchange (TAIFEX) to participate in the U.S. Futures Industry Association’s (FIA) annual conference in Boca Raton, Florida, from March 14 to 16, 2023. With an intense timetable packed with bilateral meetings, TAIFEX has scheduled to meet top executives of several global partners including CME Group, Nasdaq, Intercontinental Exchange, Cboe Global Markets, and FTSE Russell, as well various information vendors and foreign institutions, aiming at expanding its global outreach.

Moscow Exchange announces financial results for 2022; Unless otherwise noted, all figures are for 2022 and dynamics (percentage change) are year-on-year based on IFRS financials.
Main Results IN 2022 Fee and commission income decreased by 9.8% to RUB 37.5 billion, due to a decrease in trading volumes by non-residents and prices of ruble-denominated assets. Operating expenses increased by 16.2% compared to 2021 and were well within the forecast range. EBITDA increased by 28.4% to RUB 49.7 billion. Net profit increased by 29.2% to 36.3 billion rubles.


FIX EMEA 2023: ‘Divergence is in the hands of the UK’; Panellists seemed hopeful that regulators globally were taking a more coordinated approach to policymaking.
Annabel Smith – The Trade
FIX EMEA 2023 kicked off with a regulatory focus yesterday with panels and keynote speeches exploring the global regulatory outlook for the year to come. The morning’s panels played an effective game of regulatory bingo, touching on the consolidated tape, outages on exchanges, crypto regulation and the move to T+1.

FIX EMEA 2023: Is the industry ready for T+1?; With the US set to shift to T+1 settlements in May next year, panellists discussed the impact on international markets and whether the UK and EU should follow suit.
Wesley Bray – The Trade
At the FIX EMEA Trading Conference 2023, the shift to T+1 settlements was a huge topic of discussion, especially given the US Securities and Exchange Commission’s confirmation to implement the accelerated settlement time from 28 May 2024. With T+1 now confirmed in the US, panellists at the conference discussed whether the industry is ready for the transition, how it will impact international business, time needed to prepare and whether or not the UK and EU should follow the US’ lead.


Hackers are quickly learning how to breach cloud systems
Sam Sabin – Axios
Hackers are quickly finding flaws in organizations’ cloud infrastructure despite perceptions that the technology is ironclad against cyberattacks. The big picture: Organizations have invested billions of dollars in recent years to move their digital data from traditional, on-premise enterprise storage solutions to the cloud. That investment is expected to keep growing and reach close to $600 billion this year. The high price of relocating data was largely paid for one reason: It’s far more difficult for hackers to break into an organization’s cloud systems. But recent research and incidents underscore how quickly malicious hackers are adapting to the new reality.

Biden’s budget proposal underscores cybersecurity priorities
Tim Starks – The Washington Post
President Biden on Thursday proposed a fiscal 2024 budget that emphasizes his cybersecurity priorities, from new ideas like supporting his national cyber strategy to continuations of old ones, like providing further cyber assistance to Ukraine. “The budget continues to invest in cybersecurity programs recognizing that cybersecurity is essential to the basic functioning of our economy, the operation of our critical infrastructure, the strength of our democracy and democratic institutions, the privacy of our data and communications, and our national security,” a White House fact sheet reads.

Wall Street regulator to unveil new cybersecurity, customer data rules
The top U.S. markets regulator is set to unveil a new effort to control how broker-dealers and others tackle the risk of hacking and respond to theft of customer data, continuing a regulatory drive on cybersecurity in the financial sector. The Securities and Exchange Commission’s five members are due to vote March 15 on issuing three new proposals, according to the agency’s website. Since last year, the commission has unveiled a series of cybersecurity proposals citing increased danger to public companies and investors.


Crypto Bros Turn Back Time on Their Rolexes, Patek Philippes; Many of those who bought luxury timepieces during the boom of 2022 have been forced to sell. But those bargains might soon run out.
Andrea Felsted – Bloomberg
Inflation? What inflation? It’s gotten so much cheaper to get your hands on a Rolex. After a boom and bust in the market for pre-owned watches over the past three years, there have lately been signs of stability, particularly for Rolex. Time may now even be running out for bargain hunters, though that will depend on whether crypto bros are finished offloading their collections and if a resurgent China compensates for slowing demand in the US.

FTX’s Singh Bought His Dream House in October. It’s the Government’s Now; Former chief engineer bought house just before FTX collapsed; He has agreed to forfeit home, which US says is tied to crimes
Ava Benny-Morrison – Bloomberg
Late last year FTX engineering chief Nishad Singh snapped up a Pacific Northwest vacation home with a commanding view of the San Juan Islands as a retreat from his job at the red hot crypto exchange. Now it will go to the US government, after Singh agreed to forfeit the six-bedroom, $3.7 million property as part of his guilty plea in the federal fraud case over the exchange’s implosion, according to people familiar with the case. They spoke on the condition of anonymity because the forfeiture was redacted from court records.

SWIFT to Conduct More Tests With CBDC Project
Jack Schickler – CoinDesk
A project run by interbank messaging company SWIFT to connect central bank digital currencies, or CBDCs, offers “clear potential and value,” the company said in a statement on Thursday. The project, which included banks such as France’s BNP Paribas, Italy’s Intesa Sanpaolo and the U.K.’s Standard Chartered (STAN), as well as the central banks in France and Singapore, will now move on to a second phase of testing to assess applications like trade finance and securities settlement.

Three Arrows Founders’ Bankruptcy Exchange to Offer Claims as Portfolio Margin
Oliver Knight – CoinDesk
Zhu Su and Kyle Davies, the founders of bankrupt hedge fund Three Arrows Capital, last month teamed with the co-founders of troubled crypto exchange CoinFLEX to create Open Exchange, calling it the “world’s first public market place for crypto claims trading and derivatives.”

Cryptocurrency Subreddit Launches New MOON Token Pool on SushiSwap
Nivesh Rustgi – Decrypt
The popular subreddit r/CryptoCurrency has joined SushiSwap’s dual rewards program Onsen to provide liquidity providers (LPs) with exchange fees, SUSHI, and MOON rewards. The key objective, according to a governance post from February, is to deepen the MOON token liquidity.

U.S. crypto exchanges could face possible class-action lawsuit
Eleanor Terrett and Charlie Gasparino – FOX Business
Crypto’s latest headache could be a big class action lawsuit filed on behalf of retail investors against top U.S. crypto exchanges. Long time securities lawyer Tom Grady, known as one of the nation’s leading investment fraud attorneys, is preparing for potential litigation against the nation’s biggest crypto exchanges Coinbase, Robinhood, Kraken and others, according to a press release reviewed by FOX Business.

New York Attorney General Sues KuCoin, Claims Ethereum Is a Security
Guillermo Jimenez and Mathew Di Salvo – Decrypt
The New York Attorney General’s office today filed a lawsuit against cryptocurrency exchange KuCoin for allegedly violating securities and commodities laws in the state. In the complaint, Attorney General Letitia James makes the startling claim that not only are Terra (LUNA) and TerraUSD (UST) securities, as previously alleged by the United States Securities and Exchange Commission, but also Ethereum (ETH), the second-largest cryptocurrency by market capitalization.

GQ Magazine NFT Drop Flops-And the Floor Is Falling Fast
Andrew Hayward – Decrypt
GQ is the latest legacy print magazine to make moves in Web3 with the launch of its GQ3 community and the associated Ethereum NFT drop, which promised various benefits to buyers. But the men’s lifestyle magazine failed to sell out its mint, and now the brand is apparently trying to keep NFT buyers happy as resale prices fall. The GQ3 NFT mint began Wednesday, with 1,661 total NFT access passes offered up for 0.1957 ETH apiece-about $290 worth as of this publication. But when the mint window ended this morning, only 1,060 of the NFTs had been sold per data from the OpenSea marketplace.

What is a rug pull?
Nina Semczuk – Bankrate
A rug pull is a scam where a cryptocurrency or NFT developer hypes a project to attract investor money, only to suddenly shut down or disappear, taking investor assets with them. The name comes from the idiom “to pull the rug out” from under someone, leaving the victim off-balance and scrambling.


US seeks to avoid EU trade rivalry over clean energy spending; Energy secretary Jennifer Granholm: ‘make sure we can do this in a way that lifts all’
Derek Brower – Financial Times
US energy secretary Jennifer Granholm sought to ease clean energy trade tensions with the EU, saying the Biden administration was seeking to build supply chains with “countries whose values we share”. The US and EU were in talks about a free trade-style deal around clean technology, she said, which could soothe European anxieties that the US’s $369bn in new subsidies for low-carbon energy would suck capital across the Atlantic.

President Kamala Harris? Dems on Wall Street are betting on it
Lydia Moynihan – NY Post
Reports of the death of Kamala Harris’ political career have been greatly exaggerated, Wall Street donors told On The Money. While it may sound far fetched to many, some Wall Streeters have quietly begun to place bets on the historically unpopular veep for a 2024 White House bid. Harris – who has suffered dismal ratings following reports of complaints from staffers about a toxic work environment and a botched handling of the southern border – is now the darling at fundraisers.

Texas Gas Market Gets New Calls for Transparency Two Years After Storm Uri; State lawmaker plans bill to create independent gas monitor; Proposed legislation comes two years after deadly winter storm
Rachel Adams-Heard – Bloomberg
Texas’s notoriously opaque natural gas market is getting fresh calls for transparency and oversight, two years after the 2021 winter storm that left millions in the dark and more than 200 dead. Texas Representative John Bryant, a Democrat, is planning on introducing a bill this week that would establish an independent monitor for the natural gas market in Texas in order to detect potential manipulation.

Boris Johnson Wants to Knight His Dad? That’s Britain; The former prime minister may be causing the latest dismay, but much of Britain’s political class no longer knows how to behave.
Martin Ivens – Bloomberg
The emperor Gaius Caligula showed his contempt for the legislature, it’s rumored, by making his horse Incitatus a Roman consul. In his resignation honours list, Boris Johnson, a keen student of the classics, has nominated his father Stanley for a knighthood for his work on environmentalism. We suppose Johnson thinks more highly of his father’s talents than Caligula did of his trusty steed’s, but the news has been greeted with a similar level of dismay. An opinion poll suggests that only 4% of voters approve of the new “Gong for Dad” campaign.

Xi Jinping confirmed for unprecedented third term as China’s president; Most powerful leader since Mao sworn in as tensions with US and economic challenges at home deepen
Joe Leahy – Financial Times
Xi Jinping began an unprecedented third term as China’s president on Friday, cementing his unchallenged grip on power amid growing tensions with the US and deepening economic challenges at home. In a solemn ceremony at Beijing’s Great Hall of the People, China’s most powerful leader since Mao Zedong was sworn in as head of state for another five years.


Equities traders bear cost of US crypto enforcements; Plus, Silvergate closes its doors
Scott Chipolina – Financial Times
To say that the US’s main markets regulator, the Securities and Exchange Commission, is being kept busy by crypto is an understatement. The names that the SEC has gone after this year would have qualified as most of the industry’s Hollywood A-list a year ago. There’s been Coinbase, Kraken, Gemini, Genesis and Terraform Labs’ Do Kwon, as well as many senior executives from FTX. It tried to stop Binance US from purchasing the assets of bankrupt lender Voyager Digital, until a judge ruled against it this week.

FINRA Fines Webull $3 Million for Options Customer Approval Violations; Firm Also Failed to Maintain Supervisory System, Report Customer Complaints
FINRA announced today that it has fined Webull Financial LLC $3 million for not exercising reasonable due diligence before it approved customers for options trading; not maintaining a supervisory system reasonably designed to identify and respond to customer complaints; and not reporting certain written customer complaints to FINRA as required.

SEC Charges Software Company Blackbaud Inc. for Misleading Disclosures About Ransomware Attack That Impacted Charitable Donors
The Securities and Exchange Commission today announced that Blackbaud Inc., a South Carolina-based public company that provides donor data management software to non-profit organizations, agreed to pay $3 million to settle charges for making misleading disclosures about a 2020 ransomware attack that impacted more than 13,000 customers.

SEC Obtains Final Judgments Against Canadian Public Company and Its CEO in Fraudulent Microcap Scheme
On March 8, 2023, the U.S. District Court for the District of Massachusetts entered final judgments against Canadian citizen Bradley Moynes and Canadian corporation Digatrade Financial Corp., in connection with the SEC’s allegations that they engaged in a deceptive scheme involving microcap companies that generated more than $1.5 million in unlawful stock sale proceeds at the expense of unsuspecting retail investors. Among other things, the defendants have been ordered to pay a total of over $3.4 million in disgorgement of ill-gotten gains, prejudgment interest, and civil penalties.

SEC Settles Insider Trading Charges Against Spouse of Corporate Insider
The Securities and Exchange Commission announced today that California resident Mahmoud Abdelkader has agreed to settle charges for insider trading in the securities of Audentes Therapeutics, Inc. before the December 2, 2019 public announcement that Audentes would be acquired by Astellas Pharma, Inc. for approximately $3 billion.

ANZ penalised $10 million over non-compliant Home Loan Introducer Program
ANZ has been penalised $10 million by the Federal Court in relation to its Home Loan Introducer Program (Introducer Program). The Introducer Program involved home loan referrals to ANZ from third party ‘introducers’ from various professions, including cleaners and real estate agents.

ASIC continues its focus on improved material business risk disclosure in annual reports
ASIC’s ongoing financial reporting surveillance program and subsequent inquiries of a selection of 30 June 2022 annual reports has led to a further six listed entities disclosing material business risks in their 31 December 2022 interim financial reports.

Final ASIC update: Compensation for financial advice related misconduct as at 31 December 2022
Six of Australia’s largest banking and financial services institutions have paid or offered a total of $4.7 billion in compensation, as at 31 December 2022, to customers who suffered loss or detriment because of fees for no service misconduct or non-compliant advice.

FMA warns Du Val Capital Partners Limited over misleading or deceptive statements to investors in the Du Val Mortgage Fund
Financial Markets Authority
The FMA has warned Du Val Capital Partners Limited (DVCP), the general partner of the Du Val Mortgage Fund Limited Partnership (Du Val Mortgage Fund, MFLP, the Fund) and Du Val Group. The FMA is satisfied that DVCP and Du Val Group may have breached section 19 of the Financial Markets Conduct Act 2013 (FMC Act) by engaging in misleading or deceptive conduct, or conduct that is likely to mislead or deceive investors in the Du Val Mortgage fund, in relation to dealing in financial products.

Joint consultation on changes to the OTC derivative Clearing Rules
Securities & Futures Commission of Hong Kong
The Hong Kong Monetary Authority (HKMA) and Securities and Futures Commission (SFC) today launched a joint consultation on proposed changes to the types of transactions subject to clearing obligations under the Clearing Rules (Note 1) for over-the-counter (OTC) derivatives (Note 2).

Investing and Trading

US taps big trading houses to help move price-capped Russian oil
David Sheppard, Derek Brower and James Politi – Financial Times
The US has privately urged some of the world’s largest commodity traders to shed concerns over shipping price-capped Russian oil, in a bid to keep supplies stable and regain some oversight of Moscow’s exports. US Department of Treasury officials met executives and traders at Trafigura and Gunvor among others, according to five people familiar with the talks, and offered reassurances over expanding their role in Russian crude and fuels trade without breaching western restrictions.

Rookie Traders Are Earning $400,000 in One Unlikely Markets Hub; City has become an Asia-Pacific base for tech-driven trading; Citadel Securities, IMC, Optiver hired rapidly, plan more
Patrick Winter – Bloomberg
Graduate traders are earning salaries of as much as $400,000 straight out of school. But this isn’t New York, London or Hong Kong. It’s Sydney, where firms including Citadel Securities, IMC Trading BV and Optiver BV have established bases, hired rapidly and plan to employ even more. Elite recruits with math and science backgrounds can command up to that amount, people familiar with the matter said, asking not to be identified as the information is private.

SVB Financial stock tumbles 22% after hours on reports of funds advising clients to pull money from bank
Claudia Assis – MarketWatch
SVB Financial Group fell more than 22% in the extended session Thursday as reports surfaced that several funds are advising clients to pull their money from Silicon Valley Bank. Bloomberg News late Thursday reported that Founders Fund, the San Francisco-based venture-capital fund co-founded by Peter Thiel, has advised companies to do just so. The report cited people familiar with the matter.

Banks Throw Markets a Curveball; Signs of banking distress are jolting bonds and adding to the litany of worries for investors figuring out where the US economy is at.
John Authers – Bloomberg
Is This the Real Life? Is This Just Fantasy?
The economic data for January were unbelievably strong. So strong, in fact, that many didn’t believe them. With the imminent publication of the US employment report for February, all kinds of theories are about to be put to the test. They may require the drastic repricing of the bond market that has taken place in the last month to be undone.

Investors nervously watch for impact of ECB shrinking its bond holdings; Overall borrowing costs for eurozone governments have risen sharply in the past year
Martin Arnold and George Steer – Financial Times
Investors expect the European Central Bank to accelerate the shrinking of its balance sheet this summer, testing their appetite for eurozone sovereign debt as cash-strapped governments also turn to markets to raise funds. The shift by the ECB to tighten its policy stance is likely to drive up government borrowing costs in more heavily indebted southern European countries once “investor fatigue” from more bonds flooding the market sets in, some analysts warned.

‘Cut stamp duty to boost UK stocks’, brokers urge; Trade groups in plea to halt the loss of London listings
Mary McDougall – Financial Times
The Treasury should slash the taxes applied to UK share transactions to help boost investment and curb the exodus abroad of stock market listings, trade groups and brokers have urged. Investors buying shares listed on the main London Stock Exchange pay a transaction tax of 0.5 per cent. For shares traded electronically, this is known as stamp duty reserve tax and is deducted automatically through the Crest settlement system.

Environmental, Social and Corporate Governance

ESG Reporting Standards Are Coming: Here’s What You Need to Know
Sarah Thompson and Nicola Milne – TabbForum (opinion)
The Inaugural IFRS Sustainability Symposium. On February 16 and 17, 2023, RBC sponsored the inaugural IFRS Sustainability Symposium in Montreal. The two-day event convened global businesses, investors, service providers, and policymakers to discuss progress towards a global baseline of sustainability disclosures. The main day of the Symposium began with several notable updates related to the two Draft Standards, S1 and S2. After receiving over 1,400 comment letters and conducting extensive consultations, Emmanuel Faber, Chair of the International Sustainability Standards Board (ISSB), announced that the ISSB had finalized the technical content of S1 and S2. The Standards will now enter a drafting and approval process and are expected to be published toward the end of Q2 2023. The Standards will become effective for annual reporting periods beginning on or after January 1, 2024, which means that we can expect to see the first disclosures aligned with the IFRS Sustainability Disclosure Standards to be published in 2025.

How Artificial Intelligence is Enabling ESG Reporting
Ben Howard-Cooper – ESG Investor
The transition to a sustainable economy requires vast amounts of capital to flow into environmentally and socially positive activities at an unprecedented scale and pace. Europe is leading the way with flagship regulations including the EU Taxonomy and CSRD, which provide a clear framework to define truly sustainable projects and mitigate “greenwashing”. However, the complexity of data disclosure requirements embedded in these regulations creates usability issues and limits the capacity for the market to comply. Primarily, there is an incredible amount of granular data that needs to be collected from a broad array of stakeholders, many of whom are simply not up to date on ESG frameworks. Thankfully, there are emerging technology solutions that can help manage these issues at scale, including Artificial Intelligence (AI) and in particular natural language processing (NLP).

High Time for a High Seas Deal
Chris Hall – ESG Investor
A selection of this week’s major stories impacting ESG investors, in five easy pieces. Progress this week on protecting oceans gave further evidence of the power of multilateralism to address systemic risks.

UN buys huge ship to avert catastrophic oil spill off Yemen
Gareth Evans – BBC News
The UN has purchased a huge ship that it hopes will prevent an environmental catastrophe off the coast of Yemen. For years, more than a million barrels of crude oil have been sitting on a decaying supertanker in the Red Sea. There are fears the vessel could soon break apart or explode, risking one of the worst oil spills in recent memory. But on Thursday, the UN said it had purchased a crude carrier that would head to Yemen and remove the oil from the stricken ship.

Apple TV’s Extrapolations Pits A-List Actors Against the Climate Crisis; A new series from the writer of Contagion dramatizes life in the not-so-distant future on a warming planet.
Todd Woody. – Bloomberg
Filmmaker and writer Scott Z. Burns is not known for science fiction, but he has an uncanny track record of foretelling the future. Burns wrote the 2011 movie Contagion, which anticipated the Covid-19 pandemic. Before that, he was a producer of Al Gore’s prescient 2006 climate change documentary, An Inconvenient Truth. And next week will see the arrival of Extrapolations, Burns’ star-studded Apple TV+ series that dramatizes a near-future in which the climate crisis intensifies. It’s the first time a scripted television show has attempted to depict the all-too-probable realities of daily life in a world where carbon levels continue their inexorable rise.

What would you pay for a sustainable home? New-build developers are enticing buyers with a raft of green features – at a premium
Zoe Dare Hall- Financial Times
In an east London backstreet, on an old light industrial site, a new terrace of homes promises “planet-positive” living. The Arbour’s 10 properties, priced £950,000-£1.5mn, are designed to be carbon negative, energy positive and zero waste. By being carbon negative, these homes go a step further than being carbon neutral or net zero. Built from recycled materials – including foundations formed of bricks and blocks from the old buildings that stood on the site, and shower enclosures made from recycled yoghurt pots – they should absorb more carbon from the atmosphere than they produce, both during construction and from day one of their life cycle. Even the carbon emissions of transporting materials have been included in the equation.

Jenny Odell Worries About the Migratory Patterns of Birds; In her new book, Saving Time: Discovering a Life Beyond the Clock, the bestselling author examines how time impacts the climate crisis and personal dread.
Carly Wanna – Bloomberg
“If I see fewer ducks, I feel concerned. I want to know what happened to them. Why aren’t there more of them?” Jenny Odell, author of How to Do Nothing: Resisting the Attention Economy, thinks a lot about how human patterns can disrupt natural ecosystems. This week, she released her new book, Saving Time: Discovering a Life Beyond the Clock, about how time connects with the climate crisis and our personal lives. -As told to Carly Wanna. I was very exhausted, lying on the couch in my apartment, staring out the window, and thinking that I was hallucinating because there were 40 or 50 birds in the top of this redwood tree in the backyard. They were all facing the same direction, and it was in the late afternoon, so the sun was hitting them, and they looked super yellow.

Six Benefits of Using Outside-In Stakeholder Views in ESG Evaluations
Mackenzie Hargrave – TabbForum (opinion)
Getting a Complete View of ESG. Using multiple data sources to evaluate a company’s environmental, social, and governance (ESG) performance has become commonplace for investment professionals. As ESG issues are becoming increasingly important to asset owners, regulators, and investors, incorporating multiple sources for ESG information offers a means to support performance evaluations-despite the lack of standardized disclosures, transparent scoring methodology, and consistent data availability.

The Cornish village getting its heat from beneath the street; Could a new shared network of ground-source heat pumps provide a model for decarbonising millions of UK homes?
Roger Harrabin – Financial Times
This is the year Vicki Spooner and her family finally got cosy at home in the Cornish village of Stithians. The village is not on the gas grid, so for years Vicki, her husband and two boys relied on an oil boiler, which coughed clouds of noxious fumes on to their patio. Then they decided to invest in an air-source heat pump, which acts like a fridge in reverse. It didn’t stink like the oil burner, but nor did it produce as much heat as they wanted. Then the family was offered the chance to join a groundbreaking new project that might change the way many homes are heated – particularly in off-grid villages and on new estates.

Blended Finance: Big Change Means More Than Big Numbers
Emmy Hawker – ESG Investor
The EMDE funding agreement between the European Commission, EIB has been welcomed, but global goals need global reform. Public sector-led funding initiatives, such as the EU’s latest commitment to invest in sustainability-focused projects across select emerging markets and developing economies (EMDEs), will not meaningfully reduce the private sector investment gap in the blended finance market, said experts calling for systemic reform. Last month, the European Investment Bank (EIB) and European Commission signed guarantee agreements to mobilise up to EUR3.5 billion in lending under the European Fund for Sustainable Development Plus (EFSD+) and EUR500 million to the ACP Trust Fund to support sustainable development-focused businesses across African, Caribbean and Pacific (ACP) countries until 2027.

US solar power installations slow in setback for climate goals; Trade restrictions and red tape on grid cause 16% decline in capacity additions
Amanda Chu – Financial Times
The pace of new US solar power installations decelerated last year for the first time since 2018, undercutting goals to cut carbon emissions from electricity supplies. The 20.2 gigawatts of added generating capacity amounted to a 16 per cent decline from 2021 as a result of “policy-driven supply constraints”, according to a report released on Thursday by Wood Mackenzie and the Solar Energy Industries Association. Obstacles to greater deployment included trade restrictions and supply chain problems.

Planet-Saving Wind Farms Fall Victim to Global Inflation Fight; From New York to the North Sea, offshore projects face delays as investment foundations crumble.
Josh Saul, Will Mathis and Rachel Morison – Bloomberg
Off the coast of New England, winds whip over the frigid Atlantic Ocean creating perfect conditions for giant offshore turbines. While plans are in place to tap that natural power to generate electricity, progress – here and around the world – is being held up by soaring inflation. As investment foundations crumble due to rising interest rates and higher materials costs, developers in the US are delaying clean-power projects like the 1.2-gigawatt Commonwealth Wind development near Massachusetts, which would be one of the largest wind farms in the country and capable of powering 700,000 homes.


Thiel Fund, Venture Firms Advise Companies to Pull Money From SVB; Founders Fund and others advise companies to limit exposure; Panic spreads in tech circles about bank’s financial situation
Katie Roof, Hannah Miller, Gillian Tan and Priya Anand – Bloomberg
Panic spread across the startup world as worries about the financial health of Silicon Valley Bank, a major lender to fledgling companies, prompted Peter Thiel’s Founders Fund and other prominent venture capitalists to advise portfolio businesses to withdraw their money, even as the bank’s top executive urged calm.

JPMorgan must hand over CEO Dimon’s records in Jeffrey Epstein lawsuit
Jonathan Stempel – Reuters
A U.S. judge on Thursday ordered JPMorgan Chase & Co to hand over more documents concerning Chief Executive Jamie Dimon to the U.S. Virgin Islands for the territory’s lawsuit accusing the bank of aiding in Jeffrey Epstein’s sex trafficking. U.S. District Judge Jed Rakoff in Manhattan said the bank must turn over requested documents from 2015 to 2019, a period after JPMorgan had dropped Epstein as a client. Rakoff did not explain his reasoning in his one-sentence order. JPMorgan declined to comment.

Signature Bank says its financial position is ‘strong’ but stock falls anyway
Steve Gelsi – MarketWatch
Signature Bank issued fresh comments Thursday about its financial strength as its stock price got caught up in steeper losses by two other financial firms. Signature Bank stock, a component of the S&P 500, dropped 8.4%, as investors reacted to its digital currency exposure, which is being reduced. New York-based Signature Bank said it’s maintaining a “strong, well-diversified financial position and limited digital-asset related deposit balances in the wake of industry developments.”

Singapore’s Central Bank Boosted Gold Reserves 30% in January; City-state’s biggest purchase since the 1960s: BullionStar; Central banks are building up holdings of the precious metal
Ranjeetha Pakiam – Bloomberg
Singapore boosted its gold reserves by about 30% in January, joining central banks from China to Turkey in building up holdings of the precious metal. The Monetary Authority of Singapore’s bullion reserves rose to 6.4 million fine troy ounces, or 199 tons, at the end of January, up from 4.9 million ounces a month earlier, a spokesperson for the central bank said in response to emailed questions. The total value of its bullion was $4.5 billion at the end of the period, the authority said.

Former Goldman Sachs banker Roger Ng sentenced to 10 years for 1MDB fraud
Stefania Palma – Financial Times
Roger Ng, the former Goldman Sachs banker convicted in connection with the multibillion-dollar embezzlement scheme at 1MDB, was sentenced to 10 years in prison on Thursday in a New York court, the latest chapter in one of the biggest financial scandals in recent history. Last year, a US jury in Brooklyn found Ng, a 50-year-old Malaysian citizen, guilty on all three counts in his case: conspiring to violate US anti-bribery laws, conspiring to launder money and conspiring to skirt Goldman’s internal accounting controls.

Credit Suisse shares hit new all-time low as banks hit by U.S. fallout
Credit Suisse shares hit a new all-time low in early trading on Friday as the European banking sector suffered the fallout from a sharp sell-off in U.S. financial stocks. The embattled bank’s stock fell to 2.463 Swiss francs on the Swiss Market Index amid the sell-off.

A Hedge Fund Trader Gained 119% Betting Against Malls. Now He’s Targeting Offices; McNamara sees default risks across US commercial real estate; Nearly $92 billion of office debt is due to mature in 2023
Erin Hudson, Neil Callanan and John Gittelsohn – Bloomberg
A hedge fund manager who made a 119% return shorting debt linked to shopping malls is betting on fresh pain in the US commercial property market. A large number of older offices will fail to lure back workers in the post-Covid era, making them less attractive to occupiers and spurring a wave of defaults, according to Daniel McNamara, founder of Polpo Capital Management.

Work & Management

The return to the office once seemed inevitable. A new study shows companies are already reversing course
Gleb Tsipursky – Fortune
Extensive headlines about companies ordering employees back to the office might make the return to the office seem inevitable. Do these headlines reflect the reality-or are they just clickbait for anxious workers who want to avoid the threat of a forced return? Recent survey data from The Conference Board provides a surprising insight into how companies are approaching hybrid workplace policies. After surveying 1,100 corporate executives across several industries around the globe, including 24% from the U.S., the findings revealed that the return-to-office mandates of companies such as Amazon, Disney, and Starbucks represent the exception, not the rule. In fact, of the CEOs from the U.S., a puny 3% indicated they would decrease the availability of remote work in their companies.

Citigroup to recalibrate investment banking workforce as required- Bloomberg News
Citigroup Inc’s (C.N) chief financial officer Mark Mason said that the lender would adjust its investment banking headcount as necessary, Bloomberg News reported on Wednesday. Citigroup, which has been boosting its investment banking division by hiring for sectors including energy and biotechnology over the years, is considering changing the pace of some of its investments following the recent drought in dealmaking, the report added, citing Mason’s interview with Bloomberg Television.

Discord Adds OpenAI Functions to Offerings From Chat to Moderation
Cecilia D’Anastasio – Bloomberg
Discord Inc. announced a bevy of plans on Thursday to expand artificial intelligence offerings on the popular chat platform, including incorporating OpenAI’s technology into functions such as its chatbot and moderation systems. Once considered a niche gaming voice-chat app, Discord has grown to become a hub for all sorts of conversations via text, audio and video and now counts more than 150 million users across 19 million servers, or groups organized by interest.

The Promise of Higher Pay Woos MBAs, Yet Earnings Haven’t Kept Up With Inflation; Students consistently say better pay is their top reason for attending business school.
Alexander McIntyre and Amanda Chen – Bloomberg
The reasons prospective MBA students consider attending business school are multifaceted, but one theme consistently stands above the rest: higher salaries. When surveyed last year by Bloomberg Businessweek as part of the Best B-Schools rankings, 73.3% of second-year students at US schools selected increased compensation as one of the top five factors (out of 13 choices, which include to develop better quantitative skills, to build a professional network and to become a better leader) they considered when deciding whether to pursue an MBA. The responses of alumni six to eight years out of school were similar.

Wellness Exchange

We have a huge salt problem. Millions will die without action, WHO warns.
Leo Sands – The Washington Post
Seven million people could die of diseases linked to excessive salt consumption before the decade’s end unless governments immediately pass tighter restrictions on salt, a report by the World Health Organization warned Thursday. Its authors are calling on governments to implement stricter sodium targets for food, mark salt content more clearly on packaging and boost public awareness of the health dangers posed by eating a lot of salty food.

Air pollution ‘speeds up osteoporosis’ in postmenopausal women; US study finds bone loss occurs twice as fast among women living in areas with higher air pollution
Gary Fuller – The Guardian
A study has concluded that air pollution is accelerating osteoporosis in postmenopausal women. Researchers scanned the bones of more than 9,000 women living in four different parts of the US. Each had a bone scan three times over a six-year period that was compared with the air they breathed. On average, air pollution accounted for a doubling of the speed of bone loss.


Xi clinches third term as China’s president amid host of challenges
Yew Lun Tian – Reuters
Xi Jinping secured a precedent-breaking third term as president of China on Friday during a parliamentary session in which he tightened his control of the world’s second-largest economy as it emerges from a COVID slump and diplomatic challenges mount. Nearly 3,000 members of China’s rubber-stamp parliament, the National People’s Congress (NPC), voted unanimously in the Great Hall of the People for the 69-year-old Xi in an election in which there was no other candidate.

Sheikh Tahnoon named chair of $790bn Abu Dhabi sovereign wealth fund; UAE founder’s son – who is both national security adviser and a prominent private sector figure – extends influence
Simeon Kerr – Financial Times
Sheikh Tahnoon bin Zayed al-Nahyan has been appointed chair of the $790bn Abu Dhabi Investment Authority, the main sovereign wealth fund of the United Arab Emirates’ capital, in a signal of his expanding influence.

Diagnosing London’s listing miasma; Arm blows, but it can be a wake-up call
Craig Coben – Financial Times
Last week, UK-based semiconductor chip designer Arm announced that it would pursue a “US-only listing” in 2023. For a country anxious about its financial standing after Brexit, the decision felt like losing an arm (sorry). The FT described the decision as a “personal blow to prime minister Rishi Sunak”, while one Conservative MP said it was a “big blow”. The Guardian said it was a “blow to Rishi Sunak’s ambitions for London”; the Telegraph said it was a “blow to the prime minister”. Meanwhile, Reuters called it a “blow to London”, and according to CNBC it “deal[t] a blow to the UK’s post-Brexit vision.” “London suffers new blow,” headlined Bloomberg, and City AM said it was a “blow to the UK tech industry” and a “blow to the UK markets.”

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The Spread

Wall Street Faces Tougher Margin Rule as Zero-Day Options Boom

Observations & Insight NOTE: JLN Options will not be published tomorrow (Wednesday) in observance of the Juneteenth holiday. We will be back on Thursday. ~JB ++++ Regulatory Uncertainty Clouds Options Market Innovation David Dooman, head of...

Past JLN Newsletters

The unsustainable hype around ESG

The unsustainable hype around ESG

First Read Hits & Takes John Lothian & JLN Staff Fifty years ago today, SEC Commissioner A.A. Sommer, Jr. issued a paper titled "The SEC in the Midst of Revolution." Here is a summary of his speech: The securities industry is undergoing a significant...