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Margin Loan Losses Spook BOE Bank Regulators; Tearful Theresa May Quits

May 24, 2019

First Read

Leo Melamed Looks Back and Forward in Fireside Chat
Sarah Rudolph – John Lothian News

Leo Melamed, who fell in love with the trading pits back in the 1960s, says “You can’t stop technology” and that anyone who tries to stop it or slow its pace will lose. He was referring, in part, to the “speed bumps” currently being introduced into the markets, first from IEX and most recently from ICE.

Melamed talked about this and a number of other recent developments in the futures industry at a “fireside chat” last night with Matthew Kluchenek, a partner at Mayer Brown, which hosted the event for the Futures & Derivatives Law Committee of the Chicago Bar Association.

Melamed loves technology despite the fact that electronification of the futures industry was the “hardest thing [he] had ever accomplished.”

To read the rest of this story, go here.


Hits & Takes
JLN Staff

JLN’s Staff wishes you a healthy, happy and safe Memorial Day weekend. Monday is the Memorial Day holiday in the U.S. We will be publishing an abbreviated JLN on Monday, but no JLN Options. Have a great weekend.~JJL

Narendra Modi’s BJP party won India’s polarizing election in a landslide.~SD

This week Merrill Lynch, Pierce, Fenner & Smith was fined $17,500 by Nasdaq for failing “to maintain a continuous two-sided trading interest during regular market hours at prices within certain percentages away from the NBBO” on 97 occasions.~SD

The fireside chat at Mayer Brown, which hosted the Futures & Derivatives Law Committee of the Chicago Bar Association event yesterday where Leo Melamed spoke, was well attended. Many of the industry’s lawyers were in attendance, including Bernie Doyle, who I first met when I worked for Bud Frazier at U.S. Futures & Options Company.~JJL

JLN will open up the registration for MarketsWiki Education on June 1. On Tuesday we will announce the lineup of speakers we have so far. Keep July 16 and 17 open for your interns and interested parties for our annual MarketsWiki Education World of Opportunity series in Chicago.~JJL


European Interest, Cross Asset Growth and the Retail Base
In this video from the 2019 Options Exchange Leader Series, Cboe Head of Options and Global Client Services Arianne Criqui talks about the exchange’s select sector index options, the listing of XSP, corporate bond futures, and more.
Watch the video »


Nasdaq CEO’s social media habit lands her in court
Kevin Dugan – NY Post
Nasdaq’s CEO should probably get off social media. Adena Friedman, the head of Wall Street’s second-largest stock exchange, got dragged into Manhattan federal court on Thursday over a business dispute with a fund manager ó and a key piece of evidence was her response to an upset businessman who messaged her on LinkedIn.

*****That is the last time Adena will use that emoji!~JJL


Rethinking Wealth, From Birthright Capital to Big Spender Taxes; Academics and analysts on how to make society more equitable.
Bloomberg News
There’s a large racial wealth gap in the U.S.: Federal Reserve data show that the median white family has $171,000 in wealth. That’s about $150,000 more than the $17,600 of the median black family. These numbers include home equity.

***** Your wealth depends on what kingdom you are thinking about.~JJL


In Wine Country, Dogs Are Sniffing Out Threats to $325 Cabernet; Cocaine- and contraband-sniffing dogs train their noses on cork taint and vineyard pests.
Elin McCoy – Bloomberg
At 6:30 a.m. in Chile’s Casablanca Valley, two Labrador retrievers named Zamba and Mamba are pawing and sniffing stacks of oak staves destined for wine barrels. International barrel-making company TN Coopers is counting on their remarkable noses to track down such harmful chemical compounds in the wood as TCA (2,4,6-trichloroanisole) and TBA (2,4,6-tribromoanisole) that could contaminate the flavors and aromas of wine stored in one of its barrels. A signal to the trainer that the dogs have found something brings a reward treat. After a 30-minute stint, they get to rest, and another team takes on the routine.

***** Brings new meaning to MadDog2020.~JJL


Thursday’s Top Three
It’s a hat trick for the Goldman story. Our top read story for the third straight day was from eFinancialCareers, “Every single one of my Goldman friends are looking for jobs right now”. Tied for first was another eFinancialCareers piece Python is now a prerequisite for all these banking jobs. The third most read piece was the Chicago Tribune’s editorial The Loop requires reinvention, a Chicago specialty since 1871


MarketsWiki Stats
152,334,265 pages viewed; 23,732 pages; 219,320 edits
MarketsWiki Statistics


CryptoMarketsWiki Coin of the Week: Bitcoin SV (BSV)
Bitcoin SV, a cryptocurrency that was created via a fork in the code of Bitcoin Cash (BCH), spiked in price by over 90 percent this week. This dramatic price increase happened after news broke that Craig Wright, whose company developed the code for BSV, had registered himself with the U.S. Copyright Office as the pseudonymous author of bitcoin’s original white paper, Satoshi Nakamoto.

CryptoMarketsWiki Website»
CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.

Recently Updated Pages

Recently updated pages include
Bitcoin Cash SV
Craig Wright
SIX Group

CryptoMarketsWiki Stats

1,097 pages; 9,685 edits
CryptoMarketsWiki Statistics


Lead Stories

Billions in Losses on Margin Loans Spook BOE’s Bank Regulators
Silla Brush – Bloomberg
The Bank of England is warning that the safety of the financial system could be at risk from big investment banks extending loans against borrowers’ share holdings.

Tearful Theresa May Quits as Brexit Breaks Her Premiership
Tim Ross – Bloomberg
May will stay on as PM while Conservatives elect new leader; May warns her successor will need to find a Brexit compromise
An emotional Theresa May announced she will quit as Britain’s prime minister after admitting she had failed to deliver the one task that defined her time in office — taking the country out of the European Union.

Broker Sales Practices to Face Limits; SEC plans June vote on ‘best interest’ conflict-of-interest rule limiting some incentives
Dave Michaels – WSJ
Stockbrokers will soon have to disclose more about conflicts of interest that can bias investment advice under a government plan favored by Wall Street.

Mifid rules highlight the costs of investing; Wealth managers now required to produce annual fee statements
Kate Beioley – FT
Customers’ eyes have been opened this year to the full amount they pay their wealth managers. Wealth managers are now required produce fee statements for customers as part of Mifid II rules that came into effect in January 2018.

Bankers bemoan Mifid’s high costs and unclear benefits; EU market participants say poorly-worded rules undermine some key objectives
Philip Stafford – FT
For one of Europe’s most senior markets regulators, the arrival of Mifid II after seven long years has been a real tonic.

Nasdaq Chief Testifies in ETF Theft Lawsuit
Asjylyn Loder – WSJ
Nasdaq Inc. Chief Executive Adena Friedman testified Thursday morning in the exchange’s lawsuit against a former business partner that Nasdaq contends stole more than $1 billion in exchange-traded funds.
Nasdaq’s civil suit, filed in October 2017 in the U.S. District Court for the Southern District of New York, alleges that ETF Managers Group LLC improperly kept millions of dollars in management fees generated by funds including a popular cybersecurity ETF best known by its ticker HACK.

Why banks like Deutsche have too many managing directors
Former Deutsche Bank MD – eFinancialCareers
So, Deutsche Bank’s London office has nearly twice as many managing directors and directors as analysts and associates. Surprised? Don’t be. I worked for Deutsche in London and the senior overhang has been a thing for a while. And DB isn’t the only bank with this issue.

Flow Traders: Bigger, Better Than Ever, With a Twist…
Paul Rowady – Alphacution Research Conservatory
…For this update, we went the extra mile to fully update our financial modeling, our 13F position modeling, and some new modeling of the FOCUS report (X17A5) for Flow Traders US, LLC (FTUS) – the US broker-dealer affiliate of the Netherlands-based parent company. With all that to draw from, we start with the total gross portfolio value of FTUS – securities owned plus securities sold and not yet purchased – for the 10-year period 2009 to 2018. Here we show the US broker-dealer portfolio growing from $61.8 million in 2009 to $3.8 billion for 2018:

Deutsche Bank chief warns of transformational phase for beleaguered bank
John Brazier – The Trade
Deutsche Bank’s chief executive has warned shareholders that there will be a period of during its Annual General Investors meeting in Frankfurt.

US food and restaurant chains hit by rising pork prices; Chipotle shares among those affected as African swine fever prompts hog cull
Mamta Badkar and Matthew Rocco – FT
A disease ravaging hog farms 11,000km away in China is affecting US restaurant chains and meat producers, leaving customers forking over higher prices for their pork.

What’s Suspicious? Here’s How Banks Apply the Smell Test
Yalman Onaran – Bloomberg
The phrase “if you see something, say something” isn’t just about packages left on the subway. Banks around the world have a similar duty. The first line of defense against money laundering and other financial crimes often boils down to the thousands of bank employees flagging transactions that somehow don’t look right or sending them to the government for investigation.

Exchanges, OTC and Clearing

Cboe Europe Signs GAIN Capital as New Index Customer
Cboe Europe, the region’s largest equities exchange operator and a division of Cboe Global Markets, today announced that GAIN Capital, a leading global provider of online trading services, has signed a licence agreement to utilise Cboe’s suite of 18 UK benchmark indexes and the Cboe Brexit High 50/Low 50 Indexes for benchmarking against European markets and the creation of original products across their two leading trading brands; City Index and

SGX welcomes Eagle Hospitality Trust to Mainboard
Singapore Exchange (SGX) today welcomed Eagle Hospitality Trust to its Mainboard under the stock code “LIW”. Eagle Hospitality Trust has an initial portfolio of 18 full-service hotel properties, ranging from upper midscale to upper upscale hotels, located in the United States (US). All the assets in the initial portfolio, except The Queen Mary Long Beach, are branded by and operated under franchise agreements with the three largest global hotel franchisors – Marriott International, Hilton Worldwide Holdings and InterContinental Hotels Group.

Intercontinental Exchange Chairman and CEO Jeffrey C. Sprecher to Present at the Sandler O’Neill Global Exchange and Brokerage Conference on June 6
Intercontinental Exchange, Inc. announced today that ICE Chairman and CEO, Jeffrey C. Sprecher will present at the Sandler O’Neill Global Exchange and Brokerage Conference on Thursday, June 6 at 10:00 a.m. ET. The event will be available live and in replay via webcast and can be accessed in the investor relations section of ICE’s website at

ATX Award, Lenzing Honored As Most Sustainable Company
Today, the Vienna Stock Exchange and its partners honored Austrian listed companies with the Vienna Stock Exchange Award for the 12th year running. The domestic capital market elite, representatives from business and politics celebrated the ten winners in five categories at the Palais Niederˆsterreich. A jury of analysts honoured companies in the ATX, Corporate Bonds and Mid Cap categories. This year, there was also a separate sustainability award. Another category is dedicated to media relations (“journalists”).

Athens Exchange Group: Semi-Annual Review Of FTSE/ATHEX Index Series
FTSE/ATHEX Index Series Advisory Committee endorsed today the following changes in the composition of the FTSE/ATHEX Index Series, taking into consideration the results of the semi- annual review for the period November 2018 – April 2019.


First Derivatives registers 17% rise in FinTech revenues in FY19
FinTech revenue increased by 17% to £166.7 million in the year to end-February 2019, on the back of expansion of services provided to clients and new contract wins.


Grayscale to Open Ethereum Trust to Individual Investors
Olga Kharif – Bloomberg
FINRA has allowed the creation of a secondary market for trust; Minimum purchase had been $25,000 for accredited investors
Grayscale Investments LLC said its investment vehicle that holds the cryptocurrency Ether will open soon to mom-and-pop buyers after receiving secondary-market trading approval.

The Benefits of a Centralized Exchange
ErisX Insights – Medium
Last week ErisX attended Consensus 2019 where various experts discussed how the blockchain industry is developing state of the art technology and infrastructure as well as witnessing long term institutional capital enter the digital asset markets. While conference attendees and speakers were cautiously optimistic, the crowd also addressed recent headlines that included exchange hackings, fake volume and market manipulation such as front running.

$71 Million: Galaxy Digital Sells Stake in EOS Blockchain Maker Block.One
Wolfie Zhao – Coindesk
Galaxy Digital, the crypto merchant bank founded by former hedge fund manager Michael Novogratz, has received $71.2 million after selling its shares in, the maker of the EOS blockchain. Galaxy Digital said in an announcement on May 21 that it closed the transaction on Monday after a tender offer for its position in was made on April 18. The firm claims it made a 123 percent return on the realized investment and following the transaction, its remaining shares in “will no longer maintain a material investment position.”

Avelacom Partners With Seed CX To Increase Speed And Stability For Institutional Investors Globally
Seed CX – Medium
Avelacom, the high-performance global connectivity and IT infrastructure provider for the financial services industry, today announced a landmark partnership with Seed CX, the leading digital asset exchange built expressly for institutional investors.

Founder of Defunct Cryptopia Launches New Crypto Exchange
Landon Manning – Bitcoin Magazine
The founder of defunct cryptocurrency exchange Cryptopia, which entered liquidation following a hack in January 2019, has launched a new exchange called Assetylene. The LinkedIn employment history for the founder of the failed New Zealand exchange, Adam Clark, indicates that he’s been working on Assetylene since September 2018, which is also when the exchange’s Twitter account went live. With fewer than 100 followers, the account is billed as representing “New Zealand’s most advanced crypto-currency exchange [sic].”

Robinhood Zero-Fee Trading App Officially Launches in New York
Helen Partz – Cointelegraph
American stock brokerage Robinhood Crypto has officially launched its zero-fee crypto trading app in New York, the company announced in a blog post on May 23.

Japan Scrutinizing Crypto Exchanges Ahead of G20 Summit
Yogita Khatri – Coindesk
Japan’s Financial Services Agency (FSA) is said to be scrutinizing cryptocurrency exchanges in the country to ensure anti-money laundering (AML) processes are in place. A report from the Nikkei Asian Review on Wednesday, citing an unnamed FSA official, said that inspections are being carried out ahead of the G20 summit next month.

Russian Central Bank to Consider Gold-Backed Cryptocurrency
Daniel Palmer – Coindesk
Russia’s central bank will consider the use of a gold-backed cryptocurrency to facilitate international settlements, according to a Tass report. Elvira Nabiullina, governor of the Bank of Russia, said Thursday that her institution is to review a proposal for the development of the cryptocurrency.

Coinbase Commerce eclipses $50 million in transactions
The Block Crypto
Coinbase Commerce, the exchange’s online retail service, announced today it has facilitated $50 million in transactions since launching last year. With 10,000 monthly users, the platform is on a growth trajectory, homing in on early adopters with plans to innovate, according to Justin O’Brien, the product lead for the platform.

Facebook held talks with Winklevoss twins over new currency; Social media giant wants to create ‘big, open’ global digital coin
Hannah Murphy and Philip Stafford -FT
Facebook’s vaulting ambition to create a new global digital currency has led it to hold talks with some of America’s largest trading houses and cryptocurrency exchanges, including one founded by Mark Zuckerberg’s sworn enemies ó the Winklevoss twins.

Facebook to Roll Out ‘GlobalCoin’ Cryptocurrency in 2020: Report=
Wolfie Zhao – Coindesk
Social media giant Facebook is set to roll out its own cryptocurrency dubbed “GlobalCoin” in 2020, according to a report from the BBC.

Russian Central Bank to Consider Gold-Backed Cryptocurrency
Daniel Palmer – Coindesk
Russia’s central bank will consider the use of a gold-backed cryptocurrency to facilitate international settlements, according to a Tass report.

Rep. Eric Swalwell Is Accepting Crypto Donations in Bid for US Presidency
Yogita Khatri – Coindesk
Rep. Eric Swalwell is accepting donations in cryptocurrencies to support his bid for the U.S. presidency in 2020.


Who can stop Manfred Weber becoming European Commission president?; The German ‘spitzenkandidat’ is angling for the role, but not everyone agrees
Alex Barker – FT
Who can stop Manfred Weber? After this weekend’s elections, the centre-right Spitzenkandidat is expected to be standing in one of Brussels’ most coveted and exposed positions: at the front of the queue to be European Commission president.

Trump administration announces $16 billion farm-aid program
Josh Zumbrun – MarketWatch
The Trump administration announced a $16 billion aid package for the U.S. farm sector, which primarily will make direct payments to farmers to offset losses resulting from the trade conflict with China.

‘Frightening’: Charges Against Julian Assange Alarm Press Advocates
Michael M. Grynbaum and Marc Tracy – WSJ
Journalists and press freedom groups reacted with alarm on Thursday after the Trump administration announced new charges against Julian Assange, the WikiLeaks leader, for publishing classified information, in a case that legal experts say takes direct aim at previously sacrosanct protections for the news media.

Trump Gives Farmers $16 Billion in Aid Amid Prolonged China Trade War
Ana Swanson – WSJ
President Trump on Thursday unveiled a $16 billion bailout for farmers hurt by his trade war with Beijing, signaling a protracted fight ahead that is already prompting some American companies to shift business away from China.

Trump Tweets Lose Their Punch as Maersk CEO Turns to Real Data
Christian Wienberg – Bloomberg
Shipping company plans to buy back $1.5 billion in shares; New tariffs seen weighing on global container volume growth
The chief executive officer of the world’s biggest shipping company has learned not to panic every time U.S. President Donald Trump fires off a tweet threatening more tariffs.

Trump’s Palestine Investment Conference Is a Cynical Farce; U.S. officials are shocked by the news that Palestinian business leaders won’t accept their invitation to trade national rights for cash.
Hussein Ibish – Bloomberg
It’s hard to imagine a more pointless exercise than a Palestinian investment conference without Palestinians. Talk about staging Hamlet without the prince! But that’s exactly what the Trump administration is cooking up, to be held June 25-26 in Bahrain. And it’s emblematic of the predetermined, intentional failure of its approach to brokering Israeli-Palestinian peace.

The New Assange Indictment Endangers Journalism; A prosecution under the Espionage Act is not only dangerous but also unnecessary.
Eli Lake – Bloomberg
When the Justice Department unsealed a March 2018 indictment of Wikileaks founder Julian Assange last month, there was a reasonable case to be made that his prosecution would avoid setting a dangerous precedent against press freedom.

Trump Wields More Powerful Weapon Than Tariffs in Trade War
Shawn Donnan and Jenny Leonard – Bloomberg
U.S. moves to toughen export controls are fanning trade fears; Blacklist against Huawei could just be the start for Trump
President Donald Trump’s trade war against China has so far focused on attacking imports. His new front: Weaponizing American exports.

Wells Fargo and TD Bank have already handed over Trump’s financial records to the Maxine Waters-led House Financial Services committee
President Donald Trump’s financial records from Wells Fargo and TD Bank have been turned over to House Democrats.

Boris Johnson’s Brexit Claims Were Dishonest, Private Prosecutor Says
Jonathan Browning – Bloomberg
Johnson leading race to become next Tory prime minister; Campaigner trying to prosecute ex-mayor for misconduct
U.K. Conservative Party frontrunner Boris Johnson made false claims about British spending on the European Union and should face criminal charges, according to a man trying to privately prosecute the politician in a London court.

Manafort Banker Charged With Bribery in Seeking Trump Post
Andrew Martin and Bob Van Voris – Bloomberg
Abused role as bank chief to lend to campaign aide, U.S. says; Prosecutors say Calk lied to officials about desire for post
A Chicago banker who lent millions of dollars to Trump campaign chairman Paul Manafort was charged by prosecutors with bribery for seeking a post in the Trump administration in return for $16 million in loans.


SEC Sues Alleged Perpetrator of Fraudulent Pyramid Scheme Promising Investors Cryptocurrency Riches
The Securities and Exchange Commission filed a civil injunctive action against Daniel Pacheco, a resident of San Clemente, California, and the alleged perpetrator of a multimillion-dollar pyramid scheme.

U.S. starts giving documents to lawyers of ex-Goldman banker Ng in 1MDB case
Suzanne Barlyn – Reuters
U.S. prosecutors on Thursday handed over the first of 1 million evidentiary documents to the lawyers of Roger Ng, a former Goldman Sachs banker facing criminal charges linked to a multibillion-dollar scandal at the Malaysian state investment fund 1MDB.

TFS-ICAP’s ex-Global Head of Emerging Markets broking says CFTC has no case against him
Maria Nikolova – FinanceFeeds
As a “flying & printing” case targeting TFS-ICAP and two of its former managers continues at the New York Southern District Court, the arguments keep building up.

NASAA, SEC and FINRA Issue Senior Safe Act Fact Sheet to Help Promote Greater Reporting of Suspected Senior Financial Exploitation
In recognition of the one-year anniversary of the passage of The Senior Safe Act, the North American Securities Administrators Association (NASAA), the U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) have issued a fact sheet to help raise awareness among broker-dealers, investment advisers, and transfer agents of the Act and how the Act’s immunity provisions work.

Senior Safe Act Fact Sheet

Alleged shadow director charged with failing to co-operate during liquidator’s public examination
Mr Paul Annesley of Bulla, Victoria, has appeared in the Broadmeadows Magistrates’ Court after being charged with failing to answer questions during a liquidator’s public examination.

ESMA updates the CSDR Q&As
The European Securities and Markets Authority (ESMA) has today updated its Questions and Answers (Q&As) regarding the implementation of the Central Securities Depository Regulation (CSDR).

ESMA updates its Q&As regarding the Benchmark Regulation
The European Securities and Markets Authority (ESMA) has issued today an update of its Q&As on the European Benchmarks Regulation (BMR).

IIROC AND Canadian Securities Administrators Provide Update On Conflicts Of Interest Arising From Soliciting Dealer Arrangements
The Investment Industry Regulatory Organization of Canada (IIROC) and the Canadian Securities Administrators (CSA) today published an update about the management of conflicts of interest arising from soliciting dealer arrangements.

SIFMA Statement On The SECURE Act Of 2019
SIFMA today issued the following statement from President and CEO Kenneth E. Bentsen, Jr. on H.R. 1994, the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019:

Investing and Trading

The Power Players That Dominate Chapter 11 Bankruptcy; Corporate bankruptcy is increasingly shaped by a handful of powerful law firms and advisers working in courts in New York and Delaware
Tom Corrigan, Joel Eastwood and Jennifer S. Forsyth – WSJ
The fate of trillions of dollars in corporate assetsóas well as millions of employees, pensioners, shareholders, investors and suppliersóis concentrated in the hands of an elite group of bankruptcy professionals and judges from just two states, according to data analyzed by The Wall Street Journal.

How green are your investments?; Environmental concerns matter as much as returns to younger wealth management clients
Madison Darbyshire – FT
Sir David Attenborough, legendary naturalist and BBC television presenter, is changing the way wealth managers do business.

Do your children like your wealth manager?; Many managers struggle to relate to the younger generation
Alice Ross – FT
The head of a well-known wealth manager told me the other day that getting her workforce to enter the modern world was still a struggle at times. Recently, she sat in on a meeting between one of her advisers and a wealthy couple and noticed that her adviser only spoke to the man. In fact, he didn’t even look at the woman once. She asked him afterwards why he’d said nothing to the wife. He hadn’t wanted to be disrespectful, he claimed, or seem licentious. Yes, this was in 2019.

The Bursting of the Tesla Stock Bubble
Esha Dey and Molly Smith – Bloomberg
Shares fell after analysts cited cash flow, demand issues; Musk remains upbeat, saying company will meet delivery targets
For Elon Musk and Tesla Inc., the blows from Wall Street came one after another this week — a relentless barrage that left the stock so beat up that some now wonder if it can ever regain its status as the ultimate 21st century disrupter.


Hedge Fund Titan David Tepper Is Planning to Return Investors’ Money; Appaloosa LP will turn into a family office managing his personal wealth
Juliet Chung – WSJ
Famed hedge-fund manager David Tepper plans to turn Appaloosa LP into a family office managing his personal wealth as he spends more time focused on running the Carolina Panthers, his professional football team, said people familiar with the matter.

Legg Mason axes 12% of its staff; US asset manager cuts costs as activist Nelson Peltz joins the board
Richard Henderson – FT
Legg Mason will cut 120 staff to trim costs, its chief executive announced on Wednesday, just days after the asset management group added activist investor Nelson Peltz to its board.

It’s Just a Walk in the Park Sown With Land Mines: Taking Stock
Elena Popina – Bloomberg
Sahm Adrangi can tell you all about patience. In January, the chief investment officer at Kerrisdale Capital said that Qualcomm would lose the Federal Trade Commission’s antitrust case, resulting in a halving of the firm’s licensing revenue, earnings and share price, and that he’s short the stock. Shares subsequently notched a 43% rise over the following four months. Then came the ruling from a California federal judge, which sent the stock 11% down in one session. Shares are down another 2.9% before the bell Thursday.

Billionaire Soros Bets on GAM as Scandal-Hit Firm Courts Buyers
Patrick Winters – Bloomberg
Soros family office takes 3% stake in Swiss asset manager; GAM investors pulled $28 billion since bond manager suspension
Billionaire investor George Soros disclosed a 3% stake in GAM Holding AG after the asset manager lost two-thirds of its value over a scandal involving a former star bond trader.

Nomura CEO to take 30% pay cut after information leak
Taro Fuse, Takashi Umekawa – Reuters
The chief executive of Nomura Holdings will take a 30% pay cut for three months over its improper handling of market information, marking the latest headache for CEO Koji Nagai, as he struggles to turn around the Japanese investment bank.

D.E. Shaw’s top shareholder activist Koffey leaves hedge fund
Svea Herbst-Bayliss – Reuters
Hedge fund manager Quentin Koffey, who joined D.E. Shaw & Co two years ago from Elliott Management Corp to lead its shareholder activism strategy, has left to join Senator Investment Group LP, the firms told Reuters on Thursday.


China Takes Over Bank Linked to Missing Financier; Central bank and banking regulator cite the lender as severe credit risk
China’s central bank and banking regulator took over a troubled small commercial bank, Baoshang Bank Co., on Friday, citing the lender as a severe credit risk.

Emerging market stock funds suffer $3.8bn withdrawals; Trade war concerns over 7 days to May 22 takes losing streak to five consecutive weeks
Richard Henderson – FT
Investors have pulled money from emerging market stock funds in the past week at the fastest rate since the crises last year involving Turkey and Argentina, as concerns mount over the trade stand-off between the US and China.

Chinese Tycoon Who Shook Up Global Aluminum Industry Dies at 73
Alfred Cang – Bloomberg
Zhang Shiping founded world’s biggest aluminum, textile makers; Billionaire made use of market reforms to build his empire
Zhang Shiping, the industrialist who hauled cotton bales in rural China before building a multi billion-dollar empire spanning metal to textiles to electricity, has died. He was 73.

Africa’s No. 1 Bank Says Lonmin Investors Should Reject Offer
Felix Njini – Bloomberg
SBG Securities says Sibanye bid grossly undervalues Lonmin; Lonmin assets could be worth triple Sibanye’s offer, SBG says
Africa’s biggest bank said Lonmin Plc investors should reject Sibanye Gold Ltd.’s takeover offer as it undervalues the platinum miner’s assets by as much as 6.64 billion rand ($460 million).

China’s Brightest Are the Trade War’s Latest Casualties; The country’s largest graduating class ever is about to confront an especially grim job market.
Adam Minter – Bloomberg
It’s college graduation season in China and the timing couldn’t be much worse for the record-breaking 8.34 million students emerging from university this year. A slowing economy, hobbled further by the trade war, has produced the worst Chinese job market since at least 2015. Among the hardest hit will be the aspiring white-collar workers just now throwing off their caps and gowns. Applicants far outnumber jobs in big cities and salary expectations simply aren’t being met.

Russia’s Dirty Oil Crisis Is Worse Than Almost Anyone Predicted
Javier Blas – Bloomberg
Flow through Druzhba pipeline still little more than a trickle; Solution hampered by fight about who’s going to pay the bill
For almost four weeks, the tanker Mendeleev Prospect has been anchored idly off the Polish port of Gdansk unable to discharge a $50 million cargo of crude oil.

U.S.-Listed Chinese Stocks Tumble at Fastest Pace Since 2008
Bloomberg News
S&P/BNY Mellon China ADR Index has plummeted 15% in May; Chinese stock losses are weighing on MSCI’s global benchmarks
The worsening trade war is driving the steepest sell-off in Chinese shares traded in the U.S since the global financial crisis.

Chinese regulator to take over Baoshang Bank for a year due to credit risks
China’s central bank said on Friday that the banking and insurance regulator will take over Inner Mongolia-based Baoshang Bank due to serious credit risks.

Mnuchin Meets With Vietnamese After U.S. Warning on Currency
Saleha Mohsin – Bloomberg
Treasury Secretary Steven Mnuchin said he met with Vietnamese officials on Thursday, after the U.S. indicated earlier this month that the country was under scrutiny for possibly manipulating its currency.


A No-Deal Brexit Is Back on Table: Five Things You Need to Know
Emma Ross-Thomas – Bloomberg
Theresa May has set out her exit date, firing the starting gun on the leadership race to replace her. Pro-Brexit hardliner Boris Johnson is the favorite and he’s made clear he’d be prepared to rip the U.K. out of the bloc without a deal.

A Moment of Clarity in the Brexit Chaos; May’s compromise is dead, and Parliament has no answer. The country should vote again.
Editorial Board – Bloomberg
Theresa May’s Brexit policy has been a wreck for months, and this week’s events have surely exhausted even her capacity to think otherwise. Amid the chaos at Westminster, the final collapse of her attempted compromise nonetheless offers hope – because it provides a kind of clarity.

How Brexit Ate the Prime Minister; Theresa May couldn’t break a political stalemate that’s hardened British national divisions. That’s her legacy, but only partly her fault.
Therese Raphael – Bloomberg
Prime Minister Theresa May was popular once. That may be hard to remember as she steps down in two weeks’ time, but it’s true. Just three years before her own political party forced her to step aside, she was hailed by politicians and citizens as the wisest choice to lead the U.K.’s separation from the European Union.


The return of the phone booth-style box – this time as a micro-office for the mobile workforce
Jonathan Margolis – Financial Times
I was on a flight from New York’s LaGuardia airport recently and I had some work to do on the plane. So when the flight was delayed by two hours, I set about finding somewhere quiet to sit with my laptop and finish it before the revised departure time.

Many Adults Would Struggle to Find $400, the Fed Finds
Jeanna Smialek – NY Times
Four in 10 American adults wouldn’t be able to cover an unexpected $400 expense with cash, savings or a credit-card charge that could be quickly paid off, a new Federal Reserve survey finds.

Power Of The Pack: Women Who Support Women Are More Successful
Shelley Zalis – Forbes
I always say a woman alone has power; collectively we have impact. Traditionally we have been taught to be competitive with one another, because there was such a scarcity of jobs at the top. It’s so clear that strategy doesn’t work. The truth is that raising each other up and channeling the power of collaboration is truly how we’ll change the equationóand have a lot more fun along the way.

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Past Newsletters

Hedge Fund Talent Schools Are Looking for the Perfect Trader

Hedge Fund Talent Schools Are Looking for the Perfect Trader

First Read Hits & Takes John Lothian & JLN Staff FIA's IDX concluded last night on a high note with the gala dinner in support of the Futures For Kids charity and the end of Rama Pillai's Kilt Challenge. The dinner gala raised a total of 150K British pounds, including...

William Donaldson, Investment Banker Who Led SEC, Dies at 93

William Donaldson, Investment Banker Who Led SEC, Dies at 93

First Read Hits & Takes John Lothian & JLN Staff The FIA today announced, rather early, that nominations for the FIA Hall of Fame Class of 2025 are open and you can submit them via this online form. This is a grand idea for the FIA to announce it during IDX...