Morgan Stanley Is Buying E*Trade, Betting on Littler Customers; JPMorgan and Goldman throw weight behind exchange start-up

Feb 20, 2020

First Read

Hits & Takes
By JLN Staff

The FIA issued a statement on their website about the Novel Coronavirus:

FIA is monitoring closely the latest developments concerning the Coronavirus including recommendations regarding events and travel, and to follow guidelines from health agencies and government offices, including the World Health Organization as well as regional and domestic public health and disease control organizations.

FIA conferences are important to our industry and we appreciate the enormous value of bringing our community together. However, the health and safety of our conference attendees and staff are our number one priority. Therefore, FIA will be taking additional measures at upcoming events, in conjunction with our venues and suppliers, to increase sanitization efforts and minimize the spread of germs.

If you have any questions regarding FIA events, please contact memberservices@fia.org~JJL

Trading Technologies is partnering with FIA for the FIA Boca Tennis Tournament on Tuesday, March 10 at the FIA conference in Florida. The tournament will benefit Futures for Kids and TT will provide a matching donation of the total raised in registration fees. You can go here for more details and to register.~SR

You can also register online for the FIA Charity Golf Event at FIA Boca, which also benefits Futures For Kids.~SR

Scott Knudsen, CEO of Cove Markets, has a commentary titled “How to Find the Best Price for Bitcoin and Other Cryptocurrencies.”~JJL

Walt Lukken and Don Byron of the FIA held a discussion yesterday at the Union League Club of Chicago updating the Chicago trading community on issues in Washington, DC and within FIA. One item of interest was the FIA will be making a teaching moment out of the problems with cybersecurity that FIA Tech had a couple of months ago, reported in JLN. Expect to hear more about this from the Boca conference. Byron had recently joined FIA as global head of industry operations and execution.~JJL

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DASH Taking Order Routing to Next Level, Exec Says
JohnLothianNews.com

DASH Co-COO Stino Milito talks about options, algos, transparency and price improvement. How can order routing be improved? Milito explains fintech’s expansive role.

“What sets Dash apart,” says Milito, “is its extremely flexible architecture.”

Suzanne Cosgrove of John Lothian News interviews Stino Milito, the co-chief operating officer at Dash Financial Technologies, for this JLN Interview Podcast.

Watch the video »

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Nasdaq Appoints Fredrik Ekström as President of Nasdaq Stockholm; Lauri Rosendahl to retire from Nasdaq
Nasdaq
Nasdaq (Nasdaq: NDAQ) today announced the appointment of Fredrik Ekström to President of the Nasdaq Stockholm Stock Exchange. Ekström will oversee Nasdaq Stockholm’s overall business operations as well as continue to lead Nasdaq’s European Fixed Income and Commodities businesses. Ekström will report to Bjørn Sibbern, President of Nasdaq’s European Markets.
bit.ly/2HEtYWz

***** Orderly succession from Nasdaq.~JJL

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Cancellation of seminars/events and temporary closure of visitor facilities in response to novel coronavirus outbreak
JPX
In light of recent developments in the novel coronavirus outbreak, we are suspending public seminars and events and visits to our visitor facilities for the time being. Persons who have registered for our seminars or events, or made visit reservations will be contacted separately.
bit.ly/2PbJCgf

*****JPX being thoughtful and cautious in light of the situation.~JJL

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Sen. Kelly Loeffler Appears In ‘Hunting’ Video But Doesn’t Actually Have A Hunting License
Ed Mazza – HuffPost
A Republican lawmaker is being called out for posting a video clip that makes it appear as if she may be hunting. In reality, Sen. Kelly Loeffler (R-Ga.) doesn’t even have a hunting license, according to records obtained by the progressive group American Bridge, The Atlanta Journal-Constitution reported.
bit.ly/39OQg3V

***** The good news is she did not shoot anyone in the face like Dick Cheney did. The bad news is she appears to have shot herself in the foot with this oversight, assuming it is true. But then, it was just a campaign piece so a little fiction is expected.~JJL

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The uncomfortable truth about fake news; New research suggests that, irrespective of age, education or political allegiance, most of us are susceptible
Gillian Tett – FT
If Financial Times readers were asked whether they could tell the difference between “fake” and “true” news, most would reply with an indignant “yes”.
/on.ft.com/2v0AsfJ

***** I do have a high level of confidence I can make mistakes.~JJL

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Wednesday’s Top Three
Our most read story Wednesday was quite a story: Junk bond king’s pardon viewed as ‘spectacular’ on Wall Street, from The Financial Times, about the just-pardoned Michael Milken. Second was a repeat from Tuesday’s top three, All the reasons your boss should let you work from anywhere, from MarketWatch. Third was another Michael Milken story, Bloomberg’s Milken Pardon Backed by Billionaires From Funds, Real Estate.

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Lead Stories

Morgan Stanley Is Buying E*Trade, Betting on Littler Customers; Investment bank will pay $13 billion for the e-broker, doubling down on wealth management
Liz Hoffman – WSJ
Morgan Stanley MS 1.42% is buying E*Trade Financial Corp. in a $13 billion deal that will reshape the storied investment bank and firmly stake its future on managing money for regular people.
/on.wsj.com/2P9urnS

JPMorgan and Goldman throw weight behind exchange start-up; MEMX is hoping to disrupt the US equities market when it launches in July
Philip Stafford – FT
JPMorgan, Goldman Sachs and Jane Street Capital have joined rival Wall Street firms in backing Members Exchange, a new stock-trading venue that aims to shake up the US equity market.
/on.ft.com/2Ve1tHr

Hubei Changes Virus Count Method With Data Mistrust Growing
Bloomberg News
Second revision in a month results in just 349 confirmed cases; Changes feed growing suspicion over official data from China
The number of new coronavirus cases reported by Hubei province dropped sharply after China changed the way it officially reports the number of infections for the second time in a month, raising questions over the reliability of data from the epicenter of the outbreak.
/bloom.bg/2P81V5S

UBS to Name ING’s Ralph Hamers as CEO
Margot Patrick – The Wall Street Journal
UBS Group AG Chief Executive Sergio Ermotti is stepping down and will be succeeded by current ING Groep NV boss Ralph Hamers, a person familiar with the matter said Wednesday, marking another leadership change at a major Swiss bank.
/on.wsj.com/2SX0U1H

The City of London Can’t Be Bullied by Brussels; As Colm Kelleher says, Europe’s capital markets aren’t strong enough or deep enough. The EU needs the City as much as the City needs Europe.
Marcus Ashworth – Bloomberg
There hasn’t been much balance in the overheated debate around the post-Brexit trade settlement between Britain and the European Union. So it was a welcome surprise to see former Morgan Stanley President Colm Kelleher describe Europe’s capital markets as “not fit for purpose” recently.
/bloom.bg/2P6lnA4

Fecal Transmission May Be Behind Coronavirus’s Rapid Spread
Jason Gale – Bloomberg
Chinese researchers find live virus particles in stool samples; Outbreak on cruise ships is reminiscent of gastro virus
The novel coronavirus is shed in the feces of infected people, which may help explain why it’s spread so fast, according to Chinese researchers. The finding of live virus particles in stool specimens indicates a fecal-oral route for coronavirus, which may be why it’s caused outbreaks on cruise ships with an intensity often seen with gastro-causing norovirus, which also spreads along that pathway. More than 600 Covid-19 infections were confirmed among passengers and crew aboard the Diamond Princess, the ship quarantined for two weeks in Yokohama, Japan.
/bloom.bg/39T8mlA

Swiss bank Julius Baer slammed for money laundering failures
Silke Koltrowitz – Reuters
Swiss bank Julius Baer (BAER.S) has been reprimanded by the country’s watchdog for ignoring money laundering risks in handling millions of francs of suspect payments linked to corruption in Venezuela and world soccer body FIFA.
/reut.rs/39S4Mrw

Not-so-bitter pill
Lisa Jucca – BreakingViews.com
Julius Baer can be grateful for not getting what it deserves. Switzerland’s finance watchdog on Thursday ordered the $11 billion wealth manager to step up its fight against money laundering and barred it from embarking on major deals until compliance was up to scratch. That’s mild punishment for nearly a decade of systematic failings, and reflects the limits of the supervisor’s powers.
bit.ly/2P9EwRw

Rising water raises climate change fears in the Great Lakes region; Record high levels in Lake Michigan have prompted dark mutterings about global warming
Patti Waldmeir – FT
Lakefront property owners lose sleep over flood risks. High school students fill sandbags to protect the fragile coastline. America’s Great Lakes, the largest body of fresh water on Earth, are at, or near, historically high levels.
/on.ft.com/2uPNHjr

Fidelity’s Parent Company Is Spinning Out Its Akoya Personal-Data Startup; FMR wants to jump-start use of platform that gives consumers more control over how their financial data is shared
Justin Baer – WSJ
Fidelity Investments’ parent company is spinning out its software startup that gives consumers more control over how their bank-account information is shared with tax, budget and other online financial applications.
/on.wsj.com/2wxW1op

Exchanges, OTC and Clearing

Goldman, JPMorgan Lead New Funding Round for Members Exchange; Members Exchange hopes to challenge the New York Stock Exchange and Nasdaq by charging rock-bottom fees
Alexander Osipovich – WSJ
Goldman Sachs Group Inc. GS 1.77% and JPMorgan Chase JPM 1.36% & Co. agreed to back a new low-cost stock exchange that plans to launch this summer to challenge the New York Stock Exchange and Nasdaq Inc.
/on.wsj.com/38LXMwl

Members Exchange Closes Additional Round of Strategic Financing, Announces July 24th Launch Date
Strategic Investment led by J.P. Morgan, Goldman Sachs, Jane Street Capital; MEMX to Launch Exchange on July 24, 2020, Pending Regulatory Approval
MEMX
Members Exchange (MEMX), a market operator founded by members to benefit all investors, announced today the closure of a strategic round of funding led by J.P. Morgan, Goldman Sachs Group, Inc., and Jane Street Capital, LLC., as well as plans to launch the exchange on July 24, 2020.
/bwnews.pr/329Vfti

FTSE Russell creates new role for ESG investing in Asia Pacific; Growing demand for sustainable investment in the Asia Pacific sees FTSE Russell create new role.
Kiays Khalil – The Trade
Helena Fung has joined FTSE Russell, taking on a newly created role as head of sustainable investment for Asia Pacific.
bit.ly/32dGGF2

LCH launches clearing of European Subordinated Financials Credit Derivatives
LCH
LCH, a leading global clearing house, today announced that its CDSClear service has expanded its product offering to clear Markit iTraxx Europe Subordinated Financials Index and its 30 single name constituents. Goldman Sachs is among the first participants to clear these products.
bit.ly/2T0nir5

Goldman Sachs clears first subordinated financials credit derivatives at LCH; LCH says it is the first clearing house to offer clearing of subordinated financials single name credit default swaps through CDSClear.
Hayley McDowell – The Trade
The London Stock Exchange Group’s clearing house LCH has launched clearing of European subordinated financials index and single names via its CDSClear service.
bit.ly/38LzToC

Former AQR global trading head launches independent algo trading platform; ITG and AQR Capital veteran, Hitesh Mittal, looks to reduce transaction costs of ‘stale’ broker algorithms with new algo trading and TCA platform.
Hayley McDowell – The Trade
Industry veteran and former global head of trading at hedge fund AQR Capital Management, Hitesh Mittal, has confirmed the launch of a new algorithmic trading platform via his company BestEx Research.
bit.ly/39QTVym

Keynote: Outlook 2020 – Economical and geopolitical developments
Martin Lück – Eurex
Looking at the prospects for 2020, two key considerations are currently shaping our view of the general macroeconomic outlook: central bank policy and the potential for geopolitical uncertainty throughout the year.
bit.ly/37HZDRI

Fintech

A Clever Strategy to Minimize the Damage From Cyberattacks; Block information so the attackers can’t build a reputation, say University of Texas researchers.
Peter Coy
Ransomware is hard to stop, but the cybercriminals who use it do have one Achilles’ heel: Who trusts an anonymous crook?
/bloom.bg/2T0iFxd

The Crop Software Behind Your Daily Cup of Coffee; Cropster started as a tool to lift coffee producers out of poverty. Now it has a bigger mission: to save the entire global food supply.
Amanda Little – Bloomberg
“Buscamos a mis enemigos,” says Raul Perez, jogging toward his coffee fields in the mountains of western Guatemala—let’s go find my enemies.
/bloom.bg/3bMlH0y

FIS, Clients Awarded for Innovative Treasury and Cash Management Solutions
FIS Global
Financial technology leader FIS™ (NYSE:FIS) and its clients have earned a total of six awards from two prestigious award programs for their quality and innovative treasury and cash management solutions.
bit.ly/2T6wtXc

Your Corporate Email Isn’t as Safe as You Think
William Turton – Bloomberg
Cybersecurity firm tells of attacks aided by besotted mules; Business email compromise a growing cyber problem, FBI says
The discovery of an alleged international ring of fraudsters started with a one-line email. In April 2019, a company accountant received an email that appeared to be from the chief executive officer.
/bloom.bg/2T3LusH

A vetting guide for banks mulling fintech partnerships
Paul Schaus – American Banker
The explosion of fintech startups in the last decade has transformed predictions that they would be disruptors to now, partners in banking — a critical element to the next evolution in financial services in the 2020s.
As many of these fintechs mature, banks will need to approach these newfound relationships more strategically, and with a modernized integration plan.
bit.ly/38JDOm7

LendingClub deal could spur more fintech-bank mergers
Jim Dobbs – American Banker
LendingClub’s headline-grabbing deal for Radius Bank will likely have more fintechs scouting for other banks to buy.
Though the $185 million deal makes strategic sense for LendingClub, other fintechs might be challenged to find targets as compatible as Radius, an online-only lender in Boston, is to the $3 billion-asset marketplace lender. That might require some compromise as those buyers pursue deals.
bit.ly/2HD3cOk

Sterling Trading Tech Releases Custom Margin Rates and Enhanced VAR for Its Real-Time Risk Engine
Business Wire
Sterling Trading Tech (STT), a leader in compliance, risk and infrastructure solutions for equity, options, and futures trading, unveiled customizable margins and enhanced VAR calculations, a major set of enhancements for its risk analytics Risk as a Service (RaaS) solution, the Sterling Risk Engine (SRE).
/bwnews.pr/38LE8k2

Cryptocurrencies

Forbes Blockchain 50
Lauren Debter, Millie Dent, Michael del Castillo, Sarah Hansen, Jeff Kauflin, Chloe Sorvino, Hank Tucker, Michael del Castillo and Matt Schifrin – Forbes
Blockchain started as a way to move bitcoin from point A to point B, but it is now being used by a host of big companies to monitor and move any number of assets around the world as easily as sending an email. Our second annual Blockchain 50 represents enterprises embracing the technology underlying cryptocurrencies like bitcoin and using it to speed up business processes, increase transparency and potentially save billions of dollars. To qualify, Blockchain 50 members must be generating no less than $1 billion in revenue annually or be valued at $1 billion or more.
bit.ly/2P9nMKh

EU Official: We Can’t Regulate Libra Without More Details
Danny Nelson – Coindesk
The European Union is still trying to figure out what to do about Libra, according to a memo released Tuesday by European Commission Executive Vice-President Valdis Dombrovskis. The indecisiveness stems from a lack of actionable information. Specifically, Libra “lacks detail,” according to Dombrovskis. Despite repeatedly asking the Facebook-launched Libra Association for information about its payments ecosystem and eponymous stablecoin, the Commission – the EU’s executive branch – has yet to determine what, exactly, Libra is.
bit.ly/38Jspmh

Michael Bloomberg has taken Andrew Yang’s place as the cryptocurrency candidate
MIT Technology Review
Michael Bloomberg has unveiled a stance on cryptocurrency policy, making the businessman and former mayor of New York the only active Democratic presidential candidate to directly address the topic. He’s got a plan for that: As US president, Bloomberg would “work with regulators to provide clearer rules” for cryptocurrency users and businesses, according to a new campaign document describing his plans for financial industry reform.
bit.ly/37JvoKb

Fortress Said to Increase Offer to Purchase Mt. Gox Claims
Olga Kharif – Bloomberg
Proposal raised to $1,300 from $755 per Bitcoin in December; Bitcoin has rallied 40% since the beginning of this year
Fortress Investment Group LLC increased its offer to purchase creditor claims from the defunct Mt. Gox cryptocurrency exchange in the wake of this year’s Bitcoin rally.
/bloom.bg/3bMmKh0

Israeli Banks Can’t Refuse Services to Crypto Firms: Attorney General
Arnab Shome – Finance Magnates
Israeli banks cannot put a blanket ban on offering banking services to crypto-related customers, Attorney General Dr. Abihai Mandelblit stated in a Tel Aviv District Court. Reported by the Globes on Wednesday, Mandelblit said that banks need to examine each case individually before refusing services to any crypto-related customers on the grounds of money laundering risks.
bit.ly/2SLR0RU

A Tax Loophole Every Crypto Trader Should Know
Shehan Chandrasekera – Forbes
Tax loopholes are interesting gaps in the IRS code which you can use to reduce your taxes, legally. This post discusses an important crypto tax loophole which could significantly reduce your crypto tax bill.
bit.ly/2V3qxAN

Brazil’s Central Bank to Launch Near-Instant Payments as a Response to Cryptocurrencies
Daniel Palmer – Coindesk
A new payments system is coming to Brazil later this year promising almost instant transfers. Called PIX, the project from the country’s central bank will provide 24/7 payments in up to 10 seconds via mobile apps, internet banking and ATMs, according to reports from Reuters and local crypto news site Livecoins on Wednesday. Slated for launch on Nov. 10, 2020, PIX is aimed to speed up and reduce the costs of fiat transfers between individuals and businesses.
bit.ly/38IkXHS

Norwegian Air May Allow Customers to Pay With Crypto as Soon as Spring
Paddy Baker – Coindesk
Travelers on Norwegian Air, one of the largest airlines in Europe, will soon be able to pay for flights using cryptocurrency. In an interview with a local business newspaper, CEO of Norwegian Block Exchange (NBX) Stig Kjos-Mathisen said his crypto trading platform had successfully developed payment infrastructure that will allow customers on Norwegian Air to purchase tickets with digital assets. “Everything is ready to go from our side”, Kjos-Mathisen said the interview. NBX aims to roll out the new feature to Norwegian customers sometime later this year, and possibly as early as the spring.
bit.ly/2wz5PhV

Coinbase Pro set to list Kyber Network’s KNC token
Yogita Khatri – The Block
Coinbase Pro, the crypto exchange’s trading platform for experienced customers, is set to list Kyber Network’s KNC token next week.
bit.ly/37MnsHQ

Cryptocurrency, ‘decentralized finance,’ and the sweet promise of 8% interest
David Z. Morris and Jeff John Roberts – Fortune
Good morning. The U.S. economy may be going gangbusters, but for those looking for a return on their savings, the picture is less pretty: Even so-called high yield savings accounts offer a pittance in interest—Goldman Sachs’ Marcus product, for instance, currently offers a measly 1.7%.
bit.ly/2vOpcDm

Venture capitalist Tim Draper bought 1M ANT tokens to join the Aragon network
Yilun Cheng – The Block
Venture capitalist Tim Draper has bought 1 million ANT tokens, an amount worth approximately $823,000, to join the governance structure of Aragon. Aragon is an open-source software project for managing decentralized autonomous organizations (DAOs). According to a Wednesday press release, with a purchase of 1 million ANT tokens, Draper now holds control of around 2.5% of the total token supply. Luis Cuende, executive director at Aragon Associate, told CoinDesk that Draper’s decision was prompted by “the recent launch of Aragon Court and the realization that Aragon can be to governance what bitcoin is to money.” Cuende revealed that Draper is also becoming a member of Aragon’s advisory board.
bit.ly/2P6qsIE

Crypto derivatives exchange Deribit completes sale of 10% equity as it eyes Asian expansion
Celia Wan – The Block
Cryptocurrency derivatives exchange Deribit recently completed its 10% sale of equity, The Block has learned from one of the investors involved. The 10% worth of shares were drawn from existing shareholders of the exchange on a pro-rata basis. At the same time, Deribit CEO and COO John and Marius Jansen still retain the majority stake, according to Su Zhu, the CEO of crypto fund Three Arrows Capital. In January, The Block first reported that the soon-to-be Panama-based exchange was looking for buyers of its shares at a 9-figure valuation. Market maker QCP Capital and Three Arrows Capital own the majority of the shares.
bit.ly/2vLWjaW

Politics

Assange Lawyers Say Trump Offered Pardon If He ‘Played Ball’
Ellen Milligan – Bloomberg
WikiLeaks founder is facing charges over Chelsea Manning leaks; Democrats believe Assange leaked 2016 emails to hurt Clinton
Julian Assange’s lawyers told a London court that they will provide evidence that U.S. President Donald Trump was prepared to offer the WikiLeaks founder a pardon if he “played ball” about leaks of Democratic National Committee emails.
/bloom.bg/2PadkCy

USDA Unveils Program to Reduce Environmental Impact of Farming
Mike Dorning – Bloomberg
Joins public debate on agriculture’s role in global warming; Department criticized for suppressing climate change research
U.S. Agriculture Secretary Sonny Perdue, whose department has been criticized for suppressing research on climate change, will announce an initiative Thursday to reduce the environmental impact of American farming.
/bloom.bg/2wqBBxo

Trump offered to pardon Assange if he denied Russia helped leak Democrats’ emails: lawyer
Reuters
U.S. President Donald Trump offered to pardon WikiLeaks founder Julian Assange if he said that Russia had nothing to do with WikiLeaks’ publication of Democratic Party emails in 2016, a London court heard on Wednesday.
/reut.rs/2ViLlED

The Wall Street Journal Excluded Elizabeth Warren From a Poll…Because They Wanted To?; I have been around this racket for going on 40 years, and I have never seen a purportedly neutral poll that left out a top-tier candidate simply because it felt like it.
Charles P. Pierce – Esquire
I have made quite clear my longtime personal and professional affection for Elizabeth Warren and for her husband, Bruce Mann. (Quiz him about the early American judiciary. I dare yez!) If that’s all you need to know, then you needn’t read any further.
bit.ly/39R4520

Michael Bloomberg Hit From All Sides in Spirited Democratic Debate
Tyler Pager, Jennifer Epstein, and Mark Niquette – Bloomberg
Ninth debate comes at crucial moment for leading campaign; Sanders defends front-runner status ahead of Nevada caucuses
Michael Bloomberg came under sustained attack in a spirited Democratic debate Wednesday that saw Elizabeth Warren compare him to President Donald Trump in his treatment of women and Bernie Sanders assail him over his attitude toward minorities.
/bloom.bg/2V4lzUl

White House Admits That Trump Trade Stance Did Depress Economy
Rich Miller – Bloomberg
Economic report of president cites trade policy uncertainty; Trump economist Philipson plays down virus impact on U.S.
The White House acknowledged what many economists considered obvious through much of last year: President Donald Trump’s trade stance depressed economic growth and business investment.
/bloom.bg/2vLIJV1

Regulation

New Mifid equivalence rules leave UK firms in limbo; Revised market access rules won’t kick in until six months after UK leaves single market
Samuel Wilkes – Risk.net
The ability of UK investment firms to trade with European Union entities following Brexit is under new doubt as updated equivalence rules are not due to take effect until six months after the UK becomes a third country.
bit.ly/3bVwVzN

FCA Highlights Libor Transition Risk
Shanny Basar – Markets Media
The UK Financial Conduct Authority included the transition from Libor as one of its four priorities this year in its supervision of wholesale financial markets.
bit.ly/2ubjkU2

Statement on Continued Dialogue with Audit Firm Representatives on Audit Quality in China and Other Emerging Markets; Coronavirus — Reporting Considerations and Potential Relief
SEC
In November 2019, we met with senior representatives of the four largest U.S. audit firms, including certain of their network representatives, to discuss audit quality across their global networks and certain of the challenges faced in auditing public companies with operations in emerging markets, including China. Those November 2019 meetings, which were discussed in a contemporaneous joint press release, were part of our ongoing efforts to address the issues highlighted in our December 2018 Statement on the vital role of audit quality and regulatory access to audit and other information internationally.
bit.ly/2HHHGYU

Cybersecurity: Five Top Stories From FINRA’s 2020 Conference
FINRA
FINRA held its biannual Cybersecurity Conference last month, bringing together experts from securities firms, regulators and law enforcement to share effective practices, practical tips and information about new threats and challenges. More than 270 attendees in person and approximately 75 firms via the web saw presentations covering a broad range of topics including:
bit.ly/2uePwpE

ICO Issuer Settles SEC Registration Charges, Agrees to Return Funds and Register Tokens As Securities
SEC
The Securities and Exchange Commission today announced settled charges against blockchain technology startup Enigma MPC for conducting an unregistered offering of securities in the form of an initial coin offering (ICO). Enigma, based in San Francisco and Israel, has agreed to return funds to harmed investors via a claims process, register its tokens as securities, file periodic reports with the SEC, and pay a $500,000 penalty.
bit.ly/38W1y6g

SEC Charges Global Alcohol Producer with Disclosure Failures
SEC
The Securities and Exchange Commission announced charges against alcohol producer Diageo plc for failing to make required disclosures of known trends relating to the shipments of unneeded products by its North American subsidiary to distributors. Diageo has agreed to pay $5 million to settle the action.
bit.ly/2vP9eJ0

Investing and Trading

California Man Scammed Investors Out of $147 Million in Gem Scam
Edvard Pettersson – Bloomberg
Scheme targeted 70,000 investors worldwide, prosecutor says; Investors lured by worthless digital coins ‘backed’ by gems
A Southern California man collected about $147 million from more than 70,000 investors around the world by promising them profits from amber and gemstones mines that didn’t actually exist and selling them worthless digital coins purportedly backed by the gems.
/bloom.bg/3bT0C4y

In America’s Richest Town, $500k a Year Is Now Below Average
Shelly Hagan, Wei Lu, and Sophie Alexander – Bloomberg
Silicon Valley area towns take three of the top five spots; Texas gets two more towns on Bloomberg 100 Richest Places list
You could easily drive through this leafy Silicon Valley suburb without realizing you were in America’s richest neighborhood. From the road, it’s all high brick walls and opaque gates.
/bloom.bg/2wAMM73

Carbon Capture Investors Get Tax Credit Clarity From IRS
Allyson Versprille – Bloomberg
Investors and developers looking to take advantage of an enhanced tax credit for carbon capture projects just got much-needed clarity from the IRS. The agency, in a notice and a revenue procedure Wednesday, addressed questions that the industry has said it needs answered before projects can move forward.
/bloom.bg/39Lquxm

The U.S. Shale Drillers Flaring the Most Natural Gas in Texas
Kevin Crowley and Rachel Adams-Heard – Bloomberg
Texas energy regulator posts flaring report amid criticism; Report spells out best, worst producers under certain measures
Who burns off the most gas in the Lone Star state’s giant oil basins? It’s not such an easy answer, according to Texas Railroad Commissioner Ryan Sitton, who released a report on flaring Tuesday amid backlash that the agency isn’t doing enough to curb the practice. In the report, Sitton spells out different ways to measure flaring but contends that any meaningful reduction will likely have a profound impact on oil production.
/bloom.bg/2wqAxto

Why Sweden ditched its negative rate experiment; Results of the Riksbank’s 5-year trial are being scrutinised by the world’s leading central banks
Richard Milne and Martin Arnold – FT
It is the biggest monetary policy experiment of modern times. One that has divided economists, central bankers and politicians. But now that Sweden has called a halt to its five-year trial with negative interest rates the serious work has begun on looking at whether it worked.
/on.ft.com/37JEExy

Institutions

Morgan Stanley to Acquire E*TRADE, Creating a Leader in all Major Wealth Management Channels
BUSINESS WIRE
Morgan Stanley (NYSE: MS) and E*TRADE Financial Corporation (NASDAQ: ETFC) have entered into a definitive agreement under which Morgan Stanley will acquire E*TRADE, a leading financial services company and pioneer in the online brokerage industry, in an all-stock transaction valued at approximately $13 billion. Under the terms of the agreement, E*TRADE stockholders will receive 1.0432 Morgan Stanley shares for each E*TRADE share, which represents per share consideration of $58.74 based on the closing price of Morgan Stanley common stock on February 19, 2020.
/bwnews.pr/2T3IRXR

UBS Names Outsider Hamers in Surprise to Succeed CEO Ermotti
Marion Halftermeyer and Ruben Munsterman – Bloomberg
ING chief has spent most of his career at Dutch retail bank; Ermotti is one of Europe’s longest-serving bank chiefs
naming ING Groep NV’s Ralph Hamers as its next chief executive officer, UBS Group AG turned to an outsider with a record of pushing digital banking but who has been vilified in the Netherlands over a money-laundering scandal.
/bloom.bg/39QQB6h

Bill Gates-Led Fund Invests in Making Lithium Mining More Sustainable; Lilac Solutions has developed a process for extracting lithium that drastically cuts water use.
Akshat Rathi – Bloomberg
Breakthrough Energy Ventures, helmed by Bill Gates, and MIT’s The Engine fund are leading an investment round of $20 million for Lilac Solutions, a U.S. startup aimed at making the extraction of lithium less water-intensive and more sustainable.
/bloom.bg/39QlAiI

UBS’s tech-savvy new boss Hamers not always loved by the Dutch
Bart H. Meijer – Reuters
Ralph Hamers made his mark as a tech-savvy chief executive who led Dutch bank ING (INGA.AS) back to profitability after cementing its position as a no-frills lender in Germany and simplifying its product portfolio.
/reut.rs/2V7uhRO

Watch Europe’s Weakest Banks Get Left Behind; Intesa’s surprise bid for Italian rival Ubi highlights just how balkanized the EU’s banking industry remains.
Ferdinando Giugliano – Bloomberg
The rise of social media has turned the fear of missing out — or FOMO — into a widespread anxiety. Those jitters may now strike parts of Europe’s banking sector with renewed anticipation for a wave of much-needed consolidation.
/bloom.bg/39HQTwe

Julius Baer rebuked over anti-money laundering shortcomings; Swiss regulators ban private bank from acquisitions and install independent auditor
Sarah Provan – FT
Swiss financial regulators have reprimanded Julius Baer for falling “significantly short” in its fight against money laundering and banned the private bank from carrying out large acquisitions until it “fully complies with the law”.
/on.ft.com/37HYp8T

GAM executives to receive no bonuses after dismal year; Asset manager reports sharp drop in profits as investors pull funds
Siobhan Riding – FT
GAM has waived bonuses for its senior leadership following a torrid year for the Swiss asset manager which is struggling to move on from a high-profile scandal involving a former star portfolio manager.
/on.ft.com/329bbfB

Regions

Vietnam Will Order Banks to Cut or Delay Interest Payments for Virus-Hit Companies
Nguyen Dieu Tu Uyen – Bloomberg
Economy at risk of missing its growth target for this year; Central bank to announce loan directive ‘soon,’ official says
The State Bank of Vietnam will order commercial banks to eliminate, cut or delay interest payments on loans to companies struggling with plunging revenue because of the coronavirus outbreak.
/bloom.bg/2uTdlns

A Fugitive Billionaire Isn’t Creditors’ Biggest Worry; Founder Group’s debt investors may be worried about a high-profile legal drama in China. A restructuring could be even worse.
Shuli Ren – Bloombrg
Who says China’s vast bureaucratic machine is too busy fighting the coronavirus to do anything else? The country is finally speeding up its creaky bankruptcy process after two years of record defaults.
/bloom.bg/2PbdLMO

Thai Banker Makes a $2.7 Billion Bet to Secure His Family’s Legacy
Chanyaporn Chanjaroen, Lee J Miller, and Suttinee Yuvejwattana – Bloomberg
Chartsiri seeks to restore Bangkok Bank’s former prominence; Sophonpanich family’s bank once the largest in Southeast Asia
For Thailand’s oldest banking family, it’s a legacy-defining deal 25 years in the making. That’s how long Chartsiri Sophonpanich has been waiting to turn Bangkok Bank Pcl into a key regional player in Southeast Asia. His winning takeover bid for Indonesia’s PT Bank Permata in December is a $2.7 billion bet that now is the time to jettison decades of caution and secure his family’s legacy for a fourth generation.
/bloom.bg/3bV2dXR

HNA Bonds Soar on Talks of State Takeover of Debt-Laden Group
Bloomberg News
Plan to sell assets sees dollar notes jump most since 2017; Group has 4.1 billion yuan in local, offshore bonds due 2020
Dollar bonds of Chinese conglomerate HNA Group Co. jumped the most in more than two years after plans emerged of a government seizure of the embattled firm. Once the poster child for China’s debt-fueled overseas acquisition spree, HNA could now find itself a takeover target of Beijing, a plan that may involve the sale of its lucrative airline assets in an effort to limit the economic damage of the coronavirus.
/bloom.bg/2v2wWRV

Coronavirus fears grip South Korea; China reports drop in new infections
Hyonhee Shin, Ryan Woo – Reuters
Scores of new coronavirus cases and a first death in South Korea fanned fears on Thursday of the global spread of the pathogen as research suggested it was more contagious than thought and China appealed to its Southeast Asian neighbours for solidarity.
/reut.rs/2T1gv0f

Chinese banks cut lending rate to prop up coronavirus-hit economy; S&P warns of $1.1tn surge in bad loans and annual economic growth as low as 4.4%
Hudson Lockett and Adam Samson – FT
Chinese lenders have cut a benchmark lending rate in a bid to prop up the country’s virus-hit economy as S&P warned that banks faced a surge of up to $1.1tn in bad loans.
/on.ft.com/38Lzpif

Climate campaigners turn their fire on the financial world; Banks and asset managers under pressure to stop investing in polluting industries
Attracta Mooney and Billy Nauman- FT
“BlackRock — murderer.” “Greenwashing kills.” “Our planet. Your crime.” These were the words graffitied on the walls of BlackRock’s Paris office after climate activists barricaded themselves inside earlier this month.
/on.ft.com/37Pm73i

Schneider Electric warns of EUR300m hit from coronavirus; French group braced for revenue losses this quarter despite reopening most of its China factories
David Keohane – FT
Schneider Electric, the French electrical equipment group, has warned that coronavirus has already inflicted a EUR300m hit to its revenues this quarter.
/on.ft.com/2vOmZry

Corruption must be fought across all of Europe or not at all; To address the rule of law crisis, Europeans must see it as a broader crisis of governance
Martin Sandbu – FT
The word corruption means two things: gaining financial advantage by abusing trust, and degrading something of value.
/on.ft.com/2PbmUot

Brexit

Brexit deal ‘a different ball game’ to Canada agreement, warns EU
Simon Murphy – The Guardian
Downing Street’s hopes of a Canada-style trade deal with the EU have been dealt a further blow after a senior adviser to Brussels’ chief negotiator, Michel Barnier, said the bloc’s relationship with the North American country was a “different ball game”. As the two sides prepare for the start of negotiations next month, Stefaan De Rynck highlighted the UK’s proximity to Brussels compared with Canada as a key factor, as well as warning that the trade talks could get “rather difficult”.
bit.ly/2Ve6Kid

Brexit complicates EU budget plans
Andrew Walker – BBC
EU leaders are meeting in Brussels this week to discuss the bloc’s future budget plans. These negotiations are always challenging, tending to pit net payers against net beneficiaries. There are proposals from the European Commission and the Parliament that some countries think involve spending too much. This time, the talks are further complicated by the departure of the UK, which was a large net contributor.
/bbc.in/32af7g9

Brexit’s New Paradox: How to Build an Economy With Fewer People
Olivia Konotey-Ahulu – Bloomberg
David Ellis took a walk around a half-built skyscraper towering above Birmingham, a British metropolis dotted with the winking red lights of construction site cranes. As he watched a team of workers installing glass panels, the full implications of the U.K.’s exit from the European Union and its free flow of goods, services and—critically—people, suddenly struck him.
/bloom.bg/2SIM5Rt

Low-Skilled Workers Need Not Apply In Post-Brexit Britain
Frey Lindsay – Forbes
The U.K. Home Office, responsible for immigration, have announced the U.K’s new immigration regime once it fully leaves the European Union. All about high-skilled immigration, the new plan does not include a general low-skilled visa or temporary work route. Many predict this will cause problems for the U.K. economy.
bit.ly/3bVayuD

Miscellaneous

Thomson Reuters close to naming ex-Nielsen president Hasker as CEO: sources
Jessica DiNapoli, Kenneth Li, Joshua Franklin – Reuters
Thomson Reuters Corp (TRI.TO) (TRI.N) is close to naming former Nielsen Holdings Plc (NLSN.N) president Steve Hasker as its next chief executive, succeeding Jim Smith, according to people familiar with the matter.
/reut.rs/2PabdP8

At Stake in Boy Scouts’ Bankruptcy: $1 Billion in Assets, or Much More; As the Boy Scouts tries to deal with a flood of sexual abuse claims in bankruptcy court, it wants to shield the local councils that own most scout camps. But plaintiffs’ lawyers say the councils must pay.
Mike Baker – NY Times
On a 2,800-acre tract of Texas woodland surrounded by the Sam Houston National Forest, a $65 million youth camp is taking shape that will include an aquatics center, a shooting range, a climbing and rappelling tower, a science center, three chapels and an air-conditioned dining hall with room for 450 people.
/nyti.ms/2SGJU0N

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First Read Hits & Takes By John Lothian and JLN Staff How about a good news story to start the newsletter? John Mormando is an RJ O'Brien broker in New York who contracted the coronavirus on March 1. The 53-year old was just released from Valley Hospital in...

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