Harlan Ten Pas
NFL Calls Time-Out on ErisX’s NFL Binary Options
Thom Thompson – John Lothian News
The National Football League asked the CFTC to delay any approval of ErisX’s proposed binary options contracts “pending a more comprehensive study” of whether the contracts would be used for hedging and whether users of the contract might be breaking federal laws by risking money on football spread betting across state lines. The NFL was reacting on the record to ErisX’s certification of three contracts that would settle to the results of NFL games.
ErisX operates cryptocurrency spot and futures markets as well as a futures clearing organization. It lists deliverable futures contracts on bitcoin and Ether. In December last year, the exchange said it wanted to offer contracts on the winner of professional football games, the final point spread and the total number of points scored in weekly NFL games.
To read the rest of this story, go here.
Hits & Takes
John Lothian & JLN Staff
Michael Kraines is out as president of Trading Technologies and Farley Owens is in the role, TT announced in a press release. Also, Roger Mills is in as chief financial officer, Guy Scott is EVP global head of sales and Bharat Mittal is chief technology officer. So now Tim Geannopulos, the chairman and CEO of TT, has his team in place to sell the firm, or take it to the next level themselves.
The NFA wants you to know that if any Members located in the U.S. are having issues regarding filings or their operations due to recent winter storms or other severe weather issues, you can contact NFA’s Information Center by calling 312-781-1410 or 800-621-3570 or emailing email@example.com.
At least 21 people have died from the extreme cold hitting the southern U.S., the New York Post reported.
Today’s lesson is to say something nice about someone and good things can happen. I called Harlan Ten Pas “revered” here in JLN and presto.
The revered Harlan Ten Pas is the latest to give to the JLN MarketsWiki Education GoFundMe campaign. Harlan is a veteran lawyer and CPA who was my business accountant when I first started John J. Lothian & Company, Inc. He never charged me a dime for the work he did and he shared his years of Scouting wisdom with me during each of our yearly meetings. Several years ago, Harlan suffered a heart attack and a stroke the same week. He is now retired from RSM, but is remembered well by all who worked with him or were clients of his. He was the inspiration for the Harlan (Ten Pas) Award given to Scouts who earn five merit badges in the Trading Tech merit badge workshop program I created with the Pathway to Adventure Council. He is an inspiration to all. Thank you to Harlan and all who have given and all who have yet to give. Support our efforts to preserve industry history by donating to our GoFundMe campaign.
A favorite Harlan story. One time a client of his was called in to the IRS about their return. The return was only half signed by Harlan, with only his first name. He had evidently been interrupted when signing the return and did not complete it. When asked about the form the customer noticed the half signature. The customer started to say something about it and the IRS agent said, “No worries, we know who Harlan is.”
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
In a bid to attract retail investors who tend to trade smaller-sized orders, Cboe Global Markets Tuesday said it plans to activate its electronic crossing auction functionality, known as AIM, for orders of up to 10 S&P 500 index options (SPX) and S&P 500 Index Weeklys options (SPXW) contracts traded on Cboe Options Exchange, which is Cboe’s largest options pit. Worth noting: Options order size has been trending smaller over the past year and currently more than 30 percent of the volume in SPX options trades in orders of between one to 20 contracts. Arianne Criqui, Cboe’s head of derivatives and global client services, said in a statement that the AIM function will complement open outcry during regular trading hours. It’s slated to begin Monday, February 22. More details here. ~SC
PanXchange, refusing to be bullied by other entities in the industrial hemp space, is announcing this morning that it has kicked off a crowdfunding campaign to help pay legal costs as it is harassed by New Leaf Data Services and New Leaf Capital Partners for using the term “benchmarks” in its monthly “PanXchange® Hemp: Benchmarks and Analysis.” New Leaf claims that its own use of “hempbenchmarks.com” in 2016 is infringed by the title of the PanXchange report. You can read more about the crowdfunding campaign here.
Trading Technologies Appoints New President, Chief Financial Officer, EVP Global Head of Sales and Chief Technology Officer; New executive appointments further strengthen company for continued global growth and expansion
Trading Technologies International, Inc. (TT), a global provider of high-performance professional trading software, infrastructure and data solutions, today announced the promotion of four executive leaders in the organization. Farley Owens is now President, Roger Mills is Chief Financial Officer, Guy Scott is EVP Global Head of Sales and Bharat Mittal is Chief Technology Officer. “Farley, Roger, Guy and Bharat are long-standing leaders who have proven themselves to our customers, shareholders and employees. In their new roles, they will continue to bring keen domain expertise and experience as we forge ahead with our goals of growth and expansion.” As President, Farley Owens will oversee the day-to-day operations of the company, specifically driving the execution of the company’s objectives to fuel growth. Previously, he served as Head of Product Marketing and EVP Product Management and Marketing.
*****Now former TT President Michael Kraines has left TT for another opportunity. Tim G has his team together without the former investment banker.~JJL
New Momentum for Ameribor Benchmark Follows Citi’s Market-Making Move; Regional banks look to gain a hedging tool in the Libor transition as dealers eye an opportunity
John Hintze – GARP
Citi’s decision to join the American Financial Exchange (AFX) and make markets in Ameribor-based derivatives brought the upstart exchange long-sought affirmation from a major Wall Street player. More are likely to follow, bolstering this U.S. alternative to the Libor benchmark, though it may not result in a quick ramp-up in Ameribor usage.
*****There are lots of smiling faces over at the AFX.~JJL
Vaccinating the world is a test of our ability to co-operate; It is also a trial of our enlightened self-interest and will need G20 leadership to succeed
Martin Wolf – FT
Is it possible to tackle a global pandemic in a world marked by huge inequalities of wealth and power? The answer might tell us how the world will address the far more complex challenge of climate change. What we have learnt from Covid-19, so far, is that the world has shown more co-operation than many might have expected. Even so, given that we are all in this together, it has not been enough.
*****We have defeated evil before. We can do it again.~JJL
Robert Glauber Probed Causes of 1987 Stock-Market Crash; Harvard professor, who has died at age 81, also helped craft S&L bailout as Treasury official
James R. Hagerty – WSJ
Robert R. Glauber, a Harvard professor who investigated the causes of the 1987 stock-market crash and helped shape federal legislation bailing out the savings-and-loan industry, died Sunday at his home in Brookline, Mass. He was 81 and had been diagnosed with pancreatic cancer last year.
*****Condolences to his family, friends and colleagues.~JJL
At 93, She Waged War on JPMorgan—and Her Own Grandsons; Beverley Schottenstein said two grandsons who managed her money at JPMorgan forged documents, ran up commissions with inappropriate trading and made her miss tens of millions of dollars in gains. So she decided to teach them all a lesson.
Tom Schoenberg – Bloomberg
Beverley Schottenstein was 93 years old when she decided to go to war with the biggest bank in the U.S. It was a June day, and the Atlantic shimmered beyond the balcony of her Florida condominium. Beverley studied an independent review of her accounts as family and lawyers gathered around a table and listened in by phone. The document confirmed her worst fears: Her two financial advisers at JPMorgan Chase & Co., who oversaw more than $80 million for her, had run up big commissions putting her money in risky investments they weren’t telling her about. It was the latest red flag about the bankers. There had been missing account statements. Document shredding. Unexplained credit-card charges.
*****Don’t mess with this old lady.~JJL
Tuesday’s Top Three
Our top story Tuesday was the link to registration for DePaul University’s Arditti Center for Risk Management’s Annual Risk Conference, which takes place virtually on February 23. John Lothian is the moderator of the first panel. Second was Bloomberg’s How Extreme Cold Turned Into a U.S. Energy Crisis. Third was the Wall Street Journal’s Goldman Sachs to Offer Its Investing Know-How to the Masses.
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Online-Trading Platform Will Let Investors Bet on Yes-or-No Questions; Sequoia, Chuck Schwab are among those backing Kalshi, which plans to launch in March
Alexander Osipovich – WSJ
An online-trading startup that aims to let people wager on questions about future events ranging from economics to the weather to public health has raised $30 million from an array of prominent investors including venture firm Sequoia Capital and discount-brokerage pioneer Charles R. “Chuck” Schwab. Kalshi Inc. expects to launch in March. It plans to let users bet on “yes” or “no” answers to questions about future events. For instance, had the platform existed last year, it might have asked users whether a Covid-19 vaccine would be approved by the end of 2020.
Call for SEC to regulate index providers as investment advisers; Academics say narrower thematic or style approaches should be subject to regulatory scrutiny
Chris Flood – FT
Stricter rules should be imposed on providers of financial indices, which underpin trillions of dollars of investment decisions globally, according to a new academic study that calls for action by US regulators. Index providers, such as S&P Global, MSCI, FTSE Russell and Bloomberg, calculate widely used benchmarks for stocks, bonds and other securities, but these companies are not regulated by the Securities and Exchange Commission, the US investment industry’s main watchdog.
European bankers set sights on Amsterdam as regional Spac capital; Dealmakers say the Netherlands’ flexible listing rules are attracting blank-cheque companies
Nikou Asgari and Stephen Morris – FT
Amsterdam is emerging as Europe’s centre for blank-cheque companies as investors race to emulate the boom in listings that has gripped US markets. Special-purpose acquisition companies, or Spacs, have surged in popularity over the past year to become Wall Street’s hottest investment product as a flood of capital provides investors with a new and often quicker way to take businesses public.
Russia’s main bourse to open earlier to attract traders in China; Moscow and Beijing have struggled to gain momentum in effort to forge closer trading ties
Eva Szalay – FT
The Moscow Exchange is set to open currencies and derivatives trading three hours earlier from March, in the latest effort to drum up more demand from investors in China. Trading will run from 7am to midnight Moscow time as the exchange seeks to capture more of the waking hours of countries east of Russia.
Russia to limit trading options for amateur investors after Reddit frenzy concerns
Russia will limit retail investors’ access to complex products on financial markets from October, the central bank announced on Tuesday, saying the recent share trading frenzy in the United States had highlighted the dangers of a lack of regulation.
Texas Livestock Industry Reels From Storm, Outages; Exposure and frozen pipes threaten cattle; dairy farmers are forced to dump milk after plant shutdowns
Jacob Bunge – WSJ
Bitter cold and power outages have created a crisis for some Texan farms and ranches, leaving livestock dead from exposure and raising fears that herds could run short of food and water. Forced shutdowns of plants that process milk and make animal feed are disrupting the state’s agricultural supply chains, industry executives said. Some farmers are being forced to dump tankers of milk on fields because it can’t be processed, and state agriculture officials feared livestock may have to be euthanized if they cannot be watered and fed.
Two Million? Five Million? Real Size of U.S. Blackouts a Mystery
Lynn Doan – Bloomberg
Texas grid operator says at least 2 million customers in dark; Amount of load shed suggests 5 million may be affected
It’s not easy putting a number on what is undoubtedly the largest forced blackout in U.S. history. If you take the Texas power grid operator’s word for it, the rolling outages that have plunged much of the state into darkness amid an unprecedented cold blast have affected at least two million homes and businesses. If you trust a well-known website that scrapes data from 725 utility outage maps nationwide, it’s about 3.3 million in Texas alone, and 3.6 million across four states. But that may not include rolling outages that some power companies aren’t accustomed to reporting.
Don’t Blame Wind for Texas Electricity Woes; Renewable energy and market design are easy targets during electricity failures but they are inadequate explanations
Jinjoo Lee – WSJ
Rolling blackouts in Texas during a historic winter storm are inviting scrutiny of everything from the grid’s reliance on wind energy to laissez-faire market design. The answer is actually quite simple: Texas isn’t used to the cold.
Review Your WSPs – Subpoenas are Coming
The authority to open SEC investigations, and therefore to issue subpoenas, was expanded under the Obama Administration to the director of Enforcement, rather than solely to the Commission itself. The Director of Enforcement then delegated that authority to various senior officials, including regional and associate directors and specialized unit chiefs. The number of investigations thereafter rose.
China blocked Jack Ma’s Ant IPO after investigation revealed likely beneficiaries: Report
Times of India
When China late last year decided to pull the plug on Ant Group’s $37-billion initial public offering (IPO), it was said to be in reaction to co-founder Jack Ma’s criticism of the country’s financial system. Apparently, there was another reason that led to quashing of what could have been the world’s largest-ever IPO.
Traders chase sky-high returns in leveraged exchange traded products
Saqib Iqbal Ahmed – Reuters
Frenzied speculation in the shares of GameStop may have subsided, but it is business as usual in a small corner of the market where traders looking to turbocharge their gains dabble in what may be some of the market’s most volatile funds.
Ariel and JPMorgan to invest in minority-owned companies; Initiative will seek to back middle-market suppliers to Fortune 500 groups
James Fontanella-Khan and Michael Mackenzie – FT
Ariel Investments, the asset manager founded by value investor John Rogers, is joining JPMorgan Chase in a strategic initiative aimed at turning minority-owned businesses into multi billion-dollar companies.
IEX Increases Lit Volume With D-Limit Order
Displayed share at IEX Group has risen from 10% to 30% of total trading volume since it introduced a new order type last year, which the exchange said has demonstrated improved execution quality. IEX Exchange fully launched its D-Limit, discretionary limit order type, on October 1 last year after receiving approval from the US Securities and Exchange Commission.
New York widens lead over London as finance hub: Duff & Phelps
A growing majority of top bankers and asset managers consider New York as the world’s top financial hub and expect Brexit to damage London’s global standing, consultants Duff & Phelps said in a global regulatory outlook on Tuesday.
Citi Loses Bid to Recoup Massive Mistake in Surprise Ruling
Chris Dolmetsch, Katherine Doherty, and Jennifer Surane – Bloomberg
Asset managers for Revlon lenders can keep over $500 million; It’s the latest blow to Citigroup and could affect industry
Citigroup Inc. unexpectedly lost a legal battle to recover half a billion dollars it sent Revlon Inc. lenders, after the embarrassing blunder forced it to answer to regulators and tighten its internal controls. U.S. District Judge Jesse Furman on Tuesday ruled that 10 asset managers for the lenders — which include Brigade Capital Management, HPS Investment Partners and Symphony Asset Management — don’t have to return $504 million that Citibank said it mistakenly transferred in August while trying to make an interest payment. He said they shouldn’t have been expected to know that the transfer, which totaled more than $900 million before some lenders returned their share, was an error.
Virtual control: the agenda behind China’s new digital currency; The planned ‘e-yuan’ could boost Beijing’s surveillance state and create competition for private fintech groups
James Kynge and Sun Yu – FT
Celebrations in China to mark the lunar new year of the Ox, which began on February 12, have been somewhat muted because of the coronavirus pandemic. The numbers of people travelling to visit relatives this year are down sharply, depriving family gatherings of a measure of joy.
‘We got lucky’: hedge funds that cashed in on the Reddit rally; Surge of amateur investors’ stock bets also boosted returns of some fund managers
Laurence Fletcher – FT
Retail investors who dealt a black eye to hedge funds betting against the price of stocks including GameStop last month also delivered years’ worth of gains in a matter of days to a handful of other fund managers. Investors co-ordinating their actions on Reddit drove up the price of GameStop by as much as 2,400 per cent at its peak last month, leading to huge losses for funds betting against them. Beaten-down stocks such as Bed Bath & Beyond, BlackBerry and Nokia also shot higher.
Total chief warns of renewable energy bubble; Patrick Pouyanné says oil supermajors are competing over a still scarce supply of renewable assets
David Keohane and Anjli Raval – FT
Renewable energy assets are in a bubble that has led to a string of deals with “crazy” valuations, according to the chief executive of Total, one of the world’s biggest oil and gas companies.
Bank of America Issues Warning About Potential Stock Market Bubble
Dawn Allcot – Yahoo Finance
As Bitcoin breaks the $50,000 mark and the Dow hovers in the low 30,000s, a new report from the Bank of America and EPFR Global reveals that the latest market exuberance “may precede a correction,” Bloomberg reports.
Insiders at Covid-19 Vaccine Makers Sold Nearly $500 Million of Stock Last Year; Executives at Moderna, Merck are among those who have reaped the biggest rewards
Inti Pacheco – WSJ
Executives and directors at Pfizer Inc., PFE -0.09% Moderna Inc. MRNA -2.84% and other companies developing Covid-19 vaccines sold approximately $496 million of stock last year, reaping rewards of positive vaccine developments that drove up the value of the drugmakers’ shares.
The Coronavirus May Not Be Able to Mutate Beyond Control; Yes, the variants are worrying, but there appear to be limits to what might be coming.
Faye Flam – Bloomberg
It’s been about a year since the early coronavirus alarms were raised, and despite a decline in infections, new fears are rising up. New Covid-19 variants are making pessimists worry that an even bigger next wave may be coming. It’s true that the virus is mutating in ways more profound than biologists anticipated last summer. But new research also suggests that there may be limits to how many tricks the coronavirus has up its sleeve — and that may make it easier for vaccines to keep up.
UK companies look to make Covid-19 vaccinations mandatory; Law firms say businesses are considering making jabs a condition of employment
Kate Beioley, George Parker, Delphine Strauss, Alice Hancock and Siddharth Venkataramakrishnan – FT
British companies are looking to draw up “no jab, no job” contracts for employees, as the government admitted that it was “up to businesses” if they wanted workers or customers to hold coronavirus vaccination passports.
EU set to announce fresh vaccine deal with Moderna; Commission president Ursula von der Leyen seeks to set up response to pandemic following criticisms
Michael Peel and Sam Fleming and Donato Paolo Mancini – FT
Brussels is set to almost triple its orders of Moderna’s coronavirus vaccine as part of an EU push to respond to the emergence of new variants and the possible need for booster shots. The European Commission is due on Wednesday to announce a deal for a further 150m doses of the US pharmaceutical company’s jab this year and an option for 150m more next year, people briefed on the matter said.
Shortage of giant plastic bags threatens global vaccines rollout; Manufacturers come close to halting production over scarcity of sterile liners
Hannah Kuchler and Joe Miller – FT
Vaccine manufacturers are struggling to secure supplies of giant plastic bags used in bioreactors that mix pharmaceutical ingredients, creating a bottleneck that threatens the rollout of Covid-19 shots around the world.
Sweden eyes tighter Covid measures as third wave looms; Government proposal would close shopping centres, gyms and restaurants for the first time
Richard Milne – FT
Sweden has warned that it might have to close businesses and shut down parts of society as unease grows in Stockholm at the possibility of a third wave of the Covid-19 pandemic.
Wealthy, efficient Dutch play catch-up in vaccine roll-out
Yoruk Bahceli – Reuters
Despite its wealth and reputation for efficiency, the Netherlands trails in the European Union vaccination rankings, its roll-out hampered by poor planning and a conservative strategy that kept more than 40% of its vaccines in storage rather than in people’s arms.
South Africa Rolls Out J&J Covid-19 Vaccine to Healthcare Workers; Yet-to-be-authorized shot is administered after a clinical trial showed its efficacy against the new coronavirus strain first detected in South Africa
Gabriele Steinhauser – WSJ
South Africa started administering Johnson & Johnson’s Covid-19 vaccine, which has yet to be authorized anywhere, to healthcare workers, as the country grapples with a new, more contagious coronavirus strain.
Exchanges, OTC and Clearing
Sonans lists on Euronext Growth
The education provider Sonans has today been admitted to trading on Euronext Growth (ticker code: SOHO). “The listing of the company lays the foundation for further growth and development. The goal is to strengthen our mission, which is to offer high-quality education to even more students,” says CEO Erik Brandt.
Eurex Exchange Readiness Newsflash | Incident Handling Refresher Newsflash
We strive to ensure high availability of our trusted Eurex T7 trading system. Nevertheless, we want market participants to be well prepared for any rarely occurring incidents. Hence, we have started to publish newsflash messages on a regular basis dealing with the incident handling of different special incident cases or providing more general incident handling information.
Citi Clears CDS Index Option Trades Through ICE Clear Credit; Options activity builds on record year at ICE Clear Credit in 2020
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listings services, today announced that Citi has traded and cleared the first client-executed Credit Default Swap (CDS) Index Option trades in the U.S. through ICE Clear Credit.
Cboe to Enable Electronic Auction Mechanism for S&P 500 Index Options Products, Beginning February 22
Cboe Global Markets
Cboe Global Markets, Inc. (Cboe: CBOE), a market operator and global trading solutions provider, today announced plans to enable its electronic auction mechanism to further serve market participants trading S&P 500® Index options (SPX) and S&P 500 Index WeeklysSM options (SPXW) on Cboe Options Exchange, beginning Monday, February 22.
Rosenblatt Announces Upgrades to SORT “Institutional 606” Analysis Tool
Rosenblatt Securities is pleased to announce 2021 improvements to its Streamlined Order Routing Transparency (SORT) tool, which helps institutional investors easily aggregate and analyze new Securities and Exchange Commission-mandated broker venue-selection data in US equities.
FTC Could Let Consumer Financial Protection Bureau Oversee Fintech
Stephen R. Chuk – The National Law Review
The change in the White House administration combined with a potential ground-breaking Supreme Court decision may move the oversight and enforcement for marketing by the fintech sector from the Federal Trade Commission (“FTC”) to the Consumer Financial Protection Bureau (“CFPB”). This would be a tectonic shift.
Vela adds Cboe One market data to SuperFeed
Traders Magazine (press release)
Vela, a leading independent provider of data and execution technology for global multi-asset electronic trading, has added the Cboe One Feed to its award-winning normalized market data service, SuperFeed. Vela’s SuperFeed is a fully managed, low-latency market data feed that delivers high-quality, normalized real-time data via a single source with industry-leading levels of performance, availability, and reliability. Offering an exceptional blend of fast delivery and scalability, SuperFeed is designed to simplify and speed up clients’ access to data and is available from Vela’s data centers and via all major managed infrastructure providers. In support of the growing demand for real-time market data in the cloud, Vela recently deployed SuperFeed within the Amazon Web Services (AWS) public cloud environment as well as IPC’s Connexus Cloud and Connexus Labs. Vela’s vendor bridge technology eliminates the costs and overheads associated with changing feed providers, enabling a more seamless and rapid migration.
Diginex launches Front-to-Back Digital Assets Trading, Portfolio Management and Risk Platform Powered by Itiviti
Diginex Limited (Nasdaq: EQOS), the digital assets financial services company, and Itiviti, a leading technology and service provider to financial institutions worldwide, today announced the launch of ‘Access’, a front-to-back trading, portfolio, and risk management solution that enables the trading of cryptocurrencies and crypto derivatives across several platforms.
Coinbase Opens Waitlist for Ethereum 2.0 Staking
Colin Harper – Coinbase.
Per a blog post shared with CoinDesk, Coinbase customers can now sign up to stake their ETH into the Beacon Chain smart contract, the coordinator and bridge between the old Ethereum and Ethereum 2.0, the network’s momentous migration to a proof-of-stake network.
Central Bank Digital Money Won’t Replicate Cash, Sweden’s Riksbank Says
Rafaela Lindeberg and Ott Ummelas – Bloomberg
It would be misguided to expect cash-like features of a central bank digital currency, according to one of the monetary authorities furthest ahead in exploring such a system. Sweden’s Riksbank, which has done more research than most in exploring the feasibility of a digital currency, says users won’t be able to act anonymously in the same way they can with bank notes, according to a report published on Tuesday.
Bitcoin’s $50,000 FOMO Is Overpowering Bankers; The Fear Of Missing Out is rippling through business and finance. But not everyone can be Elon Musk.
Lionel Laurent – Bloomberg
JPMorgan Chase & Co. traders are said to be “salivating” over Bitcoin. It’s easy to see why. The cryptocurrency’s price has shot past $50,000, double where it was on Christmas Day, creating a powerful centrifugal force of excitement — and real money judging by crypto exchange Coinbase Inc.’s reported profit margins of 20%.
JPMorgan Says Bitcoin Rally Unsustainable Unless Volatility Ebbs
Joanna Ossinger – Bloomberg
Largest cryptocurrency hit an all-time high on Wednesday; Token’s rising volatility is stirring caution about outlook
Bitcoin’s volatility needs to ease to prevent the token’s rally from fizzling, according to JPMorgan Chase & Co. Unless swings recede rapidly, the current price of the largest cryptocurrency “looks unsustainable,” strategists led by Nikolaos Panigirtzoglou wrote in a note Tuesday.
Corporate CFOs Not Planning to Buy Bitcoin, Gartner Survey Shows
Olivia Raimonde – Bloomberg
Only 5% plan to hold Bitcoin as corporate asset this year; Among respondents, 84% say they’ll never purchase the token
Most financial executives, including chief financial officers, are not planning to invest in Bitcoin as a corporate asset this year, according to a Gartner Inc. survey. The February survey, consisting of 77 finance executives, including 50 CFOs, showed that only 5% plan to hold the world’s largest digital token on their company books this year. At the same time, 84% of respondents said they do not plan on ever purchasing the coin as an asset.
Dogecoin Has a Top Dog Worth $2.1 Billion
Caitlin Ostroff – WSJ
The dogecoin market has a pack leader. Records show that a person, or entity, owns about 28% of all of the cryptocurrency in circulation—a stake worth about $2.1 billion at current prices. The holder’s identity isn’t known, which is common in the opaque world of digital currencies. It is hard to tell what to make of this giant position in what has long been a small and niche corner of the cryptocurrency world.
Who is Satoshi Nakamoto? Bitcoin’s creator remains a mystery
Michael Kaplan – NY Post
Bitcoin was supposedly invented by Satoshi Nakamoto, a genius from Japan. But no one knows who Nakamoto actually is — and nobody has come forward to convincingly take credit for definitively being Nakamoto. Lately, more and more people are speculating that it could be Tesla and SpaceX founder Elon Musk.
Ontario securities regulator grants approval to second bitcoin ETF in less than a week
Aislinn Keely – The Block
The Ontario Securities Commission has approved a bitcoin exchange-traded fund (ETF) just days after the regulator greenlit a similar product. A receipt dated February 16 grants the Evolve Bitcoin ETF final approval for its prospectus and paves the way for a listing on the Toronto Stock Exchange (TSX). Cidel Trust Company, a subsidiary of Cidel Bank Canada, is the fund’s custodian. Gemini is serving as sub-custodian. The receipt was published at 2:57 p.m. ET, public records on SEDAR show.
Bitwise launches new DeFi fund, offering exposure for accredited investors
Frank Chaparro – The Block
Count this as a potential sign that the institutional investment world is cozying up to the burgeoning decentralized finance market. Crypto asset manager Bitwise announced Wednesday the launch of the Bitwise DeFi Crypto Index. The new fund will provide a vehicle for accredited investors to make a diversified bet on DeFi through the structure of a security, which might make them more comfortable with the nascent market known for its hacks and rug pulls. The DeFi market – which spans lending, exchange, and insurance protocols – has grown at a fast-clip over the last year, with the notional value locked in such protocols soaring from under $1 billion at the beginning of 2020 to $56 billion this month.
Diginex Connects Crypto Exchanges and Electronic Trading Firms With New Platform; The crypto services firm is connecting high-frequency traders who use electronic trading platforms to crypto exchanges.
Nathan DiCamillo – Coindesk
Crypto services firm Diginex has partnered with electronic trading firm Itiviti to let institutions trade crypto and equities under one roof. The new platform is called Diginex Access. The firm claims it is the first crypto firm to plug into an electronic trading platform’s order management, execution management and portfolio management systems, said Diginex CEO Richard Byworth. Other firms offer just crypto portfolio management software for traditional institutions getting into crypto, Byworth said. Itiviti users, mostly investment banks and hedge funds, can now trade crypto and crypto derivatives alongside their equities positions. The product may also increase liquidity for Diginex’s exchange, EQUOS; Diginex collects a 0.01% to 0.02% fee on trades that come through the platform.
India Plans Twin Taxes on Exchanges and Traders Before Passing Crypto Bill: Report; A senior Finance Ministry official told a newspaper that taxation does not necessarily imply legality.
Omkar Godbole – Coindesk
India is reportedly planning a short-term boost to its coffers by ensuring the nation’s cryptocurrency space is taxed before bringing in a ban on such assets. The government is likely to impose both personal income tax (IT) and the goods and services tax (GST) on gains from trading cryptocurrencies, according to a Wednesday report from Business Standard, one of the largest English-language newspapers in India. “Bitcoins will be categorized as financial services attracting 18% GST on fee commission collected [by exchanges] under this segment. Plus, [income tax] to be paid on the earnings from this,” a senior finance ministry official familiar with the matter said. They added that an official circular will be released soon.
Google Ventures-backed crypto firm Blockchain raises $120 million
Ryan Weeks – The Block
Blockchain.com, the London-based crypto wallet and exchange operator, has raised $120 million from a group of macro investors.
Yellen needs to tell Asian nations to stop currency manipulation; US needs to take a tougher line so excess savings can be drawn down to stimulate global growth
David Waddill – FT
For more than 20 years, roughly a dozen Asian central banks, including those of China and Japan, have intervened to suppress the value of their currencies.
Why on earth would right-wing people with connections to the fossil fuel industry lie about ‘frozen wind turbines’ in Texas? Disinformation has been circulating about the cold snap in Texas, fed by Republicans and publication ‘experts’ with convenient connections to gas and oil
Jamie Henn, Duncan Meisel – The Independent
The fossil fuel industry’s disinformation machine turned on before the lights even went out. As a massive winter storm rolled towards Texas, it was accompanied by a barrage of lies about how renewable energy — and “frozen wind turbines” in particular — was to blame for potential blackouts.
Nordea Manager Arrested in Swedish Insider Dealing Case
Anton Wilen – Bloomberg
A manager at Nordea Bank Abp in Stockholm was arrested on allegations of severe abuse of insider information. The long-time Nordea employee is suspected of having leaked information obtained through his work to a friend, whose family traded on the information, Pontus Hamilton, prosecutor at the Swedish Economic Crime Authority, said by phone.
Ex-Goldman Sachs analyst and brother charged with insider trading; UK financial regulator alleges that personal loans were used to fund insider share dealing
Jane Croft – FT
A former Goldman Sachs analyst and his lawyer brother have appeared in court charged with insider trading and fraud. Mohammed Zina, 32, and Suhail Zina, 33, who was a solicitor at Clifford Chance, appeared at Westminster magistrates court on Tuesday. They were charged by the UK regulator, the Financial Conduct Authority, with six offences of insider dealing and three counts of fraud by false representation.
Tipster Brothers in Insider Trading Case Walk Away With Millions
Gaspard Sebag and Jonathan Browning – Bloomberg
The French siblings provided insider tips on deals to traders; One of the brothers pocketed $12 million for tips, filing says
As securities trader Joseph El Khouri waits to hear if he’ll be extradited to New York to face insider-dealing charges, the two French brothers who brought him hot tips get to go scot-free and keep the millions they made. John and Kevin Dodelande, who funneled M&A secrets from London bankers to traders including El Khouri, entered a pact that allows them to avoid U.S. prosecution and keep millions of dollars in payments they got for their tips, according to a filing by El Khouri’s lawyers. The deal secured in exchange for cooperation is the latest strand in the painstaking pursuit by U.S. and European authorities of a sprawling international web of insider trading.
Neil Woodford’s relaunch plan prompts calls for independent inquiry; UK regulator yet to conclude 20-month probe into disgraced stockpicker’s previous company
Chris Flood – FT
Neil Woodford’s plan to relaunch himself as a money manager less than two years after the collapse of his investment company has prompted a furious response from investors who have been left nursing losses and calls for an independent inquiry.
Supreme Court decides Peter Ivan Macks’ liquidator registration to be suspended for three years
On 12 February 2021, the Supreme Court of South Australia handed down its penalty decision that Peter Ivan Macks’ liquidator registration be suspended for a period of three years, commencing on a date yet to be fixed.
ESMA highlights risks to retail investors of social media driven share trading
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has released a statement to highlight to retail investors the risks connected with trading decisions based exclusively on exchanges of views, informal recommendations and sharing of trading intentions through social networks and unregulated online platforms. The statement is issued as part of ESMA’s investor protection objective to safeguard retail investors, whose participation is key to the development of the Capital Markets Union.
New Rate for Fees Paid Under Section 31 of the Exchange Act
Effective February 25, 2021, the Section 31 fee rate applicable to specified securities transactions on the exchanges and in the over-the-counter markets will decrease from its current rate of $22.10 per million dollars in transactions to a new rate of $5.10 per million dollars in transactions.
New Research: Four in 10 American Households Had Difficulty Withstanding a Financial Crisis Before COVID-19; Financial Resilience Toughest for Millennials, Singles, Women and Those With Lower Incomes, No College Degree and Facing Unemployment
Well before the COVID-19 pandemic, nearly four in 10 households lacked financial resilience, making them vulnerable to financial hardships, including those associated with the current pandemic or future financial crises, according to a report from the FINRA Investor Education Foundation. Meanwhile, fewer than two in 10 households appeared to be financially resilient.
Statement by FINRA President and CEO Robert W. Cook Upon the Death of Former NASD Chairman and CEO Robert Glauber
FINRA mourns the loss of former NASD Chairman and CEO Robert Glauber, a tireless advocate for the interests of investors and sound financial regulation throughout his distinguished career in the private, public and academic sectors.
SEC Charges Ratings Agency With Disclosure And Internal Controls Failures Relating To Undisclosed Model Adjustments
The Securities and Exchange Commission today filed a civil action alleging that former credit ratings agency Morningstar Credit Ratings LLC violated disclosure and internal controls provisions of the federal securities laws in rating commercial mortgage-backed securities (CMBS).
Statement by Mark Steward, FCA Director of Enforcement and Market Oversight, on Woodford Investment Management Ltd and WCM Partners Ltd
We have noted the recent comments by Neil Woodford on his future business plans. This statement sets out our position on specific points on which we have been asked for information.
Short selling bans and market restrictions – Considerations for investors
White & Case LLP via JD Supra
This alert reviews the steps taken by the various market regulators across the EU in response to market volatility
A number of regulators across the globe responded to recent market volatility by introducing temporary short selling bans and/or market restrictions. Such bans have since expired as of 18 May 2020. Other regulators (including the UK) said that there was no evidence to suggest that short selling had been the driver of recent market falls and emphasised the important role short selling plays in liquidity provision and price discovery, but in some cases nonetheless imposed lower thresholds for reporting short positions to ensure that regulators were able to monitor positions closely.
New Zealand Financial Markets Authority Fears Chinese New Zealanders Are Under-Reporting Investment Scams
Chinese New Zealanders are being urged to beware of investment scams in the current economic climate, and to report any investment scams to the Financial Markets Authority (FMA).
SEC Sues Morningstar, Alleging Undisclosed Changes to Bond Ratings; Adjustments were made to 30 commercial mortgage-backed securities valued at $30 billion, SEC says in lawsuit
Dave Michaels – WSJ
Morningstar Inc. allowed credit-rating analysts to adjust financial models that resulted in better terms for bond issuers and in some cases less interest income for investors, the Securities and Exchange Commission alleged in a civil lawsuit on Tuesday.
Investing and Trading
Short Sellers, SPACs and the Future of Flying Cars; The mania for blank-check companies has spread to the nascent air taxi industry, but investors need to be careful.
Chris Bryant – Bloomberg
When EHang Holdings Ltd. first sold shares to the U.S. public in December 2019, investors weren’t exactly sold on the rare chance to bet on the future of flying cars. The Chinese company makes “electric vertical take-off and landing” (eVTOL) aircraft, which function a bit like a helicopter but are powered by batteries and have multiple rotors. Its passenger drones are pilotless, too, unlike those of most of its rivals.
Brothers Make Billions From Ex-Wall Street Banker’s Pharma Firm
Benjamin Stupples – Bloomberg
The Giulianis hold stakes worth $3 billion in Royalty Pharma; Royalty Pharma shares have surged 70% since last year’s IPO
Germano and Giammaria Giuliani’s family made a fortune with remedies for hair loss, indigestion and sensitive skin. The family business is still making money after more than a century in operation, but what’s really driving the brothers’ wealth is a bet on another health-care company.
The Riskiest Stocks Are in Favor. Why That Probably Won’t Change Anytime Soon.
Jacob Sonenshine – Barron’s
When the economy gains steam after a nasty episode—the Covid-19 pandemic, for instance—riskier stocks tend to outperform. That’s been the major theme lately and doesn’t seem to be losing steam, especially as some lower quality stocks still look inexpensive.
Rio Tinto announces biggest dividend in its 148-year history; Mining group hands $9bn of cash back to shareholders as commodity prices rally
Neil Hume – FT
Rio Tinto, the world’s biggest producer of iron ore, has rewarded investors with the biggest dividend in its history after what its new chief executive described as a “year of extremes”.
Overheard in the Long Room: the new commodity supercycles; JPMorgan is buying the decade-long dip.
Jamie Powell – FT
Remember the commodity supercycle? While the world was getting high on incredibly loose credit between 2000 and 2009, commodity prices went absolutely bonkers. Thanks to a weakening dollar and aggressive Chinese demand, anything tangibly linked to digging things out of the ground seemed to go up, including the currencies of certain commodity-linked emerging market nations. One stat from that era for you: global M&A activity in mining and metals rose from around $10bn in 2002 to just over $150bn in 2007.
Environmental, Social and Corporate Governance
Ford Going Almost Fully Electric by End of Decade in Europe
Craig Trudell – Bloomberg
Carmaker invests $1 billion in German plant shifting to EVs; Only some of its commercial vehicles will lack a plug by 2030
Ford Motor Co. will drastically overhaul its business in Europe, where it didn’t sell a single fully electric vehicle last year, vowing to go almost entirely electric by the end of the decade.
In Texas’s Black-Swan Blackout, Everything Went Wrong at Once
Rachel Adams-Heard, Naureen S Malik, and Brian Eckhouse – Bloomberg
Natural gas output malfunctioned as wind turbines froze; This happened a decade ago but limited steps were taken
The finger-pointing began immediately: It was the frozen wind turbines that foolishly replaced traditional sources. No, fossil fuels were at fault. No, Texas’s deregulated power market, unique in the country, had allowed companies to skimp on maintenance and upgrades.
ESG Funds Need to Shrink Their Carbon Footprint Faster; The investing public is losing patience with slow-motion climate strategies.
Tim Quinson – Bloomberg
Are the biggest, supposedly ESG-focused exchange-traded funds doing their part to lower their collective carbon footprint? This is the question that Jordan Waldrep, the Dallas-based chief investment officer of TrueMark Investments, delved into by analyzing the holdings of the largest environmental, social and governance funds, including the $14.1 billion iShares ESG Aware MSCI USA ETF.
Texas struggles to restore power to millions during Arctic blast; More than half of energy-rich state’s total power generation capacity remains offline
Justin Jacobs – FT
Millions of Texans braved freezing temperatures without heat or electricity for a second day on Tuesday as the energy-rich US state struggled to restore power generation systems knocked out of commission by an Arctic blast.
Citi Faces ‘Finders Keepers’ in Fighting $500 Million Ruling
Chris Dolmetsch – Bloomberg
Bank to appeal decision that Revlon lenders can keep payment; N.Y. precedent prizing finality in transfers is high hurdle
A 30-year-old legal precedent that essentially says “finders keepers” in certain financial transactions will make it hard for Citigroup Inc. to get a half-billion-dollar decision against it overturned. The bank has said it will appeal the ruling — issued Tuesday by a federal judge — that rejected its attempt to recover $504 million it accidentally sent to asset managers for Revlon Inc. lenders last summer. The recipients include Brigade Capital Management, HPS Investment Partners and Symphony Asset Management.
TP ICAP appoints global markets head in newly-created role; Andrew Polydor has been named head of global markets in a new role at TP ICAP after 12 years leading the broker’s energy and commodities division.
Annabel Smith – The Trade
Interdealer Broker TP ICAP has promoted the head of its energy and commodities division to head of global markets in a newly-created role. Andrew Polydor takes up the new position at TP ICAP after 12 years as head of the energy and commodities brokerage.
Vanguard hires FTSE Russell executive as first head of ESG strategy for UK and Europe; Fong Yee Chan joins Vanguard as head of ESG strategy for the UK and Europe with 11 years of industry experience working on ESG initiatives.
Annabel Smith – The Trade
Vanguard has appointed the former director of sustainable investment products at FTSE Russell as its first head of environmental and social corporate governance (ESG) strategy for the UK and Europe.
State Street launches multi-asset research platform; The platform offers users proprietary research, data-driven indicators and market commentary from State Street’s macro strategist team globally.
Annabel Smith – The Trade
Boston-based investment bank State Street has launched an investment research platform aimed at giving users tailored access to multi-asset research offerings.
Citi promotes EMEA investor sales head to lead division globally; Conor Davis will become head of investor sales and relationship management at Citi after nearly 14 years at the firm, according to an internal memo.
Annabel Smith – The Trade
US investment bank Citi has promoted its head of investor sales for EMEA markets and head of global cross asset ETF, Conor Davis, to assume responsibility for investor sales globally.
AIG Profit Falls on Catastrophes, Travel Insurance; Company’s closely watched adjusted income fell 10% in the fourth quarter, hurt by additional Covid-19 costs
Leslie Scism – WSJ
Insurance conglomerate American International Group Inc.’s AIG 1.81% net income swung to a loss on mark-to-market adjustments in hedging programs primarily for certain products sold by its life-insurance unit. The company’s closely watched adjusted income fell 10% in the fourth quarter, hurt by additional Covid-19 costs.
Reflation Trades Return German Bond Market to Normalcy
James Hirai and Greg Ritchie – Bloomberg
Nation hadn’t sold bonds with positive yield for nearly a year; German 30-year rates turned positive this month amid stimulus
Germany had to pay to borrow money for the first time in nearly a year as market bets on global reflation have pushed up bond yields. The nation sold 1.2 billion euros ($1.45 billion) of 30-year debt at an average yield of 0.1%. That was the first such auction since March where yields were above zero, while demand was the lowest in almost a year. Yields have been dragged higher by their U.S. counterparts, spurred by Treasury Secretary Janet Yellen’s call for stimulus to drive the recovery from the coronavirus crisis.
UAE Considers Cap on Food Prices as Global Crop Costs Soar
Agnieszka de Sousa – Bloomberg
Nation may control prices for chicken and milk, says minister; Food firms are ‘flooding’ UAE with requests to enter country
The United Arab Emirates is considering price controls on some foods, as soaring crop prices affect countries across the world. The Persian Gulf nation could place price caps on chicken and milk, said Mariam Almheiri, the country’s minister of state for food and water security.
U.S. Cannabis Firm Verano Goes Public in Canada to Aid Growth
Tiffany Kary – Bloomberg
Company uses reverse merger, completes $100 million placement; CEO says listing will support more acquisitions in the U.S.
Cannabis operator Verano Holdings Corp. is poised to go public as a growing number of companies seek financing and weigh deals to capitalize on the sector’s rapid growth.
Swiss Central Bank Urged to Lift Inflation Goal, Manage Currency
Catherine Bosley – Bloomberg
Economists publish paper calling for average 2% inflation aim; SNB should also consider Singapore-style crawling currency peg
The Swiss National Bank should raise its inflation target and consider using its exchange rate rather than its benchmark interest rate as its main tool, according to a group of economists. While the proposal on price growth would bring the SNB more in line with international counterparts, the suggestion on how to manage the franc would be more controversial. Switzerland is already designated as a currency manipulator by the U.S.
Japanese governor urges cancelling of Olympics as vaccinations start; Belated inoculation drive means not many will be immunised when games start in July
Robin Harding – FT
Japan has delivered its first Covid-19 vaccine dose even as a prefectural governor became the first senior politician to call for the cancellation of this summer’s Tokyo Olympics.
India’s farm reforms fail to tackle growers’ sluggish incomes; Agricultural transformation will not be achieved until consumers can afford to spend more
Amy Kazmin – FT
India’s state food agency has a chronic problem: its grain silos are overflowing with wheat and rice, forcing it to store large quantities outdoors. There, under plastic tarps, much of it slowly rot away, ruined by the searing heat and driving rain, and nibbled by rats
Saudi Wealth Fund Made $3.3 Billion Bet on Video-Game Makers
Miles Weiss – Bloomberg
Saudis invested in Take Two, Electronic Arts and Activision; Investment fund bought game-maker stakes in the fourth quarter
Saudi Arabia’s sovereign wealth fund is pursuing investments in an industry long favored by Crown Prince Mohammed bin Salman: video games. The Riyadh-based Public Investment Fund acquired more than $3 billion worth of stock in three U.S. video-game makers during the fourth quarter, according to a regulatory filing. They include Activision Blizzard Inc., Electronic Arts Inc. and Take-Two Interactive Software Inc.
Brexit: A majority of Britons aren’t satisfied with how trade agreement turned out
Luke McGee – CNN
A majority of Britons are not satisfied with the post-Brexit trade agreement that Boris Johnson secured with the European Union, according to a survey that provides the first detailed insight into the nation’s attitude towards the deal since it took effect.
The report, published by the British Foreign Policy Group, an independent think tank advocating for a stronger UK global presence, shows that under a quarter of those surveyed believe the Prime Minister’s deal is “the best framework for our relationship with the EU moving forward.”
Brexit: Are freight exports to the EU back to normal?
Chris Morris – BBC
The government says the volume of freight exports from Great Britain to the European Union has returned to normal, in spite of the new post-Brexit barriers to trade with the EU, and restrictions related to the pandemic. “The latest available data shows that overall freight volumes are back to their normal levels,” a government spokesman said. Its internal data shows that the flow of roll-on roll-off freight (which can be driven on and off a ferry or a train) going to the EU in early February was at 98% of the levels seen during the same period in 2020.
Brexit forces Northern Ireland buyers to cancel orders for 100,000 trees
Lisa O’Carroll – The Guardian
Orders for almost 100,000 trees have been cancelled by Northern Ireland buyers because of a post-Brexit ban on the plants being moved from Britain, the Guardian can reveal. Leaders in the business say it is a major setback for tree-planting programmes in Belfast and elsewhere in the region. The Woodland Trust in Northern Ireland has just cancelled an order for 22,000 trees, which were destined for schools and communities as part of a Northern Ireland greening project.
Brexit: Stop-gap for environmental law change
Conor Macauley – BBC News
A new way for people to complain about public bodies failing to uphold environmental law has gone live. It is a stop-gap measure while the loss of environmental oversight as a result of Brexit is addressed. Environmentalists have welcomed the Interim Environmental Governance Secretariat but questioned whether it goes far enough. The European Commission previously had a role in ensuring members states complied with EU environmental law. Those laws have been copied into domestic legislation as part of the Brexit process.
Cresco co-founder plans $150M weed stock offering;Joe Caltabiano plans to roll up small cannabis operators. It would be the fourth Chicago weed company to go public.
John Pletz – Crain’s Chicago Business
A co-founder of one of Chicago’s largest weed companies plans to raise $150 million to roll up small players across the country. Choice Consolidation is led by Joe Caltabiano, a co-founder of Cresco Labs. One of its board members is Pete Kadens, a co-founder of Green Thumb Industries.
Alden Global Capital Agrees to Buy Rest of Tribune Publishing; Hedge fund to pay $17.25 a share in deal that values the newspaper publisher around $630 million
Lukas I. Alpert – WSJ
A New York hedge fund that is the largest shareholder in Tribune Publishing Co. TPCO 0.13% has reached a deal to acquire the rest of the newspaper company which owns some of the biggest papers in the country, including the Chicago Tribune and New York Daily News. Alden Global Capital LLC, which already owned a 32% stake in the company, reached an agreement with a special committee appointed by the board to buy the rest of the company for $17.25 a share, valuing the company at around $630 million. The deal still requires shareholder approval.
Court hears details of Crispin Odey’s alleged sexual assault on junior banker; Odey propositioned the junior banker but denies sexually assaulting her
James Booth – Financial News
A London court has heard details of an alleged sexual assault hedge fund boss Crispin Odey carried out on a junior banker at his Chelsea home in the late 1990s. Prosecutor Kerry Broome told Hendon Magistrates’ Court that Odey had invited the then 20-something banker to a pub, and then his house, after she caught his eye at a meeting.