Record $14bn flowed into crime-linked crypto wallets in 2021

Jan 6, 2022

First Read

Hits & Takes
John Lothian & JLN Staff

Today is the anniversary of the January 6 vote to certify Joe Biden’s election as President of the United States of America in the 2020 election. And some other stuff happened that day, that I am sure other media will remind you of. Let me just say that it has created more political risk for us all to manage from a personal, professional and career perspective. It is even something to consider for retirement location decisions potentially. We try to help you manage that risk by giving you the information you need to do so.

The year 2022 has been good to ICE’s MICRO NYSE FANG+™ Index Futures as a record 27,876 traded on January 4. I had not realized that Microsoft had been added to the index. How did I miss that? That makes it even more interesting to me.

This is the official statement of Leo Melamed on the passing of Robert J. O’ Brien, Sr.

“I am deeply saddened. As his family, and countless others are aware, Bob and I were the closest of friends. As I record in my most recent book, Bob was instrumental in joining me in the 1950s and 60s to revolutionize the archaic and lawless Chicago Mercantile Exchange into a respectable futures exchange on which the modern CME Group could be structured. Throughout his life Bob O’Brien was a pillar of honesty and dignity as reflected in his firm, R.J. O’Brien & Associates, the oldest and largest independent futures brokerage and clearing firm in the United States. I commiserate his passing and stand ready to celebrate his life of wisdom and integrity.”

Steve Adamske has left the Futures Industry Association, where he was vice president and head of communications and public affairs. There is an unconfirmed rumor he has returned to a Washington, D.C. regulator whose four letter acronym starts and ends with C. We are awaiting confirmation.

Cboe’s 2021 volume report showed record options volume, with 3.0 billion contracts traded, up 19 percent from 2020. And they did not stop there: their total options average daily volume (ADV) reached an all-time high of 12.1 million contracts per day in 2021. Just for kicks, the ADV of the S&P 500 index or SPX options was 1.6 million contracts in December, up 45 percent from December 2020. And for the year, 345 million contracts of SPX traded, with an ADV of 1.4 million contracts. The ADV in the VIX options in December was 631,000 contracts, up 60% from December 2020. Lastly, ADV for the Russell Index or RUT options was nearly 52,000 contracts in 2021, up 51 percent from 2020.

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



Telstra’s Adam Day Expounds on November Equinix Deal; Opportunities for Trading, Fintech, Crypto, Gaming Into Asia

In early November Telstra partnered with Equinix to enhance the Telstra Octagon financial services solution and expand global access and direct connectivity between North America and eight of the world’s major futures and commodities exchanges. JLN interviewed Telstra’s Adam Day after the FIA EXPO about this deal and what it means for Telstra’s customers and potential clients.

Watch the video »


FIA mourns industry icon Robert J O’Brien
In 2014, FIA honoured Robert J O’Brien, chairman emeritus of the eponymous R.J. O’Brien & Associates, for his firm’s centennial anniversary celebrating 100 years of innovation and leadership in the cleared derivatives industry.
FIA joins the futures industry in mourning the loss of Robert J O’Brien, chairman emeritus of R.J. O’Brien, at the age of 103. As the former President of the firm – the last surviving founding member firm of the Chicago Mercantile Exchange – Bob sat on the board of CME from 1964 to 1977, serving as its chair in 1967-68. He was inducted into FIA’s Futures Hall of Fame in 2007.

****** A hall of famer for sure.~JJL


Meet the 45-year-old whose untraditional career path led to her becoming the second woman in history to lead the NYSE
Declan Harty – Fortune
It was the mid-1990s, and, in lower Manhattan, a digital usurping was afoot. Computers had become integral to the workflows of technology-savvy traders and investors by then. But the broader financial industry was finally opening up to the possibilities that lay in trading stocks, currencies, and just about anything else on the screen.

****** Lynn Martin can’t get enough press. She deserves it all.~JJL


NFT Hype Sparks a Rush by Finance Pros to Mimic Hot Market; New funds being offered to both professionals and retail buyers claim to provide exposure to the nascent NFT market. Do they meet the test?
Claire Ballentine and Vildana Hajric – Bloomberg
Cryptocurrencies had a breakout moment in 2021, and NFTs were some of the biggest stars. Now, as with any new and hot investing trend, financial pros are hoping to capitalize on the craze with products promising a way to piggyback on the market.

****** How do we bottle this? If it were only that easy.~JJL


Thieves Steal Gallery Owner’s Multimillion-Dollar NFT Collection
Shanti Escalante-De Mattei – ARTnews
“I have been hacked. All my apes gone. This just sold please help me,” wrote gallery owner Todd Kramer, of New York’s Ross + Kramer Gallery, in a since-deleted tweet posted on December 30.
A phishing scam had drained his Ethereum wallet of 15 NFTs valued at a total of $2.2 million, including four apes from the “Bored Ape Yacht Club” collection. The thief seemed to have sold off many of the pieces in Kramer’s collection, and Twitter users jeered at Kramer’s bad luck, pointing out that he had bet on an unregulated, decentralized system that would be unable to help him. “Man If only there had been some kind of Regulating authority in place that could like Insure your investments against theft and fraud,” wrote one user with the handle @anarchy_shark.

***** I wonder how the thieves think they can sell that. Is some mob boss going to bring a few people to his office to impress them with his illicit collection of cartoon apes on his computer? ~JB


Wednesday’s Top Three
Our top story Wednesday was the news from TT, Trading Technologies Invests $6.35 Million in KRM22; Enters into Distribution Agreement for Risk Management Products. “This is the first investment TT has made since its acquisition by 7RIDGE in late December,” the release says. It sounds like there will be more to come. Second was the R.J. O’Brien historical timeline, which begins in 1914 when John V. McCarthy & Co. established a cash butter and egg house in Chicago. And third was the RJO Centennial Video from 2014, when RJO celebrated its 100-year anniversary.


MarketsWiki Stats
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MarketsWiki Statistics


Lead Stories

Record $14bn flowed into crime-linked crypto wallets in 2021; Boom in size of digital assets market outpaces growth in illicit activity
Eva Szalay – FT
Criminals used a record amount of cryptocurrencies for illicit purposes in 2021 but the overall growth of digital asset markets outstripped the rise in scams. The amount of crypto sent to addresses with known criminal associations shot to a record $14bn last year, more than doubling from 2020, according to research from data company Chainalysis. Scams, ransomware and theft rose 79 per cent in dollar terms last year but the overall market expanded by 550 per cent, with $15.8tn worth of cryptocurrencies traded in 2021. That means the relative share of illicit activities has dropped to a record low.

The Future of Power and Transport Markets Is Decentralization; Millions of solar generation systems and battery systems will be individually owned
Nathaniel Bullard – Bloomberg
Over the holiday I spent as much time outside as possible, and as little time in front of screens as I could. As I start up 2022 screen time, there are a few announcements of note in the world of transport and electricity that get me thinking about the year (and years) ahead. They range wide, but point to two things: a massive scaling up of clean electricity and electrified transport, and a concurrent decentralization of both at the same time. The implications of the latter are fascinating, but first, the scaling.

US start-ups raise record $330bn as venture investors vie for stakes; Sum nearly doubles from 2020 in a financing rush one fund manager deems ‘not rational’
Miles Kruppa – FT
Investors poured a record $330bn into private start-ups in the US last year, nearly doubling the total from 2020 in a flurry of dealmaking that rapidly inflated company valuations. Venture capitalists vied with other deep-pocketed investors to win deals, giving leverage to the founders of attractive start-ups. Investors gained confidence from a wave of public listings that have delivered large returns to their backers, such as foundations and endowments.

A Fed Official’s 2020 Trade Drew Outcry. It Went Further Than First Disclosed; Corrected disclosures show that Vice Chair Richard H. Clarida sold a stock fund, then swiftly repurchased it before a big Fed announcement.
Jeanna Smialek – NY Times
Richard H. Clarida, the departing vice chair of the Federal Reserve, failed to initially disclose the extent of a financial transaction he made in early 2020 as the Fed was preparing to swoop in and rescue markets amid the unfolding pandemic. Mr. Clarida previously came under fire for buying shares on Feb. 27 in an investment fund that holds stocks — one day before the Fed chair, Jerome H. Powell, announced that the central bank stood ready to help the economy as the pandemic set in. The transaction drew an outcry from lawmakers and watchdog groups because it put Mr. Clarida in a position to benefit as the Fed restored market confidence.

‘Crazy’ Carbon Offsets Market Prompts Calls for Regulation
Frances Schwartzkopff – Bloomberg
Lack of global oversight opens door for bogus offset claims; COP26 agreement paves way for increased use of carbon credits
When Swedish bank SEB AB announced recently that it wanted to buy into the market for carbon credits, what it got was a pile of duds. Hans Beyer, SEB’s chief sustainability officer, says most of the roughly 150 pitches that he received last year weren’t backed by any recognized body validating claims to be permanently removing carbon dioxide from the atmosphere. And some were pitched on the basis of doing nothing at all — merely pledges to avoid emitting CO2 in the future.

Crypto Security Is Biggest Concern for Institutional Investors
Anchalee Worrachate – Bloomberg
Volatility, regulation are less important factors than custody; Nickel Digital survey covers investors with $108 billion AUM
Security concern, more so than the volatility and regulations, is what holds institutional investors back from investing in crypto and digital assets, a survey by Europe’s largest regulated digital-asset hedge fund manager showed. The survey of institutional investors and wealth managers, who collectively manage around $108.4 billion, showed 79% see asset custody as the key consideration whether to invest in this space. Custodians provide solutions for investors who want to securely store and protect their crypto assets. The report was commissioned by Nickel Digital Asset Management, and involved interviews with 50 wealth managers and 50 institutional investors across the U.S., the U.K., Germany, France and the United Arab Emirates.

ICE Announces That a Record 27,876 MICRO NYSE FANG+™ Index Futures Traded on January 4
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of data, technology, and market infrastructure, today announced that a record 27,876 Micro NYSE FANG+™ Index futures traded on January 4, 2022. “2021 was a remarkable year for the U.S. technology sector and there has been a lot of attention on the FAANG stocks and the NYSE FANG+™ Index, including the recent addition of Microsoft® stock to the index,” said David Goone, Chief Strategy Officer at ICE. “It is great to see that 2022 has started with such strong activity in our MICRO NYSE FANG+™ Index futures, showing the continued importance of these stocks to the investor community.”

Wait, What Happened to All Those Corporate Bankruptcies? The number of filings fell by half last year thanks to low rates and nontraditional lenders.
Lauren Coleman-Lochner – Bloomberg
No one would call 2021 an uneventful year. The U.S. Capitol was stormed in a would-be insurrection. Inflation surged to levels not seen in decades. And almost 300 million people worldwide were infected by Covid-19 as the emergence of variants wrecked any return to normalcy. But for bankruptcy, a sector usually goosed by global disruption, it was unusually quiet.

The M&A Boom Times Are Set to Continue in 2022; Companies have plenty of financial firepower and want to take greater control of their supply chains.
Brooke Sutherland – Bloomberg
The pandemic’s fits and starts had most people wishing good riddance to 2021. But for bankers it was a blockbuster year for mergers and acquisitions, and they’d love to repeat it. U.S. companies were involved in $2.5 trillion worth of takeovers in 2021, handily surpassing the previous record of $1.96 trillion set in 2015, according to data compiled by Bloomberg. Unlike previous deal booms, which have been fueled by a handful of megasize transactions, this one was remarkably broad-based. There wasn’t a single U.S. acquisition larger than $50 billion in 2021, but there were more than 20,000 deals, according to Bloomberg’s count, about two-thirds more than in 2015. Dealmaking smashed records in many sectors, including industrials, consumer goods, and technology.

Battle for dominance heats up in cryptocurrency trading; Arrival of high-speed trading has increased competition in volatile digital assets
Eva Szalay – FT
The battle for supremacy in cryptocurrency trading has intensified as some of Wall Street’s largest players start challenging digital asset specialists that already handle billions of dollars’ worth of transactions every day. The most active traders and market makers in the nearly $3tn digital asset space include Alameda Research, B2C2, Cumberland and Genesis Trading, none of them well-known names in traditional financial markets.

Diamond Traders Rejected by Banks Get EU Watchdog’s Attention; Alrosa PJSC Reveals Its Largest Pink Diamond And Main Sorting Center
Frances Schwartzkopff – Bloomberg
European regulators say some banks may be going too far in their efforts to comply with anti-money laundering rules, as client groups ranging from diamond traders to gambling operators and even embassy staff find themselves cut off. According to the European Banking Authority, lenders in the region are potentially creating new financial risks by refusing to interact with a number of client groups. The Paris-based watchdog says the unintended consequences of such a business model include creating a shadow financial system that is harder to regulate, according to a Jan. 5 report.

Nasdaq’s $1 Trillion Rout Fuels Concern of a Bumpy 2022
Thyagaraju Adinarayan – Bloomberg
Pricey tech stocks lead drop, ARK Innovation down 9% this week; Volatile start to 2022 as bond yields spike to levels of March
Futures signaled further pain for tech stocks after Wednesday’s rout, adding to the nearly $1 trillion in value wiped out of the Nasdaq Composite Index this week already as a surge in U.S. bond yields spook investors.

The rotten UK energy market is expensive and difficult to fix; The surge in prices is turning justified consumer anger on the industry, its regulator and on ministers
Chris Giles – FT
Just as the global financial crisis exposed shocking complacency in UK banks’ business models and financial regulation, the surge in wholesale gas prices has demonstrated rot at the core of the UK energy sector.

Wall Street Loves China More Than Ever; Despite political tensions and Beijing’s regulatory crackdowns last year, banks and money managers desperately want to compete on the mainland.
Cathy Chan, David Scanlan – Bloomberg
As tensions were rising between the U.S. and China last summer, the chief executive officer of JPMorgan Chase & Co. was letting it be known that he wanted to get to Hong Kong as soon as he could. Jamie Dimon did just that in November, becoming the first major U.S. bank executive to visit Greater China since the pandemic began. His 32-hour trip to the Asian financial hub was billed as a chance to thank thousands of employees there. But it was also a reminder of the company’s commitment to the territory, as well as to mainland China, where JPMorgan has exposure of about $20 billion, mainly from lending, deposits, trading, and investments.


Covid vaccine makers face investor pressure over global access; Asset managers call for pharma executive pay to be linked to international access
Adrienne Klasa and Donato Paolo Mancini – FT
Drugmakers need to prioritise global access to Covid-19 vaccines and tie management pay to equitable distribution, say a group of top international investors. Asset managers Nomura, BMO and GAM are among 65 institutional investors that have written to leading pharmaceutical companies urging them “to make the global availability of vaccines part of the remuneration policy of managers and directors”. The signatories represent more than $3.5tn in assets under management.

China rushes to develop an mRNA vaccine as doubts grow over local jabs; Older inactivated virus technology in domestic shots less effective against infection than foreign rivals
Eleanor Olcott – FT
China’s race to develop its own messenger RNA vaccine has gained greater urgency as Beijing struggles to rein in an outbreak of the Omicron coronavirus variant that is threatening its zero-Covid policy.

Coronavirus (Covid-19) Financial Resilience Survey
We are asking a number of the firms we regulate to complete a short survey to help us obtain a more accurate view of firms’ financial resilience as a result of coronavirus (Covid-19).

The Lost Girls of Covid; The pandemic is erasing decades of progress in young women’s health, education, and independence in developing nations.
Jill Filipovic – Bloomberg
At the girls’ rescue house down the quiet end of a dusty road in Narok County, Kenya, there are girls who are friends, and then there are Purity and Lucy. Sisters, they both say. Purity is 17; Lucy, 19. Where Purity is soft-spoken and shy, Lucy is gregarious and funny, with expressive eyebrows and a sardonic affect. When she smiles—and she smiles a lot—the corners of her mouth turn almost vertical, and her cheeks, still freckled with teenage acne, go full and flush.

New York’s Record Wave of Omicron-Variant Cases Sees Fewer Severe Ones; Hospitals warn that staff are exhausted, which hampers isolation, care of Covid-19 patients
Jimmy Vielkind, Julie Wernau – WSJ
Fewer New York residents are seeing the worst outcomes of Covid-19 in its latest surge compared with earlier waves, a potential harbinger of what other highly vaccinated parts of the country will experience, health officials say. At Northwell Health, New York state’s largest hospital network, about 10% of recent Covid-19 patients are ending up in the ICU compared with 25%-35% in previous surges, said Mangala Narasimhan, director of critical-care services.

Malaysia Approves Pfizer’s Covid Vaccine for 5 to 11 Year Olds – Bloomberg
EU Daily Virus Cases Top 1 Million Mark for First Time – Bloomberg

Exchanges, OTC and Clearing

Cboe Global Markets Reports Trading Volume for December and Full Year 2021
Cboe Global Markets
Cboe Global Markets, Inc. (Cboe: CBOE), a leading provider of global market infrastructure and tradable products, today reported December monthly and full year 2021 trading volume statistics and projected rate per contract/net revenue capture for the fourth quarter of 2021 across its global business lines.

The impact of the Mitigation Program of Japanese Government against extreme fluctuation of fuel price to TOCOM Futures Markets (oil products)
As a measure against extreme fluctuation of fuel price during the pandemic of COVID-19, Japanese government announced the launch of mitigation program which will provide a certain amount of subsidy to the wholesale companies and import companies who support this program when the price of gasoline exceeds the reference price. TOCOM hereby share the inquiries we received with regard to this program and our answers reflecting the comments from the Agency for Natural Resources and Energy as below.

EBS Market Integration Notice – 06 Jan 2022 – CME
CME Globex Notices: January 3, 2022 – CME
CME STP Notices: January 6, 2022. CME
Notice of Summary Action; MEMBER FIRM: SG AMERICAS SECURITIES LLC, NYMEX RULES: Rule 811. Position Change Data – CME


Eventus marks another year of rapid growth; poised for further expansion in 2022
Eventus Systems
Built In just named trade surveillance firm to new list of Best Remote-First Companies
Eventus Systems, Inc., a leading global provider of multi-asset class trade surveillance and market risk solutions, announced that 2021 represented yet another record year by revenues, client count and staff expansion, and the firm plans continued aggressive growth throughout 2022.

VERMEG’s COLLINE Collateral Suite Adds New Margin Analytics Capabilities from Cassini Systems
VERMEG, a specialized software house providing Banking, Capital Markets, Insurance and Digital solutions, and Cassini Systems, the leading provider of pre- and post-trade margin and collateral analytics for derivatives markets, have partnered to assist financial institutions in complying with Initial Margin (IM) requirements for uncleared over-the-counter (OTC) derivatives, exchange-traded derivatives (futures and options) and prime brokerage. VERMEG has integrated Cassini’s margin analytics platform into its COLLINE collateral suite, giving its clients a powerful new tool for achieving cost efficiencies and helping to meet requirements of the Uncleared Margin Rules (UMR).


Remote Work and the New Normal for Enterprise Cybersecurity
Neil Okikiolu – CPO Magazine
Work from home has quickly taken over in many enterprises due to the recent crisis. For some organizations, it has come as a blessing because they can reduce fixed capital costs in segments like office real estate. In addition, it has allowed these companies to source the best talent without having to worry about geographical constraints.

Top 8 cybersecurity predictions for 2022
Shweta Sharma – CSO Online
As global economies look to exit the pandemic chaos, there is a cloud of uncertainty around navigating the new normal. While enterprises tout their efforts to accelerate digital transformation efforts, for security leaders in business there is a dark side to the rapid deployment of new technology.
Remote work, virtual meetings, hybrid cloud networks, and SaaS adoption have all brought about complex IT infrastructures that are opening up new threat avenues. Meanwhile, CSOs also must help ensure their organizations are in compliance with new regulations.

5 Tactics To Increase Your Cybersecurity Efforts
Serenity Gibbons – Forbes
SolarWinds’s massive cybersecurity hack in 2020 taught us some valuable lessons. First and foremost, it exposed the fact that even the most sophisticated (or seemingly so) computer systems are vulnerable.
With cybercrime having pushed the $6 trillion mark in 2021 alone, the event also put pressure on business owners across the world to up their cybersecurity game. If you’re concerned about the digital security of your company, here are some strategies to help you create a safe and secure online environment for your business to operate in.

Your cybersecurity training needs improvement because hacking attacks are only getting worse
Danny Palmer – ZDNet
The threat of cyberattacks is growing and much more needs to be done to educate businesses and users about risks in order to prevent widespread damage and disruption as a result of cyber incidents.
Events like ransomware attacks against utilities and infrastructure providers, production facilities and hospitals have demonstrated that cyberattacks can have very real consequences for people, restricting access to vital goods and services for days, weeks and even months.

China’s Rebuke Over Alibaba Security Flaw Sends Wrong Signal; Global communities and unfettered communication are what keep software safe, but Beijing’s response shows it takes a different view.
Tim Culpan – Bloomberg
When Alibaba Group Holdings Ltd. researcher Chen Zhaojun notified members of an open-source software development team in November about a possible software vulnerability, the employee was following good industry practice. Yet the way authorities in Beijing reacted to Chen’s disclosure sent a shiver down the spines of cybersecurity researchers globally.


Crypto Firm Sygnum Hits $800 Million Valuation in Funding Round
Joanna Ossinger – Bloomberg
Sygnum, which runs a digital-asset bank and trading platform, raised $90 million in a funding round that valued it at $800 million, as venture capital firms pour record-shattering amounts of money into the crypto industry. The financing was led by Sun Hung Kai & Co., and also included investors like Animoca Brands and Canada’s Meta Investments, according to a statement from Sygnum.

Matt Damon’s crypto ad is more than just cringeworthy; The backlash the advert has provoked feels like a symptom of a market that has lost some of its fizz
Jemima Kelly – FT
“History is filled with almosts — with those who almost adventured, who almost achieved,” a black-clad Matt Damon tells the camera as he saunters through a virtual “museum of bravery” displaying an array of milestones in human achievement. “Then, there are others — the ones who embrace the moment and commit,” he continues as he walks past a mountaineer. The video clip ends with Damon telling us: “Fortune favours the brave.”

Scions of Secretive Singapore Tycoons Want to Create an NFT Club
Yoolim Lee – Bloomberg
ARC is an online platform with non-fungible token membership; Singapore-based firm plans to add offline events for members
A pair of scions from Singapore’s wealthiest families are teaming up to create a private NFT-based social networking app, becoming the latest among the well-heeled to jump aboard an intensifying crypto craze.


Russia’s Winter Generals Have Yet to Show Up at the Gas War; Prices remain high but a mild season has so far allowed storage to remain above the levels associated with power blackouts in Europe.
Javier Blas – Bloomberg
Russia’s winter defeated Napoleon Bonaparte and Adolf Hitler. The bitter season has played such a historic role against the nation’s enemies that it now enjoys military rank, popularly known as General Moroz and General Zima (that is, “frost” and “winter”). In the great European natural gas battle of 2021-22, however, the weather has so far worked against Moscow. If President Vladimir Putin was counting on Moroz and Zima, the commanders have yet to show up at the Western front.

Trump Lost, But Falsehoods About the Capitol Riot Won; Last Jan. 6, I dismissed claims of a stolen election as absurd. They were—yet they’ve won over a large and growing share of the American public.
Joshua Green – Bloomberg
In the weeks leading up to the Jan. 6 riot, Steve Bannon was pushing me (and many other reporters, I assume) to write a story that was objectively nonsense. His calls and messages all struck the same theme: Donald Trump, not Joe Biden, had won the 2020 election. “He won in a landslide,” Bannon messaged me shortly before the march on the Capitol. “Watch Georgia today. Heading toward a decertification.” At the time, this struck me as desperate and more than a little embarrassing, even for a guy with no evident sense of shame. I dismissed it as Bannon toadying up to Trump or luring the gullible to build his podcast audience, and assumed it would all fade away as reality set in.

Putin faces judgment call on allies over gas supplies; Rosneft is seeking access to export gas on Gazprom’s Nord Stream 2 pipeline project
Nastassia Astrasheuskaya – FT
As Europe looks to boost future gas supplies amid a bracing winter, much could depend on a judgment call by Vladimir Putin on the competing interests of two of his closest allies. Igor Sechin and Alexei Miller are two of the powerful men in Russia with deep connections to Putin, having worked with the president in the St Petersburg mayor’s office back in the 1990s and proved their loyalty since.

Opinion: America’s political polarization can’t be solved, only managed
Robert B. Talisse – MarketWatch
For the first time, the United States has been classified as a “backsliding democracy” in a global assessment of democratic societies by the International Institute for Democracy and Electoral Assistance, an intergovernmental research group. One key reason the report cites is the continuing popularity among Republicans of false allegations of widespread voter fraud in the 2020 presidential election.


CFTC Accepting Whistleblower Award Claims for $263 Million Cattle Fraud Case
Geoff Schweller –
On December 21, the U.S. Commodity Futures Trading Commission (CFTC) posted a Notice of Covered Action (NCA) relating to an enforcement action against Easterday Ranches in Washington. Earlier in December, Easterday Ranches was ordered to pay a combined $263 million in restitution and civil monetary penalty in connection with a phantom cattle fraud scheme. The NCA signals that the CFTC is now accepting whistleblower award applications in connection with the case.

Mishcon De Reya Hit With Record Fine as Law Firm Pursues IPO
Jonathan Browning – Bloomberg
SRA fines law firm for failing anti-money laundering rules; Mishcon says it fully cooperated with the lawyer’s watchdog
Mishcon de Reya LLP, known for its legal work advising Princess Diana in her divorce, was hit with a record fine for anti-money laundering failings, as the firm gears up for its initial public offering early this year.

SEC Charges Additional Defendant in Phony Certificates of Deposit Scam
The Securities and Exchange Commission today charged Allen C. Giltman, a former registered investment professional, with allegedly participating in a long-running fraudulent scheme to lure investors into buying fictitious certificates of deposit (CDs). The scheme resulted in victims, primarily older adults investing their retirement savings, losing at least $40 million.

Investing and Trading

Barchart Releases South American Crop Production and Yield Forecasts; End of season Argentina corn production is forecast at 54M kg with a yield of 7,707 kg/Hectare. This compares to the USDA FAS’ 54M kg of production and 7,271 kg/Hectare yield.
Barchart, a leading provider of data, tools, and software to global commodity markets, has announced the launch of production and yield forecasts for South American corn and soybeans. This latest release expands Barchart’s coverage of South American commodity data, and extends Barchart’s presence in proprietary insights for global grain supply and pricing.

Trump deal partner’s blank-check firm seeks to avoid liquidation
Krystal Hu – Reuters
The chief executive of the blank-check acquisition firm that plans to merge with former U.S. President Donald Trump’s new social media venture is chasing retail investors to save another of his deals from falling apart. According to regulatory filings and a person familiar with the matter, Benessere Capital led by Patrick Orlando has postponed its special shareholders’ meeting to extend its deadline to complete a merger because not enough investors sent in their votes.

Economies Have Adapted to a World Where Covid Calls the Shots; Despite the global supply chain crisis, some countries are even flourishing.
Stephanie Flanders and Michael Sasso
With shortages at the grocery store and not enough people willing to work, 2022 is starting to look a lot like 2020. But beneath the ugly exterior, the world’s economies have learned to cope with Covid’s fallout—the supply chain debacle in particular. One country is even thriving.

The Fed Minutes That Shook the World; A reminder of hawkish intent before post-New Year’s exuberance went too far isn’t all bad.
John Authers – Bloomberg
New Minutes for a New Year
2022 has received one last kick from 2021, and traders in the stock market don’t seem to like it. The Federal Open Market Committee last met to consider monetary policy on Dec. 15. Everyone knows what they decided. But the minutes of that meeting, with much more information on how the decision was made, didn’t come out until 2 p.m. Wednesday in New York. The effect on both bond yields and share prices was immediate, with the former surging while stocks sold off:

What Happens When Bonds Lose Money; With the Federal Reserve focused on fighting inflation, rate hikes could mean losses for the “safe haven” side of your portfolio.
Michael Mackenzie – Bloomberg
Early January is when many investors give their portfolios a checkup, and this year a sting awaits from the bond market. While equity returns dazzled in 2021, “safe” government bonds registered their first negative return since 2013. Professional investors are of course accustomed to the idea that even so-called risk-free bonds lose money when interest rates rise—or are expected to rise. Those taking a diversified approach with their nest eggs are accustomed to think of Treasuries and high-quality bonds as conservative and safe investments that provide a consistent, if modest, positive return.

Investment and the multiple risks of 2022; From unwinding central bank policies and overvalued assets to geopolitical fears
John Plender – FT
Will 2022 go down in financial history as the year the music stopped? After the extraordinary buoyancy in markets in 2021 the risk of a painful downturn is certainly escalating. In weighing that risk, investors face one overwhelmingly uncomfortable fact — central banks continue to rig the markets through their asset purchasing programmes, with important consequences for private portfolios.

U.S. Investors Will Return to the Office, but Probably in London; Tight supply of the best buildings and higher returns should make buying office blocks in the U.K. capital more attractive than other major cities
Carol Ryan – WSJ
Even as the Omicron strain forces London’s white-collar workers to do their job from home, U.S. investors are eyeing the U.K. capital’s offices. Returns are better than other European hubs, but maybe not for long. North Americans were the biggest purchasers of London offices in the fourth quarter of 2021, accounting for 39% of deals by value overall and 56% within the City of London district, based on data from real-estate firm Knight Frank. Typically, they make around one in five purchases.

Three-quarters of stockpickers lagged US market last year; Inconsistent returns prompt investors to switch to passive index trackers
Chris Flood – FT
Just one in four active fund managers that invest in large US-listed companies beat Wall Street’s S&P 500 share gauge in 2021, as stockpickers again struggled to match the returns delivered by cheap index trackers following the US equity market.

Environmental, Social and Corporate Governance

Bloomberg Data Management Services Selected by M&G Investments to Manage ESG Data Feeds; Bloomberg DMS will streamline and consolidate ESG vendor data for seamless integration and feed management
Bloomberg Data Management Services (DMS) today announced that it has been selected by M&G Investments, one of the UK’s largest and most tenured investment houses, to host the acquisition and management of its ESG data, enabling seamless integration of the data into the investment process. DMS has been engaged to onboard and consolidate all of M&G Investments’ ESG data providers to its private, cloud-based solution. Bloomberg DMS enables more control and a holistic view of data and addresses the challenges of aggregating different sources by applying validations, mapping feeds to a common company hierarchy, producing a consolidated view across providers and offering transparency around governance and data lineage.

Goldman Says Carbon Net Zero Shift Will Likely Boost Inflation
Yuko Takeo – Bloomberg
The global push to achieve net zero carbon emissions will likely result in a meaningful boost to inflation, according to analysts at Goldman Sachs Group Inc. Based on the assumption that carbon taxes would rise to $100 a ton by 2030, the analysts led by Jan Hatzius calculated the likely rise in prices in four major economies — the U.S., China, Germany and Canada.

Canada minister defends oil sands despite pursuing emissions cuts; Trudeau administration intends to ‘extract value’ from controversial projects
Derek Brower – FT
Canada’s new natural resources minister has defended the country’s promotion of exports from its controversial oil sands projects even as he vowed to enforce “aggressive” greenhouse gas emissions cuts on the energy sector.

Cost of neutralising carbon emissions soars as demand escalates; Prices triple since June 2021 boosting regulators’ calls for global standards
Camilla Hodgson and Laura Noonan – FT
Soaring demand for carbon offsets is driving up prices and causing a supply crunch, as companies and investors scramble to buy the credits that compensate for emissions of the greenhouse gas. The rising interest in offsets, which represent a tonne of carbon that has been permanently avoided or removed from the atmosphere, has tilted the market in favour of sellers, after years of low prices.


Jefferies bolsters UK investment banking division with two new senior hires; Among the appointments is a new vice chairman for UK investment banking and a new head of EMEA financial institutions group (FIG) debt capital markets.
Annabel Smith – The Trade
Investment bank Jefferies has expanded its UK banking remit with two new senior appointments based in London. Industry veteran Philip Yates has been appointed as vice chairman within the UK investment banking division, bringing with him over 30 years of industry experience specialising in mergers and acquisitions and corporate finance.

Blackstone upgrades risk management systems with Beacon; The world’s largest asset manager also helped the FinTech raise $56 million in Series C funding.
Laurie McAughtry – The Trade
Blackstone has decided to accelerate its digital transformation by integrating the development specialist Beacon Platform into its strategic financial and cloud technologies. Founded in 2014 by JP Morgan and Goldman Sachs alumni Mark Higgins and Kirat Singh, Beacon is a development platform that aims to help quants, data scientists and engineers to analyse, model and manage risk in a more scalable and efficient way.


Look Beyond Oil for Clues Into $447 Billion Saudi Currency Stash
Vivian Nereim – Bloomberg
Biggest jump in decade reflects Aramco dividend in November;Saudi reserves are key indicator for investors and speculators
For investors closely watching a key indicator of Saudi Arabia’s financial health, deciphering the ups and downs of its $447 billion foreign-currency reserves has become more about dividends than crude prices. Sharp increases in the central bank’s net foreign assets now coincide with payouts from state-controlled oil producer Saudi Aramco. Disbursements of the company’s $18.75 billion quarterly dividend, almost all of which goes to the Saudi government, mean the reserves reflect less frequent but larger transfers of cash from the Dhahran-based firm.

Turkey Devises Bonds to Pay If Banks Lose From Erdogan Lira Plan
Firat Kozok, Kerim Karakaya, and Asli Kandemir – Bloomberg
Turkey’s government is seeking approval to issue new bonds to compensate banks for possible losses from lira deposits linked to foreign-exchange rates. The Ministry of Treasury and Finance will be able to issue specially designed bonds to lenders instead of paying them cash, according to a bill submitted by the ruling AK Party to legislators. The banks will then use the securities to pay lira deposit holders additional interest should the currency depreciate again.

Switzerland’s $58 Billion ‘Helicopter Money’ Vote Plan Stalls
Andy Hoffman – Bloomberg
Swiss newspaper says only half of needed signatures collected; Helicopter money plan would have distributed SNB funds
A proposal to get Switzerland’s central bank to give out 53 billion francs ($58 billion) in “helicopter money” has stalled. The measure envisioned giving tax-free 7,500 francs to all citizens from SNB coffers but the initiative appears unlikely to get enough signatures to move it forward for a national vote.

Temasek-Backed Vertex Set to Be First SPAC to List in Singapore
Joyce Koh and Filipe Pacheco – Bloomberg
Firm aims to raise $125 million by selling 34 million units; Vertex Venture incorporates a SPAC company in Cayman Islands
Singapore is about to get its first blank-check company listing, as Vertex Technology Acquisition Corporation Ltd. is seeking to raise at least S$170 million ($125 million) through the sale of units.


Media veterans Ben and Justin Smith say their news business is not a quick flip; Ex-Bloomberg executive and New York Times journalist are aiming for multi-decade growth
Anna Nicolaou – FT
The founders of a news organisation designed to take on CNN, the BBC and the New York Times say they have had a “flood of inquiries” from investors but deny they are exploiting a hot venture capital market to make a fast buck. Justin Smith stepped down as head of Bloomberg Media this week and Ben Smith resigned as a New York Times columnist to create an “unbiased” news publication aimed at an international audience of 200m university-educated English speakers.

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The Spread

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