SEC Grants $50 Million Award to Two JPMorgan Whistleblowers

Mar 27, 2019

First Read

Hits & Takes
JLN Staff

Software developer Jitesh Thakkar has made moves to dismiss his indictment with prejudice, exclude untimely jury instruction and a response in opposition to the government’s motion.~JJL

The briefs from his lawyer Renato Mariotti are well worth reading, as this is an issue not just for Jitesh, but for any software developer in the financial markets. This is a classic case of trying to pick off a smaller member of the herd first by the prosecution taking aim at developers of financial software.~JJL

The Chicago Blockchain Center is presenting an exclusive screening of “Trust Machine: The Story of Blockchain” on Thursday, April 11. Created by Alex Winter (Bill from “Bill and Ted’s Excellent Adventure”) and narrated by Rosario Dawson, the documentary explores the evolution of blockchain and cryptocurrency and discusses the technology’s role in real-world problems such as income inequality, hunger, and refugees. The show begins at 6 PM at The Museum of Contemporary Art. Tickets are $10 and may be purchased HERE.~CM

CryptoCompare published its Monthly Exchange Review for February 2019, which includes the most recent crypto exchange rankings and volume analysis, Traders Magazine reports. ~SR

CFTC Commissioner Dawn Stump will deliver a keynote address at the Women’s Energy Network (WEN) 2019 National Conference discussing “Is Perfection the Enemy of the Girl?” on Thursday (tomorrow) from 8:00 a.m. to 9:30 a.m. at the Gaylord Rockies Resort & Convention Center, 6700 N Gaylord Rockies Blvd., in Aurora, Colorado. ~SR


Brexit: Fine in Five Years, but a Mess Right Now – Garry Jones
At the 2019 FIA conference in Boca Raton, Fla., Garry Jones was inducted into the Futures Hall of Fame. In this video from JLN’s annual Industry Leader Series, Jones runs through how Brexit will impact the political sphere, capital markets in general, and then derivatives markets in particular. Jones believes that in the end London will remain a financial capital, but will take a while to recover in the near term.
Watch the video »


Consumer confidence falls in March in another sign of economic anxiety
Jeffry Bartash – MarketWatch
The numbers: Consumer confidence fell sharply in March, extending a recent up-and-down pattern that reflects greater worries about the U.S. economy.
The consumer confidence index dropped to 124.1 from 131.4 in February, the Conference Board said Tuesday. That’s the second lowest rate in a year.

*****Have you seen your tax bill yet? That might be the cause of the anxiety.~JJL


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Women inventors, long overlooked, are churning out more patents than ever
Michelle Lou and Brandon Griggs – CNN
If you’ve used Wi-Fi, windshield wipers or a dishwasher — and who hasn’t? — you have a woman to thank.
Male inventors such as Henry Ford, Nikola Tesla and Alexander Graham Bell get all the press. But this Women’s History Month, it’s important to note that women have been the masterminds behind some invaluable creations, too.

***** We always have women to thank. It is a rule.~JJL


How to use computer terms to sound smart; Why software engineers and tech programmers sound so clever
Sarah Cooper – FT
Ever wonder why software engineers and computer programmers sound so smart? Is it the hard-won computer science degree? Is it their intricate knowledge of complex scientific and mathematical principles? Is it their stunning level of natural intellectual acuity? No. It’s none of those things. These individuals sound smart because they use computer terms. You know — those big words they throw around when they’re talking about computer doodads, gizmos, widgets and whatnot.

*****220/221 Volts Whatever it takes?~JJL


Tuesday’s Top Three
Our top three stories were led by Jim Kharouf’s piece in JLN, SG America’s FCM business aims to be different, about how SG is trying to differentiate itself from other FCMs. Second was The Wall Street Journal’s Thinning Liquidity in Key Futures Market Worries Traders, which focused on E-mini S&P futures. Third was Spencer Doar’s intrepid interview with Terry Duffy, CME Group in JLN’s 2019 Industry Leader Series


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Lead Stories

SEC Grants $50 Million Award to Two JPMorgan Whistleblowers; One of the tipsters received $37 million, the third-largest award in the history of the agency’s whistleblower program
Kristin Broughton – WSJ
Two whistleblowers received a total of $50 million for providing information that helped the Securities and Exchange Commission pursue a case of corporate wrongdoing, the agency said Tuesday.

Software developer accused of spoofing seeks to nix “ostrich” jury instruction
Maria Nikolova – Financefeeds
Jitesh Thakkar opposes the theory that he deliberately avoided learning that London-based trader Navinder Sarao would use Edge Financial’s program to spoof.
As the start of the trial against Jitesh Thakkar, the founder and principal of Edge Financial Technologies Inc., gets closer, the legal battle concerning evidence and jury instructions intensifies. Jitesh Thakkar is charged with spoofing and conspiracy to commit spoofing for trades made by London-based trader Navinder Sarao using Thakkar’s company software.

Kraken Exchange Announces Launch of Both Spot and Futures Trading
Krystle M – Bitcoin Exchange Guide
Kraken Exchange has become a slow but powerful force in the crypto industry, adding to their validity with the recent acquisition of Crypto Facilities. The acquired platform has since been renamed Kraken Futures, but the attention is on the fact that this addition makes it possible to offer both spot and futures trading, which no other crypto exchange offers yet.

Ex-Barclays trader Carlo Palombo convicted of Euribor rigging; A jury in London acquitted a fellow Barclays employee Sisse Bohart on the same charges
Barney Thompson – FT
A former trader at Barclays has been convicted for his role in a conspiracy to rig the Euribor interbank lending rate. Carlo Palombo, 40 and a British-Italian dual national, was found guilty by a jury on a 10-2 verdict at Southwark Crown Court in London yesterday.

****Reuters here.

Lloyd’s of London threatens lifetime ban for harassment; Insurance market responds to outcry about behaviour
Oliver Ralph – Financial Times
Lloyd’s of London has threatened to ban for life anyone found to be responsible for sexual harassment. The move is one of a range of measures announced in response to an outcry about behaviour in the 331-year-old insurance market, where hundreds of brokers and insurers meet to do business.

****Given some of the activity outlined in Bloomberg’s longform, if there aren’t a lot of lifetime bans coming down shortly, then this announcement was a lot of bunk.~SD

Wall Street readies for IPO boom as ‘unicorns’ stampede to market; Uber, Lyft and Airbnb rush to go public ahead of possible change in investor sentiment
Robin Wigglesworth, Richard Henderson and Shannon Bond – FT
The New York Stock Exchange zealously enforces its dress code for the trading floor, even insisting that beards, moustaches and sideburns be kept “neatly trimmed”. But for one day last week the floor looked more like a Bruce Springsteen convention, with traders decked out in stonewashed jeans and denim jackets.

SEC Addresses Cybersecurity Concerns About Stock-Investor Data; Agency considers incentives and concessions to move the Consolidated Audit Trail toward completion
Gabriel T. Rubin – WSJ
A data repository for all U.S. stock-market activity won’t store some personal information from individual investors, a concession to brokers and traders who worried their data would be a prime target for hackers, a top regulator said Tuesday. The decision by the Securities and Exchange Commission and the stock exchanges that are building the repository, known as the Consolidated Audit Trail, comes as regulators try to get the ambitious project back on track after years of delays and setbacks.

Crackdown on short selling roils Turkish money markets; Cost to borrow lira overnight more than doubles to 700 per cent
Adam Samson and Laura Pitel – FT
The cost to borrow Turkish liras overnight more than doubled on Wednesday after soaring to an 18-year peak the previous day in a sign of how money markets have seized up after an apparent bid to stymie foreign short sellers.

Foreign Investors Are Trapped in Turkey Days Before Vote
Constantine Courcoulas and Kerim Karakaya – Bloomberg
Local lenders said to be under pressure not to provide liras; Cost of borrowing currency offshore surged 10-fold in two days
Turkey has made it virtually impossible for foreign investors to sell the lira, averting a currency slide that might have dealt a blow to President Recep Tayyip Erdogan before local elections this weekend.

LME backs Mercuria-led blockchain consortium to track global metals; System will enable buyers to track their metal and help traders secure their inventory
Henry Sanderson – FT
The London Metal Exchange has backed a consortium of metals traders and banks to build a blockchain-based system to track the trade of physical metal, according to people familiar with the effort.

NYSE and Nasdaq lock horns over 2019 IPO rush; There is more at stake than bragging rights
Philip Stafford – FT
A rush of US technology companies preparing to list in coming months has highlighted a battle between the New York Stock Exchange and Nasdaq to be the listing venue of choice for one of the most vital segments of the US economy.

How Almost $300 Million Vanished in a Black Hole for Deals in Asia; Executives at French lender Natixis were said to have ignored warnings that they were taking on too much risk.
Donal Griffin, Fabio Benedetti Valentini, and Viren Vaghela – Bloomberg
It’s the black hole of Asian finance: a business with so much gravitational pull that it has swallowed up European and U.S. traders for more than a decade.

Hedge Fund Spurns Saudi Arabia’s $300 Million After Khashoggi Murder
Nishant Kumar and Dinesh Nair – Bloomberg
Jamal Khashoggi was killed in kingdom’s Istanbul Consulate; Pharo Management is said to give back about $300 million
A hedge fund has told investors it returned money to Saudi Arabia following the murder of columnist Jamal Khashoggi, according to people with knowledge of the matter.

Banks Get Break on Hedging; Derivatives regulators loosen rules for regional bank swap trades
Gabriel T. Rubin – WSJ
Banks will be able to more easily hedge against the risks of the loans they originate without triggering stricter regulatory requirements, under rule changes made Monday by a federal markets regulator.

Exchanges, OTC and Clearing

EEX Welcomes Adoption Of The Clean Energy Package: Strong Support For Markets And Renewables Integration
The European Energy Exchange (EEX) welcomes the adoption of the Electricity Directive and Regulation by the European Parliament. This is a milestone which finalises the ‘Clean Energy Package’ (CEP). The CEP sets the cornerstone for the further development of a market-based energy system with an increasing share of renewables in Europe in the coming decade. Following this route provides a basis for Europe to deliver on its climate and energy policy targets at the lowest cost, and making it possible to find the best solutions to the broader mega trends of decentralisation, decarbonisation and digitalisation

EU adopts ‘Clean Energy’ package
The revised electricity market regulation opens up electricity markets to renewables, energy storage and demand response, while harmonising rules for capacity mechanisms.
The regulations are designed to empower energy consumers to play an active role in driving the energy transition and to benefit from a less centralised, and more digitalised and sustainable energy system.

Nasdaq Expands in Treasuries
Five months after unveiling a new partnership for front-end technology in U.S. Treasuries, Nasdaq is planning upgraded functionality for trading in the $41 trillion market.

SGX to report 3Q FY2019 results on 25 April
Singapore Exchange (SGX) is reporting its third-quarter (3Q) results for Financial Year 2019 (FY2019) after the market closes on 25 April 2019.

SGX expands FX growth pillar with strategic investment in BidFX
SGX sees opportunity in bringing together FX futures, OTC markets; BidFX accelerating sales, development of next-generation cloud-based FX trading platform
Singapore Exchange (SGX), Asia’s most international multi-asset exchange and largest foreign exchange (FX) marketplace, today announced it has acquired a 20% stake in BidFX, including an option for additional shares to gain a controlling interest, for a total cash consideration of US$25 million.

Dow Inc. to Replace DowDuPont in DJIA; Move was spurred by DowDuPont’s plan to spin off Dow as a separate company effective.
Akane Otani – WSJ
DowDuPont Inc., formed in 2017 with the merger of Dow Chemical and DuPont, is working toward a three-way separation. Dow Inc. will take DowDuPont Inc.’s place in the Dow Jones Industrial Average before the start of trading April 2, S&P Dow Jones Indices said Tuesday.


Bloomberg maintains dominance of OMS and EMS space, analysis finds; Research says that buy-side firms spent over $1 billion on OMS and EMS last year, as Bloomberg leads list of primary platforms.
Hayley McDowell – The Trade
Bloomberg has dominated an analysis of order management systems (OMS) and execution management systems (EMS) used by asset managers, who spent $1.4 billion on deploying such systems in 2018.

Apple Card Fails To Impress Wall Street, Investors
Donna Fuscaldo – Forbes
Apple Inc. is getting into the credit card business, teaming up with Goldman Sachs to launch the Apple Card, a fee-free credit card that’s integrated into Apple Pay.
The move, part of the Cupertino, California iPhone maker’s effort to expand beyond the saturating smartphone market, received mixed reviews on Wall Street with even analysts at Goldman Sachs wondering how successful it will be. The reason for much of the skepticism: Apple Pay.

Confluence Appoints Joe Bree as Senior Global Strategic Account Executive
Globe Newswire
Confluence, a global leader in investment data management automation for regulatory, financial and investor reporting, today announced that Joe Bree has joined the firm as Senior Global Strategic Account Executive.

Tech Nation Lists 10 Fintech Pioneers In Future Fifty 2019 Cohort
Madhvi Mavadiya – Forbes
Revolut, Monzo, Starling Bank, Currencycloud, Aire, Blockchain, MarketInvoice, Quantexa, Nested and Salary Finance were revealed to be among the 24 most dynamic and fast-growing late-stage technology companies to be chosen to join Future Fifty’s 2019 cohort.
Founded in 2013, Future Fifty works to champion the best British technology companies and provide support as they embark on their scale up journey on a national and international level. Alongside this, the programmes helps the organizations create jobs and inspire the next generation of entrepreneurs.

Council Post: The Many Faces Of FinTech: Demystifying A Trending Topic
Anabel Perez – Forbes
While the word “FinTech” may often be on many people’s lips and minds these days, the truth is there’s still a bit of uncertainty and ambiguity about the different types of players, and even what constitutes a FinTech company. Part of the problem is a tendency among many of us to want to see things in binary and mutually exclusive terms. Head-to-head competitors. Winners and losers. It’s done this way or that way.
With that in mind, I’ve set out to describe what I, and others in the industry, widely consider the principal types of FinTech companies and how they interact.


Russia’s Richest Man Plans Crypto Tokens Backed by Palladium
Yuliya Fedorinova – Bloomberg
Nornickel and Potanin are developing several digital platforms; Palladium tokens could make trading easier, billionaire says
MMC Norilsk Nickel PJSC and its billionaire chief Vladimir Potanin are planning several digital platforms, including using crypto tokens for trading palladium.

London Metal Exchange Backs Plan to Track Physical Metals With Blockchain
Yogita Khatri – Coindesk
The London Metal Exchange (LME), which boasts the world’s largest market for metal derivatives, is said to be supporting an initiative to track physical metals using blockchain.

Bitcoin Futures Kingpin Reveals Why Regulators Hate Crypto
Yashu Gola 26/03/2019 Bitcoin Analysis, Crypto, News
Bitcoin might have taken the financial world by surprise. But regulatory squeamishness ensures that it is still far away from gaining mainstream adoption on Wall Street, according to Terry Duffy. The CME Group chairman and CEO told Business Insider that the biggest thing that is keeping governments away from bitcoin is its finite supply. The cryptocurrency’s supply cap does not fit well with modern economic theories, which allow governments to print money at will. With bitcoin providing no such control, Duffy said governments would be unlikely to ever use it themselves.

Grin Cryptocurrency to Vote on Change to Hard Fork Roadmap
Christine Kim – Coindesk
Developers behind privacy-oriented coin Grin are discussing crucial, potential changes to the cryptocurrency’s hard fork roadmap.

Bitmain’s IPO application expires; company appoints new CEO
The Block Crypto
Bitmain, one of the biggest mining chip manufacturers, has seen its initial public offering application expire, the company announced in a blog post. “Bitmain’s listing application to HKex in September 2018 has reached its 6-month expiration date,” the company writes.

Binance CEO Zhao Morphs Into Bitcoin Grouch in Crypto Twitter Brawl Samantha Chang Samantha Chang – CCN
Bitcoin bull Changpeng Zhao, the CEO of Binance, has earned a reputation as an affable, laid-back guy enjoying the meteoric success of his popular cryptocurrency exchange. But is Zhao’s nice-guy persona merely an act?


This Morning in Metals: Industry Groups Call for Removal of Aluminum Tariff
Fouad Egbaria – Metalminer
The Aluminum Association released a joint letter with the Aluminum Association of Canada and the Instituto Mexicano del Aluminio calling for the removal of the U.S.’s Section 232 aluminum tariff before ratification of the pending United States-Mexico-Canada Agreement (USMCA).

Swedbank Dirty Money Case Explodes Amid Reported Manafort Link
Niklas Magnusson – Bloomberg
Swedish bank allegedly gave misleading information to U.S.; Bank is reportedly also implicated in Mossack Fonseca case
The Swedbank AB money laundering scandal widened as Sweden’s main broadcaster published a report alleging the bank misled U.S. authorities. Former Trump campaign chairman and convicted felon Paul Manafort was among those to have received suspicious payments made through the Stockholm-based lender, the SVT network reported on Wednesday, amid intensifying scrutiny of Russian cash that passed through the bank’s Estonian unit.


Get Credit (the Earned Income Tax Credit) Where Credit’s Due
Every dollar counts, especially when you’re trying to stretch each paycheck just to meet basic expenses. That’s where the Earned Income Tax Credit (EITC) can be extremely helpful. Eligible workers can receive a refundable tax credit that could exceed $6,500.

Statement of Chairman J. Christopher Giancarlo on Amendment to Japan Comparability Determination: Margin Requirements for Uncleared Swaps for Swap Dealers and Major Swap Participants
Today the Commission is amending its previous comparability determination for Japan with respect to margin requirements for uncleared swaps published on September 15, 2016.[1] The amendment makes a positive determination of comparability with respect to the scope of entities subject to margin requirements and the treatment of inter-affiliate transactions. All other findings and determinations contained in the original comparability determination remain unchanged and in full force and effect.

Statement of CFTC Commissioner Brian Quintenz on the Amendment to Comparability Determination for Japan: Margin Requirements for Uncleared Swaps for Swap Dealers and Major Swap Participants
I support the expansion of the Commission’s 2016 Margin Comparability Determination for Japan (Determination).[1] I am pleased that the amendments to the Determination adopted by the Commission today apply an outcomes-based approach to substituted compliance and recognize the discretion of Japanese financial regulators to implement reforms consistent with the G-20 framework in a manner suited to their local markets. Moreover, the expanded Determination is appropriately deferential to our counterparts in Japan, who have already found CFTC margin regulations to be comparable to their own.

Statement of Commissioner Dan M. Berkovitz on Amendment to Comparability Determination for Japan: Margin Requirements for Uncleared Swaps
I support today’s Amendment to Comparability Determination for Japan: Margin Requirements for Uncleared Swaps for Swap Dealers and Major Swap Participants (“Amended Japan Determination”).

CFTC’s Technology Advisory Announces Agenda for its March 27 Public Meeting
The Commodity Futures Trading Commission (CFTC) today announced the agenda for the upcoming Technology Advisory Committee (TAC) public meeting on March 27, 2019 at CFTC’s headquarters in Washington, DC. CFTC Commissioner Brian Quintenz is the sponsor of the TAC and Daniel Gorfine, Director of LabCFTC, is the Designated Federal Officer (DFO). (Click here for information on attending or viewing the meeting)

CFTC Issues Amended Margin Comparability Determination for Japan
Japan is deemed comparable for two additional aspects of Margin for Uncleared Swaps
The Commodity Futures Trading Commission (CFTC) today unanimously approved an amended comparability determination that would extend the substituted compliance permitted for Japan’s margin requirements for uncleared swaps as compared to the uncleared swap margin provisions of Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) and CFTC regulations.

EU enforcers focus on new IFRS standards and non-financial information
The European Securities and Markets Authority (ESMA) today publishes its Annual Report on the enforcement and regulatory activities of accounting enforcers within the European Union (EU).

ESMA publishes the first Q&As relating to the Prospectus Regulation
The European Securities and Markets Authority (ESMA) has today published a new document containing nine Q&As relating to Regulation (EU) 2017/1129 (Prospectus Regulation).

ESMA to renew restrictions on CFDs for a further three months from 1 May 2019
The European Securities and Markets Authority (ESMA) has agreed to renew the restrictions on the marketing, distribution or sale of contracts for differences (CFDs) to retail clients, in effect since 1 August, from 1 May 2019 for a further three-month period.

LCF savings scheme channelled millions to chief before collapse; Millions invested with London Capital & Finance ended up with CEO and connected people, say administrators
Caroline Binham – FT
Millions of pounds invested by 11,600 British retail investors into a failed savings company ended up enriching its boss and the head of its biggest borrower, according to administrators who tracked its funds.

Investing and Trading

How Fragile Is Competition in High-Frequency Trading?
Donald MacKenzie, University of Edinburgh – Tabb Forum
The past few years have seen much consolidation in the HFT business. Is that simply the result of the sector’s maturity, along with generally low volatility and often stagnant overall volumes of trading? Or is something more profound happening? ‘Jitter’ (random fluctuations in processing time) in exchanges’ systems has been falling, making small advantages in speed in HFT much more salient, while the costs of setting up and running an HFT firm – especially one trading US equities – are now very daunting.

AlphaQuest Has Had a Rocky Decade. Its Founder Has Seen Worse.
Eric Uhlfelder – Institutional Investor
Nigol Koulajian’s youth was quite different from those of most other hedge fund managers. Sitting recently in a quiet Italian restaurant on New York’s West 4th Street on a cold winter evening, Koulajian calmly explained an unsettling past: “When you’re a kid and you need to regularly escape to a bomb shelter to survive mortar shelling and bombings, it affects you for the rest of your life.”… Alpha Quest Original (AQO) — the flagship strategy — managed $1.4 billion at the end of 2018. The program’s models place 1,500 limit orders for a wide range of futures contracts every day, with 10 to 20 percent of these orders getting executed daily as limit prices are hit.

Anglo-American chief says palladium rise creates ‘bubble’; Prices to stay high while carmakers keep up demand for metal, says Mark Cutifani
Neil Hume and Henry Sanderson – FT
The chief executive of Anglo-American says the rapid rise in the price of palladium is a “bubble” but prices will stay high until carmakers begin substituting the metal in their catalysts.

Physical oil traders aren’t buying hedge fund optimism; Royal Dutch Shell and Glencore remain cautious on whether the oil price recovery has much further to run
David Sheppard -FT
If you only looked at hedge fund activity in the oil market you could be forgiven for thinking the mood was turning bullish. In the past 10 weeks hedge funds have added almost 400m barrels of long positions in crude and refined products — equivalent to four days of global demand — in a bet that last year’s sell-off was overdone.

Almost Half of Older Americans Have Zero in Retirement Savings
Ben Steverman – Bloomberg
The bad news is that almost half of Americans approaching retirement have nothing saved in a 401(k) or other individual account. The good news is that the new estimate, from the U.S. Government Accountability Office, is slightly better than a few years earlier.

Tesla’s New Chairman Says Elon Musk Uses Twitter ‘Wisely’
Angus Whitley – Bloomberg
‘He uses it wisely,’ Robyn Denholm says in rare interview; Musk poses no corporate governance challenges, Denholm says
Tesla Inc.’s new chairman defended Chief Executive Officer Elon Musk’s frequent tweets, lending high-level support to a social media habit that’s set him and the company on a collision course with U.S. regulators.

The ‘Weird’ Yield Curve Shows the Next Recession Could Be Different
Alexandra Scaggs – Barron’s
Ned Davis Research says the yield curve “looks weird”—and not just because it is inverted. Tuesday was the third consecutive day that three-month Treasuries were yielding more than 10-year notes. This is known as a yield curve inversion, and is seen as a key indicator that a recession is coming. The yield curve measures the difference between yields on Treasuries across different maturities, and reflects the market’s expectations about interest rates and inflation—in short, the long-term health of the economy.

Lower Interest Rates Could Come Faster Than We Realize; Global deceleration keeps catching officials off-guard. Fed rate cuts were once a fringe view – no longer.
Daniel Moss – Bloomberg
In a measure of how the global slowdown has caught officials on the hop, an interest-rate cut by the Federal Reserve no longer sounds outlandish.


BNY Mellon recruits Citi’s risk management expert; Senthil Kumar joins BNY Mellon from Citi, where he held various senior risk positions since he started working there in 2004.
Joe Parsons – The Trade
BNY Mellon has hired Senthil Kumar as its new chief risk officer, as the investment bank looks to strengthen its risk management and compliance capabilities.

Deutsche unions warn on Commerzbank merger proposal; Senior worker representatives threaten to scupper Postbank integration if deal goes ahead
Olaf Storbeck – FT
Union bosses have warned Deutsche Bank’s top management that they will scupper the integration of Postbank, which it bought nearly a decade ago, if a merger with Commerzbank goes ahead.

This Hedge Fund Lost $139 Million Last Year and Citigroup is Feeling the Pain
Bloomberg News
GTEC Pandion fund started unraveling in August on FX trades; Parent GF Securities is now coming under regulatory scrutiny
Three months after news first emerged of a hedge fund blowup that threatens to saddle Citigroup Inc. with millions of dollars in losses, details of the fund’s implosion are becoming clearer.

Former Citi banker claims group is ‘institutionally ageist’; Niels Kirk is suing the bank for £9.7m over his 2017 redundancy
Becky Pritchard – Financial News
A former senior executive at Citi is suing the US bank for more than £9.7m over allegations the company is “institutionally ageist”.


Citi accused of spoofing as Japanese regulator pursues $1.2 million fine; Citi’s markets business in the UK has been accused of spoofing Japanese Government Bond futures and could face a fine of $1.2 million.
Hayley McDowell – The Trade
Citigroup could face a fine of $1.2 million after the market regulator in Japan recommended the penalty be handed to the US investment bank for alleged spoofing activity in the futures market.

Global Iron Ore Market Faces Deficit, Mining Billionaire Forrest Warns
Krystal Chia and Tom Mackenzie – Bloomberg
‘We do have to face the reality,’ Fortescue’s founder says; Spot prices set for quarterly rally after Vale’s disruptions
The global iron ore market is likely to have a shortfall following the dam spill and mine curtailments at top supplier Vale SA, according to Fortescue Metals Group Ltd. founder Andrew Forrest, who cautioned that other producers face constraints in boosting output.

Some China Brokerages Halt Bond Repos Amid Credit Risks
Bloomberg News
At least two Chinese brokerages have halted new exchange-listed bond repurchases after rising credit risks damped the value of the pledged notes, according to people familiar with the matter.

World’s Deepest Rate Cuts Beckon in Egypt
Tarek El-Tablawy – Bloomberg
The Federal Reserve has handed Egypt another reason to proceed with what could be the world’s deepest series of interest-rate cuts.

Infected U.S. Shale Oil Is Being Turned Away by Asian Buyers
Serene Cheong, Sharon Cho, and Alfred Cang – Bloomberg
Complex infrastructure web risks contaminating U.S. shipments; Two S. Korean refiners have rejected Eagle Ford crude cargoes
The complex web of U.S. pipelines, tanks and export terminals that’s helped make America the world’s top oil producer is causing a headache for some crude buyers.

A Chinese Law Professor Criticized Xi. Now He’s Been Suspended.
Chris Buckley – NY Times
One of China’s most prestigious universities has suspended a law professor and placed him under investigation after he published a series of essays that warned of deepening repression under President Xi Jinping, he said on Tuesday.


Business leaders back ‘Common Market 2.0’ deal after Brexit; IoD survey shows strong support for staying in single market and customs union
James Blitz – FT
Six out of 10 business leaders want MPs to back a Brexit deal that would see the UK closely aligned to the EU’s single market in goods and services, according to a survey by the Institute of Directors.

Brexit Slips Down Priority List for Money Managers Outside U.K.
Anooja Debnath and Ruth Carson – Bloomberg
British political saga becoming local event, Oppenheimer says; Asian funds are avoiding taking positions on Brexit outcomes
Fund managers have a lot to be anxious about other than the never-ending Brexit saga.

A Boycott Is the Underpriced Risk of a Second Brexit Vote; Brexit-supporters could just decide to abstain from voting in a second referendum. What then?
Danny Hatem – Bloomberg
Now that parliament has taken control of the timetable in order to hold indicative votes on various Brexit paths, one option MPs will be asked to reconsider is a second referendum. Talk of a new vote, with a Remain option on the ballot, has grown again following Saturday’s mass-scale protest march. But lost amid all the chatter about another vote is the tangible danger to British democracy lurking in such a plan.

The Brexit delusion of taking back control; The UK is a large minnow, but still a minnow, in a very big lake
Martin Wolf – FT
From Beijing, where I now am, the UK looks small. It also looks as if it has fallen into the hands of lunatics engaged in an astonishing act of national self-harm. But this, Brexiters will say, is an illusion. The UK is going to “take back control”. The slogan was brilliant. But it was the biggest delusion of all.

Now It’s Parliament’s Turn to Lead Brexit Delusions; There’s no “seizing control” of this disaster.
Clive Crook – Bloomberg
Given her countless errors in supervising Brexit, sympathy for U.K. Prime Minister Theresa May is out of the question. Even so, Parliament’s pointless move this week to take control confirms she’s not alone in preferring an alternative reality. When it comes to Brexit, there’s plenty of delusion to go around.


Why Central Bank Gold Demand Is Reaching New Highs
Andrew Capon – CME Group OpenMarkets
There was a point in the early-1990s when lunchtime London wine tipplers above a certain pay-grade would boast of being in the ABC club: “anything but Chardonnay”. Now it seems central bank reserve managers have founded a rather less bibulous fraternity of their own, the ABD club – “anything but (US) dollars”.

Minimum wage would be $33 today if it grew like Wall Street bonuses have
Aimee Picci – CBS News
Wall Street bonuses fell 17 percent to an average of $153,700 last year.
Despite the decline, Wall Street bonuses are 52 percent higher than a decade ago.
If the minimum wage had kept pace with the same growth as Wall Street bonuses, the hourly baseline wage would be $33.51 an hour, one analysis finds.
Wall Street employees saw their typical annual bonus slip by 17 percent last year to $153,700, according to new data from the New York State Comptroller. But don’t feel sorry for the banking set just yet — even including down years like 2018, bankers’ bonuses have jumped by 1,000 percent since 1985.

Exclusive: Google partners to fund new local media sites
Google is launching the Local Experiments Project, an effort to fund dozens of new local news websites around the country and eventually around the world. The tech giant says it will have no editorial control over the sites, which will be built by partners it selects with local news expertise.

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Past Newsletters

SEC Takes Action Aimed at Proxy Advisers for Shareholders

Get a FREE 90 day trial of John Lothian Newsletter First ReadHits & TakesJLN StaffEpisode 2 of the CryptoMarketsWiki Podcast is now up! In this podcast, Juan Hernandez, CEO of OpenFinance Network, talks to JLN associate editor Matt Raebel...

Banks Get Some Relief in Volcker-Rule Changes

Get a FREE 90 day trial of John Lothian Newsletter First Read Hits & Takes JLN Staff Trading Technologies Chief Technology Officer Drew Shields is leaving the company for a new opportunity in New York, a TT source said. His departure is not...

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