SEC Seeks to Muffle a Mystery Troll With Crackdown on Fake News

Jul 31, 2019

First Read

Hits & Takes
JLN Staff

Yesterday I had the privilege of interviewing Lee Tenzer, the founder of LETCO and a member of the OIC Crowd of Fame, for the Open Outcry Traders History Project. Lee, who hired Don Wilson for his first trading job, is managing his family office these days, which includes a ziplining business in Lake Geneva where my Scouting Venture Crew went this spring. Lake Geneva Canopy Tours is a lot of fun. Here is the website and video showing some ziplining fun.~JJL

Simon Rostron asked me to buy a copy of the Wall Street Journal with the quote about him in it. To say I was shocked by the cost of a print copy of the Journal would be an understatement. Do you know what a print copy of the Wall Street Journal costs? $4. Of course, It has been a long time since I bought a paper copy of a newspaper of any kind.~JJL

SIFMA has a slick interactive graphic depicting outstanding the growth in fixed income obligations from 1996 to the present. As of 2018 year-end, the debt total (munis, plus Treasuries, plus junk bonds, etc.) was $42.6 trillion.~SD

Baton Systems hired Andres Choussy from Triana as its new COO, a big move for the DLT firm. JLN featured Baton in March on how it is working with clients to save time and cash on money transfer processes.

High net worth individuals have been allocating more of their wealth to collectibles. This blog from Alpha Architect features a chart of returns from an array of collectible indices, from post-war European cars (mean quarterly return of 8.66%) to sculptures (mean quarterly return of 1.34%) to the “Fine Wine 100” (mean quarterly return of 6.20%).~SD

Cboe Europe just announced via Twitter that they plan to launch Cboe Closing Cross, “a simple and cost-effective post-close trading service.” Here is the link:


The Case for More Clearing of Treasury Securities

In this video, DTCC Managing Director and Head of Global Public Policy Mark Wetjen reflects on the Treasury flash crash of 2014 and lays out why more Treasury trading activity should involve a central counterparty.

Watch the video »


Chairman Tarbert Announces Key Executive Leadership Appointment; Clark Hutchison to Serve as Director of the Division of Clearing and Risk
U.S. Commodity Futures Trading Commission Chairman Heath P. Tarbert today announced the appointment of Malcolm Clark “Clark” Hutchison III to serve as Director of the Division of Clearing and Risk. In his role, Mr. Hutchison will be responsible for the CFTC’s supervision of derivatives clearinghouses and their members, including oversight of clearing processes through risk assessment and surveillance.

***** Congratulations to longtime JLN reader Clark Hutchison in his new role at the CFTC.~JJL


College Financial-Aid Loophole: Wealthy Parents Transfer Guardianship of Their Teens to Get Aid
Education Department, universities are investigating the practice, which has been used in the Chicago area
Douglas Belkin – The Wall Street Journal
Amid an intense national furor over the fairness of college admissions, the Education Department is looking into a tactic that has been used in some suburbs here, in which wealthy parents transfer legal guardianship of their college-bound children to relatives or friends so the teens can claim financial aid, say people familiar with the matter.

***If wealthy celebs were paying to have their children’s SAT scores secretly corrected and high school athletic careers fabricated out of thin air, this is, sadly, not surprising.~SD


Trading in Securities and Derivatives Markets Terminated Due to Issuance of Typhoon Signal No. 8
Hong Kong Exchanges and Clearing Limited (HKEX) announced that trading in the securities market, including Stock Connect trading, and derivatives markets will be terminated at 1:55pm, due to the issuance of Typhoon Signal No. 8.

***** Time to cover your shorts and your windows.~JJL


Tuesday’s Top Three
Our top read story of the day was Bloomberg’s Citigroup Plans to Cut Hundred of Trading Jobs. Second was The Wall Street Journal’s piece More Exchanges Add ‘Speed Bumps,’ Defying High-Frequency Traders. Did you know the article listed 14 different exchanges in stock, futures and FX that have speed bumps? Third was a blog post from attorney Michael McLeod called My False Hope for the FBI, DOJ Assistance in the OptionSellers, INT. It’s a short rant on how the FBI and DOJ aren’t returning his calls regarding a financial crime.


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Lead Stories

SEC Seeks to Muffle a Mystery Troll With Crackdown on Fake News
Matt Robinson – Bloomberg
Regulator hiring reputation expert to suppress ‘false’ content; Move comes after SEC enforcers were targeted by online attacks
Elon Musk mocked it as the “Shortseller Enrichment Commission.” Billionaire Mark Cuban said it’s “useless.” Hedge fund legend Leon Cooperman called it “abusive.”

UK markets watchdog: cryptoassets have ‘no intrinsic value’
People should be cautious about putting money into unregulated cryptoassets like bitcoin that have “no intrinsic value” and few protections, Britain’s Financial Conduct Authority said on Wednesday.

Nasdaq Deploys AI to Detect Stock-Market Abuse; Exchange operator is testing new technology that could detect novel forms of U.S. market manipulation
James Rundle – WSJ
Nasdaq Inc. is testing an artificial-intelligence surveillance system this summer to monitor its U.S. stock market and spot previously unknown methods of illegal equities trading.

One-stop bourse handling stocks, commodities to launch in summer 2020
The Mainichi
Japan Exchange Group Inc. and Tokyo Commodity Exchange Inc. said Tuesday they have agreed on a merger to launch the country’s first all-in-one exchange that can handle both stocks and commodity futures.

MSCI chief looks beyond traditional indices for growth; Chairman Henry Fernandez says the future lies in private capital and ESG
Robin Wigglesworth – FT
When in 1996 Henry Fernandez asked Morgan Stanley’s investment bankers to estimate the value of its modest indexing joint venture with Capital Group, he was told that the division he ran was probably worth no more than $20m.

For Big Banks, It’s an Endless Fight With Hackers
Stacy Cowley and Nicole Perlroth – NY Times
Large financial companies have to thwart hundreds of thousands of cyberattacks every single day. Data thieves have to get lucky only once.

Carlyle to Abandon Partnership Structure and Dual-Class Shares; Single class of shares could help with inclusion in broad stock indexes
Miriam Gottfried – WSJ
Carlyle Group CG 0.12% LP said Wednesday it would abandon its partnership structure and become a corporation with a single class of shares, going a step further than private-equity peers that have already converted.

TNS Expands its Managed Financial Services Portfolio with the Acquisition of NetXpress
Transaction Network Services (TNS) today announced the acquisition of Chicago-based trading technology provider NetXpress, in a strategic move that augments its financial services portfolio with ultra-low latency exchange connectivity at 11 key global locations across North America, Europe, and Asia.

****I hope NetXpress Chief Enforcer Enzo gets to hang around! When not studying for technical certifications, Enzo enjoys treats and sticks. (Enzo is a canine.)

Traiana chief departs for COO role at blockchain settlement firm; Baton Systems has hired former Traiana CEO, Andrés Choussy, who takes on the role of COO at the firm.
Hayley McDowell – The Trade
The chief executive of CME Group’s post-trade services provider Traiana, Andrés Choussy, has departed the firm to become COO at a blockchain-based settlement specialist.

Singapore’s Shrinking Stock Market May Turn Around Its Fortunes
Julia Fioretti – Bloomberg
Singapore’s shrinking stock market has seen more companies leave its stock exchange than join in the past five years. But a resurgence of initial share sales and placements on the exchange may help turn around its fortunes.

Exchanges, OTC and Clearing

CME Group Inc. Reports Second-Quarter 2019 Financial Results
CME Group
CME Group Inc. (NASDAQ: CME) today reported financial results for the second quarter of 2019. The company reported revenue of $1.3 billion and operating income of $699 million for the second quarter of 2019. Net income was $514 million and diluted earnings per share were $1.43. On an adjusted basis, net income was $632 million and diluted earnings per share were $1.76. Financial results presented on an adjusted basis for the second quarter of 2019 and 2018 exclude certain items, which are detailed in the reconciliation of non-GAAP results.1

SGX reports FY2019 net profit of S$391 million
Singapore Exchange (SGX) today reported FY2019 net profit of S$391.1 million (S$363.2 million), its highest net profit in 11 years. Revenues were also the highest since listing at S$909.8 million (S$844.7 million).

CCP Basis – The Cost of Clearing Fragmentation
Chris Barnes – Clarus Financial Technology
Staff Working Paper No. 800 from the Bank of England was published in May 2019. Titled “The Cost of Clearing Fragmentation”, the paper lays out a quantitative process to model the level of CCP basis.

Navigating the next steps in ESG
James Thursfield – Global Investor Group
Given the fast-growing global demand for environmental, social and governance (ESG) investing, it is easy to forget just how new the sector is.Nasdaq Nordic launched its ESG compliant index futures contract in October of last year. Since then Deutsche Boerse-owned exchange Eurex also delved into ESG derivatives, launching three derivatives products in February, as well as ESG-X indices in May. One thing that Nasdaq’s index and all but one of Eurex’s products have in common is that they rely on negative screening.

DME records strong growth in forward trading; record number of participants
Dubai Mercantile Exchange
Dubai Mercantile Exchange (DME), the premier international energy futures exchange in the Middle East, today announced a 45% increase quarter-on-quarter in trading activity on the exchange’s forward curve and a 33% growth in Exchange Average Daily Volume (ADV) during the first half of 2019.

A. Single Stock Futures/Single Stock Dividend Futures: Introduction of three SSFs and two SSDFs; B. Single Stock Futures/ Single Stock Dividend Futures: Withdrawal of admission; C. Single Stock Futures/equity options: Name change
Eurex Circular 078/19 A. Single Stock Futures/Single Stock Dividend Futures: Introduction of three SSFs and two SSDFs; B. Single Stock Futures/ Single Stock Dividend Futures: Withdrawal of admission; C. Single Stock Futures/equity options: Name change

STOXX announces recognition as an administrator under Benchmark Regulation
Deutsche Börse Group
STOXX Ltd., the operator of Deutsche Börse Group’s index business and a global provider of innovative and tradable index concepts, has been recognized as an administrator under the EU benchmark regulation.

Clearstream completes acquisition of Ausmaq Limited
Deutsche Börse Group
Clearstream, the post-trade services provider of Deutsche Börse Group, has today successfully completed the acquisition of Ausmaq Limited from the National Australia Bank (NAB) with the approval of the Luxembourg regulator.

Russell US Equity Indices Reconstitution Results
CME Group
The Russell US Indices were reconstituted at close of trading on Friday, June 28, concluding an annual seven-week process during which FTSE International Ltd, the index administrator, made rule-based changes to their composition to ensure they remain accurately reflective of market conditions. The newly rebalanced Russell US Indices took effect on Monday, July 1, 2019, and will remain in place for 12 months.

Refinitiv – What other choice does the London Stock Exchange really have?
Steve Grob via LinkedIn
There has been a lot of commentary on the proposed acquisition of Refinitiv by the London Stock Exchange Group (LSEG) but much of it seems to have missed the real point – what other choice does the LSEG really have?

AIX has approved Listed Funds Rules
Astana International Exchange (AIX) is pleased to announce that Listed Funds Rules (the “Rules”) aimed at enabling the Listed Funds market have been approved by the Board of Directors and received a final approval from Astana Financial Services Authority on July 23, 2019.


5 Questions with Todd Leigh, Algo Developer and ADL Consultant
Brian Mehta – Trading Technologies
Todd began his career in the mid-2000s as a proprietary trader at Marex Spectron in London. He went on to run a global macro investment fund in Australia, then founded Quantum Futures, a provider of futures execution algorithms, in the U.S. in 2015. Todd also advises TT clients on bespoke execution solutions and integrated automation through his ADL Tools initiative. With offices in Los Angeles and Australia, Todd travels extensively throughout the U.S., UK, Europe and Canada to support his clients and their trading endeavors.

Itiviti Appoints Gavin Welsh As Head Of Customer Success, Strengthening Customer Focus
Itiviti, a leading technology and service provider to financial institutions worldwide, today announced the appointment of Gavin Welsh as EVP, Head of Customer Success, Itiviti Group. Gavin brings more than 25 years’ experience of Fintech customer support and relations to Itiviti, most recently as Global Head of Client Coverage at TradingScreen. Reporting to CEO Rob Mackay, Gavin will define and drive Itiviti’s customer strategy.

Blockchain settlement firm recruits former Traiana chief as COO
Hayley McDowell – Global Custodian
The chief executive of CME Group’s post-trade services provider Traiana, Andrés Choussy, has departed the firm to become COO at a blockchain-based settlement specialist. Baton Systems confirmed in a statement it has appointed Choussy as president and chief operating officer. He will lead the firm’s move to scale its payments and settlements products, and expand its client base beyond major financial institutions to the payments industry. Choussy joined Traiana in May 2017, and prior to that spent more than a decade at JP Morgan in various clearing and FX prime brokerage roles. Most recently, Choussy was head of derivatives clearing and OTC prime brokerage for the Americas at JP Morgan.

Liontrust to acquire Neptune for £40 million; Shortly after confirming talks with Neptune, Liontrust has agreed to acquire the investment management firm for £40 million.
Hayley McDowell – The Trade
Liontrust is set to acquire rival Neptune Investment Management for £40 million, after confirming the two asset managers were in talks earlier this week.

Digital bank Atom starts to make money on loans; Chief Mark Mullen says group defied closure and held nerve in face of mortgage price war
Nicholas Megaw – FT
The UK’s first digital-only bank has finally started making money on its loans after a “painful” year in the highly competitive mortgage market.

Exchange Data International (EDI) Launches A New Security Reference Feed: PIT (Point In Time)
Exchange Data International (EDI), a leading provider of global security corporate actions, pricing and reference data services, officially announces the launch of a new Security Reference file feed: PIT (Point In Time).


Craig Wright to become the world’s top philanthropist. Allegedly.
Jemima Kelly
In case you haven’t yet heard, Craig Wright, the man who claims to be Satoshi Nakamoto, the pseudonymous creator of bitcoin, performed at FT Alphaville’s Vaudeville — the Fyre Festival of Finance — on Friday night.

UK Finance Watchdog Issues Guidance on Regulation for Bitcoin and Crypto Assets
Ian Allison Cointelegraph
The U.K. Financial Conduct Authority (FCA) has finalized its guidance on crypto assets, clarifying which tokens fall under its jurisdiction.
Most of the rules issued Wednesday were proposed in consultation paper CP19, which was released for public comment in January. As widely expected, the final guidance does not drastically alter the regulatory landscape, instead specifying when certain types of crypto assets fall under existing categories.

Major Indian Trade Organization Speaks Out Against Proposed Crypto Ban
Max Boddy – Cointelegraph
Nasscom, a major Indian trade organization, has said that it is against a blanket ban on cryptocurrencies, which was recently proposed by a governmental panel in the country. According to a report by local financial periodical The Economic Times on July 30, Nasscom commented:

Mindtree joins blockchain collaboration Hyperledger; Hyperledger is a multi-project, multi-stakeholder effort that includes 14 business blockchain and distributed ledger technologies.
Jochelle Mendonca, ET
MindtreeNSE 0.64 % said it had joined Hyperledger, an open source collaborative effort on blockchain, to help accelerate the development of its capabilities on the technology and offer industry-specific solutions to clients.

Blockchain takes shot at Coinbase and other crypto exchanges: ‘They kind of all look the same’
Daniel Roberts – Yahoo Finance
Blockchain, the company launched in 2011—not to be confused with blockchain, the technology—was one of the earliest bitcoin startups and is best known for its public blockchain explorer page and its free bitcoin wallet software. The company says it has more than 40 million bitcoin wallets in use.

Ripple Sides With US Regulators on Crypto Controversy and Facebook Libra
Tony Spilotro – NewsBTC
Crypto was designed to eventually serve as a complete replacement for fiat currencies like the US dollar as the entire world moves into a fully digital age, so money itself can more easily and quickly be managed without the requirement of a third-party intermediary.

United States Regulators Begin Crack Down on Crypto and Bitcoin Crime
Tony Spilotro – NewsBTC
Following the announcement of Facebook Libra – a crypto project aimed to replace the US dollar and other fiat currencies, the United States has been up in arms regarding Libra, Bitcoin, and the rest of the cryptocurrency landscape.
The US is finally ready to begin regulating this portion of the financial sector and has begun a widespread crypto crackdown that’s only increased in recent weeks.

Kraken Acquires Institutional-Grade Cryptocurrency Portfolio Reconciliation Solution Interchange, Creates First Full-Service Crypto Trading Platform
Business Wire
Kraken, consistently rated the most secure digital asset exchange and leader in euro volume since 2013, today announced the acquisition of Interchange, a best-in-class accounting, reconciliation and reporting service provider for cryptocurrency hedge funds, asset managers and fund administrators.

Bitcoin Miner Maker Canaan Confidentially Files for IPO in US: Report
Daniel Palmer – Coindesk
Canaan Creative, the major bitcoin miner manufacturer, is said to have confidentially filed for an IPO in the U.S.

Blockchain Insurance Group B3i Launches First Product on R3’s Corda
Daniel Palmer – Coindesk
B3i, a consortium startup working to use blockchain tech in the insurance industry, has launched its first product on R3’s Corda platform.

Crypto Exchange Rain Raises from BitMEX, Opens Trading In Middle East=
William Foxley – Coindesk
Cryptocurrency exchange Rain has opened its doors for business following regulatory approval by Bahrain’s central bank. The exchange also closed a $2.5 million funding round co-led by BitMEX Ventures.

BitMEX CEO Arthur Hayes Goes AWOL Amidst CFTC Probe
Davit Babayan –
An otherwise active social media personality, BitMEX CEO and co-founder Arthur Hayes has gone silent on Twitter for more than two weeks. Is it due to the ongoing CFTC investigation?

Branson-backed cryptocurrency firm launches a super-fast exchange to take on Coinbase
Blockchain, one of the world’s largest cryptocurrency wallet platforms, says it’s launched a digital currency exchange aimed at delivering “lightning-fast” trades.

US Commodity Futures Trading Commission Rehires Advisor From Coinbase
Max Boddy – Cointelegraph
The United States Commodity Futures Trading Commission (CFTC) has announced that it is hiring Andrew L. Ridenour as senior counsel to the chairman. Up until recently, Ridenour worked at the major cryptocurrency exchange Coinbase.


Fed poised to give Trump boost with rate cut
Sylvan Lane – TheHill
The Federal Reserve is poised to cut interest rates on Wednesday, delivering President Trump a long-sought boost to the economy. Trump has pushed the Fed to loosen rates and stimulate the economy for more than a year, accusing the independent central bank of impeding his agenda and holding back growth.

Trump Says He Wants a Large Cut in Interest Rates
Kate Davidson – WSJ
President Trump reiterated his call for easier monetary policy on Tuesday as Federal Reserve officials began their two-day meeting at

Trump unsettles markets by taking aim at Fed and China; President’s comments come ahead of US rate meeting and as trade talks resume in Shanghai
James Politi in Washington and Colby Smith – FT
Donald Trump lashed out at China and the US Federal Reserve on Tuesday, unsettling investors worried about mounting risks to the global outlook.

Tariffs or No Tariffs, U.S. Corn May Be Too Expensive for China
Bloomberg News
With or without retaliatory tariffs, Chinese companies will probably show little interest in buying U.S. corn because the jump in Chicago benchmark futures since May has wiped out the price advantage over domestic supplies, according to Yigu Info Consulting Ltd.

White House Eyeing Chinese Forces Gathered on Hong Kong Border
Jennifer Jacobs and Glen Carey – Bloomberg
Chinese government calls protests ‘creation of the U.S.’; Pompeo urged China to ‘do the right thing’ in handling unrest
The White House is monitoring what a senior administration official called a congregation of Chinese forces on Hong Kong’s border.

Judge Overturns IRS Rule to Shield Political Donor Identities
Laura Davison – Bloomberg
A federal judge in Montana overturned an Internal Revenue Service rule that would allow many political non-profit groups to keep their donor lists private.


Chairman Tarbert Announces Key Executive Leadership Appointment
U.S. Commodity Futures Trading Commission Chairman Heath P. Tarbert today announced the appointment of Malcolm Clark “Clark” Hutchison III to serve as Director of the Division of Clearing and Risk.

UK watchdog triples fines on accountancy firms; Financial Reporting Council issues £43m of penalties in drive to shed soft image
Tabby Kinder – FT
The audit watchdog levied almost three times more sanctions against UK accountants last year than in the previous year, as it attempted to combat accusations that it has been too lenient.

Elon Musk Tweeting on Tesla Production Raises Questions on SEC Deal
Craig Trudell and Brian Eckhouse – Bloomberg
CEO writes he hopes to make 1,000 roofs a week by year-end; Posts on production numbers need pre-approval under agreement
Elon Musk tweeted a Tesla Inc. production number that the company hadn’t communicated previously, presenting the first test case of whether his April settlement with securities regulators has made him more disciplined on social media.

The ASIC Podcast; Episode 54: The future of financial services
In this episode with the Chair and CEO of the Ontario Securities Commission, Maureen Jensen and ASIC Executive Director (Markets) Greg Yanco explore digitisation, changing consumer expectations, disruptive business models, innovation and the future of financial services.

Doing the right thing
A speech by Deputy Chair, Karen Chester, Australian Securities and Investments Commission at The Directors’ Colloquium: Conversations for Corporate Board Members, Sydney, 30 July 2019.

Trustees warned about influencing employers through improper inducements
ASIC has issued guidance to superannuation trustees today, reminding them that using improper inducements to influence employers in their choice of default fund is illegal.

Review upholds Australian equity market’s record for cleanliness
A recent review by ASIC found Australian equity markets continue to operate with a high degree of integrity.

ESMA publishes responses to its Consultation on reporting guidelines under SFTR
ESMA publishes responses to its Consultation on Guidelines for reporting under Articles 4 and 12 SFTR.

ESMA issues opinions on product intervention measures by Germany, Hungary, Malta and Poland
The European Securities and Markets Authority (ESMA) has today issued four opinions on product intervention measures taken by the following National Competent Authorities (NCAs) of Germany, Hungary, Malta and Poland.

FCA provides clarity on current cryptoassets regulation
The FCA is today publishing Final Guidance which sets out the cryptoasset activities it regulates. This is in response to the FCA’s consultation published earlier this year.

FCA and Practitioner Panel publish findings from 2019 joint survey
We and the Practitioner Panel have published a report from our 2019 joint survey of FCA-regulated firms. The survey gives views across the financial services sector of our performance as a regulator. It provides us with important information to help us achieve our objectives.

Investing and Trading

Clearer metrics are needed to assess green bond authenticity; Lack of agreed standards raises questions for investors seeking more than just financial return
Joshua Kendall – FT
Imagine lending money to a company to invest in green projects — and that group then using the proceeds to pay off other debt. That money has no discernible environmental impact and there is nothing you can do: it is all in the contract.

How the World Looked Last Time Pound Was This Weak
Anna Isaac and Caitlin Ostroff – WSJ
The British pound is headed toward multidecade lows hit in 1985, but investors and analysts said the forces driving it down now are very different. The pound hit its weakest level in years against the dollar and euro on Tuesday, dragged lower by investors’ fears grew that the U.K. may leave the European Union without a deal. The U.K. currency has fallen 18.3% since the Brexit vote in 2016, in reach of its recent low of $1.2047 in January 2017.

Bunge reports second-quarter profit
Agricultural commodities trader Bunge Ltd reported a quarterly profit on Wednesday, compared with a year-ago loss, helped by an unrealized gain from its stake in Beyond Meat.

Fed Day Has Bond Traders Feeling Giddy; Ebullient bond investors lead market commentary. Plus, Trump’s China tirade, the unstoppable dollar, discounted diamonds and more.
Robert Burgess – Bloomberg
It all comes down to this. The remarkable and surprising rally in the bond market this year has been predicated first on the Federal Reserve’s dovish pivot, and then on the central bank actually cutting interest rates for the first time in more than a decade. And with the Fed expected to do just that on Wednesday, bond traders will soon be vindicated for their bravado, which only seems to be intensifying.

Cannabis companies are having a horrible summer as scandals mount and stocks slide
Ciara Linnane – MarketWatch
The cannabis sector has hit a three-month summer slump, weighed down by a series of scandals, regulatory deadlock and a growing sense that the industry is not delivering the gold rush that some investors were expecting.


Quant strategies fuel investment gains at Man Group
Jennifer Thompson – FT
A bounceback for quant strategies propelled investment gains at Man Group, although outflows at the world’s largest publicly listed hedge fund group signalled continuing pressure on the industry.

Computers boost Man Group first-half assets, shares up
Lena Masri, Carolyn Cohn – Reuters
British hedge fund manager Man Group said assets rose 5% in the first half of the year, helped by performance in its computer-driven strategies, boosting fee income and sending its shares higher.

Kluis Commodity Advisors Partners with Indigo Agriculture to Launch New Managed Pricing Program for Farmers
Kluis Commodity Advisors (“KCA”), a full-service commodities brokerage and agricultural advisory that assists America’s farmers with grain marketing and risk management solutions and Kluis Commodity Publishing (“KCP”), have announced a strategic partnership with Indigo Agriculture (“Indigo”), a company dedicated to harnessing nature to help farmers sustainably feed the planet.

Sports Cars, Psychopaths, and Testosterone: Inside the New Frontier of Fund Manager Research
Amy Whyte – Institutional Investor
Should investors care about a fund manager’s relationship status? What kind of car they drive? Ask them if they’ve won any poker games lately? Research points to yes. A recent outpouring of academic papers links the investment performance of professional fund managers to their characteristics as individuals – how they grew up, their personality traits, even their testosterone levels. Studies have explored the impact of everything from where investors went to school to whether they lost a parent in childhood.

JP Morgan and Goldman Sachs go live with CLS FX settlement; Same-day FX settlement service CLSNow has gone live with JP Morgan and Goldman Sachs among the first to use the platform.
Hayley McDowell – The Trade
US investment banks JP Morgan and Goldman Sachs are the first firms to go live on a same-day FX settlement service launched by CLS.

Credit Suisse’s Revamp Powers Profit; Shares in the Swiss lender rise after profit beats expectations
Pietro Lombardi and Julie Steinberg – WSJ
Credit Suisse CS -0.58% Group AG’s profit growth accelerated in the second quarter, bolstered by its global markets businesses and domestic operations despite a challenging environment for Europe’s lenders.

Capital One Hack Hits the Reputation of a Tech-Savvy Bank; The lender is known for diving into new technology ahead of its peers. But that could become a liability.
Peter Rudegeair, AnnaMaria Andriotis and David Benoit – WSJ
Long before Silicon Valley became enamored with financial-technology startups and the promise of using better data and algorithms to remake banking, Capital One Financial Corp. COF -5.89% was already blazing that trail.

Woodford fund breaches unquoted limit after Guernsey delistings; Exchange demands delisting of Benevolent AI and Industrial Heat
Owen Walker and Peter Smith – FT
Neil Woodford’s stricken investment fund has smashed through a regulatory limit on unquoted stocks after the Guernsey stock exchange demanded the cancellation of two of its largest holdings.

Credit Suisse second-quarter profit defies bleak backdrop; Strong performance from trading offset by weakness in capital markets
Stephen Morris – FT
Credit Suisse reported a 45 per cent surge in second-quarter net profit on Wednesday, driven by strong performances at its investment bank, beating expectations and defying the bleak backdrop for European financials.

Carlyle Group to abandon partnership status; Buyout group to also strip staff of voting rights to improve share price
Mark Vandevelde- FT
The Carlyle Group is abandoning its tax-advantaged partnership status and stripping its staff of their special voting rights in a bid to improve the private equity group’s share price by qualifying for inclusion in index tracker funds.

Credit Suisse, BNP Break Bank Gloom With Debt Trading Gains
Patrick Winters and Nicholas Comfort – Bloomberg
Both banks post better-than-expected revenue from debt trading; Equities trading, while down, held up better than expected
Credit Suisse Group AG and BNP Paribas SA broke some of the gloom surrounding Europe’s banks with trading results that mostly beat their Wall Street peers.

How a Flexible Bond Fund Keeps Beating Its Peers
Lewis Braham – Barron’s
Matt Toms, the manager of the Voya Strategic Income Opportunities fund, loves change—how the daily twists and turns in the global economy affect bond markets. “Managing money is very different from engineering, where you get to build something and know it’s complete,” he says. “This job is never complete. That’s one of the fun parts about it.”

BNP Paribas buoyed by corporate and investment banking
Inti Landauro, Matthieu Protard – Reuters
French bank BNP Paribas (BNPP.PA) posted forecast-beating quarterly profit on Wednesday, boosted by its corporate and investment banking (CIB) business, lifting its share price by more than 3%.


Brazilian banks carry on regardless
Rob Dwyer – Euromoney Magazine
The rapid fall in interest rates in Brazil, from a peak of 14.25% in 2016 to 6.5% in February 2018, created expectations among analysts that the biggest banks’ famously high net interest margin was finally about to be eroded.

Companies resist Hong Kong ESG disclosure proposal; Stock exchange pushes for more transparency, but business groups see it as a burden
Patrick Temple-West – FT
Some of Asia’s biggest companies are pushing back against plans from the Hong Kong Stock Exchange to demand greater disclosure on environment, social and governance issues.

China accounting scandal threatens corporate fundraising; Fundraising disrupted as listings halted in situation evoking Arthur Andersen collapse
Don Weinland – FT
An accounting scandal rocking corporate China is drawing comparisons with the collapse of US firm Arthur Andersen as dozens of Chinese companies are forced to halt public listing work.

Businesses struggle for survival in US coal country; Wave of bankruptcies hits Wyoming and Montana as power plants ditch the fuel
Gregory Meyer – FT
The Powder River Basin of Wyoming and Montana was meant to weather the shift towards cleaner energy. If some in the energy business were sceptical about US president Donald Trump’s promises of a renaissance for coal, many at least expected the PRB would keep finding buyers for its brand of low-sulphur coal, which can be extracted cheaply from open-pit mines.

London Dealer Jailed for Swindling Clients on Picasso Sales
Gerald Porter Jr. – Bloomberg
Timothy Sammons gets four to 12 years in prison for fraud; Owners ripped off on sales of Picasso, Chagall and others
A London art dealer who stole tens of millions of dollars from clients who gave him works, including some by Pablo Picasso, to sell on consignment was sentenced to four to 12 years in prison by a New York judge.

Some Very Hungry Cows May Rescue India From a Giant Sugar Glut
Pratik Parija – Bloomberg
Higher fodder prices prompting farmers to sell cane as feed; Sugar cane crushing in Maharashtra seen delayed next season
India’s second-biggest sugar producing region is facing an unusual situation: Attractive returns in the cattle-feed market are prompting farmers to sell sugar cane as fodder.

UBS Analyst Who Predicted China Bank Woes Sees $349 Billion Hole
Bloomberg News
Bedford says smaller Chinese banks have a big capital hole; He issued prescient warnings on the industry’s problems
Jason Bedford might be the only person on Earth who reads every line of every financial statement issued by nearly 250 Chinese banks.


Optimism alone will not be enough to make Brexit succeed; Untethered from reality, enthusiasm sets people up for a greater let-down
Roula Khalaf – FT
“What is this optimism?” asks Cacambo, Candide’s servant and friend in Voltaire’s 1759 novella. “Alas”, responds Candide, “it is the madness of maintaining that everything is right when it is wrong.”

Boris Johnson warned over Brexit impact on Northern Ireland; A no-deal exit could trigger a ‘border poll’ on the region leaving the UK
George Parker and Vincent Boland – FT
Boris Johnson has been warned on a visit to Northern Ireland that the region could vote to break away from the UK if he presses ahead with a no-deal Brexit on October 31.

Boris Johnson Won’t Back Down on Brexit Despite Plunging Pound
Jess Shankleman and Alex Morales – Bloomberg
Johnson: It’s up to EU to compromise if it wants an exit deal; Senior official: government won’t soften tone to help sterling
Prime Minister Boris Johnson refused to back down over his threat to take the U.K. out of the European Union without a deal, despite a growing backlash over the impact his strategy is having on the pound.

Lloyds Bank plays down Brexit fears as mis-selling charge hits profits again
Iain Withers, Lawrence White – Reuters
Lloyds Banking Group (LLOY.L) played down mounting concerns about Britain’s Brexit crisis as it missed first-half profit forecasts due to a much larger than expected charge for mis-selling insurance.

If Boris Johnson gets his Brexit, it may break the United Kingdom
Ishaan Tharoor – Washington Post
In his first speech last week as Britain’s new leader, Prime Minister Boris Johnson exhibited his customary bravado: “The people who bet against Britain are going to lose their shirts because we are going to restore trust in our democracy,” he said, reiterating his promise to lead the country out of the European Union, “and we are going to fulfill the repeated promises of Parliament to the people and come out of the E.U. on October 31st. No ifs or buts.”

No-Deal Brexit ‘Up To The EU’ Says Boris Johnson But Is Brussels Ready?
Pascale Davies – Forbes
Within a week of being sworn in as Britain’s new prime minister, Boris Johnson has made his intentions to his EU neighbors clear: the U.K. will be leaving the European Union “no matter what” on October 31.

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Past Newsletters

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