Hits & Takes
By JLN Staff
Where to start? The Dow Jones fell the most number of points yesterday, ever. Five trillion dollars has been wiped off the value of stock markets globally as a result of the impact of the coronavirus. Most markets performed well, though there were issues with TSX trading and NYSE Arca clearing.~JJL
Meanwhile, Switzerland is cancelling any conferences with more than 1000 people. Several other conferences were cancelled as well. Clorox traded to record highs with investors seeming concluding we will need a lot more of their products.~JJL
Bcause’s trustee was back in court on Thursday ready to argue that Wesco does not have a secured claim. Last April, Wesco obtained an order from a Virginia court requiring Bcause to pay the amounts it owed. That decision led Bcause to seek federal bankruptcy court protection. By now, the parties have filed plenty of paper and it seems to boil down to a claim by the trustee that Wesco’s original notice to Bcause wasn’t proper under Virginia law, that the court there erred, that its decision wasn’t final, and so forth. The ever equanimous Judge Baer gave the parties a week to come up with a reason why she should not just abstain at this point and let everyone argue who did what when in Virginia where it all started.~Thom Thompson
Kalshi, a privately held event exchange based in San Francisco, applied to the CFTC for registration as a designated contract market late last year. According to the company’s website, “Kalshi will revolutionize financial markets by allowing everyone to trade on things that they actually care about.” ~Thom Thompson
The Chicago Bar Association’s Futures & Derivatives and Media & Entertainment (1st Amendment) Law Committee’s co-hosted a panel “CFTC v. Kraft: Administrative Enforcement and the Public’s Right to Know” yesterday. While we in the futures industry are pretty up to date on the manipulation case, it was interesting to hear about the significance of the CFTC/Kraft gag agreement. If not for what the judge in the case later termed the CFTC’s “egregious misconduct” violating the gag agreement, we might not have learned much about the case. As it is, the parties said they have agreed to a new settlement, and the derivatives bar fully expects that the CFTC will release statements of facts and findings in law when they publish it.~Thom Thompson
The actor Steven Seagal has been Under Siege by the SEC for unlawfully promoting an ICO by cryptocurrency company Bitcoiin2Gen, for which he was promised $250,000 in cash and $750,000 worth of cryptocurrency. This put him on Deadly Ground, and sent the SEC Out For Justice against the 67-year-old actor. Conceding that he was not Above The Law, Seagal recently settled with the SEC, granting him Absolution. You can read more about it in the Financial Times story below, or in our “Crypto” section.~MR
Steven Seagal settles with SEC over bitcoin promotion; ‘Under Siege’ actor accused of failing to disclose payments to promote Bitcoiin2Gen
Kadhim Shubber – FT
Steven Seagal, the straight-to-video action movie star, has been fined $314,000 for allegedly touting a cryptocurrency without disclosing payments he received for the work.
****He should have been fined for “acting.”~JJL
London jury clears three former Barclays bankers of fraud charges; Decision leaves Serious Fraud Office’s case against bank’s Qatar arrangements in tatters
Jane Croft – FT
The UK Serious Fraud Office has lost its high-profile seven-year case against Barclays bankers over deals they made with Qatar during the financial crisis after three former top executives were all cleared of fraud charges by a jury.
******”Tatters” is the word of the day.~JJL
Predata and CME DataMine: Innovations in Data and Delivery
Hazem Dawani, CEO of Predata
It’s been an exciting start to 2020 for us here at Predata. Our predictive analytics have been recognized for successfully preparing customers for several recent geopolitical events including last September’s attacks on Saudi oil facilities, Iran’s retaliation against the United States for killing Iranian general Qasem Soleimani, and the recent market sell-off due to coronavirus fears.
****** Before there was data, there was predata.~JJL
Geneva Car Show Canceled as Swiss Try to Contain Coronavirus
Siddharth Vikram Philip and Christoph Rauwald – Bloomberg
Organizers cite force majeure after government bans gatherings; Financial consequences are ‘significant,’ tickets reimbursed
One of the auto industry’s marquee events fell victim to the coronavirus epidemic, with organizers of the Geneva International Motor Show pulling the plug as the outbreak spreads in Europe.
*****I have gotten sick before and after going to the Chicago auto show. Lots of people touching the same things getting into and out of cars.~JJL
Nearly 40% of beer-drinking Americans won’t buy Corona due to coronavirus, study shows
A new study found people may be skeptical of Corona beer because it shares part of its name with the virus making people ill across the world.
****** There are plenty of beers to drink, why take the chance?~JJL
CryptoMarketsWiki Coin of the Week: Litecoin (LTC)
Litecoin is making a big push for adoption in South Korea; news broke this week that the Litecoin Foundation had partnered with fintech firm MeconCash. According to a press release by the Foundation, MeconCash integrated Litecoin into its payment system M.Pay, allowing Litecoin to be withdrawn as Korean Wan (KRW) at over 13,000 ATM machines across South Korea.
Thursday’s Top Three
Our most read story Thursday was the disturbing Reddit’s Profane, Greedy Traders Are Shaking Up the Stock Market from Bloomberg. Second was CME Posts Record Trading on Coronavirus-Driven Market Frenzy from Crain’s Chicago Business. Also disturbing. Third was Cryptocurrencies are nothing more than confidence games from John Crudele at the NY Post.
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Singapore Emerges as Litmus Test for Coronavirus Containment
Philip Heijmans – Bloomberg
Patient recoveries are starting to outpace new cases; Nation could show the virus is not as deadly as feared
As the novel coronavirus starts to gather speed in Europe, the Middle East and the U.S., there’s one place it is seemingly being contained: Singapore. With no reported virus-related deaths despite 98 cases, and a slowing rate of infection that’s been outpaced by recoveries, the Asian city-state is emerging as a litmus test of whether the deadly pathogen can be, if not contained, then neutralized.
We Just Witnessed The Fastest Stock Market Correction on Record
Sarah Ponczek – Bloomberg
S&P 500 has fallen more than 10% from its record high; It only took six days, the quickest plunge in history
Six days. That’s all the time it took for the S&P 500 to fall more than 10% from a record into a correction. That’s the quickest turnaround of the sort ever, according to data from Deutsche Bank Global Research. The S&P 500 fell 4.4% Thursday, the worst day since 2011, bringing its total decline from a Feb. 19 high to 12%
LSEG still ‘on track’ to close Refinitiv deal later this year, says CEO; London Stock Exchange Group chief says Refinitiv deal is on track to close in the second half of the year, as annual results read well for bourse.
Jonathan Watkins – The Trade
The London Stock Exchange Group’s chief executive has reaffirmed that its landmark acquisition of Refinitiv is set to go ahead in the second half of the year, in a week where various media reports have speculated whether regulators may delay the deal.
Coronavirus threatens global economy as experts warn no country will be spared
Stephanie Nebehay, Michael Shields, Parisa Hafezi – Reuters
All countries need to prepare to combat the coronavirus, the World Health Organization said on Thursday, as authorities raced to contain the epidemic’s rapid global spread and Wall Street looked set for its biggest weekly fall since the 2008-2009 financial crisis.
Guggenheim’s Scott Minerd Says Coronavirus May Be Worst Event in His Career
John Gittelsohn – Bloomberg
The Fed has few tools to combat the growing crisis, he says; Guggenheim money manager oversees about $215 billion in assets
Scott Minerd, who oversees about $215 billion for Guggenheim Investments, said the coronavirus is “possibly the worst thing I’ve seen” as a money manager because of its potential to spread globally and the Federal Reserve’s limited tools to blunt its economic impact.
TSX shut down for ‘technical halt’ as stock markets sell off; Company that owns and operates exchange says systems will be ready for Friday
Pete Evans · CBC News
The company that owns and operates the Toronto Stock Exchange ordered a “technical halt” to all trading on Canada’s largest stock exchange on Thursday, a day when stock markets around the world saw heavy losses.
NYSE Arca resolves delay in trades reported to OCC options clearinghouse
The NYSE Arca options exchange said on Thursday that it had resolved a delay in trades being reported to the Options Clearing Corporation (OCC) for options on the SPDR S&P 500 ETF Trust (SPY.P).
Banks Need To Set Priorities For LIBOR Transition
Steve Culp – Forbes
I wrote in an earlier piece about some of the considerations that the financial services industry faces in a post-London Interbank Offered Rate (LIBOR) environment. LIBOR currently underpins around $400 trillion in financial contracts for derivatives, bonds, mortgages, commercial and retail loans, but it is scheduled to be phased out by the end of 2021.
Five Hundred Points in 45 Minutes: Dow Close Runs Street Ragged
Claire Ballentine and Sarah Ponczek – Bloomberg
U.S. stocks suffer worst battering since August 2011; Threat of virus spread rises, hammering global growth calls
A week that has served up more harrowing moments for traders than sometimes happen in a whole year turned terrifying into Thursday’s close. Stock indexes lurched to the biggest one-day loss in almost nine years as coronavirus anxiety started feeling like panic.
Seth Merrin steps away from CEO role at Liquidnet; The name most synonymous with the meteoric rise of Liquidnet over the past two decades steps down as CEO, with company president promoted to helm.
Jonathan Watkins – The Trade
Liquidnet founder and chief executive officer, Seth Merrin, will step down from the role after almost two decades. The industry veteran will maintain his role as chairman but pass the reins of the company to Brian Conroy, who joined just a year ago from Fidelity Investments.
Wells Fargo to Pay $35 Million to Settle ETF Probe; SEC says sales controls weren’t sufficient over products called too risky for some investors
Dave Michaels – WSJ
Wells Fargo WFC -3.78% & Co. agreed to pay $35 million to settle regulatory claims that its financial advisers recommended exchange-traded funds that were too risky for some clients.
Paris: a rather exclusive global financial centre; France’s ‘tapis rouge’ doesn’t extend to hedge funds, activists and short-sellers
Tom Braithwaite – FT
France has seduced Jamie Dimon. JPMorgan Chase last month acquired a seven-storey building in Paris to house hundreds of traders. The deal was announced to coincide with an initiative at Versailles led by President Emmanuel Macron, entitled “Choose France”.
Fed Is Losing Its Credibility to Coronavirus; The central bank is failing to act in the face of a threat to world growth, and for no good reason.
Narayana Kocherlakota – Bloomberg
Richard Clarida, the vice chair of the Federal Reserve, made a series of perplexing statements on Tuesday. First, he said that “the economic disruptions from China could spill over to the rest of the global economy.” Nonetheless, he then made clear that despite the rising threat the coronavirus poses to world growth, the Fed isn’t planning to cut interest rates anytime soon. This raises the question of what the Fed perceives to be the costs of cutting interest rates. There are three possible arguments.
A ‘Massive Petri Dish’: Virus Takes Shine Off Mining’s Big Show
Danielle Bochove and Divya Balji – Bloomberg
Gold is up, but the mood at PDAC will be less than celebratory; Some cancel their plans; others will just avoid the fist bumps
The champagne is on ice and organizers are putting on a brave face, but a whiff of trepidation is building ahead of one of the world’s largest mining conferences.
CME Group to raise hog futures trading limits as pig virus fuels volatility
Tom Polansek – Reuters
CME Group Inc said on Thursday it plans to increase the daily trading limits for its lean hog futures in April and then adjust them annually because of heightened volatility linked to the outbreak of a fatal pig disease in China.
The Dairy Farm of Your Imagination Is Disappearing; Falling prices and factory-farm competition are taking out family farms by the thousands.
Monte Reel – Bloomberg
To lure drivers off Interstate 65 at Exit 220, about 70 miles southeast of Chicago, the roadside ads lean hard on wordplay. A metal corncob the size of a speedboat carries the words, VISIT EAR OFTEN! A sign with a cow on it promises A DAIRY GOOD TIME FOR THE FAMILY! Another billboard shows a wide-eyed kid with a fruit-flavored ice cream in his hand: BERRY TEMPTING!
Exchanges, OTC and Clearing
TMX Provides Update on Market Outage and Confirms Friday Market Opening
TMX today experienced a market interruption that affected trading on our equities markets: Toronto Stock Exchange (TSX), TSX Venture Exchange (TSXV) and TSX Alpha Exchange (Alpha). The issue was first identified at approximately 1:30 pm EST as TSX Alpha clients reported difficulty in receiving messages from the Exchange. As TMX initiated an investigation, the order entry process across TSX and TSXV began to fail as well. Trading on TSX Alpha was halted at 1:51 pm EST and trading on both TSX and TSXV was halted at 1:54 pm EST. As a result of the outage on TMX equities markets, Montreal Exchange halted trading on all Equity Derivative Instruments at 1:59 pm EST.
TMX Markets Incident
UPDATE 6: The technical halt will remain in effect for the remainder of the day on TSX, TSX Venture and TSX Alpha. As a result, the TSX Market on Close Facility will not run today. We apologize for the inconvenience.
CME, Eurex rebuff calls to compensate members for losses; BlackRock and BNP want CCPs that recover from a default to reimburse members and clients
Costas Mourselas – Risk.net
The chief risk officers of CME Group and Eurex Clearing have both rejected calls for clearing houses to compensate members and clients that incur extreme losses after a default.
London Stock Exchange Group PLC Preliminary Results for the Year Ended 21 December 2019
London Stock Exchange Group
Unless stated otherwise, all figures in the highlights below refer to 12 months to 31 December 2019 and comparisons with the prior 12 month period on the same basis.
Euronext welcomes Paulic Meunerie to Euronext Growth
Euronext today rang the opening bell with Paulic Meunerie, a longstanding producer of wheat and buckwheat flour in Brittany, to celebrate its listing on Euronext Growth (ticker code ALPAU) on 18 February 2020. Paulic Meunerie is a family-owned milling group known for its premium branded flours. Based in Brittany in western France, it currently has a client base of over 700 professionals in a range of markets—industrial and artisan bakeries, in-house bakeries at major retailers, restaurants, and more. In 2018, its three mills produced more than 22,000 tons of flour, representing total sales of EUR8.2 million. The company’s Oxygreen process uses ozone to purify wheat grains, reducing pesticide residues by 20 and mycotoxins by 30 to 50%. This has enabled Paulic Meunerie to position itself in the premium market, focusing on health and nutrition as well as the fast-growing and profitable market for farmed insect feed.
Exchange Updates and Streamlines Guidance Materials
The Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), today (Friday) updated three Guidance Letters and eight sets of Frequently Asked Questions (FAQs), and withdrew 15 Guidance Materials.
Equity derivatives: Introduction of new Liquidity Provider schemes
The Management Board of Eurex Deutschland and the Executive Board of Eurex Frankfurt AG decided, with effect from 1 April 2020, to introduce new Liquidity Provider (LP) schemes for the following products:
Report on Initial Public Offering Applications, Delisting and Suspensions
BondCliQ 9 Dealers Away From Operating Full-Scale SIP for Bonds; Tier-1 corporate bond dealers are still holding out from contributing their quote and pricing data to the two-year-old platform.
Rebecca Natale – Waters Technology
BondCliQ has secured 36 out of roughly 45 capital-committing dealers needed to run a full-scale Securities and Information Processor (SIP) for the corporate bond market. Similar to how other SIPs work for cash equities—the Consolidated Tape Association operates the SIP for NYSE-listed equities while the UTP Plan governs a similar system for Nasdaq-listed securities—BondCliQ is working to create an industry utility that will give investors equal access to bid, ask, and size data in the corporate
Contemporary Trends in Model Risk Management
Saqib Jamshed, OCC Senior Vice President, Model Risk Governance
“Model risk still is an extremely important component of a firm’s operational risk profile. It deserves the utmost attention at the C-suite level, the Board of Directors, and regulators.” This is the logical next step in the evolution of model risk management practices as the frameworks underpinning them become more mature. What follows are some of the contemporary trends in model risk management gleaned from my interactions with peers at several financial services firms.
The top issues in fintech, according to Coinbase, Plaid, Square, and more
Adam Lashinsky and Aaron Pressman – Fortune
With humility and a tad of dark humor about how the world was falling apart around us, several Fortune writers and I hosted a dinner Thursday night in an unseasonably warm San Francisco to talk about fintech. We gathered a who’s who of the technologically savvy companies that are trying to reinvent financial services: Andreessen Horowitz, Ant Financial, Brex, Calibra, Coinbase, Honey, Plaid, Ripple, Ribbit Capital, Robinhood, SoFi, Square, Stripe, and more.
Fintech venture firm Anthemis raises new $90 million fund
Anna Irrera – Reuters
Financial services venture capital firm Anthemis has raised $90 million for a new fund that will invest in fast-growing insurance technology startups, the company said on Thursday.
Investors in the Anthemis Insurance Venture Growth Fund I include Aflac Global Ventures, Sumitomo Life and Nürnberger in partnership with Daido Life Insurance Company.
South African fintech JUMO scooped up $55 million in funding
Lea Nonninger – Business Insider
JUMO’s debt and equity round included participation from both new and existing investors, like Goldman Sachs, Odey Asset Management, and Leapfrog Investments, per TechStartups.com.
Actor Steven Seagal Settles SEC Cryptocurrency Charges
Dave Sebastian – The Wall Street Journal
Martial-arts actor Steven Seagal has settled charges brought by U.S. securities regulators that allege he didn’t disclose payments he received for promoting an investment in an initial coin offering for the cryptocurrency Bitcoiin2Gen, also known as B2G. Mr. Seagal, who has starred in movies such as “Under Siege” and “Hard to Kill,” didn’t disclose the $250,000 cash and $750,000 worth of B2G tokens he was promised in exchange for his promotions, the Securities and Exchange Commission alleged in an order Thursday. The SEC said the martial-arts actor agreed to pay $157,000 in disgorgements, without admitting or denying the charges. He also agreed not to promote securities for three years.
House committee to explore benefits of blockchain for small businesses next week
Michael McSweeney – The Block
The U.S. House of Representatives Committee on Small Business will hold a hearing on blockchain’s impact on small businesses next week. The hearing – “Building Blocks of Change: The Benefits of Blockchain Technology for Small Businesses” will be held at 11:30 a.m. EDT on March 4, according to the committee’s website. The hearing “will explore how innovators and entrepreneurs are using blockchain technology to help small businesses boost productivity, increase security, open new markets, and change the way business is done.”
Litecoin Foundation Partners With MeconCash, Enabling Fiat Withdrawal At Over 13,000 ATMs Across South Korea.
Litecoin Foundation (press release)
Litecoin Foundation has partnered with MeconCash to integrate Litecoin into its M.Pay platform. This will allow Litecoin (LTC) to be withdrawn to Korean Won (KRW) at over 13,000 ATMs in South Korea. This new service allows Litecoin holders access to quick cash as well as the ability to send remittances to Korea from overseas, a $6 billion market annually. In addition to payments, Litecoin holders can also purchase products on MeconCash’s MeconMall, and pay for mobile games that utilize M.Pay for rewards. This is only the beginning of a fruitful partnership and users can expect to see more interesting collaborations between MeconCash and Litecoin Foundation in the future.
Human Resources Giant Randstad Explores Blockchain to Quickly Match Talent With Recruiters
Sebastian Sinclair – Coindesk
Randstad, the world’s largest human resources firm, has begun testing a combination of the Cypherium blockchain and Google Cloud to better match talent to corporate needs. The Netherlands-based firm said in a blog post that it believes the blockchain can offer ways to automate bureaucratic tasks associated with workforce recruitment by handling the “nuts and bolts” of day-to-day recruitment activities, making the entire process more efficient. A recent study conducted by Randstad found that distributed ledger technology (DLT) provided a means to securely preserve customers’ personal data while enabling the verification of academic and professional qualifications, as well as birth dates, addresses and IDs, of prospective talent.
Venezuela Sanctions: What U.S. Citizens With Cryptocurrency Need To Know
Jason Brett – Forbes
On February 18, 2020, Secretary of State Mike Pompeo announced how the U. S. sanctioned Rosneft Trading S. A., a Swiss-incorporated, Russian-owned oil brokerage firm, for operating in Venezuela’s oil sector. Since then, headlines in the news showcase the Trump Administration discussing ways it may increase the pressure on the Maduro regime in Venezuela through economic sanctions.
TRON’s 2020 summit for next week has been postponed indefinitely due to coronavirus
Yogita Khatri – The Block
TRON’s native summit niTROn has been delayed indefinitely due to coronavirus. The event was scheduled to take place between February 29 and March 1 in Seoul, South Korea. A notice on niTROn’s website now reads that the new dates will be decided based on the ongoing situation of the epidemic. niTROn is offering refunds to those who purchased tickets, along with a few other options. These include — a free upgrade to VIP for ordinary ticket holders, one additional VIP ticket for VIP ticket holders, and one extra ticket for those who will purchase tickets until April 1.
Revolut Will Make Crypto Available in 50 States
Michael Kapilkov – Cointelegraph
Revolut is coming to the smartphone near you with an array of cryptocurrencies before tax day. Having just raised $500 million on a $5.5 billion valuation, Revolut is one of the biggest fintechs in Europe. Revolut is a neobank: simply, a bank without the expense and convenience of physical branches or the headache of licensing. Revolut is already well-established in Europe. On its home soil, it allows users to buy and sell Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Bitcoin Cash (BCH) and (XRP) for one of 29 fiat currencies. Revolut expects to start offering the same service to its clients in all 50 U.S. states.
Victims have paid $144M in bitcoin as ransom over last six years, says FBI agent
Yogita Khatri – The Block
A recent presentation from Joel DeCapua, a supervisory special agent at the Federal Bureau of Investigation (FBI), has shown that victims have paid $144.35 million in bitcoin as ransom during 2013-2019. DeCapua presented at the RSA cybersecurity conference earlier this week, saying that the “vast majority” of ransomware proceeds are paid in bitcoin.
The art of redefining success, MoneyGram and Ripple edition
Izabella Kaminska and Cat Rutter-Pooley – Financial Times
For all its talk about imminently disrupting cross-border payments, Ripple Labs, the cryptocurrency-startup that likes to make-out it’s in with the mainstream banking boys, has had very little to show for its efforts in terms of real-world applications or relationships. With two exceptions. A much touted partnership with Santander. And an even more hyped up and highly-promoted relationship with $125m MoneyGram, the Nasdaq-listed worldwide remittance specialist.
Crypto exchanges OKEx and Bitfinex hit by DDoS attacks, no users impacted
Yogita Khatri – The Block
Crypto exchanges OKEx and Bitfinex both experienced Distributed Denial-of-Service (DDoS) attacks in the last 24 hours, but say no users are affected. An OKEx spokesperson told The Block that the attack was a malicious attempt to disrupt normal traffic of the exchange’s server with a flood of Internet traffic. OKEx CEO Jay Hao described the attack as “large-scale,” on his Weibo account, saying that competitor(s) was behind it. OKEx’s technical support team spotted the attack and reacted “quickly” to resolve the issue, said the spokesperson. “With our 24/7 technical support and monitoring, it was properly handled within a short period of time, and no client is impacted.”
Draper-Backed Exchange in Lockdown Following ‘Sophisticated’ Attack
Paddy Baker – Coindesk
Coinhako, a cryptocurrency exchange backed by Tim Draper, has restricted user withdrawals after falling victim to a “sophisticated attack.” The Singapore-based exchange told users Friday that account send functions for cryptocurrencies had been temporarily disabled. Although a spokesperson initially said this was for “network maintenance”, the exchange admitted Saturday it had been victim to an attack and that it would impose account restrictions to prevent “unauthorized transactions,” until the matter had been fully resolved.
How Big Is The Role Of Digital Asset Custodians In Enterprise Adoption?
Darryn Pollock – Forbes
The evolution of Bitcoin, and subsequently blockchain technology, since the major cryptocurrency topped out at $20,000 has been fascinating to watch. The price may not even be halfway back to that mark some two-and-a-bit years on, but the growth of the entire industry has been exponential.
When a Pandemic Meets a Personality Cult; The Trump team confirms all of our worst fears.
Paul Krugman – NY Times
So, here’s the response of the Trump team and its allies to the coronavirus, at least so far: It’s actually good for America. Also, it’s a hoax perpetrated by the news media and the Democrats. Besides, it’s no big deal, and people should buy stocks. Anyway, we’ll get it all under control under the leadership of a man who doesn’t believe in science.
Republican Wants to Stop House From Pursuing Wall Street Tax
Laura Davison – Bloomberg
The ranking Republican on the House Financial Services Committee proposed an amendment that would stop the panel from even thinking about taxing trades of stocks, bonds and derivatives.
Coronavirus Isn’t Exactly Bringing Out the Best in Our Leaders; Overconfidence at the top seems to be contagious.
Mark Gongloff – Bloomberg
One nasty coronavirus side effect seems to be that it makes government officials forget how to act. Like the bug itself, this epidemic of shaky leadership is spreading quickly around the world.
Trump’s ‘Totally Prepared’ Coronavirus Pledge Will Be Put to the Test; We will know soon enough if the administration’s plans are sufficient to fight what may well become a pandemic.
Max Nisen – Bloomberg
During a press briefing Wednesday evening on the coronavirus outbreak, President Donald Trump claimed the U.S. is “totally prepared” to respond to a disease that is spreading to new countries seemingly every day.
Trump Says He’s Doing ‘Incredible Job’ Handling Coronavirus
Josh Wingrove – Bloomberg
President says 15 people in U.S. contracted virus, most better; California governor says state monitoring 8,400 people
President Donald Trump said his administration has done an “incredible job” preventing the spread of coronavirus after California’s governor said the state is monitoring 8,400 people for signs of exposure.
Democrats Give Cold Shoulder to Big Wall Street Donor; M&A lawyer H. Rodgin Cohen is shunned over financial-crisis and Weinstein roles; public health experts express alarm at Trump officials’ rhetoric on virus
Gabriel T. Rubin – WSJ
DEMOCRATS’ WARINESS OF WALL STREET MONEY has complicated the political giving of one of the Street’s most prominent M&A lawyers. H. Rodgin Cohen, chairman of law firm Sullivan & Cromwell, is a prolific Democratic donor, giving to state parties and House, Senate and presidential campaigns. He has donated between $2,500 and $5,600 to six Democratic Senate challengers and four incumbents running for re-election this cycle—Michigan’s Gary Peters, Alabama’s Doug Jones, Minnesota’s Tina Smith and Virginia’s Mark Warner. He has donated to multiple Democratic presidential campaigns, including Joe Biden’s and Pete Buttigieg’s.
Main Street leans toward Sanders, but Wall Street says Trump
Caroline Valetkevitch, April Joyner, Lewis Krauskopf – Reuters
Vermont Senator Bernie Sanders may be surging in the polls ahead of Super Tuesday, but some on Wall Street have made their own conclusions on what November will bring: four more years of President Donald Trump.
FIA calls on Basel Committee to remove client clearing from Credit Valuation Adjustment
FIA believes that client cleared derivatives should be removed from Credit Valuation Adjustment risk (CVA). In a response to Basel Committee on Banking Supervision (BCBS) consultation, FIA asked that the committee consider that banks only incur a loss when there is an actual default of a client and that is fully covered by other capital charges. Additionally, FIA argues that client cleared transactions are not accounted for on the bank’s balance sheet as the bank does not assume principal risk in these transactions.
Actor Steven Seagal Charged With Unlawfully Touting Digital Asset Offering
The Securities and Exchange Commission today announced settled charges against actor Steven Seagal for failing to disclose payments he received for promoting an investment in an initial coin offering (ICO) conducted by Bitcoiin2Gen (B2G).
Actor Steven Seagal Fined by SEC for Touting Token Offering
Matt Robinson – Bloomberg
Action star allegedly didn’t disclose he was being paid; He joins other celebrities in being sanctioned by regulators
Steven Seagal may have starred in “Above the Law,” but it turns out he isn’t in real life. The 67-year-old Hollywood actor, who also appeared in “Under Siege,” became the latest celebrity punished by the U.S. Securities and Exchange Commission for failing to disclose that he was being paid to promote a digital token.
Ex-Barclays Executives Cleared Over Financial Crisis Fraud Case
Franz Wild – Bloomberg
London jury takes a just few hours to acquit trio of bankers; Eight years of investigation and trials end in loss for SFO
Three former Barclays Plc executives were cleared of fraud charges by a London jury, ending a long-running saga stemming from the bank’s fight to avoid nationalization during the financial crisis a decade ago.
Pre-insolvency adviser imprisoned for money laundering
Former pre-insolvency adviser Stephen O’Neill has been sentenced at Brisbane District Court to five years in prison with a non-parole period of 22 months, after pleading guilty to one charge of dealing in the proceeds of crime.
FINRA Reminds Member Firms of Their Responsibilities for Supervising UTMA and UGMA Accounts
This Notice addresses the characteristics of Uniform Transfers to Minors Act (UTMA) and Uniform Gifts to Minors Act (UGMA) accounts (collectively referred to herein as “UTMA/UGMA Accounts”) and the responsibilities of member firms to supervise UTMA/UGMA Accounts.
SEC Charges South Carolina Energy Companies, Former Executives With Defrauding Investors; Charges Spring From Failed $9 Billion Nuclear Power Plant Expansion
The Securities and Exchange Commission today charged SCANA Corp., two of its former top executives, and South Carolina Electric & Gas Co. (SCE&G), now known as Dominion Energy South Carolina Inc., with defrauding investors by making false and misleading statements about a nuclear power plant expansion that was ultimately abandoned.
SEC Charges Wells Fargo In Connection With Investment Recommendation Practices
The Securities and Exchange Commission today announced settled charges against Wells Fargo Clearing Services and Wells Fargo Advisors Financial Network for failing reasonably to supervise investment advisers and registered representatives who recommended single-inverse ETF investments to retail investors, and for lacking adequate compliance policies and procedures with respect to the suitability of those recommendations. The SEC ordered Wells Fargo to pay a $35 million penalty, which will be distributed to harmed investors
FCA publishes the number of STORs received in 2019; We have published our suspicious transaction and order reports (STORs) figures for the year ending December 2019.
The STOR regime requires market participants to identify and report suspicions of potential market abuse to the FCA. High quality STORs are an important intelligence source for us and assist our identification of harm in financial markets.
Canadian Securities Regulators Propose New Nationally Harmonized Crowdfunding Rules
The Canadian Securities Administrators (CSA) is seeking comment on proposed harmonized rules for start-up securities crowdfunding.
Kelly L. Gibson Named Director of SEC’s Philadelphia Office
The Securities and Exchange Commission today announced that Kelly L. Gibson has been named Director of the Philadelphia Regional Office.
Investing and Trading
Dow tumbles almost 1,200 points, 124-year record, amid coronavirus scare
Noah Manskar and Thornton McEnery – NY Post
The Dow lost nearly 1,200 points — its worst single-day point drop in its 124-year history — as the worsening coronavirus outbreak stoked fears of a global slowdown.
Volatility index hits highest level since 2011; Wall Street’s ‘fear gauge’ is eyeing its biggest weekly rise since the 2008 crisis
Matthew Rocco – FT
The Cboe volatility index — known as Wall Street’s “fear gauge” — jumped to its highest level since August 2011, reflecting the heightened volatility in US stocks at a time of growing concerns over the coronavirus outbreak.
Junk bond funds suffer worst outflows in more than a year; Investors dump high-yield ETFs on concern over financial impact of the coronavirus
Richard Henderson and Joe Rennison – FT
Junk bond funds suffered their biggest outflows in more than a year during the market tumult of the past week, with more than half the withdrawals coming from a single exchange-traded fund.
Coronavirus scare highlights euro role in new ‘carry trade’; Low rates have encouraged investors to borrow in the currency to invest elsewhere
Katie Martin and Eva Szalay – FT
While the coronavirus outbreak has bitten into markets, the euro has behaved oddly: it has climbed. Typically, bouts of nerves have a predictable impact on major currencies. When the going gets tough, because of economic or geopolitical shocks, traders head for the US dollar, lured by its traditional role as a super-liquid haven and by its tendency to rally when investors close out bets that had been funded with the currency. Even when shocks are US-focused, such as during the failure of Lehman Brothers, the dollar shoots higher, crushing other currencies such as the euro.
Commodities Savaged in Sell-Off as Coronavirus Fears Rise
Jake Lloyd-Smith and Megan Durisin – Bloomberg
Crude, gold and copper all slump as risk-off mood gathers pace; Coronavirus seen slowing growth, crushing raw material demand
Global commodity prices continued to tumble Friday as the fast-spreading coronavirus epidemic sparked fears for global growth prospects and demand for raw materials from fuel to food.
Here’s Where Investors Have Found Refuge in the Market Storm
Cormac Mullen – Bloomberg
Chinese tech-stocks, clean energy funds show solid 2020 gains; Investors benefiting from exposure to government bonds, gold
Even with the relentless coronavirus pushing the global economy toward its worst performance in over a decade, a number of investment themes are proving their resilience to the slump in sentiment.
Solar Has Finally Gone Off the Scale
Josh Petri – Bloomberg
“But will it scale?” It’s a question you’ve likely heard a dozen times. Either in tech (if you work in tech) or in a former tech worker’s uncanny memoir (if you read about tech) or in a high-brow satire of tech culture (if you enjoy painful humor).
Markets Are Pricing in a Coronavirus Recession; The deluge of business warnings around the coronavirus is alarming and a correction was overdue anyway. But is the world really headed for recession?
Marcus Ashworth – Bloomberg
Global markets have entered the meltdown stage, accelerating in the past few days beyond a relatively orderly stock-market correction. With coronavirus cases now on all continents this is no longer a domestic China problem; that suddenly dawned on complacent investors after last weekend’s big outbreak in Italy.
New Law Covering IRAs & 401(k)s Could Upend Estate Planning And Taxes
Lawrence Carrel – Forbes
If over the past two months you’ve been preoccupied with the race to the Super Bowl, the Democratic Primaries, the coronavirus or the stock market, it’s understandable if you missed a little piece of legislation the Congress passed and President Trump signed right before Christmas that will upend the retirement plans of many people.
Clorox Hits Record With Wall Street Betting on Sanitizer Sales
Gerald Porter Jr. – Bloomberg
Clorox Co. eked out a fifth straight gain to reach a record high amid the broad market’s dramatic declines, as investors bet on increased demand for the company’s hand sanitizers and disinfectants after U.S. officials warned that the new coronavirus could spread widely.
Why Your Index Fund Is Built To Survive The Coronavirus Outbreak
Antoine Gara – Forbes
With the market already down more than 10%, the coronavirus-triggered plunge may turn into one of the fastest bear markets to hit U.S. stocks ever. But, believe it or not, a passive investment in the S&P 500 may be the best way to ride out and ultimately profit from the storm.
Citi shifts European leadership role to Frankfurt in post-Brexit move; Kristine Braden becomes head of the Europe Cluster and CEO of Citigroup Global Markets Europe amid leadership reshuffle.
Jon Watkins – The Trade
Citi has appointed a new head of the Europe Cluster to be based in Frankfurt, amid a reshuffle of its management team in the region post-Brexit, according to an internal memo. Kristine Braden takes over the role while also becoming CEO of Citigroup Global Markets Europe (CGME).
Activist Investor Robbins Closing His Firm; The $2 billion fund is latest hedge fund to call it quits as market dynamics shift toward lower fees and more ‘passive’ investing processes
Gregory Zuckerman – WSJ
Activist investor Clifton S. Robbins is closing his firm, the latest high-profile veteran to exit the hedge-fund business. His motivation appears to be different from his rivals, however. Mr. Robbins, who manages $2 billion at Blue Harbour Group LP, will inform clients of his decision Friday morning, he says.
Crispin Odey profits as investors stampede for exits over coronavirus; Hedge fund manager’s bets against oil stocks and Tesla come good amid deep sell-off
Laurence Fletcher – FT
Crispin Odey, one of Europe’s most high-profile hedge fund managers, has emerged as a winner in a brutal week for equity investors as the fallout from the coronavirus outbreak sends markets plunging.
Race to the Bottom: How a Renewable Fund Failed in the ESG Boom; The fund was unable to compete with low-cost offerings from firms like BlackRock and Vanguard.
Catherine Ngai and Rachel Adams-Heard – Bloomberg
It was a moment that should have been a win for environmentalists and sustainable-minded investors alike: a fossil fuel investment vehicle named for late oil tycoon T. Boone Pickens was transforming into a renewables fund to take advantage of interest in the energy transition.
Derivatives Traders Turn Most Bearish on Europe Inc. in a Decade
Todd White – Bloomberg
Relative cost to hedge Euro Stoxx 50 drop highest since 2008; Price of protection surpasses similar measure for Dow Jones
Investors have turned the most bearish on euro-area blue chips in more than decade — and the change has been swift. A gauge of three-month Euro Stoxx 50 index options prices on Thursday showed the relative cost of downside protection has spiked to the highest since 2008. By contrast, a similar measure for U.S. companies in the Dow Jones Industrial Average is not even testing its September 2019 high.
Dog Found to Have ‘Low Level’ of Coronavirus in Hong Kong
Dominic Lau – Bloomberg
The pet dog of a coronavirus patient in Hong Kong has been found to have a “low level” of the virus, the Hong Kong government said early Friday. The dog tested “weak positive” for the coronavirus, the city’s agricultural and fisheries department said in a statement, without giving further details. Officials will carry out further tests to confirm whether the dog has really been infected with the disease, or if it was a result of environmental contamination of its mouth and nose.
China Makes Bad Loans Disappear as Virus Pummels Banks
Lenders are taking steps to delay recognition of NPLs; That may help companies and the economy, but comes at a price
Chinese banks are taking extraordinary measures to avoid recognizing bad loans, seeking to shield themselves and cash-strapped borrowers from the economic fallout of the coronavirus outbreak.
Brexit: UK warns it could walk away from EU trade talks
The United Kingdom has unveiled a negotiating mandate for talks with the European Union that puts it on a collision course with Brussels, saying it was ready to walk away if “good progress” was not made by June.
After leaving the EU last month, the UK has until the end of the year to negotiate a trade deal and agreements on everything from fishing to transport, to replace more than 40 years of closely aligned political and economic relations.
Brexit: Ministers urged to get on with EU aid replacement
Wales’ Brexit minister Jeremy Miles has urged the UK government to give “clarity and commitment” that EU funding will be fully replaced. UK ministers have vowed to substitute the £375m that Wales gets annually from the EU, but have not confirmed how. Mr Miles said there was “no time to lose”. The Welsh Government wants to keep control of the cash but a Tory MP said it could be spent better. The UK government said it was committed to the devolution settlement.
Border red tape will mean 50,000 new form-fillers after Brexit
George Parker and Daniel Thomas – Financial Times
Michael Gove has endorsed claims that up to 50,000 people will have to be recruited to carry out customs paperwork under the government’s preferred Canada-style trade deal with the EU — the equivalent of the population of a medium-sized town. The Cabinet Office minister was on Thursday pressed by businesses that send goods across borders to provide more cash to help them recruit and train the army of form-fillers needed to process the red tape spawned when Britain exits the transition period on January 1 2021.
Brexit Britain should rewrite the global tech regulation rulebook
Jimmy Mcloughlin – WIRED
Technology companies are the quickest beasts on the planet. At the other end of the spectrum, the government is often viewed as the slowest. Paradoxically, the latter is much quicker at reacting to the court of public opinion. The two opposite beasts are going to need to work together over the next decade, like the crocodile opening its jaws so the plover bird can hop in and pick its teeth.
Facebook Cancels Annual F8 Developer Conference Over Coronavirus
Kurt Wagner – Bloomberg
Social network to release info via local events or livestreams; F8 has become a way for Facebook to update its product line
Facebook Inc. canceled its annual F8 Developer Conference over concerns about Covid-19, commonly referred to as the coronavirus, according to a blog post.