Spoofing charges dropped against Chicago developer; Automation is the future of futures markets

Apr 24, 2019

First Read

Getting To Market Fast Is The Difference Between Success Or Failure
Jim Kharouf – JLN

Developing new markets, especially when there is strong competition, is all about speed: not microseconds, but days, weeks or months.

It’s been proven time and again with failed exchanges that it simply took too long to get to the starting gate. Eurex US, the Eurex effort to compete with Chicago’s exchanges, which endured some foot-dragging and untimely Congressional hearings about a foreign company owning a US market, comes to mind. That delay among others bought some critical time for Chicago exchanges to recover and readjust, and Eurex US was dead almost on arrival. If there was a poll of how many new markets made a splash with an “Opening Soon” sign but then trailed off shortly thereafter, the list would likely be long indeed.

Beating incumbents and newcomers is one thing. Conquering bureaucracy and regulation is another. Gaining and maintaining momentum is yet another level that is critical to a marketplace’s success. Bcause, the crypto mining, spot and futures trading market, is the latest to hit the brakes, having recently filed for Chapter 11 bankruptcy reorganization.

To read the rest of this commentary, go here.

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Hits & Takes
JLN Staff

Congratulations to Jitesh Thakkar on having the charges against him in his recent spoofing trial dismissed with prejudice. And congratulations to attorney Renato Mariotti on his successful defense of Thakkar in this trial. I believed Thakkar to be innocent, as did Mariotti and many others in the industry. I believe this case could have set a terrible precedent for the industry if he had been found guilty, which would have increased compliance and insurance costs and ultimately impacted market quality.~JJL

The LinkedIn post I made with the judge’s decision on the Thakkar case received over 5500 views and 15 comments.~JJL

BTW, it would be nice for some big electronic trading vendors and traders to help Thakkar with his legal bills, considering this was not just a victory for him, but for the industry. The Go Fund Me campaign started by Tayloe Draughon has only raised just over $4600. Take action and make a contribution to his legal defence fund today

Crain’s Chicago Business is reporting that the Chicago Board of Trade Building, the home of the CME Group‘s trading floors and the headquarters of John Lothian News, is for sale for $330 million.~JJL

A quick check on CME Group disciplinary actions this week: Merrill Lynch Commodities was fined $75,000 for position limit violations. Hongfeng Wang was fined $30,000 for wash trading activities. Amy Lubeck was fined $30,000 for pre-execution communications with potential counter-parties. Interactive Brokers was fined $20,000 for misuse of Tag 50 IDs. UBS Securities was fined $4,000 for misreporting transfer trades to the clearing house. Last, Marcello Arrambide was fined $2,500 for misuse of a Tag 50 ID (and reimbursed $10,550 to the affected customer). Merrill, Hongfeng, Lubeck, and Arrambide neither admitted nor denied the rule violations or factual findings.~SD

Friday marks Cboe’s 46th anniversary and they are celebrating all week with some of their favorite memories and moments. Follow #Cboe46 on your preferred social platform, or check out their Instagram page for stories and opportunities to vote on your favorite Cboe button throughout the decades.~JJL

The Wall Street Journal is reporting that “More States Are Pursuing Rent Control. That’s Bad News for Landlords.” Rent controls were one of the causes of World War II, so let’s put this bad idea away, shall we.~JJL

Apologies for the lack of an “s” at the end of “declare” in the headline yesterday. We had bought enough vowels, but not enough consonants, evidently. ~JJL

John Falck of VSEC, LLC has written a short primer on “NFA Security Requirements Effective April 1st.”~JJL

Anthony Crudele of Futures Radio interviewed Mark Haraburda of Barchart on Data For Commodities.~JJL

The Consensus blockchain conference is coming up in May. Last year, nearly 8,000 people attended, Snoop Dogg played at an after party hosted by Ripple, and an array of (rented) Lamborghinis was parked outside the venue in a publicity stunt by the crypto-exchange BitMex. What will this year hold?~SD

Thinking of blockchain, check out this LinkedIn post from Digital Asset Chief Strategy Officer Zohar Hod: “$300B annually is spent on fixing bad code. On average out of a full week of coding, only 23 hours get spent on new code the rest is fixing bad code and technical debt…”~SD

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Crypto Exchanges: A Centralized Future? – Colleen Sullivan, CMT Digital
JohnLothianNews.com

In the world of crypto trading there are decentralized exchanges (DEXes) and centralized exchanges. It is not entirely clear which exchange model is likely to win out in the future, or if there will be a winner at all. In this video, CMT Digital CEO Colleen Sullivan talks about the crypto exchange landscape, how those two exchange models can coexist, and what needs to happen for cryptocurrencies to regain some of the traction lost in 2018.

Watch the video »

****For more on CMT Digital, see this recent blog – Meet the CMT Team: Jan-Dirk Lueders, Partner & Co-Founder. You’ll never guess what initially brought Jan-Dirk to Chicago.~SD

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John McAfee Vows to Unmask Bitcoin’s Satoshi Nakamoto
Olga Kharif – Bloomberg
McAfee says the Bitcoin creator is alive and residing in U.S.; ‘Finding Satoshi was a piece of cake,’ software pioneer says
John McAfee, the eccentric antivirus pioneer known for his brushes with the law, said he has spoken with Bitcoin creator Satoshi Nakamoto and plans to reveal the person’s identity.
/bloom.bg/2UR4sX2

***** Glad to know I am not the only crazy dude with the first name of John interested in who Satoshi Nakamoto really is.~JJL

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Capitalism needs a welfare state to survive
The Economist
In the mythologies of both left and right, the welfare state is a work of socialism. Yet the intellectual tradition it owes most to is liberalism. The architect of its British version, William Beveridge, did not want to use the power of the state for its own sake. The point was to give people the security to pursue the lives they chose. And liberal reformers believed that by insuring people against some risks of creative destruction, welfare states would bolster democratic support for free markets.
/econ.st/2ZtkFAy

****** The better you can manage risk, the more risk you can take. This is a sound theory.~JJL

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Big Bitcoin Exchange Ends Bid to Lure High-Speed Traders; Coinbase laid off about 30 people in its Chicago office
Alexander Osipovich – WSJ
Cryptocurrency exchange Coinbase Inc. is ending an ambitious effort to win over high-frequency traders, the latest sign that bitcoin companies are having trouble attracting mainstream financial players.
/on.wsj.com/2GzhUVP

***** That huge sucking sound you hear is the black hole that is consuming overly optimistic crypto trading plans.~JJL

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TD Ameritrade Says Market Fears Slowed Trading in Latest Quarter; Net revenue rose about 3% to $1.45 billion
Micah Maidenberg – WSJ
TD Ameritrade Holding Corp. said investors pulled back on trading in the company’s latest quarter, worried about the market decline in December and the strength of the global economy.
/on.wsj.com/2XAMQf1

****** TDA trading velocity is a leading indicator and this reading is not good.~JJL

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Board of Trade Building going up for sale; The landmark Loop tower’s owners look to cash out while the downtown office market is thriving. And with an asking price of more than $330 million, a sale would set a high bar for property values along LaSalle Street.
Danny Ecker – Crain’s Chicago Business
The owners of the Chicago Board of Trade Building are putting the landmark tower up for sale, looking to cash out with a big profit as investors continue to bet on the downtown office market.
bit.ly/2GAIg9B

***** You can buy the building that is the home of John Lothian News and home to the restaurant and bar that serves the stiffest drinks in Chicago, Ceres.~JJL

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Friday’s Top Three
Our top read story again was Business Insider’s top 13 trading floor pranks. Second was the Virginian Pilot’s piece on Bcause, Virginia Beach bitcoin mining company that won $500,000 city grant files for bankruptcy. Third was also about Bcause, in The Block Crypto’s piece Mining company files bankruptcy and reveals interesting debtors

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Lead Stories

Spoofing charges dropped against Chicago software developer for program used in trading fraud scheme
Robert Channick – Chicago Tribune
Last year, during a crackdown on spoofing ó a form of high-speed computer trading fraud ó federal prosecutors charged a Chicago software developer with creating a program that helped a rogue trader net millions in illegal gains.
bit.ly/2GxjnM7

*****This Chicago Tribune story is paywalled.~JJL

‘Flash Crash’ trader fails to help feds bring conviction in spoofing case
Jon Seidel – Sun Times
The British futures trader once blamed for the 2010 U.S. stock market drop known as the “Flash Crash” came to Chicago earlier this month, where federal prosecutors hoped he’d help them convict a software executive from Naperville.
bit.ly/2Gw1wVQ

Automation is the future of futures markets; CME orders executed in one-tenth of a second are on the rise as robots power trades
Gregory Meyer – FT
It is easy to ascribe human logic to market moves but in the US futures arena the majority of orders are not placed by a sentient being. New studies by the main US derivatives regulator have established just how much robots account for the day-to-day action inside futures bourses operated by CME Group, the world’s biggest exchange company.
/on.ft.com/2GvZJjA

Coinbase Shutters High-Speed Crypto Trading Division, Axing 30 Jobs
Ian Allison – Coindesk
Cryptocurrency exchange Coinbase is shutting down the Chicago office it opened a year ago, eliminating 30 engineering jobs.
The San Francisco-based startup’s Chicago division, known as Coinbase Markets, was dedicated to creating sophisticated electronic markets technologies such as matching engines and high-frequency trading for cryptocurrency.
bit.ly/2UVg9Mr

Deutsche Bank Considers Forming ‘Bad Bank’
Jenny Strasburg – WSJ
Deutsche Bank AG executives have discussed creating a new unit to house unwanted assets and businesses that could be earmarked for closure, part of contingency planning under way should a possible merger with German rival Commerzbank AG fall through, according to people familiar with the matter.
/on.wsj.com/2XE0r5c

U.K. FCA Considers Publishing More Details on Investigations
Kaye Wiggins – Bloomberg
Watchdog now discloses investigations in ‘limited’ cases; Financial Conduct Authority to review approach to publicity
The U.K. financial watchdog will consider publishing more information about its investigations online, it said in a report Wednesday, in a possible change to its current approach of only disclosing its probes in “limited circumstances.”
/bloom.bg/2UTZ1qj

Lawsuit says Tyson, Cargill, JBS conspired to suppress beef prices paid to U.S. ranchers
Jonathan Stempel – Reuters
Four of the largest U.S. beef-packing companies were accused in a lawsuit on Tuesday of violating federal antitrust law by conspiring to drive down prices they paid ranchers for cattle, even as retail beef prices hovered near record levels.
/reut.rs/2Guaq6q

Cannabis Corner: Cannabis Becomes Mainstream – Part 3
Sachin Barot – Traders News
The latest forecast for the cannabis industry within currently legal states is poised to grow from $10 billion in 2018 to nearly $26 billion by 2025. In 2018 there were more than 24.5 million regular cannabis users (i.e., those consuming at least once a month) in the U.S., an increase of nearly 40% from five years earlier. As the cannabis market continues its dramatic increase, the financial opportunities also continue to expand as many consumers now view cannabis squarely in the ever-growing wellness arena. And while the younger population uses cannabis most frequently, seniors represent among the fastest-growing demographic segments in the industry.
bit.ly/2ZsSoKq

****In case you missed it, check out our video with CERESLabs CEO Sachin Barot (the author of the article) – Taking Wall Street Know-How to the Cannabis Industry. ~SD

Trends in Global Equity Electronic Execution
Richard Johnson – Greenwich Associates
Electronic equity trading is as pervasive today as trading itself. It is the fastest-paced part of capital markets and remains one of the most innovative and dynamic environments. The creative destruction of the last decade has seen dozens of new business models launchósome fail, but a few thrive. Dark pools have shut down, only to be replaced by new ones. Fresh-faced young startups get bought out by established firms, while at the same time, some new companies take out old ones. And trading flow shifts from venue to venue, as new products debut and advanced decision-making tools are employed.
bit.ly/2XHUjsX

Diverse trading skill sets essential for the buy-side desk, says BlackRock’s head of trading; Building a flexible, diverse skill set on the trading desk is essential to adapting to evolving market conditions and growing at scale says Supurna VedBrat.
John Brazier – The Trade
Building a flexible and diverse skill set on the trading desk is essential to adapting to evolving market conditions and growing at scale according to Supurna VedBrat, the global head of trading at BlackRock, during a buy-side keynote interview at this year’s TradeTech conference.
bit.ly/2GplYHO

Demand for TCA dropping despite sell-side investment, says Citi market structure head; Despite buy-side citing use of transaction cost analysis (TCA) as a larger focus post-MiFID II, Citi’s market structure head for EMEA says the bank is actually seeing the converse in action.
Jonathan Watkins – The Trade
Client demand for transaction cost analysis (TCA) is dropping, according to Citigroup’s head of EMEA market structure, in a statement that contradicts reports since the introduction of MiFID II that suggest the contrary.
bit.ly/2GvXe0F

A Conversation with Mike Bodson, CEO of DTCC
Frank Chaparro and Ryan Todd – The Block Crypto
The following transcript is taken from season one, episode one of The Scoop, The Block’s new podcast. Listen below and subscribe to The Scoop on Apple, Spotify, Google Play, Stitcher, or wherever you listen to podcasts. Email feedback to podcast@theblockcrypto.com. This transcript has been edited for clarity and length.
bit.ly/2GziN0B

Exchanges, OTC and Clearing

Scotland moves closer to first stock exchange in 50 years
Samuel Agini – Financial News
Plans to launch the first stock exchange in Scotland for nearly 50 years are gathering pace, with the appointment of a chair expected imminently and deals struck with clearing and settlement providers.
Tom·s Carruthers, an Edinburgh-based entrepreneur, hopes the new exchange will go live as soon as the second half of the year, when it will help smaller companies raise capital to support development and make a difference in their communities.
bit.ly/2Ve9r3J

Nasdaq Announces Results from 2019 Annual Meeting of Stockholders
GlobeNewswire
Alfred W. Zollar, New Director, Elected to the Board and Ten Directors Re-elected;
Nasdaq Board Re-elects Michael R. Splinter as Chairman of the Board
Nasdaq, Inc. (Nasdaq:NDAQ) stockholders today elected all nominated directors at the company’s Annual Meeting of Stockholders. All directors will serve one-year terms. Elected board members include:
bit.ly/2GvphNR

Nasdaq Announces 7% Increase in Quarterly Dividend to $0.47 Per Share
GlobeNewswire
The Board of Directors of Nasdaq, Inc. (Nasdaq:NDAQ) has declared a regular quarterly dividend of $0.47 per share on the company’s outstanding common stock. The dividend is payable on June 28, 2019 to shareowners of record at the close of business on June 14, 2019. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to approval by the Board of Directors.
bit.ly/2GBEg9c

Nasdaq Reports First Quarter 2019 Results; Strategic Repositioning and Non-Trading Revenue Growth Continue
GlobeNewswire
Nasdaq, Inc. (Nasdaq:NDAQ) today reported financial results for the first quarter of 2019.
bit.ly/2Gzfq9X

China’s new Nasdaq designed to let traders experiment
Bloomberg via Japan Times
China’s newest stock-trading venue is more than just an effort to keep start-ups at home. It’s a laboratory for rules that could eventually ripple across the nation’s $7.6 trillion equity market.
bit.ly/2ZvgKDi

SIX And Shanghai Stock Exchange Sign An Updated Memorandum Of Understanding
Mondovisione
SIX and Shanghai Stock Exchange renewed their Memorandum of Understanding (MoU) with the intention to further deepen their collaboration which was initiated in 2015. A Swiss delegation visited the Shanghai Stock Exchange today, where the two parties signed the document in the presence of Swiss Confederation President Ueli Maurer.
bit.ly/2Zv9Tty

In perspective (part III): Tackling China’s capital markets
Eurex
The third part of this series of articles puts China and the development of its capital market in perspective. The development itself is not new – new is the speed in which it has been happening over the last years. The changes we see are impressive.
bit.ly/2ZrHBQC

Fintech

big-xyt integrates client executions with its consolidated view to create flexible TCA solution
big xyt
big xyt, an independent provider of high-volume smart data and data analytics, is pleased to announce that, following consultation with a number of clients, the big xyt analytics platform has been extended to include Transaction Cost Analysis (TCA).
bit.ly/2ZlPWoS

FlexTRADER Extends Integration With Goldman Sachs Actionable Indication of Interest (IOI) Liquidity
BusinessWire
FlexTrade Systems today announced an extension of Goldman Sachs’ actionable IOI functionality within the FlexTRADER EMS. The functionality adds IOI profiling and analysis capabilities to the existing FlexIOI product and makes Goldman Sachs actionable liquidity available on the desktop. Customers can action IOI liquidity directly from the trading blotter, which now displays information, including the AFME codes, and the proportion of an order that can be completed using Goldman Sachs’ actionable liquidity.
bit.ly/2ZxccMu

Meta Trading Selects Rival Systems for Enterprise Risk Management Solution
Rival
Rival Systems (Rival) today announced that Meta Trading is leveraging its
enterprise risk management solution, Rival Risk. Meta Trading, a prop trading firm that trades a diverse set of assets with multiple trading groups, was looking for one platform that would allow them to monitor the activity of their traders who use a variety of different trading systems. Rival’s enterprise risk management solution offers Meta Trading this visibility along with advanced features including automated reporting and real-time email alerts.
bit.ly/2UDi974

In the Race for Front-to-Back, Integration Makes All the Difference
Klaus Holse, SimCorp – TABB Forum
Buy-side firms are now seeing the benefits of multi-asset, end-to-end solutions. With increased volumes of data and the complexity of alternative instruments, the need to consolidate fragmented, inhibiting and costly investment operations is now mission critical. And in the current competitive market, it is paramount that the buy side choose investment technology that provides the best scale and automation, says SimCorp CEO Klaus Holse.
bit.ly/2ZtF0FT

The Investment Management Tool Advisors Love
The Reformed Broker
Sean Brown is the CEO of YCharts, one of the hottest investment research platforms on the web. Michael Batnick and Ben Carlson use YCharts for research projects all the time, whether they’re answering a client question, creating a blog post or seeking to prove or disprove an idea about markets, the economy, investing or portfolio construction.
bit.ly/2XF2SVo

Wall Street grafts new technology on to old-school fundraisings; Bankers hope artificial intelligence will boost efficiency of stock and bond sales
Robin Wigglesworth and Laura Noonan – FT
Bankers on Wall Street have always tended to look for an edge in old-fashioned ways: a firm handshake, an expensive suit, an invitation for a client to a top sporting event.
/on.ft.com/2GuuhSV

How developing nations use tech to reach the ‘underbanked’; Lenders in Africa and the Middle East circumvent weak digital infrastructure to make progress
Sarah Murray – FT
They come armed with a clipboard. Across much of Africa and the Middle East, microfinance lending officers visit homes and businesses to assess the value of collateral such as cars, sewing machines or livestock.
/on.ft.com/2USZZmZ

Iraq’s financial inclusion drive boosted by homegrown fintech; An electronic payments system disburses government salaries and welfare to some 7m citizens
Chloe Cornish – FT
Around 7m Iraqis are now receiving welfare benefits or public sector salaries electronically, as the government replaces cumbersome cash dispersals with biometric debit cards that can be used at ATMs and in shops.
/on.ft.com/2US7TNt

Cash culture drags on financial inclusion efforts in north Africa; A distrust of banks is slowing efforts in some countries to bring digital banking to the masses
Alice Kantor – FT
When Sahar Ben Hadj Falah was recently given a book as a gift from a friend, the traditional present came via an untraditional channel: the friend transferred her the money via a mobile payments app, which the 29-year-old Tunisian then used to send the gift to her home.
/on.ft.com/2UTgUWh

Banks use fintech to make up for lost time on financial inclusion; Institutions are investing in a bid to reach ‘unbanked’ groups in Africa and the Middle East
Laura Noonan – FT
It fell to a mobile phone company more than a decade ago to financially empower tens of millions of Africans who found themselves passed over by the traditional banking sector.
/on.ft.com/2UVc6Qg

Pioneering Kenya eyes next stage of mobile money; Fintech aims to tackle a fragmented farming sector and help solve bigger economic problems
Tom Wilson – FT
Kenya has led the African continent in financial innovation for more than a decade with its revolutionary mobile money service M-Pesa, used by two in five Kenyans. Now its entrepreneurs are seeking to use the country’s love for mobile payments to solve bigger economic problems.
/on.ft.com/2UTOKur

No end to poverty without financial inclusion, says World Bank; Finance in developing countries has to be expanded carefully, says a senior official
James Politi – FT
Two things come to mind for Ceyla Pazarbasioglu when she thinks of financial inclusion. First is the core mission of the World Bank, where she has been vice-president for equitable growth, finance and institutions since October of last year.
/on.ft.com/2USZQ2V

How developing nations use tech to reach the ‘underbanked’; Lenders in Africa and the Middle East circumvent weak digital infrastructure to make progress
Sarah Murray – FT
They come armed with a clipboard. Across much of Africa and the Middle East, microfinance lending officers visit homes and businesses to assess the value of collateral such as cars, sewing machines or livestock.
/on.ft.com/2UQSEnP

EBay raises forecast as redesign draws customers, boosts ad revenue
Arjun Panchadar – Reuters
EBay Inc raised its full-year sales and profit forecasts on Tuesday, as user-friendly changes to its ecommerce platforms attracted more customers and also increased its advertising revenue.
/reut.rs/2Gu1ttM

Cryptocurrencies

SoftBank Founder Masayoshi Son Lost $130 Million on Bitcoin
Rachael Levy and Liz Hoffman – WSJ
Masayoshi Son, the billionaire founder of SoftBank Group Corp., made a huge personal bet on bitcoin just as prices for the digital currency peaked, losing more than $130 million when he sold out, according to people familiar with the matter.
/on.wsj.com/2ZDiRFg

Meet the CMT Team: Jan-Dirk Lueders, Partner & Co-Founder
CMT Digital Limited
At CMT, we’ve worked in a variety of different asset classes through our history, but our company’s biggest asset by far is our people. We’re a relatively small firm, and thus our success has been predicated on finding talented people who make an impact by themselves and an even greater impact when combined with a strong team.
bit.ly/2L1SEwK

Using Blockchain to Help Fight Conflict Minerals; Startups and big companies are relying on the technology to better track shipments of metals, from mines to factories worldwide.
Stefan Nicola – Bloomberg
Tantalum, tin, tungsten, and gold, often grouped together in mining industry jargon as 3TG, are vitally important to the industrial economy, used in high-tech products from smartphones to jets. But these conflict minerals, as they’re known, frequently follow a sketchy path from mine to factory, coming from mines whose profits flow to violent militias, criminals, and even terrorists. As human-rights groups step up pressure on big companies to better police the provenance of raw materials in the $600 billion industry, Nathan Williams says he can help.
/bloom.bg/2URSw7G

A Gemini-Backed Bitcoin Interest Account Is Opening Up To More People
Billy Bambrough – Forbes
Bitcoin and ethereum got their first interest-bearing accounts last month after the New York-based cryptocurrency lending startup BlockFi launched them, paying 6.2% interest on deposits and backed by the Winklevoss twins’ Gemini exchange.
bit.ly/2GuIyyU

French Lender Societe Generale Issues $112 Million Bond on Ethereum
Anna Baydakova – Coindesk
French financial services giant Societe Generale Group has issued about $112 million worth of bonds in the form of a security token on the public ethereum blockchain.
bit.ly/2Gx7WEk

Politics

Philip Hammond launches search for next Bank of England governor; Government says Mark Carney will not stay on past February 2020
Chris Giles – FT
Philip Hammond has fired the starting pistol on the government’s search for a new Bank of England governor to replace the central bank’s current chief, Mark Carney.
/on.ft.com/2UUMuTu

Stronger EU Needed to Counter Populism, CEOs’ Lobby Group Argues
Lucca De Paoli – Bloomberg
The European Union needs to become more closely integrated and take a stronger line with the U.S. and China in external disputes to drive business success, according to the European Round Table of Industrialists.
/bloom.bg/2UPW4Hk

Trump Considering Waiving Jones Act Mandate for Natural Gas, Sources Say
Jennifer A Dlouhy, Jenny Leonard and Jennifer Jacobs – Bloomberg
Top administration officials disagree over Jones Act waivers; Puerto Rico, Harold Hamm have argued for relaxing requirements
President Donald Trump is seriously considering waiving the requirement that only U.S. flagged vessels can move goods from American ports to Puerto Rico or energy-starved areas of the Northeast, according to people familiar with the deliberations.
/bloom.bg/2UVSwn9

Treasury’s Mnuchin misses congressional deadline to hand over Trump tax returns
David Morgan – Reuters
U.S. Treasury Secretary Steven Mnuchin failed to meet a final congressional deadline on Tuesday for turning over President Donald Trump’s tax returns to lawmakers, setting the stage for a possible court battle between Congress and the administration.
/reut.rs/2GxiLWP

Excerpts of Stephen Moore’s Writing: Bashing Women, Gay Rights and More
Jim Tankersley and Kitty Bennett – NY Times
Stephen Moore is a conservative commentator best known for opining on economic issues. But the longtime columnist, who is in line to be nominated to the Federal Reserve Board by President Trump, has also written on a range of social topics during his career, including women’s rights, gender equity and marriage.
/nyti.ms/2GtfIPu

U.S. congressional leaders query Google on tracking database
Reuters
Top U.S. lawmakers on Tuesday wrote to Google’s chief executive raising concerns about reports of a massive database known as Sensorvault that allegedly contains precise consumer location information from hundreds of millions of devices.
/reut.rs/2Gw3rtw

Trump complained to Twitter CEO about lost followers: source
David Shepardson – Reuters
U.S. President Donald Trump met with Twitter Inc Chief Executive Jack Dorsey on Tuesday and spent a significant time questioning him about why he had lost some Twitter followers, a person briefed on the matter said.
/reut.rs/2GBZeo6

Regulation

UBS Insider Case Came From Probe of Rich Investor, Lawyer Says
Franz Wild – Bloomberg
The lawyer for a day trader charged with receiving illegal tips from a UBS Group AG compliance officer told a London court that the case only emerged from a probe into a much wealthier investor.
/bloom.bg/2XFubP5

The future of financial conduct regulation
UK FCA
Speech by Andrew Bailey, Chief Executive of the FCA, on the the future of financial conduct regulation, delivered at Bloomberg, London.
bit.ly/2GADTvd

FCA chief eyes ‘lower burden’ regulation after Brexit; Andrew Bailey expects UK to return to a more principles-based system of regulation
Cat Rutter Pooley – FT
Britain would favour a “lower burden” approach to financial regulation after leaving the EU, the head of the UK’s market watchdog has said as the regulator looks to reshape the rule book for financial services.
/on.ft.com/2GBWd7g

Federal Reserve and FDIC Issue Proposed Changes to Resolution Plan Requirements for Foreign and Domestic Banking Organizations
JD Supra
The Federal Reserve and the FDIC published proposed changes to resolution plan (or “living will”) requirements applicable to U.S. and foreign banking organizations. The regulatory changes are necessary because the 2018 Regulatory Relief Act raised the asset thresholds for applicability of the living will requirements. The proposal would apply different filing frequency and informational content requirements based on the risk a firm poses to the U.S. financial system.
bit.ly/2DuwsFo

Hong Kong Regulators Warn Banks Over Complex Lending Risks
Benjamin Robertson – Bloomberg
SFC, HKMA single out Chinese bank unit in joint statement; Firms need better post-lending monitoring systems, they say
Hong Kong’s financial regulators warned banks against complex lending transactions, highlighting a case at an unnamed Chinese bank as authorities in the city increase their scrutiny of risky financial practices.
/bloom.bg/2UTZadl

Investing and Trading

`Extreme’ Stock-Valuation Gap Looms Over Gravity-Defying Rally
Justina Lee – Bloomberg
As the S&P 500 approaches all-time highs, defensive investing styles are trading at their most overbought levels in decades — a sign of investor incredulity at this gravity-defying rally.
/bloom.bg/2XzKr4g

America’s Stock Market Exceptionalism Can’t Continue Forever; Relative to the size of the economy, U.S. corporate earnings are at steep levels
Mike Bird – WSJ
The S&P 500 is back at a new record high, while stocks in most of the rest of the world are yet to return to 2018’s peaks. But the rampant outperformance of U.S. equities can’t last forever.
/on.wsj.com/2GvmDry

Wall Street hits fresh peak as earnings fears recede; Inflows into equity ETFs pick up but active fund managers miss out
Chris Flood – FT
A strong rally for the US stock market this year has propelled Wall Street to a fresh all-time high, a rebound that has surprised many investors after a savage sell-off in the closing months of 2018.
/on.ft.com/2GpkWLW

Big Oil Traders Accused of Cheating Puerto Rico’s Power Utility
Alex Nussbaum – Bloomberg
Shell, Vitol, Trafigura, Petrobras may face $3 billion penalty; Lawsuit alleges they bribed Prepa officials, sold dirty fuel
In one of many scandals that plague Puerto Rico, four of the world’s largest oil suppliers are accused of cheating the island’s electric utility out of more than $1 billion.
/bloom.bg/2UR53YM

Olam launches bid for Dangote’s flour milling business
Neil Hume – FT
Olam, one of the world’s biggest traders of agricultural commodities, has made a $360m offer for the flour milling business of African’s richest man Aliko Dangote.
/on.ft.com/2Gxm4NJ

Institutions

INTL FCStone Financial Launches Prime Brokerage Division
PRnewswire
INTL FCStone Inc. today announced that its subsidiary, INTL FCStone Financial (“INTL” or “the Company”), has launched a prime brokerage division, offering multi-asset prime brokerage, execution, outsourced trading, custody, and self-clearing and introduced clearing services for hedge funds, mutual funds, and family offices.
/prn.to/2ZtXcPB

Wells Fargo’s Interim CEO Faces Hecklers’ Shouts of ‘Frauds’
Hannah Levitt – Bloomberg
Bank has dealt with string of scandals, exit of CEO last month; Chair says CEO search underway, no updates until decision made
C. Allen Parker was interrupted more than a dozen times during Wells Fargo & Co.’s annual meeting by activists who called executives “frauds” and “criminals” and demanded the interim chief executive officer turn the scandal-plagued bank around.
/bloom.bg/2XApLZV

State Street Stock Falls Most Since December in Fee Outlook
Bloomberg
State Street Corp. fell as much as 7.5 percent, the most since December, after the company reported a drop in fee income and warned that conditions remain challenging.
/bloom.bg/2XCnvBm

Auditions for Morgan Stanley’s No. 2 Job Start With Wealth-Management, Banking Shuffle
Liz Hoffman – WSJ
A change atop Morgan Stanley ‘s MS 0.13% giant retail brokerage holds clues for the race to succeed Chief Executive James Gorman and shows the firm leaning into the type of plain-vanilla banking activities it once avoided.
/on.wsj.com/2GACsgj

Credit Suisse’s Revival Gathers Pace as Restructuring Bears Fruit; The better-than-expected results come after the completion of a three-year restructuring plan
Brian Blackstone and Pietro Lombardi – WSJ
Credit Suisse Group AG reported its strongest quarterly profit in more than three years aided by its global markets and wealth management units, suggesting the Swiss bank’s three-year restructuring is starting to pay off.
/on.wsj.com/2Gw0glA

Uber Chooses Citadel Securities to Handle Its IPO; Ride-hailing company picks electronic-trading giant as its designated market maker ahead of debut on NYSE
Alexander Osipovich – WSJ
Uber Technologies Inc. has chosen electronic-trading giant Citadel Securities LLC to manage its hotly anticipated initial public offering on the New York Stock Exchange, people familiar with the matter said.
/on.wsj.com/2GwEDlj

Lawyer for Platinum founder says investors knew and accepted risks
Brendan Pierson – Reuters
Investors in the defunct billion-dollar hedge fund firm Platinum Partners had ample notice they might not get their money back, a lawyer for Platinum founder Mark Nordlicht told jurors on Tuesday, urging them to acquit his client of criminal fraud charges.
/reut.rs/2GpoEFm

Soros Fund’s New Leader Upends Firm in Strategic Overhaul; Investment chief Dawn Fitzpatrick’s tenure atop $25 billion family office marked by turnover and sweeping change
Juliet Chung and Dawn Lim – WSJ
George Soros’s new investment chief made hedge-fund manager Adam Fisher an offer to join the firm two years ago. He’d get a multimillion-dollar annual bonus or an up-to $1.5 billion investment for a new fund if the job didn’t work out, said people familiar with the matter.
/on.wsj.com/2GxemTN

Colony Capital: the mixed investment record of Tom Barrack; Despite notable successes, some believe the longtime friend of Donald Trump has been a poor steward of other people’s capital
Mark Vandevelde – FT
As the global recession deepened in 2008, Tom Barrack was in his element. Over the course of two decades, the chief executive of Los Angeles-based Colony Capital had carved out a reputation as a real estate investor who placed winning bets when others ran scared. So, at the bidding of a longtime associate, Mr Barrack set off for Las Vegas to meet Michael Jackson.
/on.ft.com/2URSPiQ

Bankers’ Pay Curbs a ‘Real Concern,’ Allied Irish Says
Dara Doyle – Bloomberg
Allied Irish Banks Plc said it may struggle to retain and lure new workers amid state-imposed pay limits, continuing to push the case for an easing of the curbs.
/bloom.bg/2UR4P3S

Credit Suisse lifts profit with surprise equity trading gains
Brenna Hughes Neghaiwi – Reuters
Credit Suisse set a positive tone for this quarter’s European bank results on Wednesday, lifting its net profit as gains in equities and deeper ties between trading and private banking helped offset lower revenue.
/reut.rs/2GsYzW6

Regions

Venezuela Arrests Five for `Sabotage’ After Nationwide Blackouts
Andrew Rosati and Alex Vasquez – Bloomberg
Venezuelan authorities have arrested five people and are seeking to extradite three more for “electric sabotage” that they blame for rolling blackouts over the past month.
/bloom.bg/2XHBJkF

Japan’s long holiday could yield a golden opportunity; Emperor’s abdication raises question of how to trade the 10-day shutdown
Leo Lewis – FT
As the sudden appearance of beer multipack offers and viciously ramped up hotel prices suggest, Japan is preparing for an extended 10-day “golden week” holiday to mark the Emperor’s abdication in favour of his son, who will ascend the Chrysanthemum throne. It is era-defining stuff. But how to trade the shutdown?
/on.ft.com/2GtYYYq

Exclusive: Gold worth billions smuggled out of Africa
David Lewis, Ryan McNeill, Zandi Shabalala – Reuters
Billions of dollars’ worth of gold is being smuggled out of Africa every year through the United Arab Emirates in the Middle East – a gateway to markets in Europe, the United States and beyond – a Reuters analysis has found.
/reut.rs/2UEzqNr

Can renewable energy sector drive further cuts in UK emissions?; Improved electricity storage vital as government eyes tougher greenhouse gas targets
Leslie Hook – FT
Over Easter the UK set a new record for coal-free power, with the country running for more than 90 hours powered by gas, nuclear, hydro, renewables and imports.
/on.ft.com/2Gys6xv

Ukraine to Cut Gas Prices in Move That May Strain IMF Relations
Daryna Krasnolutska – Bloomberg
It’s unclear if decision violates country’s IMF agreement; Zelenskiy, Prime Minister Hroisman both support price cut
Ukraine will cut natural gas prices next month, a move that may strain cooperation with the International Monetary Fund.
/bloom.bg/2UWMZfV

Taiwan’s Top Stock Investor Sees Tech Frenzy Getting Extreme
Cindy Wang – Bloomberg
Corrina Xiao of Allianz to reduce positions after strong gains; She plans to boost cash to as much as 20 percent this quarter
Taiwan’s top investor of 2019 is dialing down her massive bet on technology stocks, warning that expectations for earnings growth are now far too high.
/bloom.bg/2UPVQQu

Competition Intensifies to Court Hamburg’s Old Money
Stephan Kahl – Bloomberg
Several asset managers opening offices, expanding in port city; Companies are also attracted by foundations based in Hamburg
Hamburg’s iconic new steel-and-glass concert hall is a vivid reminder of the affluence of the city. Well-off families contributed about 70 million euros ($78 million) and now a slew of asset managers want to tap into that wealth.
/bloom.bg/2UR24j8

Top China pig farmer falls into red on weak hog prices, hygiene costs
Reuters
China’s biggest pig and poultry producer, Wen’s Foodstuff Group, said on Wednesday it recorded a loss of 460.5 million yuan ($68.58 million) for the first three months of the year as weak pig and poultry prices eroded earnings.
/reut.rs/2GxhhvJ

Brexit

The EU’s post-Brexit finance ambitions miss an important point; Lost in the London v Europe dogfight is a larger truth ó the market is global, not regional
Colm Kelleher – FT
Although the British political system appears to have staved off a no-deal Brexit for now, London still faces an existential threat. Unless the UK suddenly changes its mind about leaving the EU, banks, insurers and other financial services businesses still face the prospect of a hard Brexit in all the likely scenarios ó including a no-deal departure or membership of the customs union.
/on.ft.com/2Gt1deu

Paris Is Going All Out for London’s Brexit Exiles; The French capital hasn’t always been seen as welcoming, but its government, schools and businesses are determined to make new residents feel at home.
By Fabio Benedetti Valentini , Angeline Benoit , and Geraldine Amiel – Bloomberg
On floors 24 to 27 of the Europlaza tower in La Defense, on the outskirts of Paris, workers hammer away as they prepare the offices of the European Banking Authority, unperturbed by the twists and turns of the seemingly never-ending Brexit negotiations.
/bloom.bg/2GAHCZJ

Miscellaneous

Rothschilds to Sell Lavish Heirlooms Made for Kings and Queens
Katya Kazakina – Bloomberg
Family consigns items estimated at $12.9 million for auction; Lots include Marie Antoinette’s desk, King Philip’s cabinets
Furniture and artifacts that once belonged to European monarchs and were later snagged by the scions of the Rothschild banking family are heading to the auction block. Call it a royal summer yard sale.
/bloom.bg/2UULnTO

A warming Arctic could cost the world trillions of dollars; New science warns that melting ice and permafrost could set off feedback loops that make climate change worse.
Stephen Leahy – National Geographic
Scientists have long warned that climate change is likely to bring expensive impacts, from rising seas to stronger storms. And a new study comes with a hefty price tag.
/on.natgeo.com/2Gxifbl

Hollywood Writers Trace Friction With Agents to Wall Street
Noam Scheiber – NY Times
When Hollywood writers began firing their agents en masse this month, their gripes seemed esoteric. They contended that an obscure set of financial arrangements had created conflicts of interest for their agents and squeezed the writers’ earnings.
/nyti.ms/2Gw4Sbo

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