Stock Exchanges Accuse Government of Ethics Lapse in Market-Data Fight

Jun 25, 2019

First Read

Bcause: “Not There Yet”
Thom Thompson – John Lothian News

The hearing on WESCO’s motion to lift Bcause’s bankruptcy protection and/or to remove the bankruptcy court’s stay on a lower court’s order to pay WESCO continued on Monday, June 24. WESCO, an electrical equipment supplier, has asked the court to accelerate Bcause’s payments to WESCO to avoid the risk of Bcause dissipating the currently $900,000 in cash it has on hand before it pays WESCO.

At the end of the second day of testimony and argument, Judge Janet Baer adjourned the case indefinitely. At first she said she was denying the motion, finding in favor of Bcause and the other creditors, She also emphasized that her decision was without prejudice and that WESCO would be free to re-file the motion. WESCO’s attorney asked that the decision not be entered so that it would be easier and faster for all parties to continue the action than to re-file as a new motion and Judge Baer agreed.

To read the rest of this story, go here.

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Tech-X Lights Up Former Chicago Trading Floor with Awards to Sandner and Dawani
Sarah Rudolph – John Lothian News

Illinois Tech’s (IIT) biennial Tech-X awards dinner last night honored a well-known industry pioneer and icon, former CME Chairman Jack Sandner, and a relative newcomer, Hazem Dawani, chief executive officer of Predata, a predictive analytics platform. The dinner was held in the Chicago Board of Trade building in the former trading floor built in the Annex in 1981 and now leased by Skylight Studios, an event space company. The room is more than 30,000 square feet with 40 foot ceilings and the Big Board is still up there, glowing red, green and gold.

The focus was on Chicago as a tech hub, and of course on the role Illinois Tech and its graduates have played in making it so. Hazem Dawani, an IIT graduate in computer engineering, was part of the first class of Leadership Academy grads and was named an outstanding alumnus in 2013. He founded OptionsCity along with Victor Glava, in 2006. Dawani was presented with the Emerging Leader Award.

To read the rest, go here.

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Hits & Takes
JLN Staff

There is an article in Barron’s from June 22 by Mary Childs titled “Pioneer of Financial Futures Now Brings You Libor Alternative—And Futures To Match.” You have to guess who it is about. Richard Sandor? Yes, you win!~JJL

The U.S. Supreme Court declined to hear a challenge to the Trump administration’s steel tariffs brought by a group of steel companies who say they were hurt by the 25% tariffs, leaving an earlier Court of International Trade decision in place.~SR

The Crypto Evolved conference takes place today from 8 a.m. to 8 p.m. at Convene in New York City, with Keynote Speaker Timothy Massad. Viable Markets has released a Conference Guide with all the info on the conference. ~SR

The CFA Institute is set for the first female CEO in its history. Margaret Franklin will assume the role of CEO and president on September 2nd.~SD

Are you doing something new and/or exciting in blockchain or cryptocurrency or know someone who is? Do you or that other person potentially want to appear as a guest on a podcast? If your answer was ‘yes’ to both of those questions, we’re looking for subjects for a new podcast on digital assets and blockchain technology. If you want to help out, email me at mattraebel@johnlothian.com.~MR

This is a message from the Executive Chairman of the OCC in the 2018 Annual Report.~JJL

Our friends at SecuritiesLendingTimes.com have a video interview with the OCC’s Matt Wolfe, vice president of product development, about the OCC’s renaissance initiative and technological innovation.~JJL

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CBL Markets to Merge with Xpansiv
cbl markets
Today the boards of Commodity Bourses Limited (CBL), trading as CBL Markets, and Xpansiv Data Systems, Inc. (Xpansiv) announced that they have signed an agreement to combine companies. This will be executed through an implementation deed, under which CBL will acquire all Xpansiv common and preferred stock in exchange for the issue of new securities in CBL. Upon transaction close—which is subject to a number of conditions and expected to finalize in July 2019—the combined companies will operate under a unified holding company named Xpansiv CBL Holding Group, with Joe Madden as CEO and John Melby as President and COO. Will Stewart will replace Donald Putnam as Chairman, with Larry Leibowitz as Vice Chairman (Mr. Putnam will remain on the board).
bit.ly/31RzU7z

*****This partially answers the question, What has Larry Leibowitz been up to since he left NYSE Euronext?~JJL

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Monday’s Top Three
Our top story Monday was Thom Thompson‘s JLN piece Bcause’s Next Steps in Bankruptcy. The in-depth piece follows the bankruptcy case for an inside look at what happened at the upstart crypto firm. Second was about the uncomfortable calls someone at Citi had to make to some of the top market making firms in the business, in fxweek’s Citi culls HFTs from FXPB client list. Third was the Nasdaq announcement Nasdaq Promotes Tal Cohen to Executive Vice President, North American Market Services. Included in the release was news that Thomas Wittman is retiring at year end. Whitman has been a guiding force for more than a decade at Nasdaq’s equity and options exchanges.

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Lead Stories

Stock Exchanges Accuse Government of Ethics Lapse in Market-Data Fight; NYSE, Nasdaq say senior SEC official Brett Redfearn has ethical conflicts because of prior Wall Street work
Dave Michaels – WSJ
The New York Stock Exchange and Nasdaq Inc. on Monday accused a senior regulator who supervises them of having ethical conflicts, raising the ante in a battle with Washington over how the companies sell market data.
/on.wsj.com/2Ya8DuV

Swiss Spat With EU Prompts London Curbs on Country’s Shares
Alexander Weber, Silla Brush, and Viren Vaghela – Bloomberg
U.K. trading venues could exclude Swiss shares from next week; Without a solution, EU recognition of Zurich bourse expires
With no signs of a resolution to a political spat between the European Union and Switzerland a week before a key deadline linked to the country’s stock market, the finance industry is bracing for the potential fallout.
/bloom.bg/2YbfKTO

Tweets, Trade and the Fed Now Have Markets Moving in Packs; ‘Risk-on, risk-off’ trading, in which major assets move in tandem, has become more prevalent
Avantika Chilkoti and Pat Minczeski – WSJ
Bonds, stocks and currencies are moving in tandem more often, as central-bank surprises and trade uncertainty assert their grip over markets.
/on.wsj.com/2Ybmcu0

London exchanges prepare to delist Swiss stocks in EU row; Share trading falls victim to dispute between Brussels and Switzerland over relationship
Philip Stafford and Mehreen Khan – FT
London-based exchanges are preparing to delist Swiss stocks this week after financial markets became entangled in a deteriorating row between Switzerland and Brussels over their relationship.
/on.ft.com/2YdOPXi

Jump Trading latest to launch FX pricing engine in Singapore; Jump Trading joins Standard Chartered, Citi, UBS and XTX Markets in establishing FX pricing and trading engine in Singapore.
Hayley McDowell – The Trade
Jump Trading is set to bring its FX pricing and trading engine to Singapore later this year, making it the latest financial institution to expand FX trading operations in the region.
bit.ly/2Yeywd0

Swiss Life Asset Managers connects to Eurex as direct clearing member; Swiss Life Asset Managers has signed up to the Eurex Clearing ISA Direct model as a clearing member, with ABN AMRO as the clearing agent.
Hayley McDowell – The Trade
Swiss Life Asset Managers has signed up to Eurex Clearing as a direct clearing member via its buy-side clearing access model, with ABN AMRO Clearing operating as the clearing agent.
bit.ly/2Y6SyWJ

Global regulators vow to address ‘manufactured defaults’
Joe Rennison – FT
Global regulators stepped up their condemnation of intentional defaults by companies aimed at triggering payouts on credit default swaps on Monday, announcing a joint effort among US and UK officials to address concerns raised by a string of contentious deals.
/on.ft.com/2Ycq6To

Andrew Bailey braced for ‘audition’ as Bank of England governor; MPs to quiz bookies’ favourite as scandals cast shadow over his tenure at FCA
Caroline Binham – FT
In what will be widely seen as an audition to be the next Bank of England governor, the chief executive of the Financial Conduct Authority will on Tuesday give evidence to MPs in a high stakes parliamentary hearing.
/on.ft.com/2Yl5LuY

Two Sigma aims to unlock ‘unique ways to make money’ in China; New York-based hedge fund group expands in Shanghai
Henny Sender – FT
Two Sigma, one of the biggest hedge funds in the US, is building out its office in Shanghai, as it seeks to take advantage of a wave of foreign investment in the world’s second biggest equity market.
/on.ft.com/2Yexe1E

UK puts mini-bond regulation under spotlight after LCF collapse
Reuters
Britain’s finance ministry said on Monday it would look at whether the regulation regime around mini-bond investments, used to raise funds for small businesses, is up to scratch following the collapse of investment firm London Capital & Finance (LCF).
/reut.rs/2Y8ehxC

China’s Money-Markets Strains Ease, but System Is Still Vulnerable to Shocks; Mistrust between borrowers and lenders in the repo market can feed on itself and build into bigger problems
Shen Hong – WSJ
Signs of funding stress in China’s money markets have abated after the country’s financial regulators urged banks and brokerages to restore calm, but the recent disruptions showed the financial system’s vulnerability to even small shocks.
/on.wsj.com/2YadH2p

INTL FCStone Opens IT Development Services Office in Bangalore, India
INTL FCSTone
INTL FCStone Inc. announced that it will open a captive IT development company with offices in Bangalore, India. INTL FCStone Technology Services Private Limited will begin operational activities on July 1, 2019.
bit.ly/2Y8kZDP

Exchanges, OTC and Clearing

Global trading head at Nasdaq set to retire by end of the year; Tom Wittman will take on executive advisor role following retirement, as Tal Cohen is promoted to executive vice president of North American Market Services at Nasdaq.
Hayley McDowell – The Trade
US exchange operator Nasdaq has confirmed that its head of global trading and market services is due to retire by the end of the year after more than a decade with the company.
bit.ly/2Y6SAOl

Intercontinental Exchange Launches Nyse Board Advisory Council To Advance Board Diversity
Press Release
The New York Stock Exchange (NYSE), a wholly-owned subsidiary of Intercontinental Exchange (NYSE: ICE), announced the launch of the NYSE Board Advisory Council, which will proactively address the critical need for inclusive leadership by connecting diverse candidates with companies seeking new directors.
bit.ly/2NfiZII

DTCC Sponsored Service Achieves Key Milestone in Treasury Market Clearing with Citadel Activity
DTCC
The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, today announced its subsidiary Fixed Income Clearing Corporation (FICC) has achieved yet another milestone in the transformation of the U.S. Treasury market toward central clearing as Citadel successfully executed and cleared both cash and repo trades via FICC’s recently expanded Sponsored Service model.
bit.ly/2ZHOBYR

Tim Beckwith Joins EuroCCP As Head Of Commercial Development
EuroCCP
EuroCCP, Europe’s leading equities clearinghouse, today announces the appointment of Tim Beckwith as Head of Commercial Development. Mr Beckwith joins from LCH Ltd where he was a Director and Head of Sales and Relationship Management for equities.
bit.ly/2J2R89o

Ceremonies to Commemorate Launch of Japan-China ETF Connectivity
JPX
On June 25, ceremonies were held in Tokyo and Shanghai to commemorate the launch of Japan-China ETF Connectivity, a scheme jointly developed by Japan Exchange Group (JPX) and Shanghai Stock Exchange (SSE). The ETFs created under the scheme were listed on the two markets on the same day.
bit.ly/2YdWipk

Nasdaq to Host Second Annual LGBT Leadership Conference
GlobeNewswire
Nasdaq will host its Second Annual LGBT Leadership conference in celebration of Pride Month. The full day program will feature discussions highlighting authenticity and intersectionality in the workplace, LGBT leadership, and the state of HIV. The list of speakers include:
bit.ly/2YbiYqo

Eurex welcomes Swiss Life as direct clearing member; ABN AMRO Clearing acting as clearing agent
Eurex
Eurex Clearing’s ISA Direct – a direct clearing membership for the buy side – gains traction: Swiss Life Asset Managers is the first buy-side client using the central counterparty’s ISA Direct service for OTC Interest Rate Derivatives with ABN AMRO acting as clearing agent. With this model, Eurex addresses changes in the regulatory landscape and contributes to the safety, robustness and efficiency of the overall market.
bit.ly/2Y8mDVQ

HKEX Welcomes Government Reappointments to HKEX Risk Management Committee (Statutory)
HKEX
Hong Kong Exchanges and Clearing Limited (HKEX) welcomes the Government’s reappointments of Lawrence Lam and Barbara Shiu to its Risk Management Committee (Statutory) (RMC). The reappointments were in accordance with the Securities and Futures Ordinance. They are for a term of two years with effect from 1 July 2019.
bit.ly/2Yd4WV1

Fintech

JPMorgan May Be Building a Competitor to BlackRock’s Aladdin
Amy Whyte – Institutional Investor
JPMorgan Chase & Co. is the latest financial firm to develop risk and portfolio management software for institutional investors.
JPMorgan’s corporate and investment bank has partnered with StatPro — a competitor to risk analytics providers like BlackRock, Axioma, and MSCI — to offer “a genuine alternative in portfolio analytics,” according to Samik Chandarana, the bank’s head of data analytics, applied artificial intelligence, and machine learning.
bit.ly/2N6We9Q

If Silicon Valley Wants to Disrupt Wall Street
Kurt Dew – TABB Forum
If Silicon Valley wants to disrupt Wall Street permanently, two rules apply:
-Accept a reasonable return for your services. Replace a service that costs too much to deliver too little.
-Keep it simple.
There is much ado in the financial press about Silicon Valley startups that plan to take over the business of finance, replacing major financial institutions, even central banks. There is no shortage of opportunity.
bit.ly/2IHMa2Z

A conversation with the European fintech regulator
Roll Call (AUDIO)
Host Chris Brummer sits down for a rare interview with Steven Maijoor, chair of the European Securities and Markets Authority, Europe’s top fintech regulator. Maijoor reveals his thoughts on the impact of Brexit on the EU’s burgeoning regulation of fintech and where Europe stands versus the United States when it comes to regulation.
bit.ly/2RwDIWW

MassChallenge FinTech and The Financial Revolutionist Announce Strategic Partnership
Yahoo Finance
MassChallenge FinTech, a program matching enterprise-ready fintech startups with industry-leading corporate partners, today announced its partnership with The Financial Revolutionist. The FR is a digital community for financial institutions and fintechs to access resources to thrive in the new era of financial innovation. This partnership signifies an aligned mission to further transform the financial services landscape through innovative technologies and solutions.
/yhoo.it/2RF63dW

Refinitiv invests in alternative data platform; Refinitiv has partnered with BattleFin to integrate alternative datasets with Eikon and its quantitative analytics platform.
Hayley McDowell – The Trade
Refinitiv has made a strategic investment in an alternative data platform provider as part of a partnership established to bring alternative datasets to its clients.
bit.ly/2YdVvES

Cryptocurrencies

Facebook’s venture into cryptocurrency is a terrible idea
Barry Eichengreen – The Washington Post
Living on the fringes of Silicon Valley and writing about the gold standard, I have the dubious privilege to be invited to lunch, from time to time, by ambitious young entrepreneurs with plans for a “stablecoin,” meaning a cryptocurrency pegged one-to-one to the dollar. I wasn’t so invited by the backers of Libra, Facebook’s newly announced stablecoin. But I still suffered a familiar case of indigestion.
/wapo.st/2J360oi

Second US Congressional Hearing Is Scheduled on Facebook’s Libra Crypto
Nikhilesh De – Coindesk
The U.S. House Financial Services Committee will host a hearing on Facebook’s libra cryptocurrency next month, one day after the Senate Banking Committee holds its previously announced hearing. Maxine Waters, chair of the powerful House committee, announced the hearing Monday, The Hill reported, after calling on Facebook to suspend development of the project multiple times last week. The hearing is scheduled for July 17, and no witness list has yet been released.
bit.ly/2ZHCrPK

UK regulator scrutinising Facebook’s plan for digital currency; FCA says technology giant ‘will not walk through authorisation’
Caroline Binham – FT
The UK’s financial regulator has already held discussions with Facebook over its planned digital currency and will seek many more, warning that the technology giant “will not walk through authorisation” likely needed from the watchdog to operate.
/on.ft.com/2Y8jSns

Correlation between cryptocurrency prices is decreasing, but still strong
Larry Cermak – The Block
In Q2 2019, Stellar and Ethereum had the strongest correlation with other cryptocurrencies; followed by Monero and Cardano. In the same time period, Bitcoin SV and Grin have the weakest correlation with other cryptocurrencies; followed by BNB and Bitcoin Cash. Bitcoin was the 8th most correlated cryptocurrency and correlated the most with Monero and the least with Bitcoin SV and Grin. Over the long term horizon, the least correlated cryptocurrencies over the long term appear to be Tezos, BNB, TRON and Bitcoin SV. The least correlated quarter was Q4 2017 while the most correlated one was Q4 2018.
bit.ly/31RDLS6

After failed Fed bid, Stephen Moore reportedly takes role at cryptocurrency ‘central bank’
Mike Murphy – Market Watch
If at first you don’t succeed, just create your own central bank. Stephen Moore failed in his bid to join the Federal Reserve board, but the controversial conservative economic adviser will reportedly soon be playing a key role at a new “central bank” for cryptocurrencies. Fox Business reported late Monday that Moore, a former Wall Street Journal editorial writer and senior fellow at the Hoover Institution, has joined a group of entrepreneurs creating an entity called “Decentral,” which apparently bills itself as “the world’s decentralized central bank.”
/on.mktw.net/2YdFIWO

House panel to hold hearing on Facebook cryptocurrency project
Sylvan Lane – The Hill
The chairwoman of the House Financial Services Committee announced Monday that the panel will hold a hearing next month on Facebook’s plan to develop a cryptocurrency-based payments platform. The Financial Services Committee will hold a hearing on Facebook’s Project Libra on July 17, Chairwoman Maxine Waters (D-Calif.) announced Monday afternoon. The Senate Banking Committee will hold its own hearing on the social media giant’s crypto project the previous day.
bit.ly/2XvP1UF

JPMorgan Sees Client Interest in JPM Coin for Bond Transactions
Takashi Nakamichi and Takako Taniguchi – Bloomberg
Customers in the U.S., Europe and Japan see potential: Farooq; Bank aims to start pilot testing as soon as this year
JPMorgan Chase & Co. is seeing interest from clients in the U.S., Europe and Japan on the potential for its prototype digital coin to speed up trading of securities such as bonds.
/bloom.bg/2YcTfh4

Swiss Central Banker ‘Relaxed’ About Facebook’s Libra Crypto
Daniel Palmer – Coindesk
A Swiss central banker has suggested that Facebook’s recently announced cryptocurrency project, Libra, is not ruffling any feathers with the regulator.
bit.ly/2YbDIyf

Bitcoin IRA launches crypto retirement accounts insured for $100m, courtesy of BitGo
Yogita Khatri – The Block Crypto
Bitcoin IRA, a company that specialises in offering crypto for individual retirement accounts (IRAs), has struck a partnership with custodian BitGo Trust that will offer clients the optionality to have their accounts insured by the custodian firm.
bit.ly/2Y6WTct

Facebook’s Libra Cryptocurrency: Bad for Privacy, Bad for Competition
Scott Shay – Coindesk
Allowing Facebook to mint its own coin, the Libra, would turn it into the greatest anti-competitive trust case in history. It would make the early 20th century Morgans or Rockefellers seem downright competitive.
bit.ly/2Y8djkY

Over 2,000 Investors Back Kraken Crypto Exchange’s $13 Million Crowdfunding
Daniel Kuhn – Coindesk
Regulated spot and futures crypto exchange Kraken has completed a $13.5 million round of financing on Bnk To The Future (BF), an online investment platform.
bit.ly/2Y6Y2kh

Facebook’s Libra must obey anti-money laundering rules: French central banker
Reuters
Facebook’s planned global ‘Libra’ cryptocurrency must respect anti-money laundering regulations and it must seek banking licenses if it offers banking services, France’s central bank chief said in a magazine interview.
/reut.rs/2YieQoI

Cryptocurrency Scammer Dubbed ‘Coyote of Wall Street’ Pleads Guilty
CCN
A scammer that called himself the “coyote of Wall Street” has admitted to telling clients he would invest their money in cryptocurrency only to keep it for himself. Patrick McDonnell, a 46-year-old from Staten Island in New York, pleaded guilty to one count of wire fraud on Friday.
bit.ly/31RDFKd

Politics

Sanders Proposes to Wipe Out All Student Debt With Funds Raised From Wall Street; Democratic presidential hopeful weighs in on issue aimed at winning over young and educated voters
Michelle Hackman – WSJ
Democratic presidential candidate Bernie Sanders is proposing to forgive all $1.5 trillion in U.S. student-loan debt with taxpayer dollars, entering a policy debate that resonates with young and educated voters the Democrats hope to secure for their 2020 electoral coalition.
/on.wsj.com/2YdR2C4

Bernie Sanders’ Old Free College Try; He tries to leap Senator Warren in a single $1.6 trillion socialist bound.
The Editorial Board – WSJ
The Democratic presidential primary is turning into a bidding war. Bernie Sanders on Monday introduced a “revolutionary” bill to eliminate tuition at public colleges, while canceling every student loan in the country. That’s $1.6 trillion owed by 45 million people. “We will make a full and complete education a human right in America,” Mr. Sanders said.
/on.wsj.com/2Y8oYQC

‘We Are Part of the Problem’: Billionaires and Heirs Demand Wealth Tax
Tom Metcalf and Suzanne Woolley – Bloomberg
Letter calls on presidential candidates to embrace higher levy; Proposal could generate $3 trillion of revenue in 10 years
They’re an eclectic bunch — some of the nation’s most privileged heirs alongside entrepreneurs who have made spectacular fortunes in real estate, finance and Silicon Valley. But collectively they’re united on the need to tax more of the richest Americans’ assets.
/bloom.bg/2X0Hlp8

Pain From Trump’s China Tariffs Spreads, Reshaping Global Trade
Shawn Donnan – Bloomberg
G-20 leaders gathering as trade concerns continue to sting; China’s imports from Japan and South Korea both fell in May
President Donald Trump often cites China’s massive exports to the U.S. as a grave injustice hanging over the world economy. But lately it pays to look at Chinese imports for the pain that his tariff wars are inflicting on global growth.
/bloom.bg/2Yb0DJV

Putin’s Big Bet on Gold Is Paying Off; Russia has been the biggest sovereign gold bug for years. Now others are following in its footsteps.
Leonid Bershidsky – Bloomberg
For years, Russia has been the world’s biggest sovereign gold bug: Even while gold prices were in the doldrums, it doggedly kept increasing its reserves. Now that gold is at the highest level since 2013, the tactic appears to be paying off.
/bloom.bg/2YfHBlK

Trump Says Federal Reserve ‘Doesn’t Know What It Is Doing’; Criticism comes after central bank opted last week not to cut interest rates
Rebecca Ballhaus – WSJ
President Trump said the Federal Reserve “doesn’t know what it is doing” and compared the U.S. central bank to a “stubborn child” in a pair of tweets on Monday, after the bank opted not to cut interest rates during its two-day meeting last week.
/on.wsj.com/2YcYiOy

Regulation

ESMA consults on short-termism in financial markets
ESMA
The European Securities and Markets Authority (ESMA) has today published a questionnaire which aims to gather evidence on potential short-term pressures on corporations stemming from the financial sector.
bit.ly/2YbD4AP

Joint Statement on Opportunistic Strategies in the Credit Derivatives Market
SEC
U.S. Securities and Exchange Commission (SEC) Chairman Jay Clayton, U.S. Commodity Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo, and U.K. Financial Conduct Authority (FCA) Chief Executive Andrew Bailey issued the following joint statement regarding the credit derivatives markets:
bit.ly/2YaktoE

CFTC Announces Approximately $2.5 Million Whistleblower Award
CFTC
The Commodity Futures Trading Commission (CFTC) announced today a whistleblower award of approximately $2.5 million to be paid to an individual whistleblower. In ordering the award, the CFTC took into account the significance of early reporting of misconduct, however, the award was reduced because of the whistleblower’s delay in reporting to the CFTC.
bit.ly/2Yl9kkQ

Eric J. Pan, Director of CFTC’s Office of International Affairs, to Leave the Agency
CFTC
The Commodity Futures Trading Commission (CFTC) announced today that Eric J. Pan, Director of CFTC’s Office of International Affairs (OIA), will leave the agency in August.
bit.ly/2YictlO

ASIC further suspends the AFS licence of BBY Ltd
ASIC
ASIC has extended the suspension of the Australian financial services (AFS) licence held by BBY Limited (BBY) until 28 May 2020 effective 27 May 2019.
bit.ly/2Y9oXvD

Episode 49: ASIC’s case against hacker Steven Oakes
ASIC
A man sits outside an office building on his laptop. He keeps to himself and passers-by don’t really notice him. He has been outside this office building before, but he is not interested in going inside. Unknown to those around him, and the company operating inside the building, this man is inside their network, accessing confidential information and reading their emails. He’s after inside information.
bit.ly/2YfEytO

Computer hacker Steven Oakes jailed for unauthorised access and insider trading
ASIC
IT consultant Steven Oakes has today been sentenced in the County Court at Melbourne to a total effective sentence of three years imprisonment, and ordered that he be released after serving 18 months of the term of imprisonment, on his own recognisance to be of good behaviour for 18 months, after pleading guilty to a total of 11 charges for insider trading, unauthorised access to data with the intention to commit a serious offence (insider trading) and the alteration of electronic devices required by ASIC.
bit.ly/2Ydmv7x

ASIC commences Federal Court action against former Murray Goulburn executives Gary Helou and Bradley Hingle
ASIC
ASIC has commenced proceedings in the Federal Court of Australia in Melbourne against former managing director of Murray Goulburn Co-operative Co. Limited (MG) and MG Responsible Entity Limited (MGRE), Mr Gary Helou, and former CFO of MG and MGRE, Mr Bradley Hingle, over their involvement in MGRE’s failure to disclose to the Australian Securities Exchange (ASX) market sensitive information in a timely manner.
bit.ly/2YdRTTi

Breakingviews – Tech’s finance push is disrupting regulators too
Peter Thal Larsen – Reuters
Big technology companies have upended industries ranging from music to retailing. What will be their disruptive impact on financial services? That’s the latest conundrum keeping bank regulators awake at night. Innovations like Facebook’s new global digital currency, Libra, demand a joined-up response. That will be hard to agree.
/reut.rs/2Yb7sev

Investing and Trading

High-speed trading firm GTS is making a push into the rapidly-changing bond market, and the CEO says ‘there is so much we can do’
Dan DeFrancesco – Business Insider Prime
One of Wall Street’s most sophisticated high-frequency trading firms plans to leverage a recent acquisition to expand into the rapidly evolving corporate bond market. Global Trading Systems views corporate bonds as the natural next step for its business thanks to its recent completed acquisition of Cantor Fitzgerald’s exchange-traded fund business, which closed in May. Ari Rubenstein, CEO and cofounder of GTS, told Business Insider he’s extremely enthusiastic about the work his firm can do in ETFs, corporate bonds, and wholesale market making, another business GTS also acquired from Cantor. Rubenstein said he spends a lot of time with the new additions, of which there were 30, to discuss potential areas of growth.
bit.ly/2Fw6l1J

The Case for Dividend Futures Contracts
Tianyin Cheng – S&P Dow Jones Indexology Blog
The S&P 500 Dividend Points Index tracks dividend payments of S&P 500 constituents, based on a fixed initial market capitalization, independent of equity price changes. The index cannot be invested in directly, but it is tracked by futures contracts listed on the Chicago Mercantile Exchange (CME). Currently, the annual dividend futures are available up to 10 years forward.
bit.ly/2NaySAi

Bigger Is Better in U.S. Stock Market; Small companies, viewed as havens when turmoil swirls overseas, aren’t getting much boost this time
Corrie Driebusch – WSJ
Shares of small companies are typically touted as havens when turmoil swirls outside of the U.S.—but these days, investors aren’t piling in.
/on.wsj.com/2YbqzVZ

Top 5 Investor Marijuana Questions With Answers
Jessica Rabe – Datatrek Research
I just got back from a conference in Chicago, where I presented on the legal marijuana industry. Given that the audience included very senior investment managers who control billions of dollars, we thought it would be useful for me to share their questions and my answers about the cannabis market.
bit.ly/2IFa3YM

Investors should expect central banks to do the unexpected; Modern monetary theory may seem unlikely now, but things can change quickly
Katie Martin – FT
We now know what weary, miserable investors want to hear. The answer came just minutes after last week’s fund manager survey from Bank of America Merrill Lynch showed that investors were the most gloomy since the financial crisis of 2008. As they sat sobbing into their lattes, wracked by fears of trade wars and a global slowdown, a hero came along to turn that frown upside down: Mario Draghi.
/on.ft.com/2YbtX37

De Beers Diamond Sales Plunge Again
Thomas Biesheuvel – Bloomberg
De Beers’s diamond sales plunged again at the company’s latest offering, underlining a slump in demand from the miner’s customers who are struggling to make a profit at current prices.
/bloom.bg/2Ybw0UJ

Burberry Sets Emissions Goals in Bid to Become Carbon Neutral
Niveditha Ravi – Bloomberg
Burberry Group Plc has set targets to cut greenhouse gas emissions in its bid to become carbon neutral in operational energy use by 2022.
/bloom.bg/2Ybp1eD

Two Groups of Stocks Are About to Send Crisis-Era Signals on the Economy
Sarah Ponczek – Bloomberg
Small caps, transportation shares tumble relative to S&P 500; Prior dislocations have preceded broader market sell-offs
The S&P 500 is at a record, but areas of the stock market with a reputation for economic prescience are sending warning signals that hearken to the global financial crisis.
/bloom.bg/2Yi8gi0

Institutions

Credit Suisse shuffles global markets prime services leadership; Credit Suisse has seen increased profits from the business following a programme of optimising and rationalising its prime brokerage balance sheet.
Joe Parsons – The Trade
Credit Suisse has reorganised its global markets prime services top brass by appointing two of its most senior prime brokerage executives to jointly lead the division.
bit.ly/2YexXQq

The Loan That Fueled a Star Investor’s Risky ‘Illiquid’ Bets; Northern Trust lent to a fund of risky, hard-to-trade bets run by Neil Woodford, whose investment empire has stumbled in the face of client withdrawals and regulatory scrutiny
Paul J. Davies – WSJ
U.S. financial giant Northern Trust could be on the hook for losses related to the unraveling of a star U.K. fund manager, in a case that is drawing attention to the dangers of hard-to-sell assets hiding inside retail investment products.
/on.wsj.com/2Yl6jkw

Neil Woodford fund’s breach of rules was rare, insists regulator; FCA chief Andrew Bailey says equity income fund was one of only two that had done so
Caroline Binham – FT
Neil Woodford’s flagship fund, which froze £3.7bn of investor money this month, is one of only two funds over the past year out of a cohort of 3,000 that breached rules on holding unlisted assets, the head of the UK financial regulator has revealed.
/on.ft.com/2YbI2O7

H2O funds asset loss extends to EUR2.6bn as crisis deepens; Money continued to flow out of funds on day chief sought to calm investors
Robert Smith – FT
Six of H2O Asset Management’s funds saw their combined assets tumble by more than EUR2.6bn last week, as investors pulled their money on concerns about holdings of debt linked to a controversial German financier.
/on.ft.com/2Yd3h1J

Walmart Is Now Ethical Enough for Norway’s $1 Trillion Wealth Fund
Sveinung Sleire – Bloomberg
Fund also now allowed to invest in General Dynamics, Rio Tinto; Exclusions on Grupo Carso and Nutrien were also revoked
Norway’s $1 trillion wealth fund revoked its more than decade-long exclusion on Walmart Inc. after the U.S. retailer tightened control over potential human rights abuses in its supply chain.
/bloom.bg/2Yl4jZy

Natixis’s H2O Lost $3.4 Billion in Three Days of Carnage
Nishant Kumar , Lucca De Paoli , and Suzy Waite – Bloomberg
Six H2O funds had almost 1.4 billion euros in outflows Friday; The funds declined by more than 3 billion euros in three days
The tide is turning for H2O Asset Management, the London-based investment firm that until last week defied industry gloom with surging assets and stellar returns.
/bloom.bg/2YbEA67

Fund supermarket Allfunds bulks up with Credit Suisse deal
John Miller – Reuters
Spain’s Allfunds Group is buying Credit Suisse’s business-to-business investment fund platform InvestLab for an undisclosed sum as the investment services industry consolidates to reap the benefits of scale.
/reut.rs/2Yac84x

Regions

Removing the Infrastructure Hurdles for Asian Trading
Michael Ourabah, BSO – TABB Forum
Despite the rush from global infrastructure specialists to facilitate direct market access for western clients wishing to trade Asian markets, when it comes to facilitating Asian clients to trade outside their zone with the rest of the world, most are falling short of the mark. For financial firms based in Asia, it can be a significant struggle to find the right partner to help provide the information and knowledge needed to access new markets.
bit.ly/2IGi004

Azeri banker’s wife faces extradition over alleged credit card fraud; Zamira Hajiyeva is subject to UK’s first unexplained wealth order
Jane Croft- FT
An Azeri banker’s wife, who is the subject of the UK’s first unexplained wealth order, allegedly defrauded her husband’s bank by spending millions of pounds in hotels, restaurants and in Harrods on 10 credit cards issued by the bank, a London court heard on Monday.
/on.ft.com/2YknjaZ

Ghana’s Main Cocoa Harvest Drops to 3-Year Low on Disease
Ekow Dontoh – Bloomberg
Ghana’s main-crop cocoa harvest fell 6% to a three-year low after a disease destroyed crops, according to people with direct knowledge of the matter.
/bloom.bg/2YbvTsh

Brexit

The latest Brexit fantasy is the most absurd of all; Article 24 of the WTO’s underlying treaty is not a solution to no-deal
The editorial board – FT
It is three years since the UK voted to leave the EU. It did so without a clear plan about its future relationship with the bloc. Since then, the British public has been treated to a stream of more or less unworkable plans by the government and leading Brexiters about maintaining frictionless trade with the union from outside.
/on.ft.com/2YbzK8P

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