Hits & Takes
John Lothian & JLN Staff
Good news from the U.S. Center for Disease Control and Prevention yesterday, who said the fully vaccinated could stop wearing masks and physical distancing in most settings. You still have to wear a mask where you are asked by the business or building, or airline, bus or subway, etc. That will make it hard for businesses to differentiate between those who are fully vaccinated and those who are not and want to pretend they are because they are tired or against wearing masks. — WSJ, NY Times
I am going to keep wearing my mask for the time being. And I am going to wear my vaccination card around my neck.
If you want to go to college in Chicago, you will need to be fully vaccinated, as most of the major Chicago universities and colleges are requiring students to be fully vaccinated to attend in person classes next fall.
There is also good news from the Chicago Federal Reserve, Crain’s Chicago Business reported, as the Chicago Fed said business conditions in Chicago are the best in years. — Crain’s Chicago Business
Even 1871 in Chicago is getting into the act, saying they have a lot of momentum in the startup sector going on. Now if the Cubs could only get as hot as the Chicago White Sox. — Crain’s Chicago Business
Cboe Global Markets, Inc. held its annual meeting yesterday and some of the highlights were: “Edward T. Tilly will serve as Chairman of the board for a fifth consecutive year. Eugene S. Sunshine, who has served on the board of Cboe Global Markets since 2010 and Cboe Options from 2003 to 2017, will serve as Lead Director for a fourth consecutive year. Michael L. Richter did not stand for reelection as a director at the Annual Meeting. Mr. Richter served on the board since 2017.” — Cboe
ICE/NYSE have made a great hire. Bailey Kessing, formerly of Trillium, is now a director of sales and relationship management at NYSE.
The Australian Securities & Investment Commission issued a warning against fake news scams. This is the truth, I swear. Some of the fake news articles even dared to use the ASIC logo and say they were “approved” by the ASIC. — ASIC
The U.K.’s FCA proposed stronger protections for consumers in financial markets. In 2020, the FCA conducted a poll, the Financial Lives Survey, which showed that 1 in 4 respondents said they lack confidence in the financial services industry and only 35% of respondents agreed that firms are honest and transparent in their dealings with them. — UK FCA
Remind me again about how bitcoin is traceable. Colonial Pipeline paid roughly $5 million in ransom to hackers who asked to be paid in bitcoin. — NY Times
Have you heard of the name “Tradier?” They are a very interesting brokerage firm and they are looking for relationships with educators. I had a call with their leadership the other day and we will have more about them coming out soon. — Tradier
You might not know the name, but I bet you use his product. Spencer Silver, an inventor of Post-it Notes, Is dead at 80, the New York Times reported. He discovered the not-too sticky substance by accident while trying to make a very sticky substance for aircraft construction. — NY Times
Being a runner, phone clerk or broker’s assistant were not the roles that normally got the girl, but a former clerk on the floor of the Chicago Board of Trade is now dating actress Olivia Munn. Of course that former floor clerk is comedian John Mulaney, who used to work for Bob Otter. — NY Post
There were no new donations to the JLN MarketsWiki Education GoFundMe campaign yesterday. Support our efforts to preserve industry history by giving to our GoFundMe campaign.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
Elon Musk is apparently backpedaling on his bullish stance on bitcoin despite his long-held bullish attitude. I guess he just found out that bitcoin is super bad for the environment. He does realize that Dogecoin is also bad for the environment for the same reasons, right?~MR
Chicago Fed finds biz conditions here the best in years; Sure, the region has been through a rough patch, but there are early—and surprisingly strong—signs that certain sectors of the local economy are springing back to life.
Greg Hinz – Crain’s Chicago Business
Business conditions in the Midwest region including Chicago in some ways are the best they’ve been in nearly a decade, according to the latest Survey of Business Conditions by the Federal Reserve Bank of Chicago. But the picture is more mixed than it might appear at first blush, with hiring for lower-income jobs and capital spending particularly peppy, but growth slower for high-paid positions and cost pressures starting to perk up. (See the summary below.)
***** There are parts of Chicago that are really buzzing with activity, including north Michigan Avenue and the Fulton Market area. The downtown Loop financial district, not so much.~JJL
‘We’ve got a ton of momentum’; Betsy Ziegler, CEO of tech hub 1871, talks about the future of innovation in Chicago and the role entrepreneurship will play in the recovery.
Emily Drake – Crain’s Chicago Business
This week we connect with Betsy Ziegler, CEO of 1871, one of Chicago’s leading tech hubs, to talk about startups, building an inclusive economy and the future of innovation for Chicago.
***** If this was London, they would say, “We have tonnes of momentum.”~JJL
Northwestern students must have COVID vaccine to return in fall; The university joins Loyola, DePaul University and Columbia College Chicago in the requirement.
Wendell Hutson – Crain’s Chicago Business
Northwestern University is another local college to require students to be vaccinated before returning to campus this fall. “As confidence increases in the effectiveness and safety of the vaccine and the supply has met the demand in Illinois, Northwestern will require students to be vaccinated against COVID-19 for the 2021-22 academic year,” the school said. “COVID-19 vaccines are the most important tool to help end the pandemic, and requiring students to be vaccinated will best support the health of our community and position us for in-person classroom and co-curricular activities for the fall term.”
***** They must have a vaccine and other shots, just like in grade school.~JJL
A More Intelligent (Tick) Plan for Odd Lots
Round lots are an artifact of old, human-driven markets. Given modern computer trading systems frequently disregard round lot conventions, it seems inconsistent that regulations designed to modernize markets still want to retain this artifact of the past.
Phil Mackintosh – Nasdaq
We talked last week about how the new NMS II round lot plan doesn’t actually fix the odd lot problem. With decimal ticks and odd lots allowed for trading, it turns out that the real market doesn’t care much for convention. That, in turn, highlights the problems with regulations treating odd lots differently.
***** This is an important issue. Keep going, Phil.~JJL
Thursday’s Top Three
Our top story Thursday was a Bloomberg opinion piece, A New Global Monetary Order Threatens the Dollar. That new order is apparently “a parallel financial system led by stablecoins.” Second was a repeat from Wednesday’s top three, Bloomberg Quint’s CEO’s $17,000 Birthday Party Spurs Commodity Brokerage Lawsuit. Third was the About Us page from DRW.
CryptoMarketsWiki Coin of the Week: Tether (USDT)
Tether released a report breaking down its reserves Thursday, providing insight on how the world’s largest stablecoin is supposedly backed 1:1 by U.S. dollars. According to the report, Tether’s holdings consist of 75.85% cash and equivalents, 12.55% secured loans, 9.96% in corporate bonds and precious metals and 1.64% in other investments, including digital currencies. It also said that 49% of its holdings consist of commercial paper. The report did not mention an independent accounting firm that conducted this review.
204,652,523 pages viewed; 25,814 pages; 232,348 edits
|CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.Recently Updated Pages
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The Death and Life of the Central Business District; Offices are not going back to the way they were pre-pandemic, and neither are the downtown neighborhoods that house them.
Richard Florida – Bloomberg
Just last spring, a chorus of pundits loudly proclaimed a sweeping urban exodus and the impending death of cities. Now, just slightly more than a year later, our cities are springing back to life. Sidewalks are starting to bustle; restaurants, which have spilled onto the streets, are teeming with patrons; museums and galleries are reopening; and fans are heading back to baseball parks, basketball arenas and even outdoor concert venues.
Colonial Pipeline Paid Hackers Nearly $5 Million in Ransom
William Turton, Michael Riley, and Jennifer Jacobs – Bloomberg
Payment came shortly after attack got underway last week; FBI discourages organizations from paying ransom to hackers
Colonial Pipeline Co. paid nearly $5 million to Eastern European hackers on Friday, contradicting reports earlier this week that the company had no intention of paying an extortion fee to help restore the country’s largest fuel pipeline, according to two people familiar with the transaction.
The IRS Is Coming for Crypto Investors Who Haven’t Paid Their Taxes; On the hunt for tax cheats, Uncle Sam is winning court battles to force cryptocurrency exchanges to reveal their customers. Your big unreported profits on bitcoin, ether or dogecoin could translate into big problems with the IRS.
Laura Saunders – WSJ
Cryptocurrencies are exploding—and so is the Internal Revenue Service’s pursuit of Americans who aren’t paying taxes on them. With Tax Day approaching, it’s a good time to clean up your act if you’ve been lax about taxes on crypto. Not doing so could compound future tax problems, especially if you have traded a lot or have more than a small stake.
Binance Probed by U.S. as Money-Laundering, Tax Sleuths Bore In
Tom Schoenberg – Bloomberg
Justice Department, IRS seek information about crypto exchange; The federal agencies haven’t accused Binance of wrongdoing
Binance Holdings Ltd. is under investigation by the Justice Department and Internal Revenue Service, ensnaring the world’s biggest cryptocurrency exchange in U.S. efforts to root out illicit activity that’s thrived in the red-hot but mostly unregulated market. As part of the inquiry, officials who probe money laundering and tax offenses have sought information from individuals with insight into Binance’s business, according to people with knowledge of the matter who asked not to be named because the probe is confidential. Led by Changpeng Zhao, a charismatic tech executive who relishes promoting tokens on Twitter and in media interviews, Binance has leap-frogged rivals since he co-founded it in 2017.
London’s position as financial hub ‘not sustainable’ says EU; EU commissioner signals desire to reduce London’s influence as a financial centre
Tom Lemmon – Financial Calendar
The City of London cannot continue long-term as a financial centre as it presents too great a risk to the EU’s financial system due to it lying outside of its regulatory control post-Brexit, according to EU commissioner Mairead McGuinness.
The other climate risk investors need to talk about; The highest carbon-emitting components of businesses could be spun-off to private equity and hedge funds
Cyrus Taraporevala – State Street Global Advisors via the FT
The year is 2040. For decades, investors and regulators alike have been encouraging companies across the globe to decarbonise by mid-century. As a result, MSCI announces for the first time in its 54-year history that every company in its World Index — more than 1,500 publicly traded companies — has achieved net zero. And yet, few are celebrating. Despite the largest companies in the world all having committed to carbon neutrality, a UN report shows that carbon emissions globally have actually gone up.
Tether says its reserves are backed by cash to the tune of . . . 2.9%; Rather far off from the 100% it used to claim isn’t it?! But still, we now have “unrivaled transparency” AKA pie charts!
Jemima Kelly – FT
Sooooo remember Tether? The last time we wrote about the “dollar-backed” stablecoin around these parts was back in February, after the New York District Attorney’s office decided to suspend the company — and sister crypto exchange Bitfinex — and fined them $18.5m in a settlement because of their “illegal activities” in the state.
What Managers Are Telling Workers About Returning to the Office; The only consensus right now is that there isn’t one.
Sarah Green Carmichael – Bloomberg
Managers are making tentative plans to reopen offices, leading to a bunch of questions from workers who’ve spent more than a year settling into (and in some cases learning to love) their work-from-home routines. Here are the most common ones bosses are facing, and how they’re looking at them.
Coinbase Profit Surges in Crypto Exchange’s First Report as Public Company; Revenue and profit have largely been driven by the explosion in the popularity of bitcoin, other digital currencies
Paul Vigna – WSJ
Coinbase COIN -6.53% Global Inc.’s profit surged in the first quarter, driven by a manic rally in bitcoin and other digital assets, the cryptocurrency exchange said in its first earnings report as a public company. It earned $771 million, or $3.05 a share, in the quarter, up from $32 million a year earlier. Total revenue surged to $1.8 billion from $191 million. The top and bottom-line figures represent records for the company, which was founded in 2012 and is the largest bitcoin exchange in the U.S. In early April, the company projected earnings of $730 million to $800 million on revenue of $1.8 billion.
SEC Commissioner: What Do LIBOR Transition and ESG/SFDR Have In Common? – Each Might Make You a Werewolf!
Stuart Fross – Foley & Lardner LLP via JD Supra
SEC Commissioner Hester Peirce suggested in recent remarks before the ISDA Trading Forum (April 28, 2021) that LIBOR came to mind when reading a horror story involving a werewolf. That seems about right, as both are very hairy, and can have a nasty bite. Speaking of bite: recall that OCIE has LIBOR preparedness on its 2020 exam priorities. Noteworthy for advisers, OCIE’s focus is on investor disclosure of transition plans, performance advertising, LIBOR benchmarks and identification of LIBOR-linked contracts that might extend beyond year-end 2021, when LIBOR gets the old “silver bullet.” (Foley Note: Look for LIBOR-linked high water marks now to avoid “hairy” conversations later).
BOE to Governments: Embrace Digital Money or Risk Losing Control
David Goodman – Bloomberg
Governments should embrace digital currencies or risk private companies taking control of the money people use, a Bank of England official said. Jon Cunliffe, deputy governor of the U.K. central bank, said Stablecoins and other forms of payment could quickly gain the support of consumers because online commerce is raising demand to inject technology into the exchange of currencies.
Robinhood’s Big Gamble; In eliminating barriers to investing in the stock market, is the app democratizing finance or encouraging risky behavior?
Sheelah Kolhatkar – The New Yorker
Early on the morning of January 19th, Cody Herdman woke to the vibration of his smartphone alarm under his pillow. He immediately checked the finance app Robinhood for the trading price of a company called GameStop. Herdman, who is nineteen, is a freshman computer-science major at Dakota State University, where until recently he played center for the Dakota State Trojans football team, and he had been investing in the stock market for a month.
‘A real man of mystery’: how Ian Osborne built a $1.5bn venture capital firm; The 38-year-old theatre lover mingles with stars but prefers to be backstage
Daniel Thomas and Miles Kruppa – FT
When tech financier Ian Osborne invests in a company, executives must agree to an unusual clause: not to talk about it without his permission. Such tactics have helped Osborne and his firm Hedosophia largely fly under the radar despite his involvement in high-profile investments and takeover bids over the past decade.
Law firms chase a piece of the crypto action; The legal grey areas in this field have opened up opportunities for lawyers to become trusted advisers
Jane Croft – FT
When Scott Thiel first tried to talk to colleagues and contacts about digital tokenisation almost three years ago, he says it was like “shouting into a hurricane”. The DLA Piper lawyer had spent days holed up in a Hong Kong attic writing a paper on the implications of digital proofs of ownership for virtual or physical assets.
Foreign Investment Will Be the Last Financial Casualty of the Pandemic; For a true resumption of greenfield foreign investment, global travel restrictions will have to be all but over, which may not happen for years
Mike Bird – WSJ
The overall economic story of 2021 is recovery—a multispeed recovery, but a rapid return toward normalcy nonetheless. For foreign direct investment, which was hammered last year, the story will be very different. mForeign direct investment dropped 38% in 2020, to its lowest level since 2005, according to data released last month by the Organization for Economic Cooperation and Development.
A ‘Friend of Tom’ or ‘Can’t Be Bothered’: One Man’s Rules at Bank of America; Thomas K. Montag, the bank’s No. 2 executive, has long run its markets and corporate banking division with favoritism and an iron fist, employees say.
Kate Kelly – NY Times
Early on in the pandemic, Bank of America found an innovative way to gauge the success of the bank’s work-from-home experiment: a spreadsheet, distributed to team managers daily, that pitted the productivity of people working from home against those who were still showing up at the office.
Hundreds of Epidemiologists Expected Mask-Wearing in Public for at Least a Year; The C.D.C. said Thursday that vaccinated Americans no longer needed masks in most places. Other disease experts recently had a different message: that masks were necessary in public.
Claire Cain Miller, Kevin Quealy and Margot Sanger-Katz – NY Times
When federal health officials said on Thursday that fully vaccinated Americans no longer needed to wear masks in most places, it came as a surprise to many people in public health. It also was a stark contrast with the views of a large majority of epidemiologists surveyed in the last two weeks by The New York Times.
Fully Vaccinated People Can Stop Wearing Face Masks and End Physical Distancing in Most Settings, CDC Says; People who have been fully vaccinated should still follow precautions in doctor’s offices, airports and nursing homes, the agency recommends
Brianna Abbott – WSJ
Fully vaccinated people don’t need to wear a mask or physically distance during outdoor or indoor activities, large or small, federal health officials said, the broadest easing of pandemic recommendations so far.
Charts Show South Africa Coronavirus Resurgence Is Imminent
Leah Wilson – Bloomberg
Covid-19 test positivity rate currently at 7.45%, data show; Virus resurgence expected to be less severe than second wave
South Africa is on the brink of a third wave of coronavirus infections, driven by a steady increase in new cases after a four-day holiday weekend that saw millions of people travel to see family and friends and attend religious gatherings. New infections climbed 46% in the past week with cases rising fastest in the Northern Cape and Gauteng, the country’s most-populous province, the National Department of Health said Wednesday in a statement.
U.K. May Speed Up Vaccine Second Doses on Variant Concerns
Alex Morales and Emily Ashton – Bloomberg
Local restrictions may be imposed in worst-hit Covid hotspots; Wales, England still plan to relax pandemic rules on Monday
U.K. ministers may bring forward second vaccine doses for millions of people and local restrictions could be imposed to curb the spread of a Covid-19 variant from India.
‘Covid Zero’ Havens Find Reopening Harder Than Taming Virus
Michelle Fay Cortez and Jinshan Hong – Bloomberg
Places aiming to eliminate virus lag as other countries reopen; Travel-reliant Hong Kong and Singapore face biggest drawbacks
A smattering of places, mainly across the Asia Pacific region, have seen breathtaking victories in the battle against Covid-19 by effectively wiping it out within their borders. Now they face a fresh test: rejoining the rest of the world, which is still awash in the pathogen.
Singapore PM Defends Stricter Restrictions to Curb Virus Spread
Niluksi Koswanage – Bloomberg
Singapore Prime Minister Lee Hsien Loong defended the government’s move to ban dining-in and limiting social gatherings to two people, saying the new coronavirus clusters and unlinked community cases in the past fortnight were “very worrying.”
Longer gap between Pfizer jabs boosts antibody response in elderly; Researchers say results vindicate UK decision to extend interval between jabs from 3 to 12 weeks
Clive Cookson – FT
Extending the interval between doses of the BioNTech/Pfizer vaccine from three to 12 weeks strengthens the antibody response in elderly people, according to a UK study.
Vaccine drive for delegates being considered for UN COP26 climate summit; Organisers are determined to hold face-to-face meetings at Glasgow conference in November
Leslie Hook and Jim Pickard – FT
The UK and the UN are exploring the possibility of a special vaccination programme to ensure the global climate conference in Glasgow can proceed face-to-face in November.
Exchanges, OTC and Clearing
Hedosophia lists on Euronext Amsterdam
Fourth SPAC-listing of 2021 on Euronext markets raises EUR460 million
Euronext today congratulates Hedosophia, an investment firm, on its listing on Euronext Amsterdam (ticker code: HEGA, HEGAU and HEGAW). It is the fourth SPAC-listing on Euronext markets in 2021.
TMX Group Releases 2020 Environmental, Social and Governance Report
TMX Group has released its second annual Environmental, Social and Governance (ESG) Report, detailing the company’s progress in integrating sustainability practices into its corporate strategy, business processes and investment decisions.
Cboe Global Markets Declares Second-Quarter 2021 Dividend
Cboe Global Markets, Inc. (Cboe: CBOE), a market operator and global trading solutions provider, today announced its Board of Directors has declared a quarterly cash dividend of $0.42 per share of common stock for the second quarter of 2021. The second-quarter 2021 dividend is payable on June 15, 2021, to stockholders of record as of May 28, 2021.
Cboe Global Markets Announces 2021 Annual Meeting Results
Cboe Global Markets, Inc. (Cboe: CBOE), a market operator and global trading solutions provider, today announced the preliminary shareholder voting results from its 2021 Annual Meeting held today.
FusionIQ Adds Alternative Investments to Digital Workstation; The growing need for alternative investments progresses integration with Galaxy Plus to add managed futures, commodities, hedge funds, foreign equities, real estate and derivatives contracts to FusionIQ’s investment platform
FusionIQ, a leading investment research and technology provider, today announced the addition of more than 30 alternative investment products to its workstation through an integration with Galaxy Plus. Alongside equities and fixed income products, FusionIQ customers can now analyze and invest in a variety of alternative investment strategies.
Fintech Industry Executives from Earnest, Plaid, Fiserv, and Q2 join Atomic Advisory Board
Leading payroll API pioneer Atomic today announced the members of its newly formed strategic Advisory Board. In its mission to build a new generation of bank accounts and transform consumer-centric applications, Atomic has assembled executives, entrepreneurs, and subject matter experts across the fintech, technology, and financial services ecosystems. This esteemed group brings fresh perspectives on fueling momentum in the payroll API market amid rapid demand from early adopters. The four members draw experience from Fortune 500 organizations including Amazon, Citigroup, and Fiserv, as well as category defining companies such as Plaid, LendingClub, Simple, and SmartyPig.
African fintech startups still face major funding gaps
Carlos Mureithi – Quartz
The number of early-stage deals among African fintech startups is increasing, but the average size of the deals remains low compared to that of other regions, and funding gaps persist at the early stages, according to a new report on the industry in emerging markets. Creative funding solutions may go some way to overcoming these obstacles.
Point-of-Sale Fintech Company LendingUSA™ Responds to FEMA’s COVID-19 Funeral Assistance Program
Earlier this year, FEMA announced that they would offer financial assistance to families who experienced the loss of a loved one due to COVID-19. This funeral assistance program is part of the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 and the American Rescue Plan Act of 2021. As part of the program, FEMA will reimburse eligible families up to $9,000 in funeral costs incurred after January 20, 2020.
New Fintech Delivery Model Transforming Financial Services Through Mutualized Services, Highlighted in Whitepaper from Broadridge
To address innovation, digitization and resiliency, firms are modernizing and better optimizing operations through flexible architecture, cloud-based applications and data-driven insights. As the financial services industry confronts the new realities of a post-pandemic era, many firms are beginning to shift toward mutualization models for their technology and operations, according to a new whitepaper released today by global Fintech leader Broadridge Financial Solutions, Inc. Mutualization is a model where participants more quickly gain access to new technologies, scalability, and resiliency while saving time, money, and risk; by sharing in the benefits of an industry solution provided by a reliable, trusted, and independent third party.
Surveillance firm Eventus signs first Australian client
Wendy Lisney – FOW
Eventus Systems has signed its first Australian client as the US surveillance firm steps up plans to expand its presence in the Asia-Pacific region.
Sydney-based Morrison Securities, the top broker by volume and value in the Australian Securities Exchange’s (ASX) equity derivatives market and a provider of execution and clearing services to Australia Financial Services Licence holders, has chosen the cloud-based version of Eventus’s Validus platform for trade surveillance in equities, equity options and warrants.
Bloomberg adds more than 100 buy-side clients to OMS and PORT Enterprise platforms; Among the buy-side to implement Bloomberg’s solutions were Lombard Odier Asset Management, Union Investment, Global X Japan and Harvest Fund Management.
Annabel Smith – The Trade
Over 100 buy-side firms globally have implemented the order management system (OMS) and risk analytics platform from Bloomberg in the last 12 months, the firm has claimed.
Colonial Pipeline Paid the Ransom. Bad Move; Giving in to hackers only emboldens them and worsens the problem.
Timothy L. O’Brien – Bloomberg
Colonial Pipeline paid the ransom. And after forking over $5 million to hackers who forced it to shut down an important fuel conduit, which spurred a bonkers run on local gas stations, the burglars gave Colonial a decryption key meant to sanitize its computer networks. But the tool didn’t work very well. Bad trade.
Pipeline Crisis Spurs Calls to Boost, and Foresake, Fossil Fuels
Will Wade and Jennifer A Dlouhy – Bloomberg
Environmentalists push EVs; energy sector says more pipelines; Opposing remedies sought as attack shows U.S. vulnerability
The cyber-attack that crippled the nation’s biggest fuel pipeline this week triggered spot shortages of gasoline and a gusher of political rhetoric, with groups from across the political spectrum offering myriad, and contradictory, solutions.
Paying Cyber Ransoms Sets a Bad Precedent But Happens Often
Michael Riley and Kartikay Mehrotra – Bloomberg
Decision to ignore FBI pleas not to pay raises ethical issues; Numbers vary but experts agree many victims choose to pay
The U.S. government’s fight to choke off ransom payments collected by hackers hit a major snag Thursday, following news that Colonial Pipeline Co. paid a hefty sum to hackers who for several days this week effectively shut down the country’s largest fuel pipeline and created gas shortages along the East Coast.
Pipeline Cybersecurity Gaps Must Be Filled, Regulator Says
Romaine Bostick and Simon Casey – Bloomberg
A top U.S. energy regulator said gaps in pipeline cybersecurity must be filled after the ransomware attack on Colonial Pipeline Co. that led to widespread gasoline shortages across parts of the country.
Don’t Be the Next $5 Million Hacker Payday; Every digitally connected company has vulnerabilities. Some low-tech, low-cost practices can go a long way toward preventing breaches like the Colonial Pipeline cyberattack.
Tara Lachapelle – Bloomberg
Oil pipelines, banks, internet networks, hospitals, manufacturing plants, water-treatment systems. We don’t have to imagine the damage hackers could wreak by paralyzing just one of these gears in the larger U.S. economic engine — we’re seeing it play out this week at the gas pump. Often all it takes is an oblivious worker clicking a tainted e-mail link, or an IT department getting momentarily lazy about computer-system hygiene. While we don’t know exactly what led to the Colonial Pipeline ransomware attack, it’s a reminder that every digitally connected company has vulnerabilities and that critical U.S. infrastructure makes for the juiciest target.
Toshiba unit hit by hacker group DarkSide earlier this month; European subsidiary attacked by same criminal group that hacked Colonial petroleum pipeline
Kana Inagaki and Leo Lewis – FT
A subsidiary of Japanese industrial conglomerate Toshiba said its European operations were hit by a cyber attack earlier this month that appeared to have been perpetrated by the hacker group DarkSide.
Industry collaboration will make or break cybersecurity executive order
Dave Nyczepir – FedScoop
Government must improve the way it works with industry if it wants to implement Wednesday’s cybersecurity executive order on schedule, technology experts told FedScoop. The executive order comes after the recent Colonial Pipeline, Microsoft Exchange and SolarWinds hacks, which found the government ill-equipped to mitigate cyberattacks by nation-states or mere hackers with the right tools and know-how. Agencies’ known struggles identifying innovative tech companies that offer the cloud services they need to implement zero-trust security will likely slow compliance, Terry Rydz, tech engagement manager at Dcode, told FedScoop.
Biden issues Executive Order to strengthen nation’s cybersecurity networks
Esther Shein – Tech Republic
President Joe Biden signed an Executive Order Wednesday designed to better protect the federal government’s networks from cyberattacks, following the attack this week on the Colonial Pipeline. At the same time, the White House acknowledged that more would need to be done to stop an attack like that, and called the Colonial Pipeline hacking a “sobering reminder that U.S. public and private sector entities increasingly face sophisticated malicious cyber activity from both nation-state actors and cybercriminals.”
How to select a cybersecurity framework to protect your greatest assets: People, property and data
Baan Alsinawi – Security Magazine
A fact of doing business in today’s hyper-internet-connected world is the need for organizations, regardless of size or sector, to protect their enterprises against a constant onslaught of malicious actors, insider threats, and a slew of other cybersecurity risks. It’s more a matter of “when,” not “if” your organization will face an attack. Fortunately, cybersecurity frameworks have been developed that comprise best practices, standards, and guidelines designed to manage risks and combat these threats so you can protect your greatest assets: people, property and data.
Bitwise Rolls Out First ETF To Use ‘Crypto’ In Its Name
Evie Liu – Barron’s
Crypto investing is hot this year, and owning digital currencies such as Bitcoin and Dogecoin is not the only way to get involved. Bitwise Asset Management, one of the largest and fastest-growing crypto asset managers, launched the Bitwise Crypto Industry Innovators ETF (ticker: BITQ), on Wednesday. The fund aims to provide investors access to “valuable public companies that are participants in the growing bitcoin and cryptocurrency sector,” according to the firm.
20 million adults could dive into the cryptocurrency market over the next year, nearly doubling today’s retail investor base, says crypto exchange Gemini
Carla Mozée – Insider
The ranks of retail investors in the cryptocurrency market look set to swell over the next year with nearly 20 million American adults planning their entrance into it, according to a study by crypto exchange platform Gemini. The firm looked into the “crypto-curious audience,” which it defines as people who don’t own cryptocurrency but indicate either wanting to learn more about it or who are planning to buy it soon.
tZERO ATS Signs Agreement with Liquid Mining Funds to Enable the Trading of Its Digital Equity Security, Providing Opportunity to Invest in Institutional-Quality Bitcoin Mining Businesses
tZERO, a leader in blockchain innovation and liquidity for digital assets, announced today that its wholly owned, FINRA member broker-dealer subsidiary, tZERO ATS, has entered into an agreement with Liquid Mining Funds (through the proposed securities issuer, LMX) to enable the potential secondary trading of digital securities. LMX’s digital securities are expected to represent a $15 million equity interest in Liquid Mining Funds, subject to holders of interests in the Liquid Mining Funds electing to convert such interests to LMX digital securities. The Liquid Mining Funds are sponsored by Realio, a blockchain-enabled issuer, fund manager, and technology provider for institutional-grade digital assets that partneredwith tZERO ATS in March 2021. The funds are focused on investing in bitcoin mining development and operations. Any potential trading of LMX securities on the tZERO ATS is subject to customary due diligence, applicable regulatory holding periods, and compliance with other applicable regulatory requirements.
Elon Musk Conveniently Ignored Bitcoin’s Inconvenient Truth; Where does the future of money end and the “hustle” begin?
Lionel Laurent for Bloomberg Green – Bloomberg
When electric carmaker Tesla Inc. said in February it would buy $1.5 billion worth of Bitcoin and start accepting it as payment, billionaire boss Elon Musk had little to say about the cryptocurrency’s wasteful energy consumption — despite the obvious inconsistency with his firm’s green credentials.
Elon Musk Got Bored of Bitcoin; Also pipeline hack insider trading, SPAC sponsorship and altcoin tax deductions.
Matt Levine – Bloomberg
Apparently someone sat Elon Musk down and told him where Bitcoins come from? Yesterday he tweeted:
Coinbase to Enable Dogecoin Trading in Six to Eight Weeks
Katherine Greifeld and Kimberly Yuen – Bloomberg
Biggest U.S. crypto exchange wants to speed addition of coins; Coinbase reported first quarterly earnings as public company
Coinbase Global Inc. plans to offer joke token Dogecoin on its trading platform in six to eight weeks, the company’s chief executive officer said Thursday. The largest U.S. cryptocurrency exchange currently offers trading in Bitcoin and Ethereum, the two largest coins, along with more than 100 other alternative coins., but it hasn’t added some of the tokens that have gained popularity in recent weeks.
Coinbase promises to add trading in more cryptocurrencies, more quickly; Exchange says it will start offering dogecoin after complaining of losing out to rivals
Miles Kruppa – FT
Coinbase chief executive Brian Armstrong said the cryptocurrency exchange would offer trading in dogecoin within six to eight weeks, as the company warned it faced rising competition from alternative trading venues.
Stablecoin strife: crypto assets face calls for tougher oversight; Concerns over disclosure standards and consumer protections as market expands rapidly
Siddharth Venkataramakrishnan – FT
The stablecoin market, a crucial link between crypto and traditional currencies, is facing calls for tougher oversight, with regulations on both sides of the Atlantic lagging behind the rapid growth in digital assets.
Elon Musk wakes up to bitcoin’s fossil fuel issues; A Delphic tweet from the Tesla founder shows no one can be complacent about ESG
Gillian Tett – FT
Elon Musk, founder of Tesla, recently christened himself “technoking”, or king of tech. A better moniker might be “Wizard of Oz”. The entrepreneur possesses a startling ability to tug the strings of the crypto world. In February, bitcoin prices leapt when Musk revealed that the company had bought $1.5bn worth of the cryptocurrency. So did the price of dogecoin following similar Delphic tweets.
He’s a Dogecoin Millionaire. And He’s Not Selling; Glauber Contessoto went looking for something that could change his fortunes overnight. He found it in a joke cryptocurrency.
Kevin Roose – NY Times
Last February, when Glauber Contessoto decided to invest his life savings in Dogecoin, his friends had concerns. “They were all like, you’re crazy,” he said. “It’s a joke coin. It’s a meme. It’s going to crash.” Their skepticism was warranted. After all, Dogecoin is a joke — a digital currency started in 2013 by a pair of programmers who decided to spoof the cryptocurrency craze by creating their own virtual money based on a meme about Doge, a talking Shiba Inu puppy. And investing money in obscure cryptocurrencies has, historically, been akin to tossing it onto a bonfire.
SEC staff weighs in on CFTC regulated Bitcoin futures markets
Brad Rosen, J.D. – Jim Hamilton’s blog
The SEC’s Division of Investment Management (IM) issued a statement addressing a number of issues funds registered under the Investment Company Act investing in the Bitcoin futures markets should consider. The IM statement strongly encourages investors with an interest in mutual funds seeking exposure to the Bitcoin futures market, to carefully consider the risk disclosure of the fund, the investor’s own risk tolerance, as well as the possibility of loss.
China Vows Retaliation Against Journalists Unless U.S. Relents
China threatened further retaliation against U.S. journalists, in a sign of growing frustration with the Biden administration over a high-profile diplomatic dispute. “If the U.S. continues to deliberately make things hard for our journalists, then we will have no choice but to take countermeasures, although we haven’t done so thus far,” Chinese Foreign Ministry spokesperson Hua Chunying said at a regular briefing Friday in Beijing. “What will happen next will be completely up to the U.S.”
Wall Street panicking that Biden’s tax hikes will be retroactive
Lydia Moynihan – NY Post
The White House won’t rule out a retroactive implementation of its sweeping new tax plan — and tax haters across Wall Street are in a panic. The Biden administration has previously said levying taxes retroactively — which could stick taxpayers with jacked-up rates on transactions dating back to Jan. 1 instead of imposing them beginning next year — isn’t its “first choice” as it pushes a bold series of hikes on companies and the rich.
Our politics is no uglier or more dysfunctional than in the past
Kyle Longley – Washington Post
In 2018, NPR noted that the death of Sen. John McCain represented “the near-extinction of lawmakers who believe in seeking bipartisanship to tackle big problems.” President Biden has promised to restore the bipartisanship of yesteryear, but most observers are skeptical given the massive chasm between his proposals and what Senate Republicans seem willing to accept. As Senate Minority Leader Mitch McConnell (R-Ky.) told reporters, “One hundred percent of my focus is on stopping this new administration” — not an auspicious sign for those hoping for comity and dealmaking.
The Politics of Cutting Off Unemployment Checks
Jonathan Bernstein – Bloomberg
I’m fascinated by the move several Republican governors have made to cut off their states’ participation in supplemental unemployment benefits. I can’t think of anything similar. Yes, many states turned down federal money to expand Medicaid when it was offered by the 2010 Affordable Care Act, just as many states delayed joining the original Medicaid program in the 1960s.
ISDA-Clarus RFR Adoption Indicator: April 2021
ISDA-Clarus RFR Adoption Indicator increased to 10.1% in April compared to 8.7% the prior month. The indicator tracks how much global trading activity (as measured by DV01) is conducted in cleared over-the-counter and exchange-traded interest rate derivatives (IRD) that reference the identified risk-free rates (RFRs) in six major currencies. On a traded notional basis, the percentage of RFR-linked IRD increased to 10.8% of total IRD in April compared to 9.2% the prior month.
Bailey: Combination of reforms needed to tackle ‘dangerous’ money market funds; Pandemic revealed MMFs are still not resilient enough despite regulatory tightening since 2008 crisis
Tom Lemmon – Bob’s Guide
Bank of England governor Andrew Bailey has said that money market funds (MMFs) proved in the early stages of the pandemic that they were “not sufficiently resilient”. That is despite efforts to increase the stability of MMFs after their involvement in the demise of Lehman Brothers and the crash in 2008.
New CCR rules will boost appeal of clearing FX
Paul Golden – Euromoney
Basel’s latest effort to improve market resilience is expected to accelerate the development of clearing solutions – but it won’t leave everyone better off. The new standardized approach to counterparty credit risk (SA-CCR) comes into effect for European banks in June. It is designed to improve the risk sensitivity of CCR by differentiating between margined and unmargined, as well as bilateral and cleared, trades.
SEC commissioner Hester Peirce says the agency created an ‘investor protection problem’ by not approving a Bitcoin ETF — a day after chairman Gary Gensler dashed hopes of that happening this year
Anita Ramaswamy – Insider
SEC commissioner and “crypto mom” Hester Peirce. Chris Maddaloni/CQ Roll Call;Hester Peirce said SEC refusal to approve a crypto ETF created an “investor protection problem.”;She said US crypto investors are now going through “less direct routes to get the same result.”;SEC Chairman Gensler dashed hopes this week for the speedy approval of a crypto ETF.
US Securities and Exchange Commission (SEC) commissioner Hester Peirce, known as “crypto mom” for her support of digital assets, said at a virtual event on Wednesday that the SEC’s refusal to approve a Bitcoin exchange-traded fund thus far has created an “investor protection problem.”
U.K. Probes Gupta’s GFG for Fraud Over Greensill Financing
Ellen Milligan, Lucca De Paoli, and Eddie Spence – Bloomberg
Greensill Capital U.K. also falls under money laundering probe; Prosecutors are starting to circle Gupta, Greensill companies
The U.K.’s fraud prosecutor opened a probe into Sanjeev Gupta’s GFG Alliance over suspicions of fraud and money laundering in the magnate’s vast industrial empire.
U.K. Launches Fraud Probe Into Greensill-Linked Steel Firm GFG; Ties between Sanjeev Gupta’s GFG and failed finance firm Greensill Capital are being probed by the Serious Fraud Office
Alistair MacDonald – WSJ
Britain’s Serious Fraud Office said it is investigating suspected fraud and money laundering at metals magnate Sanjeev Gupta’s GFG Alliance, as well as its financing arrangements with bankrupt lender Greensill Capital.
Former managing director of responsible entity of Sterling Income Trust banned for four years
ASIC has banned Mr Robert Patrick Marie for four years from providing any financial services. Mr Marie has also been banned from controlling an entity that carries on a financial services business and from performing any function involved in the carrying on of a financial services business in any capacity.
ASIC disqualifies director from managing companies for engaging in illegal phoenix activity
Pauline Jennifer Rogers of Sydney, NSW has been disqualified from managing companies for four years.
ASIC warns against fake news articles promoting investment scams
ASIC has received an increased number of reports from consumers who have lost money after responding to advertisements disguised as fake news articles
These advertisements are mostly promoting crypto-assets (or crypto-currency) and contracts for difference (CFD) trading
ASIC has also seen advertisements and websites falsely using ASIC logos or misleadingly saying the investment is ‘approved’ by ASIC
ASIC takes Court action to wind-up PE Capital Funds Management Ltd and managed investment schemes
ASIC has commenced proceedings in the Federal Court in Brisbane against PE Capital Funds Management Ltd (PE Capital Funds Management) alleging misconduct in relation to the operation of managed investment schemes.
FCA proposes stronger protection for consumers in financial markets
The FCA has today set out plans for a new Consumer Duty, which will set a higher level of consumer protection in retail financial markets for firms to adhere to.
Investing and Trading
The Real Reason Why U.S. Bond Yields Are Stuck; Don’t think it’s because inflation is temporary. It’s more to do with the returns on U.S. debt being far better than what’s on offer in Europe and Japan.
Richard Cookson – Bloomberg
Here’s a conundrum. Why, when growth and inflation are picking up sharply, are U.S. bond yields stuck at modest levels? Yields on 10-year Treasuries are lower now than at the end of March, despite this week’s blowout inflation numbers and accelerating growth. The Federal Reserve wants you to believe this is because the inflationary spurt is temporary. It’s got nothing to do with that.
Billionaires Are Selling Mega-Sized Stock Blocks After Surge
Devon Pendleton and Benjamin Stupples – Bloomberg
Corporate insiders sold $24.4 billion of shares this year; Brin’s Alphabet sales were his first disposal in four years
Stock sales are reaping a windfall for the world’s richest shareholders. Corporate insiders including Amazon.com’s Jeff Bezos and Google co-founder Sergey Brin have ramped up stock sales recently, cashing in on a 14-month long bull market that’s helped boost fortunes to the tune of trillions.
Commodities Boost Economic Recoveries, Mirroring Aftermath of Financial Crisis; Record prices of industrial metals are giving countries a revenue windfall as stimulus pushes up demand
David Winning and James Glynn – WSJ
Higher commodity prices are delivering economic windfalls to countries that supply metals vital to the global recovery from the pandemic, though the boom could still mask problems like high infection rates and slow vaccine rollouts.
AMC cashes in on Reddit-trading frenzy with $428 million share sale
Cinema operator AMC Entertainment Holdings has raised about $428 million from a share sale, capitalizing on the retail-trading driven surge in its stock earlier this year. The world’s largest cinema chain operator’s shares have gained more than five-folds in 2021 thanks to interest from amateur traders on Reddit that were piling into heavily shorted stocks such as GameStop and AMC to punish hedge funds that bet against them.
Environmental, Social and Corporate Governance
ESG for early-stage investors (angels + VCs)
Event by EthicsGrade | AI & ESG
May 19, 2021, 10:00 AM – 11:00 AM (your local time)
Are you concerned about ‘watermelons’ in your investment portfolio? A ‘watermelon’ is a company that looks ‘green’ on the outside, but is everything but once you scratch the surface.
Goldman Rebrands Fracking Research as Green Shift Accelerates
David Wethe – Bloomberg
Analysts see changes afoot among hired hands of the oil patch; Energy transition, digital services offer contractors growth
Goldman Sachs Group Inc. is taking the “oil” out of oil services, rebranding its coverage of drilling and fracking providers in the latest sign of the energy industry’s shift away from fossil fuels. “We are renaming our coverage to ‘Energy Services,'” Goldman analysts including Neil Mehta wrote Thursday in a note to investors. “We believe investors should evolve the framework of evaluating this sector from ‘traditional oil services’ to ‘energy services’ to better capture emerging drivers of long-term growth.”
How Strengthening Standards for Data and Disclosure Can Make for a Greener Future
Caio Ferreira, Fabio Natalucci, Ranjit Singh, and Felix Suntheim – IMF
Imagine you plan to invest your savings and are looking for a firm or sector with a sustainable business model or a project that can make a real difference in the transition to a low-carbon economy. Where do you get reliable information to assess and compare projects from different companies?
Is Beef the New Coal? Climate-Friendly Eating Is on the Rise; Studies predict a drop in meat consumption is coming
Mike Dorning – Bloomberg
Eleven Madison Park, a top Manhattan restaurant, is going meatless. The Epicurious cooking site stopped posting new beef recipes. The Culinary Institute of America is promoting “plant-forward” menus. Dozens of colleges, including Harvard and Stanford, are shifting toward “climate-friendly” meals.
These under-the-radar stocks fight climate change by reducing carbon emissions
Debbie Carlson – MarketWatch
To fight climate change, most investors think about renewable energy and electric vehicles. But there’s another big carbon-belching culprit out there, and cutting emissions from this sector is key to mitigating climate change. It’s energy wasted in buildings, and fighting it doesn’t require relying on unproven technologies from a startup company. In fact, these methods and products used in this sector are about as old-school as it gets: energy efficiency. The buildings construction industry accounts for 38% of total global energy-related carbon emissions, according to a 2020 report from the Global Alliance for Buildings and Construction, part of the United Nations environment program.
WHAT ESG IS NOT
Christopher Burnham – Forbes
Environmental, social, and governance (ESG) standards are an essential tool in the kit of boards of directors and senior management. They help companies focus on reducing the risk of environmental disasters, winning the war for talent, and gaining the rewards the market heaps on transparent, diverse, and well governed companies, particularly those in developing countries. But make no mistake—as senior analysts from two leading investment banks said at a private meeting last week, “You must get ESG right, and it must lead to higher cash flow”.
Measuring what matters: the scramble to set standards for sustainable business
Sarah Murray – FT
In a 2018 speech about the future of corporate reporting, Erkki Liikanen, a former Bank of Finland governor, recalled Europe’s debates over adopting the International Financial Reporting Standards almost two decades earlier. “It was becoming increasingly clear that different accounting requirements of differing quality were adding cost, complexity and risk to companies and investors,” he told delegates at a European Commission conference.
BNY Mellon Transforms in Securities Finance, Collateral and Liquidity
Anna Lyudvig – Traders Magazine
With the next phase of adherence coming up in September, there are many firms looking for comprehensive margin management, not just segregated accounts, according to Laide Majiyagbe, a newly appointed Head of Financing and Liquidity at BNY Mellon. “Ahead of the non-cleared margin rules implementation, we set out to be the leading resource for knowledge and—keeping with the connected theme—provide a full solution set across the lifecycle of regulatory adherence. This strategy has been highly successful for us, cementing our position as the market solution for firms looking to outsource their compliance with these rules,” she said.
Emerging markets: risk, reward and Covid
Jonathan Wheatley – FT
Is now a good time for retail investors to buy emerging market stocks and bonds? At the height of a pandemic, as growth stutters across the developing world and governments struggle to replicate the success of vaccine rollouts in advanced economies, it may seem odd even to pose such a question. Yet, it seems to be one that many investors are not only asking, but answering with a “yes”. The number and value of emerging market-focused exchange traded funds (ETFs) and similar products — tradeable funds that typically appeal to retail investors — have risen remarkably during the coronavirus crisis.
Why the ‘SPAC Mafia’ hedge funds aren’t worried about the SEC’s recent crackdown on blank-check companies
Anita Ramaswamy – Insider
After a yearlong bout of SPAC mania, the red-hot market for blank-check companies is cooling down as regulators direct their attention to it. March was a record-breaking month for special-purpose acquisition companies, with over 100 new deals, while April only saw 10 SPACs raised, the data provider SPAC Research found.
Hedge funds look to tap into surge in corporate dealmaking; Merger arbitrage performance bounces back after last year’s ‘arb-ageddon’ shook up strategy
Laurence Fletcher – FT
Hedge funds that bet on corporate deals have rebounded from big losses during last spring’s coronavirus-driven market turmoil and are aiming to profit from a surge in M&A as economies reopen.
American Century touts active management edge in ETF campaign; Manager’s ‘Unthink ETFs’ message is focused on its non-transparent range launched last year
Jackie Noblett – FT
American Century Investments wants advisers to know it is in the ETF game, too, and that its time-tested active approach brings a new way of thinking to the product wrapper.
Deutsche Bank outlines new approach to fixed income coverage; The new fixed income and currencies model at Deutsche Bank will be rolled out in Europe for rates and credit flow products.
Annabel Smith – The Trade
Deutsche Bank has launched a new coverage model for its fixed income and currencies (FIC) business to provide clients with improved expertise across its main channels.
Londoners Eye a Return to City Center as Rental Viewings Soar
Olivia Konotey-Ahulu – Bloomberg
Interest in central city homes leaps past pre-pandemic levels; Apartments also saw resurgence of viewings last month
Londoners are heading back to the city. After a year of shunning the capital amid lockdowns and coronavirus, many renters are now looking to return to urban life as restrictions ease, according to data from estate agent Hamptons International. Viewings for central London properties soared 46% in April compared with the same month two years earlier as residents rushed to take advantage of rock bottom prices.
Rio Tinto May Lose Black Partners Needed to Meet South Africa Law
Loni Prinsloo – Bloomberg
Main Black partners want to sell their stake in unit; Debt-refinancing for Rio Tinto unit expected as soon as 2022
Rio Tinto Group’s South African operation is facing the loss of a large bloc of Black investors, a move that would leave it below the legal minimum for Black ownership, two people familiar with the situation said.