The EU Is No Match for the Financial Crime Gangs; Sprawling Insider-Trading Case Heads to Trial

Jan 3, 2020

First Read

Options markets to get liquidity boost
Matt Raebel – John Lothian News

A new rule finalized last month by the Federal Reserve Board, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency might make it easier for banks to keep less capital tied up, potentially clearing the way for them to do more business with market makers.

In late November, these regulators jointly finalized a rule that would implement the “standardized approach for measuring counterparty credit risk,” also known as SA-CCR (pronounced “SACK-er”). The rule was originally proposed in October 2018, but the final version was revised in response to feedback from various financial institutions, such as the Options Clearing Corporation (OCC). Don’t you just love it when regulators and the regulated get along?

To read the rest of this story, go here.

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Hits & Takes
By JLN Staff

The beginning of January is when we ask all readers to pay for their subscriptions to the John Lothian Newsletter for the year. I am asking you to pay for this newsletter and support the JLN team as they bring you the news for 2020. I am asking you to pay for this newsletter to support independent journalism, free from corporate ownership and control. I am asking you to pay for this newsletter because it is the right thing to do.~JJL

Students, journalists, educators, retired people and non-profit people are welcome to receive the newsletter for free. If you have a personal or professional interest in the markets, and are receiving valuable information for your job or investments, then you should pay. If you read the newsletter often, you should pay. You should pay because you want to see JLN around for this year and years to come to help keep you and your firm and colleagues, or friends, informed.~JJL

Many people forward this newsletter because they found something interesting to share. There are other, less noble, reasons why people forward the newsletter. In either case, the right thing to do is to pay for your subscription.~JJL

CME Group had a record 40 trading days with volume over 25 million contracts, up 29% from 35 days in 2018.~JJL

On January 2, 2020, FIS officially closed their acquisition of a majority interest in Virtus Partners, a leading provider of high-value Business Process as a Service (BPaaS) and front-to-back office technology, infrastructure and people who are focused on the rapidly growing credit market.~JJL

On The Guardian website, there is a story about a book titled “Dark Money review: Nazi oil, the Koch brothers and a rightwing revolution.” At the top of the page there was an advertisement for a book called “Good Profit” by Charles Koch.~JJL

The Frankfurt, Germany restaurant, “Mutter Ernst,” which became the hot spot for the local financial community, will have to close on 31 March 2020 because the building will be demolished.~JJL

Deutsche Boerse has published an interview with Carolin Kübler, who started as an intern and is now at Clearstream.~JJL

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CryptoMarketsWiki Coin of the Week: Ethereum (ETH)
Ethereum successfully implemented Muir Glacier, an upgrade designed to delay Ethereum’s “difficulty bomb,” which is a part of Ethereum’s protocol designed to make mining Ethereum significantly more difficult. This was the third time Ethereum’s developers delayed the difficulty bomb, and the second hard fork upgrade Ethereum had undergone in the past month.
/jlne.ws/2SRpK4K

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Ten people set to shape Wall Street in 2020; From Goldman to Citadel, leaders are wrestling with change in US finance
FT Reporters – FT
There will be megadeals, existential angst for famous banking names and a US election that could change the economic and regulatory backdrop. Here are 10 figures that will feature on Wall Street this year.
/jlne.ws/2QM5hvq

*****The ten people who will shape Wall Street in 2020 are unknown, in my opinion. Who knows what the future holds?~JJL

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China Denies Reports Shanghai-London Stock Connect Is Halted
Bloomberg News
Link allows firms on one exchange to issue shares on the other; Only listing under link Huatai Securities fell 11% Thursday
China denied reports that a tie-up between the Shanghai and London stock exchanges has been halted. The operation of a stock link between the two exchanges has been normal since June, the China Securities Regulatory Commission said in a media briefing on Friday. The regulator has noticed some companies delaying issuance of global depositary receipts and respects their freedom to decide a time based on financing needs and market conditions, spokesman Chang Depeng said.
/jlne.ws/2sH8nZC

*****Where is the truth?~JJL

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Amazon Threatens to Fire Climate Activists, Group Says
Matt Day – Bloomberg
A group of Amazon.com Inc. employees who pushed the company to combat climate change say Amazon has threatened to fire some of them if they continue to speak out about their employer’s internal affairs.
/jlne.ws/2SJK9bM

*****Fire and climate in a story not about Australia burning. How interesting.~JJL

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Thursday’s Top Three
Our top story on Thursday was “Psst, Mike Bloomberg — this is why most workers hate open-plan offices” from MarketWatch. That would have been about the eleventh story we’ve seen this year about how much people hate open office plans, if it were still this year. Second was “China Puts U.K. on Guard as Johnson Ponders His Huawei Decision,” from Bloomberg News, about China’s decision to suspend the tie-up between the Shanghai and London stock exchanges (which China now denies). And in third was, “Bitcoin is a ‘pyramid scheme,’ says an economist,” from The Block.

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MarketsWiki Stats
170,545,831 pages viewed; 24,004 pages; 222,874 edits
MarketsWiki Statistics

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CryptoMarketsWiki Website»
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

Recently updated pages include
Proof of Keys
TD Ameritrade
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CryptoMarketsWiki Stats

1,322 pages; 11,695 edits
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Lead Stories

The EU Is No Match for the Financial Crime Gangs; Anyone who thinks lenders and regulators are gaining the upper hand against the money launderers is in for a rude awakening.
Elisa Martinuzzi – Bloomberg
Europe’s reputation on financial crime took another battering in 2019. Several of the region’s biggest lenders, including ABN Amro Bank NV and Swedbank AB, were tarred by allegations that they let criminals move around their cash unhindered, a reminder that Danske Bank A/S’s mammoth money-laundering failings weren’t isolated.
/jlne.ws/2ZNdT99

Sprawling Insider-Trading Case Heads to Trial; Prosecutors likely to shed light on traders and bankers accused of reaping tens of millions of dollars in illicit gains
Rebecca Davis O’Brien – WSJ
The first trial to emerge from a yearslong investigation into an alleged international insider-trading ring is set to begin next week in Manhattan, a case likely to shed light on a network of highflying securities traders and investment bankers who authorities say were responsible for tens of millions of dollars in illicit profits.
/jlne.ws/2MSAlZh

Market Regulator Heads Back to Court Against Kraft and Mondelez; CFTC case could show extent of the government’s ability to go after market manipulation
Dave Michaels – WSJ
The country’s primary regulator of derivatives markets is clashing in court again with some of the nation’s biggest food companies, in a case that could reveal the extent of the government’s power to go after market manipulation. The Commodity Futures Trading Commission, Kraft Foods Group Inc. and Mondelez Global MDLZ -1.36% LLC announced a $16 million settlement last summer with an unusual feature: a gag order on both sides.
/jlne.ws/2tscQPQ

Investor Advocates See Risks in Silicon Valley’s Favorite IPO Alternative; Direct listings have been embraced by venture capitalists and big tech companies, but their safety for individual investors is a matter of debate
Alexander Osipovich – WSJ
Direct listings have been embraced by Silicon Valley venture capitalists and big technology companies. But are they safe for Main Street investors?
/jlne.ws/2MPIM7I

Soleimani Killing Raises Fears of Reprisals on Oil Infrastructure; Crude prices rally after a U.S. airstrike kills Qassem Soleimani, leader of the foreign wing of Iran’s Islamic Revolutionary Guard Corps
David Hodari – WSJ
Crude prices shot higher Friday after a U.S. airstrike killed a high-ranking Iranian military leader, with traders fearful of retaliatory attacks from Tehran on Middle Eastern energy infrastructure.
/jlne.ws/39AexLU

Key HKEX executive behind failed bid to buy LSE steps down, seconded to UK unit London Metal Exchange
Enoch Yiu – South China Morning Post
James Fok, a key Executive behind bourse operator Hong Kong Exchanges and Clearing’s surprise US$38.8 billion bid to buy the London Stock Exchange in September, has stepped down as head of group strategy and has been seconded to British unit London Metal Exchange. The transfer, confirmed by a spokesman on Friday, is being viewed as the first major staff movement following the failed bid, which would have led to the largest ever merger between two exchanges. He has been succeeded by Till Rosar,…
/jlne.ws/35mZemg

Former London Stock Exchange executives take board seats at the Saudi Stock Exchange; Long-serving CEO of the London Stock Exchange who left in December 2018, and the founder of FTSE, join Tadawul as board directors.
Jonathan Watkins – The Trade
Two former London Stock Exchange (LSE) executives, including former CEO Xavier Rolet, have been named as board members for the Saudi Stock Exchange. The trading venue, also known as Tadawul, announced its new board members for the next three years and included Rolet and his former colleague Mark Makepeace in the line-up.
/jlne.ws/2QL9lw7

Oil Options Get More Bullish as Risk of Iran Retaliation Grows
Alex Longley – Bloomberg
Put skews at their least bearish levels since November; Market is weighing consequences of Soleimani assassination
Oil options markets turned more bullish Friday as traders weighed the possibility of reprisals after the U.S. killed a top Iranian general.
/jlne.ws/37B2Ti7

Swiss Firm in Panama Papers Charged in Transatlantic Stock Scam
Christian Berthelsen – Bloomberg
Asset manager connected in data leak to 14 shell companies; Firm, executives accused of enabling microcap ‘pump-and-dumps’
Two executives and a Swiss firm linked to shell companies in the Panama Papers data leak were charged in the U.S. with scamming investors in pump-and-dump schemes.
/jlne.ws/39yRBMZ

HSBC leads EU banks on VAR measures
Louie Woodall, Abdool Fawzee Bhollah – Risk.net
HSBC had the most trading risk exposures measured using the internal model approach (IMA) of the banks featured in the European Union’s latest transparency exercise.
/jlne.ws/2tsdNYq

The Shanghai-London Stock Link Is a Financial White Elephant; Beijing may have stalled new listings through the U.K. Connect, but the more ambitious Hong Kong program made the London operation largely irrelevant anyway
Mike Bird – WSJ
A high-profile project to link the Shanghai and London stock exchanges has been thrown into question this week. But the financial pipeline’s extremely limited scope makes its future far less important than it might seem.
/jlne.ws/36pD4Bi

The Shanghai-London Connect Was Always Just a Pipe Dream; China’s move to suspend a barely used IPO link looks like an empty threat.
Nisha Gopalan – Bloomberg
It’s always easier to put up a barrier on an empty road than a busy highway. That’s worth remembering in light of recent reports that China has temporarily suspended cross-border listings between the Shanghai and London stock exchanges. The halt is a response to the U.K.’s stance on pro-democracy protests in Hong Kong, Bloomberg News reported, citing a person familiar with the matter, and any resumption would depend on how diplomatic relations proceed.
/jlne.ws/2FguOHN

Wall Street Wades Into Sports Gambling as Legalization Spreads; Stocks, bonds, and a bit of basketball.
Annie Massa – Bloomberg
The line between trading and gambling has always been fuzzy. So now that 13 U.S. states have live legal sports betting and several more have approved it, following a 2018 Supreme Court ruling, it’s natural to wonder if Wall Street will start looking for a piece of the action.
/jlne.ws/2FgkkZ1

Exchanges, OTC and Clearing

CME Group Reports 2019 Annual Volume and Monthly Market Statistics
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today reported its December and full-year 2019 market statistics, showing it reached average daily volume (ADV) of 19.2 million contracts during the year and 15.5 million contracts during the month of December. Open interest at the end of December was 113 million contracts. Market statistics are available online in greater detail at https://cmegroupinc.gcs-web.com/monthly-volume.
/jlne.ws/37ytQD4

MGEX Reports 2019 as the Second-Best Calendar Year in History
MGEX, a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO), reports 2019 concluded as the second-best calendar year in history with a total of 2,357,996
contracts traded. Accompanied by this achievement, it was also the second-best calendar year for electronic volume with a total of 2,075,531 contracts.
/jlne.ws/2QfKe5r

OCC Clears Over 4.9 Billion Contracts in 2019
Second Highest Ever Annual Cleared Volume
December Volume Down 4.2 Percent from Record-Breaking 2018
OCC, the world’s largest equity derivatives clearing organization, announced today that 2019 total cleared contract volume was 4,976,978,704 contracts, the industry’s second-highest ever annual volume, down 5.1 percent compared to 2018’s record-breaking pace of 5.24 billion contracts. Average daily cleared contract volume in 2019 was 19,749,915 contracts. OCC’s December 2019 total cleared contract volume reached 418,410,240 contracts, down 4.2 percent compared to last December.
/jlne.ws/2QSEqy7

These were the most traded German stocks in 2019; Deutsche Börse publishes annual cash market statistics / 1.5 trillion. Euro sales at the Xetra, Frankfurt Stock Exchange and Tradegate Exchange
Deutsche Börse
The shares of SAP, Commerzbank, Aixtron and Flatex were the most traded stocks in the German indices DAX, MDAX, SDAX and Scale All Share. Deutsche Börse announced this today with the publication of its spot market trading statistics for 2019. In total, order book sales of 1.50 trillion were generated at the three trading venues Xetra, Frankfurt Stock Exchange and Tradegate Exchange last year. Euro achieved (2018: 1.72 trillion euros).
/jlne.ws/2MMoXyf

SBI planning to sell 5 million shares representing 1.01% stake in NSE; Currently, State Bank of India (SBI) holds 5.19 per cent stake in the exchange
Press Trust of India
The country’s largest lender SBI on Friday said it is looking to sell 50 lakh shares representing 1.01 per cent stake in the National Stock Exchange (NSE) as part of its capital raising exercise.
/jlne.ws/2QjwaI4

Former LSE boss Rolet joins Saudi stock exchange; Rolet played a key role in trying to convince Saudi Aramco to list in London during his time running the UK exchange
Samuel Agini – Financial News
Xavier Rolet, the former chief executive of the London Stock Exchange, has joined the board of Tadawul, Saudi Arabia’s national equities market, along with his former LSE colleague Mark Makepeace.
/jlne.ws/36nuov4

Fintech

Travelex Currency-Exchange Network Shut Down by Virus Attack; The company resorted to calculators to keep money flowing
Anna Isaac – WSJ
A crippling computer virus forced retail foreign-exchange specialist Travelex to shut its online services and its app. The company, a subsidiary of London-listed Finablr FIN -3.93% PLC, said it took down all online services after the attack was detected on New Year’s Eve to stop the spread of a virus. There didn’t appear to be any breach of customer data, the company said.
/jlne.ws/2u7DQ7F

Fintech Startups Face Tough Exit Options; Venture investors value startups on growth, but Wall Street wants to see profits
Yuliya Chernova – WSJ
Venture capitalists are plowing lots of money into fintech companies at quickly multiplying valuations as they seek to reap returns on the scale of Square Inc. or Adyen NV, but exits from fintech companies have been few and far between.
/jlne.ws/2QizVxv

Cryptocurrencies

How China’s New Cryptocurrency Could Track Money Flows, Challenge Facebook’s Libra
WSJ
Beijing is preparing to launch its own cryptocurrency, a move that could potentially lead to greater state control. WSJ’s Steven Russolillo takes a look at official documents to find out more about China’s plans.
/jlne.ws/2sHasoo

ECB’s Weidmann Urges Euro-Area Banks to Battle Facebook’s Libra
Paul Gordon – Bloomberg
European Central Bank policy maker Jens Weidmann called on banks to come up with cheaper and faster systems for transferring money to combat alternatives such as Facebook Inc.’s Libra, and said there’s no pressing reason yet for the ECB to develop its own digital currency.
/jlne.ws/2QG99OF

Ousted Bitmain Co-Founder Wages Battle for Control in Court
Zheping Huang and Benjamin Robertson – Bloomberg
Micree Zhan’s company filed summons to a Cayman Islands court; Two co-founders are battling for control of top crypto-miner
Ousted Bitmain Technologies Ltd. co-founder Micree Zhan Ketuan has initiated a legal case to try to regain his position, escalating a battle for control of the world’s biggest miner of cryptocurrency.
/jlne.ws/37vLEyt

Venezuela to sell oil and gold for petro cryptocurrency, says Maduro
Yogita Khatri – The Block
Venezuelan President Nicolas Maduro has said that the country will sell oil and part of the gold it produces for its national cryptocurrency petro. “We will sell Venezuelan oil in exchange for petros. We have already signed contracts for the sale of oil, steel, iron and aluminum, and we will sell part of the gold for petros,” Maduro told Venezuelan newspaper El Nacional, as reported by Russian news agency TASS.
/jlne.ws/2tnV0O6

Bitcoin Begins Year Negative After 2019’s Eye-Catching Surge
Vildana Hajric – Bloomberg
Bitcoin’s not yet having a happy new year. A sell-off in the largest digital token pushed the price below $7,000 on Thursday. Bitcoin dropped as much as 4% to fall to its lowest level since mid-December, according to Bloomberg data. Bitcoin is coming off an eye-catching 2019, which saw it gain close to 95% despite repeated bouts of volatility. That’s emboldened some investors and analysts to call for further gains this year as adoption rates increase and fans continue to flock to decentralized currencies.
/jlne.ws/36ndfSi

How Could Political Change & Unrest Affect Crypto in 2020?
Rachel McIntosh – Finance Magnates
In many respects, the dawn of the “roaring 2020s” has begun on a rather precarious note. The UK is preparing to go through with the exit from the European Union that it has been planning for two years at the end of this month; in the United States, President Donald Trump is embroiled in an impeachment trial – and in spite of the fact that most analysts seem to agree that Trump won’t be removed from office, the polarization of the political scene in the US has been described as unprecedented.
/jlne.ws/2QHLM7l

Mining Giant Bitmain May Lay Off Another 50% of Staff Before BTC Halving
Joeri Cant – Cointelegraph
Cryptocurrency mining giant Bitmain reportedly has plans to reduce its workforce by another fifty percent. On Dec. 2, Chinese news media outlet Wushuo Blockchain reported that Bitcoin (BTC) mining rig maker Bitmain has launched a “personnel optimization plan” that will layoff a significant portion of its employees before the next BTC halving, which is expected in May. The world’s largest producer of cryptocurrency mining machines will reportedly hold an annual meeting on January 17, and it is expected that the layoffs will have been completed before that date.
/jlne.ws/2rUVVoU

South Korea Drafting Legislation To Tax Individual Crypto Profits
Rachel Wolfson – Cointelegraph
Cryptocurrency and taxation laws are creating a great deal of confusion in South Korea. On Dec. 30, South Korea’s government stated that under current law, it cannot impose income taxes on individuals’ profits from transactions of cryptocurrency. This, however, contrasts with the National Tax Service’s recent imposition of an 80 billion won ($68.9 million) tax bill on local crypto exchange Bithumb Korea. On Dec. 29, The Korea Herald reported that South Korea’s local tax agency received 80 billion won ($68.9 million) in taxes from the exchange.
/jlne.ws/37rvCWm

‘Cryptocurrency Will Not Die’: Mainstream Media on Bitcoin in 2019
Stephen O’Neal – Cointelegraph
In late 2017, Bitcoin piqued the interest of millions of people hoping to capitalize on the ongoing frenzy and, as a result, drew the attention of various traditional media outlets. The press seemed largely skeptical about the concept of decentralization but proceeded to report on Bitcoin’s erratic price movement. This year, as the space has become more regulated, cryptocurrencies saw a notably different kind of coverage. The industry’s Wild West days are over, and media outlets — most of whom were quick to bury Bitcoin at least once over that period — are now focusing on how cryptocurrencies are entering the agenda of Big Tech and, for instance, the People’s Bank of China.
/jlne.ws/2rSt7gP

Crypto exchange Poloniex denies data leak after resetting passwords for some users
Yilun Cheng – The Block
Poloniex said Thursday that account information circulating on social media did not originate from the cryptocurrency exchange.
/jlne.ws/2ZOP4Kk

Politics

US-China financial war is just beginning to take shape; Battle lines are being drawn between American hawks and Wall Street
John Dizard – FT
Now that there is a nearly meaningless truce in the US-China trade war, Wall Street and corporate America can move on to preparing for the financial war. As you would expect, China is better prepared than America, but neither of them really knows how much they have to lose — which is a lot.
/jlne.ws/39uXafv

Soleimani assassination risks all-out war between US and Iran; Killing of Quds commander takes Trump presidency into dangerous territory
David Gardner- FT
The US air strike on Baghdad airport that killed General Qassem Soleimani, commander of the Quds Force, the elite expeditionary arm of Iran’s Revolutionary Guard, is a dramatic escalation in the shadowy war between Tehran and Washington and its allies raging across the Middle East.
/jlne.ws/2sH95Gg

Top Iranian Commander Killed in U.S. Airstrike on Trump Orders
Jennifer Jacobs, Zaid Sabah, and Nick Wadhams – Bloomberg
Qassem Soleimani led the Revolutionary Guards Quds Force; Ayatollah Khamenei vows ‘severe retaliation’ for the killing
A U.S. airstrike in Iraq ordered by President Donald Trump killed one of Iran’s most powerful generals, sending global markets tumbling as Iran’s Supreme Leader threatened “severe retaliation.”
/jlne.ws/2sApn3Y

Good Riddance to Qassem Soleimani; The military commander’s fiery death was the predictable consequence of Iran’s reckless escalation.
Bobby Ghosh – Bloomberg
Qassem Soleimani was never going to die peacefully in his bed. As leader of the Quds Force of the Iranian Revolutionary Guard Corps, and puppet-master of militias and terrorist groups across the Middle East, he had the blood of hundreds of thousands on his hands: Syrians, Iraqis, Yemenis, Lebanese, Palestinians, Israelis, Americans and fellow-Iranians, among others. His death was hoped for and prayed for by the families of his victims, and plotted by their governments.
/jlne.ws/2rUUUNC

Iran’s Supreme Leader Says ‘Severe Retaliation’ Awaits Soleimani Killers
Arsalan Shahla and Yasna Haghdoost – Bloomberg
Iran’s Supreme Leader Ayatollah Ali Khamenei vowed “severe retaliation” awaits the killers of one of the country’s top commanders Qassem Soleimani in Iraq.
/jlne.ws/2FdO20K

Sanders, Buttigieg Raise Enough Money to Make 2020 a Long Race
Bill Allison and Sahil Kapur – Bloomberg
Millions raised will allow candidates to remain in the race; Biden raises $22.7 million but lags other Democratic rivals
Huge fundraising hauls by some of the 2020 Democratic candidates point to a long road to the presidential nomination that could crush front-runner Joe Biden’s hopes of securing an early victory.
/jlne.ws/2tqIIEC

Christianity Today Editor Laments ‘Ethical Naïveté’ of Trump Backers; Mark Galli, who is retiring, was overwhelmed by the vocal criticism and quiet praise after his editorial in a prominent evangelical magazine called for President Trump’s ouster.
Nicholas Bogel-Burroughs – NY Times
People have been upset with Mark Galli before. As the editor in chief of Christianity Today, a prominent evangelical magazine, he has printed some controversial editorials. But the people he irks usually do not include the IT department of his own publication.
/jlne.ws/2tujfdG

Regulation

FIA’s Commodities Members Supports CFTC’s Swaps Margin Changes
FIA.org
FIA’s U.S. Commodities members recently filed a response to the CFTC proposal relating to the implementation schedule for the CFTC’s uncleared margin rules. Last October, the CFTC proposed to align the implementation for smaller firms with the framework recommended by international standards organizations such as Basel and IOSCO. FIA’s letter supports that change and asks the CFTC to address several other operational challenges relating to swaps margin management that are impacting FIA commodities firms and end users.
/jlne.ws/2N4NA9F

10 Radical Predictions for 2020
Travis Schwab – CEO at Eventus Systems, Inc.
There is a long tradition of making predictions for the New Year, and the truth is that most of the time the items on such lists are anodyne suggestions that seldom stray far from current reality or show much imagination for the bold actions that can really shake the world. The reason for that is simple, of course: people hate to be wrong, and the easiest way to be wrong is to take a real chance. Here at Eventus, we don’t mind stepping out from orthodoxy from time and time so with that sentiment we offer ten somewhat radical predictions for the coming year.
/jlne.ws/37yZqjN

End of the Tens: What the Last Decade Taught Us About Trading Surveillance and Compliance
Eventus Systems
The decade that we’ll call “The Tens” has come and gone, making it a natural time to pause and reflect on developments in the realm of market regulation and what those developments might mean as we step into the Twenties. This exercise is particularly relevant because it has been exactly ten years since the passage of Dodd-Frank in the United States, marking the beginning of a new era of regulation for financial markets. In this blog post, we take a look at four key insights from the decade past and then look at four trends that will likely shape the future of regulation.
/jlne.ws/2ueATT1

Final Statements for Broker-Dealers, Investment Adviser Firms, Agents and Investment Adviser Representatives, and Branches
FINRA
FINRA is issuing this Notice to help firms review, reconcile and respond to their Final Statements in E-Bill as well as view the reports that are currently available in Web CRD/IARD for the annual registration renewal process. The payment deadline is January 17, 2020.
/jlne.ws/2QiDROT

SEC Charges Six Individuals in International Microcap Fraud Schemes
SEC
The Securities and Exchange Commission today charged six individuals and their companies with participating in schemes that allegedly generated more than $35 million of illegal sales of stock in at least 45 microcap companies. The charges contained in two complaints reflect investigations by staff in the SEC’s New York and Boston offices, and assistance from multiple regulators outside the U.S.
/jlne.ws/2Qkb78e

Financial trading firm endorsed by Mike Tindall faces legal action from furious investors who lost their life savings; Tindall was a brand ambassador for UFX and said he would recommend the firm
Tim Stickings – Daily Mail
A financial trading firm endorsed by former England rugby player Mike Tindall is facing possible legal action from investors who lost tens of thousands of pounds.
/jlne.ws/2QiIJ6D

Investing and Trading

Global securities lending revenues in 2019 fall on macro uncertainty; Trade wars, Brexit and central bank actions weighed heavily on hedge funds’ securities lending programmes.
Joe Parsons – The Trade
Global revenues for securities lending programmes dropped in 2019 as trade wars, Brexit and central bank actions weighed heavily on hedge funds.
/jlne.ws/37yNOxr

Central Banks Are the Biggest Risk to the Economy in 2020; The Fed’s reaction to the disruption in repo markets shows how hard it will be for policy makers to reverse their “money printing.”
Jim Bianco – Bloomberg
The U.S. economic recovery that began in June 2009 is now in its 127th month, which is a record. Even more impressive is that for the first time since the signing of the Declaration of Independence in 1776, the U.S. just completed the first calendar decade without even one day of a recession. There are a few key reasons why this is happening, and one clear risk that could bring the expansion to an end.
/jlne.ws/2rPRYBJ

Other People’s Money Was the Tech Innovation of the Decade; Disruptive companies couldn’t disrupt without an unprecedented flood of investors’ cash.
Shira Ovide – Bloomberg
Technology changed every molecule of life in the 2010s. Airbnb, Uber and other young companies morphed the physical complexion of cities and how they work. The growing prevalence of e-commerce, fast internet connections and smartphones in everyone’s pockets shifted how we shop, behave and are entertained — with both good and bad ripple effects. Even the stodgiest industries were forced to shake up what they do in reaction to new competitors and changing expectations of their customers. Governments have new ways to reach citizens and fresh fears from the ways technology empowers them.
/jlne.ws/36hEkq2

Almost Everything Wall Street Expects in 2020
Sam Potter and Jeremy Scott Diamond – Bloomberg
For the professional prognosticators and market mavens of Wall Street and beyond, there is at least one easy prediction to make about the next 12 months: Investors are going to earn less. A lot less, probably.
/jlne.ws/36mBct8

Roaring Start to the ’20s Leaves One Stock Market Nook Stranded
Lu Wang – Bloomberg
Small-caps fall in worst start of a year since 2009 vs S&P 500; The divergence highlights investor angst over economic growth
A new decade, a new record for U.S. stocks, which started this year much as they ended the last. But while large-cap equities thundered along, one pocket of the market was left out of the first-day festivities.
/jlne.ws/2ZNeO9B

Bunge sells stake in U.S. ethanol plant as biofuels industry struggles
Tom Polansek – Reuters
Bunge Ltd ended its 13-year ownership interest in an Iowa ethanol plant, the company said on Thursday, following industry struggles with thin margins and overproduction.
/jlne.ws/2QjmbCE

Muni-Bond Shopping Spree Shows No Sign of Stopping; High-income households looking for tax relief drove record inflows into municipal-bond funds in 2019
Heather Gillers – WSJ
Investors are heading into this year still eager for municipal bonds after a 2019 buying binge supercharged returns.
/jlne.ws/2QmVRaE

Institutions

Equities trading veteran Richard Semark departs UBS; Leading equities trading voice and recipient of The TRADE’s 2017 lifetime achievement award exits bank after decade and a half tenure.
Jonathan Watkins – The Trade
Industry veteran and renowned equities trading figure, Richard Semark, has left his role as head of UBS MTF after almost 16 years at the bank.
/jlne.ws/2MTUcr7

Citadel Securities’ global fixed income COO exits; Nicola White helped to significantly expand Citadel’s electronic market making capabilities for US Treasuries and other fixed income markets.
Joe Parsons – The Trade
The chief operating officer (COO) for Citadel Securities’ global fixed income business has departed, after helping lead the development of its fixed income market making business.
/jlne.ws/2szw4TX

Active fund managers pray for turnround as exodus continues; Calpers is the latest big investor to pull back from stockpickers in favour of passive approach
Robin Wigglesworth – FT
The $380bn California Public Employees’ Retirement System delivered a nightmare before Christmas to some unlucky fund managers.
/jlne.ws/2QH2TX1

Private equity giants vow to show their ESG credentials in 2020; KKR and TPG to disclose their ‘impact’ investments as US politicians turn up heat
Patrick Temple-West – FT
Private equity fund managers, the “barbarians at the gate” known for aggressive buyout deals, will be presenting a friendlier face this year, in an effort to convince investors that their environmental, social and corporate governance credentials are more than just branding.
/jlne.ws/2MSs1Jc

Danske Bank PR Snafu Highlights Dirty Money Scandal’s Long Tail
Frances Schwartzkopff – Bloomberg
A routine review of the financial markets’ performance over the past 10 years has turned into a Twitter storm for Danske Bank A/S, the Danish bank at the center of the Europe’s biggest money laundering scandal.
/jlne.ws/39zOlkl

Goldman Sachs agreed to stop funding Arctic drilling. Will other banks join them? If banks destroy our homeland, they’ll have the Gwich’in Nation, and the millions of Americans who stand with us, to answer to
Bernadette Demientieff – The Guardian
Last fall, I traveled more than 4,000 miles from my home in Alaska to meet with major banks and urge them to help protect the Arctic national wildlife refuge from destructive oil drilling and exploration. In all the years I’ve worked to defend this place, we’ve been focused on trying to make our voices heard by leaders in the White House or in Congress, and I never thought I’d be sitting in a conference room on the 43rd floor of Goldman Sachs’ global headquarters in downtown New York, talking about the Arctic refuge.
/jlne.ws/2ZRMgMf

Credit Suisse announces $1 billion 2020 share buyback program
Reuters
Credit Suisse (CSGN.S) said on Friday it expects to buy back at least 1 billion Swiss francs ($1.03 billion) worth of shares until the end of 2020, subject to market and economic conditions, after completing a similar program last year.
/jlne.ws/36moquE

Governments in Europe Find Workarounds to Bail Out Ailing Banks; State injections into banks in Germany and Italy continue to protect investors over taxpayers
Patricia Kowsmann and Giovanni Legorano – WSJ
A cluster of recent bailouts of ailing European lenders shows how governments are getting around post-financial crisis rules meant to make sure investors and shareholders take losses as a condition of receiving taxpayer funds.
/jlne.ws/2ZXyyYx

Vanguard’s Asia Head Leaves Investing Giant After Leading China Push; Axel Lomholt will serve as interim head of Asia as the company conducts an executive search
Stella Yifan Xie – WSJ
Charles Lin, an executive who oversaw Vanguard Group’s expansion in China and recently served as head of Asia, has left the world’s second-largest asset manager.
/jlne.ws/2ZKAgwb

Regions

Venezuela’s Latest Problem Is There Are Now Too Many Dollars; Businesses and consumers stash away semi-illicit greenbacks.
Patricia Laya, Michelle Yapur – Bloomberg
U.S. dollars are everywhere in Venezuela, and suddenly that’s a problem. The greenback is steadily gaining currency in this inflation-wracked country, where a single dollar buys about 60,000 bolívares on the black market. That’s creating challenges for local businesses, because Venezuelan banks are barred from offering foreign currency accounts.
/jlne.ws/2QMm3KS

Zimbabwe Imports Corn as Catastrophic Hunger Looms
Brian Latham and Ray Ndlovu – Bloomberg
Government looking at subsidies for cooking oil, salt, bread; Over half the population goes to bed hungry after drought
Facing catastrophic hunger, Zimbabwe will import corn from Mexico, Ukraine and neighboring South Africa to help feed as many as eight million of its citizens — over half the population — after drought withered crops last year and threatens do do the same in 2020.
/jlne.ws/2MQ4l8n

Russia Halts Oil Supply to Belarus, Transit to Europe Unaffected
Aliaksandr Kudrytski – Bloomberg
Countries unable to agree on 2020 oil-supply contract; Refineries in Belarus receive no crude; Druzhba still flowing
Russia halted crude oil supplies to its neighbor Belarus after the two countries were unable to agree on terms for a 2020 supply contract.
/jlne.ws/39KyJea

China Sovereign Fund’s Head of Hedge Funds Has Quit
Bloomberg News
Zhang resigned after 11 years to seek other opportunities; CIC has weathered string of executive exits in recent years
The head of hedge-fund investments at China Investment Corp. has resigned to seek other opportunities, according to people familiar with the matter, adding to a slew of senior departures at the $941 billion sovereign wealth fund.
/jlne.ws/2toR13O

Mr. Prime Minister, Your Country Is Burning; In Australia, the distraction of Scott Morrison’s ill-timed Hawaii vacation risks crowding out serious policy discussion about climate.
Daniel Moss and Tim Culpan – Bloomberg
Large tracts of the Australian continent are ablaze. Beyond the toll in lives and property, the most remarkable thing about this bushfire season is that people can see it, taste it and feel it.
/jlne.ws/2QkeL1U

Brexit

Boris Johnson’s Top Aide Seeks ‘Weirdos’ to Change British Government
Alex Morales – Bloomberg
Brexit requires adjusting U.K. decision-making, Cummings says; Says he wants to be made ‘largely redundant’ within a year
Boris Johnson’s top adviser wants to recruit “weirdos and misfits” as part of a drive to overhaul the way the U.K. government works.
/jlne.ws/2sx3NgJ

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