John Lothian

John Lothian

Executive Chairman and CEO


The John Lothian Daily Update is a podcast turning the daily JLN hits and takes comments, our original content and the stories and quips in the top box of First Read into a daily podcast.


Hits & Takes

JLN Staff

The Financial Markets Group at the Chicago Federal Reserve has published their second episode of the LaSalle Street podcast series. This episode focuses on what the pandemic is teaching us about CCP risk management. Roland Chai, Chief Risk Officer of Nasdaq, and John J. Fennell, Chief Risk Officer of the Options Clearing Corp, join Ketan Patel, Policy Advisor and Head of Financial Markets Risk Analysis in the Chicago Fed’s Financial Markets Group. They discuss market issues ranging from operational risks at central clearing counterparties during the pandemic, to climate change, work from home arrangements and the biggest risks ahead in 2020.

Brian Mehta, the CMO of Trading Technologies, has an interview on the TT blog titled “5 Questions with Jon Regan, CEO of PhillipCapital UK.”

Don’t miss the webinar from the FIA titled “The impending EU CCP recovery and resolution regime and its impact on EU and non-EU firms” tomorrow from 10:00 AM to 11:00 AM ET.

The OCC has a white paper out on ”“OCC Issues Paper on Central Clearinghouse Resiliency and Stability.”

Jill Sommers and Paul Atkins of Patomak Global Partners have a commentary out titled “Central counterparty clearing; a new white paper serves as a useful foundation for the ongoing regulatory dialogue.” It is a comment on the OCC’s white paper.

Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL


A closely followed lawsuit filed in U.S. District Court on behalf of more than 70 plaintiffs who were shut out of Illinois’s lottery to win new social equity cannabis dispensary licenses was abruptly pulled on Tuesday morning. The action followed the announcement late Monday of a “do-over” of the controversial application process by Gov. JB Pritzker and the Illinois Department of Financial and Professional Regulation. According to a press release from the state, the IDFPR will now ensure that those who did not get a maximum score of 252 points on their license applications receive a supplemental deficiency notice and score sheet identifying where they lost points. They will then be given the opportunity to amend the application or ask for the original to be rescored if they think there was an error. (Many applicants who did not make the final round of the process complained bitterly about scoring inconsistencies by KPMG, the accounting firm hired to do the scoring.) Jon Loevy, attorney for the plaintiffs in the lawsuit, Southshore Restore and Heartland Greens v. Illinois Department of Financial and Professional Regulation; Brett Bender, deputy director, said in a statement that “the governor heard people’s complaints about the concerns about the scoring process, and he listened to those complaints, and he made appropriate fixes.” The dropped lawsuit was the largest one filed after the state released the names of 21 finalists with perfect application scores for the 75 licenses on September 3, but a handful of additional complaints are still pending. The state did not provide a new date for the Illinois lottery to pick the license winners. ~SC


First Read

USA v Vorley and Chanu: DOJ Looking For Conviction Against Spoofers
Thom Thompson – JLN

On Tuesday, the defense finished cross examining the FBI special agent, the prosecution rested its case, defense declined to offer witnesses, prosecution made its closing arguments, defense made its closing arguments, Judge Tharp instructed the jury and the jury began deliberating the fates of James Vorley and Cedric Chanu.

The two were co-workers on the precious metals trading desk of Deutsche Bank in London where they were alleged to have spoofed the COMEX silver and gold futures markets from 2008 to 2013. A third, junior trader, David Liew, pleaded guilty two years ago. Vorley and Chanu did not offer any testimony during the trial.

The bank settled related charges with the CFTC in 2018, accepting a $30 million penalty.

Missing evidence

During closing arguments Tuesday, Vorley’s attorney Roger Burlingame asked repeatedly where all the evidence was against his client. (Burlingame is a familiar presence in the Dirksen courthouse, having recently defended London spoofer Navinder Sarao, getting him a sweetheart time-served/house arrest sentence last year.) As an example of missing evidence, prosecution witnesses established that there were video and voice recordings of interviews of their star witness, David Liew, that were not offered in evidence.

To read the rest of this commentary, go here.


The chiefs of Cboe and CME have a warning for City Hall; “We are no longer four walls with a trading floor,” said CME Group CEO Terry Duffy, cautioning that if the city taxes financial transactions, the exchanges could pick up and leave.
A.D. Quig, Lynne Marek – Crain’s Chicago Business
City officials seeking revenue to help fill a gaping 2021 budget hole got a strong warning from the heads of two big U.S. financial exchanges based in Chicago: Don’t touch LaSalle Street. CME Group CEO and Chairman Terry Duffy and Cboe Chairman and CEO Ed Tilly testified at a virtual Chicago City Council hearing today, telling aldermen if they pursue a tax on the exchanges’ financial transactions, both companies could pick up and leave the city.

*****We missed this story from the 21st, but it reiterates what I wrote previously. The exchanges are looking at moving and have many reasons to do so, not just the threat of new taxes. The progressive income tax proposal Illinois is going to vote on will also impact the executives of the exchanges and their incomes. A nice no-income tax state like Florida looks pretty inviting.~JJL


Libor’s End Nears
Silla Brush – Bloomberg
ISDA awaiting final approval before launching Libor protocols; The discredited benchmark is due to expire at the end of 2021
Banks and money managers will able to take a major step away from Libor in early 2021 in a move that could affect hundreds of trillions of dollars in derivatives contracts. The International Swaps and Derivatives Association, or ISDA, the global trade group for the industry, said plans to transition from the benchmark are awaiting sign-off from the U.S. Justice Department and global competition authorities, and could become effective in the second half of January.

*****The funeral for Libor will be in Zoom. Don’t miss it.~JJL


BornTec Streamlines Trade Data Analytics with Release of CrossCheck 2; The update advances the performance and functionality of the company’s unique trade data integration platform
BornTec, a software solutions provider for trade data analysis and reporting, today announced the release of CrossCheck 2 (CC2), a wholly reimagined version of its ground-breaking platform CrossCheck™. The new platform is available to the public today. “CC2 empowers our customers to harness the power of the data at their fingertips.”

*****I like the “reimagined” aspect of this product. People with imaginations can do amazing things.~JJL


Notre Dame Cancels Wake Forest Game Due to New Covid Cases
Brandon Kochkodin – Bloomberg
Seven student-athletes were positive after testing Monday; A total of 13 are in isolation, with 10 in quarantine
The University of Notre Dame canceled Saturday’s football game against Wake Forest University after seven student-athletes tested positive for Covid-19. In total, 13 players are in isolation because of the virus, the school said in a statement issued Tuesday.

*****I am happy to see schools have the integrity to postpone the games and not sweep covid cases under the rug.~JJL


A new startup is recruiting gig workers to help landlords evict people from their homes, calling it the fastest-growing moneymaking gig because of COVID-19
Aaron Holmes – Business Insider
Millions of Americans have fallen behind on rent amid economic turmoil caused by the COVID-19 pandemic, and many could face evictions. One startup is treating the dire situation as a moneymaking opportunity for gig workers. The company, Civvl, is recruiting freelancers to sign up as eviction crews for landlords, calling it the “FASTEST GROWING MONEY MAKING GIG DUE TO COVID-19.”

*****Not the kind of gig job I would want to sign up for.~JJL


Tuesday’s Top Three
Our top story Tuesday was Yahoo News’ Sen. Kelly Loeffler Roasted For Ad Saying She’s ‘More Conservative Than Attila The Hun’. Second was the New York Post’s Hedge fund Bridgewater set up tent offices in the woods to beat COVID-19. Third was Bloomberg’s Wall Street Commodity Traders Head for Best Year in a Decade.

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Now Read This

Mike Cavanaugh – Open Outcry Traders History Project

Mike Cavanaugh – Open Outcry Traders History Project

Mike Cavanaugh found his way to the trading industry despite his degree in political science because he had a brother-in-law in the wheat pit at the CBOT. He did a summer internship working for “one of the more prolific wheat traders” and soon fell in love with the place. 

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