Trading Slump Deepens: It’s as If JPMorgan and Goldman Vanished

Nov 8, 2019

First Read

Hits & Takes
By JLN Staff

The LaSalle Trading Tech Awards event in support of the Pathway to Adventure Council of the Boy Scouts of America went well last night and raised over $114,000. Thank you to Tom Sexton, president and CEO of the National Futures Association, for chairing the event. Thank you to Myriam Hererra of the Pathway to Adventure Council for helping make the event a success. And thank you to Glenstar Properties for hosting the event and the team at Ceres for pouring the drinks. ~JJL

Thank you to all the sponsors of the event, including CME, Cboe, OCC, Eurex, the Clearing Corporation Charitable Foundation, the Hanley Family Foundation, Hehmeyer Trading + Investments, FGMK, Dave Sheppard at Merrill Lynch, NFA and Jenner & Block, Brian Kasal at Four Star and others for their generous support of Scouting.~JJL

And thank you to the firms that held merit badge clinics as part of the Trading Tech program, including CME Group, Four Star, Enova, Advantage Futures, US Bank, and WGN Channel 9. And honored as part of Building Tech were the Plumbers’ JAC Local 130 and the International Union of Operating Engineers Local 399.~JJL

Matt Leising of Bloomberg is taking a book writing leave until the beginning of February. The book is about the early history of Ethereum, the people who created it, the 2016 DAO hack, and how Wall Street and Main Street are experimenting with blockchain to change how their businesses work. Good luck to Matt, we will miss his reporting and updates from Bloomberg.~JJL

Episode 6 of the CryptoMarketsWiki Podcast is now up! In this episode Carson Cook, the founder and CEO of the digital asset prop trading firm Fractal Wealth, discusses what it’s like to run a technology firm that regularly interfaces with both cryptocurrency exchanges and institutional investors, as well as decentralized (DEX) exchanges. Click HERE to listen.~MR

Richard Sandor, the father of carbon trading and CEO of American Financial Exchange, speaking at the CFTC Energy and Environmental Markets Advisory Committee meeting yesterday, noted that “Open interest in North American carbon is greater than gold, silver and platinum combined.” Combined OI in California carbon allowance futures and the Regional Greenhouse Gas Initiative allowance futures listed on the Intercontinental Exchange, formerly the Climate Exchange, and Nodal Exchange was just under 1 million contracts. ~JK

As part of any petition drive there are always people who want to clown around and sign the petition with a fake name. We have had a couple of Joe Schmoe’s sign the petition, but the winner is the person who signed the “Justice for Jitesh Thakkar; CFTC Should Drop Civil Charges and Apologize petition as james mcdonald. Of course, James McDonald is the head of the Division of Enforcement at the CFTC and the person who could change his mind and drop this case. Regardless, we are just three signatures away from 1500. However, that includes some of these phony names posted.~JJL

The more I think about it, the best headline John Lothian News ever had, and our most popular story from 2016 to boot, was Sarah Rudolph’s profile of Billy Assimos, the general manager of Ceres, the bar and restaurant in the lobby of the CBOT Building. The story was titled “Billy Assimos, the Face of Ceres.~JJL


SGX Bull Charge raises bumper $3,448,888 as financial community celebrates with beneficiaries at Charity Run
SGX rallies Singapore’s financial community to raise funds for 16th year; Education Minister flags off 6,000 participants at Charity Run in Marina Bay
Singapore Exchange’s (SGX) flagship charity initiative Bull Charge celebrated a bumper fundraising year with $3,448,888 in proceeds, as the local financial community joined beneficiaries at its annual Charity Run and carnival today.

*****Nice work by SGX that does not involve moving a bull.~JJL


Michael Bloomberg Actively Prepares to Enter 2020 Presidential Race
Alexander Burns – The New York Times
Michael R. Bloomberg is actively preparing to enter the Democratic presidential primary and is expected to file paperwork this week designating himself as a candidate in at least one state with an early filing deadline, people briefed on Mr. Bloomberg’s plans said.
Mr. Bloomberg, the former New York City mayor and billionaire businessman, has been privately weighing a bid for the White House for weeks and has not yet made a final decision on whether to run, an adviser said. But in the first sign that he is seriously moving toward a campaign, Mr. Bloomberg has dispatched staffers to Alabama to gather signatures to qualify for the primary there. Though Alabama does not hold an early primary, it has a Friday deadline for candidates to formally enter the race.

**** There is room in the center for a candidate with Biden slumping and trailing in fundraising. Bloomberg does not have that problem.~JJL


New York’s ‘Charging Bull’ Statue Will Soon Move From Longtime Corral; The tourist attraction in lower Manhattan is expected to move closer to the New York Stock Exchange
Tyler Blint-Welsh and Ben Chapman – WSJ
The famed “Charging Bull” statue in lower Manhattan will soon be rounded up and moved from its longtime home, drawing criticism from its sculptor and the leadership of a local community group.

***** This is bull.~JJL


CryptoMarketsWiki Coin of the Week: Maker DAI (DAI)
The Maker Foundation’s cryptocurrency loan system hit its debt ceiling of $100 million worth of DAI, a stablecoin created against deposits of Ether. The Maker Foundation proposed a new debt ceiling of $120 million worth of DAI, which will be voted on by community members who hold MKR tokens (tokens that give users governance rights over the Maker ecosystem).


Thursday’s Top Three
If ever there was a day of reflection about our jobs, our time, our productivity and our success, I cannot think of one. Our top story of the day tells us something. Bloomberg’s Working Longer Hours Makes You Less Productive took the top spot. The second most read piece of the day was Europe’s traders call for shorter working day. It also complements this story about Microsoft in The Guardian Microsoft Japan tested a four-day work week and productivity jumped by 40%. It’s global! And third was the New York Post’s ‘Grit’ more important for success than brains and brawn, West Point study finds. Back to it folks.


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Lead Stories

Trading Slump Deepens: It’s as If JPMorgan and Goldman Vanished
Matthew Leising – Bloomberg
Almost $40 billion has disappeared from banks’ markets units; More competitors with new technology sense an opening
Almost 20 years ago, when Susan Estes was running Deutsche Bank AG’s fixed-income desk in New York, she’d field calls from clients looking to put on $4 billion spread trades in the U.S. Treasury market. Plenty has advanced from those days. Trades don’t require a phone call anymore and are executed faster than ever, and the Treasury market itself is four times as big as it was. But one key element has regressed: Banks’ willingness to take on risks of that size. To get the same rate as Estes would’ve charged on that $4 billion trade, clients today could only pull off $250 million, she said.

Tower Research to Pay $67 Million to Settle Spoofing Claims; High-speed trading firm also signs on to deferred prosecution agreement with DOJ
Dave Michaels – WSJ
High-speed trading firm Tower Research Capital LLC agreed to pay $67 million to settle regulatory allegations that its traders manipulated the price of stock-index futures, the biggest penalty ever imposed by the U.S. derivatives watchdog in such a case.

*****The deal included a change in senior management. Hmmm. That tell a story.~JJL

Tower Research Capital pays $67m to settle spoofing charges; High-frequency trading firm’s penalty is the largest in a spoofing case
Kadhim Shubber – FT
Tower Research Capital, the high-frequency trading firm, has agreed to pay $67m to settle criminal and civil fraud charges linked to alleged spoofing by three of its former commodities traders.

Blockchain Makes Inroads Into the Stock Market’s $1 Trillion Plumbing System; Paxos, a blockchain startup, hopes to construct a faster and cheaper way to process stock trades
Alexander Osipovich – WSJ
Technology from the bitcoin world is coming to the trillion-dollar plumbing that underpins the U.S. stock market. Last week, the Securities and Exchange Commission gave the green light to a pilot project in which blockchain—the technology behind cryptocurrencies—will be used to settle trades in stocks like General Electric Co. and AT&T Inc. T 0.43% Paxos, the blockchain startup leading the project, hopes to construct a faster and cheaper way to process stock trades, ultimately reducing costs for Wall Street banks and investors alike.

Ken Fisher Has a Side Bet on a Risky Corner of Wall Street
Rachel Evans and Sabrina Willmer – Bloomberg
His firm represents a quarter of the $22 billion ETN market; High-cost products lose favor amid regulatory scrutiny
Billionaire Ken Fisher made his name and fortune picking stocks. But over the years he’s also become a huge player in an arcane — and controversial — corner of Wall Street: exchange-traded notes.

Foreign Funds Balk at Crown Prince’s Aramco IPO Valuation
Netty Idayu Ismail and Selcuk Gokoluk – Bloomberg
Aramco is worth ‘way below $1.5 trillion’: AllianceBernstein; Union Investment says it seeks dividend yield of 6.5% or more
Saudi Arabia’s Crown Prince Mohammed Bin Salman may have lowered his valuation-target for Saudi Aramco as it prepares an initial public offering, but some of the world’s biggest investors say he’s not gone far enough.

JPMorgan Deal Shows Possible Path to Smaller Fannie and Freddie; Move by bank to shed mortgage risk stirs hope for reduced government role in $11 trillion market
Sam Goldfarb – WSJ
A recent move by JPMorgan Chase JPM 0.54% & Co. to shed risk on some of its mortgage loans is stirring hope that the tactic could help reduce the government’s role in the $11 trillion mortgage market.

Banks warn of trader crunch at CCP default auctions; Risk USA: dealers hope for more cross-CCP fire drills
Noah Zuss, Tom Osborn –
Clearing houses need to more effectively co-ordinate default auction management between their peers and their members to avoid a looming resource crunch in the event of multiple defaults, banks have warned.

Norway wealth fund resumes work on blacklisting worst greenhouse gas emitters
Gwladys Fouche – Reuters
Norway’s $1 trillion wealth fund, the world’s largest, will resume its work on blacklisting greenhouse gas emitters, a senior official told Reuters, which could lead the fund to divest investments in one or more oil, steel or cement multinationals.

Gold and Silver Get Crushed as End-of-the-World Trade Implodes
Luke Kawa – Bloomberg
Gold, silver on pace for biggest weekly declines since 2017; Meltdown comes as Treasury note yields rise to 3-month highs
As investors fretted for most of the year that the trade war and slowing growth would end in a global recession, assets like gold and sovereign bonds provided protection. That ended spectacularly Thursday.

Exchanges, OTC and Clearing

DekaBank successfully switches swap book to Eurex Clearing
DekaBank, the Wertpapierhaus (securities services provider) of the German Savings Banks Finance Group, has successfully transferred a substantial portion of its swap book from London Clearing House LCH to Frankfurt-based Eurex Clearing in a single day. The complex transaction involving thousands of line items and a dealer bank as transfer agent was carried out without any disruption or market impact.

DMA Flag Introduction with T7 Release 8.0
This circular outlines important information regarding changes to the Direct Market Access (DMA) flow identification at Eurex Deutschland (Eurex Exchange). With the T7 Release 8.0, scheduled for 18 November 2019 the field “OrderOrigination” (DMA Flag) will be introduced.

Decrease of Spot Month Position Limit, Single Month Accountability Level and All Month Accountability Level of the Zinc Futures Contract
CME Group
Effective at the close of trading November 27, 2019 for the December 2019 contract month and beyond, the Commodity Exchange, Inc. (“COMEX” or “Exchange”) will decrease the spot month position limit of the Zinc Futures contract from 75 to 25 futures contract equivalents.

Euronext publishes Q3 2019 results
Amsterdam, Brussels, Dublin, Lisbon, London, Oslo and Paris – 7 November 2019 – Euronext, the leading pan-European exchange in the Eurozone with 1,500 listed issuers, today announces its results for the third quarter of 2019.

TMX Group Equity Financing Statistics – October 2019
TMX Group today announced its financing activity on Toronto Stock Exchange (TSX) and TSX Venture Exchange (TSXV) for October 2019.

TMX Group Limited Reports Results for Third Quarter 2019
TMX Group Limited [TSX:X] (“TMX Group”) today announced results for the third quarter ended September 30, 2019.

TMX Group Limited Increases Dividend to $0.66 per Common Share
The Board of Directors of TMX Group Limited today declared a dividend of $0.66 on each common share outstanding, an increase of $0.04 or 6% from the previous $0.62 per common share. This dividend is payable on December 6, 2019 to shareholders of record at the close of business on November 22, 2019.

Turquoise block trading platform sees EUR11.8 billion record in October; In October this year, the Turquoise Plato Block Discovery platform saw eight record days of trading activity.
Hayley McDowell – The Trade
The London Stock Exchange Group’s (LSEG) Turquoise set a new record on its block trading platform in October this year, after seeing EUR11.82 billion traded throughout the month.

SGX reports market statistics for October 2019
Asian equity market activity marked by return of investor risk appetite; Increased risk management in EM Asia currencies, commodities
Singapore Exchange (SGX) today released its market statistics for October 2019. Asian equity market activity was marked broadly by a return of investor risk appetite during the month, amid signs of progress in U.S.-China trade negotiations and easing uncertainties over the path ahead for Brexit.

ECC: Mizuho Becomes New General Clearing Member And Trading Participant
The European Commodity Clearing (ECC) welcomes Mizuho Americas’ investment banking subsidiary Mizuho Securities USA LLC as a new General Clearing Member (GCM) and as Trading Participant on the European Energy Exchange (EEX). As a GCM, the bank is now authorised to provide clearing services for all customers of EEX Group’s clearing house as well as for all products and markets cleared by ECC.

Jayshree P. Upadhyay – Livemint
Mumbai: At the silver jubilee celebrations of the National Stock Exchange of India Ltd (NSE), Managing Director and CEO Vikram Limaye pitched for lower taxes on trading in Indian markets.


Nasdaq deploys AI for surveillance on US stock market; Nasdaq plans to extend the upgraded AI-powered surveillance system to clients and regulators globally.
Hayley McDowell – The Trade
Exchange group Nasdaq has bolstered its surveillance technology with the use of artificial intelligence (AI) to broaden its view of US market activity.

Deutsche Bank to roll out WeChat for FX trades on Symphony platform in Asia; Deutsche Bank is one of four international banks working with Symphony to integrate WeChat for corporate clients in China.
Hayley McDowell – The Trade
Deutsche Bank’s Chinese clients will soon be able to use WeChat on the Symphony platform to work foreign exchange trades.

As WeWork Grew, Wall Street Lent It Money and Credibility; Banks arranged giant fees and strict protections that reflected concerns about the business model
David Benoit, Maureen Farrell and Liz Hoffman – WSJ
Banks jockeying for a role in WeWork’s public debut wooed founder Adam Neumann with sky-high valuations that would make him a billionaire many times over. Their loans to the company told a different story.

Putting the ‘AI’ into financial advice; Would you reveal your money wishlist to a chatbot?
Damian Fantato – FT
Think of a financial adviser and the chances are you will think of a middle-aged man in a suit with a fondness for spreadsheets. But for a new generation of customers, a regulated adviser could take the form of a digital chatbot, powered by artificial intelligence with a penchant for emojis.

Fintech Provider Preqin Is Opening Shop In Chicago, Making 20 to 30 New Hires
Tatum Hunter – Built In Chicago
If you ask a financial advisor where to invest, they’ll likely suggest a stock, bond or certificate. These traditional investments are the most accessible, but they don’t necessarily generate the highest yield.

Inside The New Quant Gold Rush, Bond Traders Get Rich By Coding
Cecile Kutscher, Yakob Peterseil – Financial Advisor
Winning in the bond market used to come down to math skills, gut instinct and the patience to wade through a hefty prospectus. That was before the quants came. These days the ability to code is one of the hottest skills out there. The multi-trillion dollar market in company debt is getting wired up by systematic players, and firms are having to pay up for the best talent.


Chinese cryptomining giant Bitmain’s civil war breaks into open
Nian Liu and Ryan McMorrow – FT
A civil war broke out at the cryptocurrency giant Bitmain on Thursday after ousted co-founder Micree Ketuan Zhan threatened to take legal action to seize back control of the company. Mr Zhan said he was unwillingly removed from his position as chairman of the company, which claims to supply three-quarters of the world’s bitcoin minting machines, while he was away on a business trip. He wrote that he was stabbed in the back by “my most-trusted partner and a brother who fought beside me”, in an open letter posted to his WeChat social media account.

Chainalysis hires Chief Revenue Officer and two new VPs
Steven Zheng – The Block Crypto
Blockchain analysis platform Chainalysis has appointed three new executives to its business development team, the firm announced Thursday. Jason Bonds will join the firm as Chief Revenue Officer after spending over 11 years at identity security company Ping Identity. Chainalysis has also hired Chris Manouse as the firm’s Vice President of Public Sector and Debra Brown as Vice President of Americas. “Our three new business development executives each bring a wealth of sales and growth strategy experience to Chainalysis, which is critical as we continue to grow across sectors on a global level,” says Chainalysis CEO and co-founder Michael Gronager.

Tether responds to academic paper on bitcoin manipulation; calls it ‘flawed’ and ’embarrassing’
Steven Zheng – The Block Crypto
Tether has issued an official response to an updated paper republished early this week by two U.S. academics who claimed a single market whale on Bitfinex likely manipulated bitcoin’s surge in 2017. Tether states the authors of the updated paper released a “weakened yet equally flawed version of their prior article,” calling the paper “a watered-down and embarrassing walk-back of its predecessor.” “The purported conclusions reached by the authors are built on a house of cards that suffers from the absence of a complete dataset.

Another crypto derivatives exchange wins CFTC nod to offer physically-settled bitcoin swaps
Celia Wan – The Block Crypto
The U.S. Commodity Futures Trading Commission (CFTC) has just given the green light to another Swap Execution Facility (SEF) operated by cryptocurrency startup Tassat, following SeedCX’s and LedgerX’s SEF registrations. Previously known as trueDigital, Tassat rebranded itself in September as it pivoted into the derivatives trading and institutional payments markets. With the CFTC approval, the firm is now planning to list physically-settled bitcoin margin swaps. Tassat hasn’t disclosed the exact launch date, but it said it has been “actively onboarding institutional participants” and testing the product.

MoneyGram processes 10% of US-Mexico transactions via Ripple solution that uses XRP
Yogita Khatri – The Block Crypto
Money transfer giant MoneyGram processes 10% of its transactions between the U.S. and Mexican corridor via Ripple’s payments solution On-Demand Liquidity (ODL) that leverages XRP cryptocurrency. MoneyGram chairman and CEO Alex Holmes announced the news on Friday at Ripple’s Swell 2019 conference in Singapore. Holmes added that the company plans to expand the use of ODL solution to four more corridors by the end of this year. “We’re able to settle billions of dollars in seconds. The magic really comes from pairing MoneyGram transactions with Ripple’s ODL,” said Holmes.

The SEC Has Rejected Every Bitcoin ETF. This Firm Thinks It Has a Solution
Nikhilesh De – Coindesk
One company thinks it knows how to get a bitcoin exchange-traded fund (ETF) approved by U.S. regulators. Wilshire Phoenix, a relatively young financial firm in New York, filed to launch the United States Bitcoin & Treasury Investment Trust ETF in May with NYSE Arca. At that point, a dozen bitcoin ETF proposals had already been swatted down by the U.S. Securities and Exchange Commission (SEC) – including nine in one day. But unlike other ETF applications, Wilshire Phoenix’s ETF will invest in both bitcoin and U.S. Treasury securities, commonly referred to as T-bills. The SEC is currently reviewing the application.

Bitcoin Could Benefit From Crypto ‘Whale’ Extinction: Report
Rachel McIntosh – FinanceMagnates
In a recent interview conducted by crypto trading platform SFOX, Whale Alert co-founder Frank Weert said that the effect of so-called crypto “whales”, or individual entities who control large amounts of cryptocurrency, can still have a profound effect on the price of cryptocurrency at this particular moment in time, more than 10 years after Bitcoin was invented.

Coinbase Will Now Reward Users for Holding This Cryptocurrency
William Foxley – Coindesk
Coinbase is for the first time allowing general users to earn rewards by simply holding cryptocurrency, starting with the Tezos (XTZ) token. In a company blog Wednesday, Coinbase said U.S. customers (barring residents of Hawaii and New York) can now stake the smart-contract platform’s crypto with an estimated 5 percent annual return. Tezos uses an alternative consensus mechanism to proof-of-work mining – the system built into the largest cryptocurrency by market cap, bitcoin. Called proof-of-stake, the alternative mechanism rewards network users for holding onto its coins and thereby helping protect the network.

Tether Says Its Stablecoin Is ‘Fully Backed’ Again
Nikhilesh De – Coindesk
USDT tokens are now fully backed by Tether’s reserves, the stablecoin issuer said Thursday. Tether published a response to what it described as “a flawed paper” written by John Griffin, a professor of finance at the University of Texas at Austin, and Amin Shams, an instructor the Ohio State University which claimed a single address on the Bitfinex exchange was responsible for manipulating the bitcoin market in late 2017, sparking the bull market. The paper was an update to a version first published in the summer of 2018. Tether pushed back on this claim, saying in Thursday’s statement that “the revised paper is a watered-down and embarrassing walk-back” of the first version.

Tassat Is One Step Closer to Offering Crypto Derivatives With CFTC Approval
Nikhilesh De – Coindesk
Tassat Derivatives has successfully acquired a swap execution facility (SEF) registration after securing regulator sign-off. The U.S. Commodity Futures Trading Commission (CFTC) announced Thursday that it had approved the transfer of a SEF registration from trueEX LLC to Tassat on Nov. 6, nearly four months after the two companies reached an “agreement in principle.” TrueEx was first granted the registration in January 2016. Tassat, formerly known as trueDigital Holdings, said in July that it was looking to launch a “fully-regulated” cryptocurrency derivatives exchange in the U.S., on which it would offer customers physically-delivered bitcoin swaps and other products.


Michael Bloomberg Preparing to Enter 2020 Democratic Race; Former New York City mayor’s decision comes as some in the party—especially wealthy donors—grumble about the leftward lurch of the party
Ken Thomas and Tarini Parti – WSJ
Billionaire Michael Bloomberg is taking steps to enter the 2020 race for the Democratic presidential nomination, one of his advisers said, months after the former New York City mayor said he wouldn’t run

Michael Bloomberg takes steps towards Democratic presidential run; Billionaire looks to file paperwork to be included on the Alabama primary ballot
Andrew Edgecliffe-Johnson and Demetri Sevastopulo – FT
Michael Bloomberg, the billionaire former mayor of New York City, is laying the groundwork to enter the Democratic presidential race months before voters in Iowa and New Hampshire kick off the fight to choose the 2020 nominee.

Wells Fargo names ex-Obama chief of staff as public affairs boss; Bill Daley joins as bank struggles to recover from mis-selling scandal
Laura Noonan – FT
Wells Fargo has appointed former Obama chief of staff Bill Daley to leads its dealings with politicians and the public, as the embattled bank battles to recover from a mis- selling scandal.

Warren’s Wealth Tax Could Drive Billionaires to Funds She Hates
Brandon Kochkodin – Bloomberg
Funding Medicare for All would include 6% levy on very wealthy; Plan may push money to private equity firms that she attacked
Senator Elizabeth Warren’s proposed wealth tax could be a gift to an industry she has accused of looting Americans — private equity.

Democrats Worried Over Wealth Tax Design Other Plans to Tax the Rich
Laura Davison – Bloomberg
Surtaxes, capital gains changes among ideas being considered; Democrats look for palatable policy ideas if they win in 2020
Moderate Democrats in Congress are crafting viable alternatives to Elizabeth Warren’s wealth tax, amid increasing concerns that her soak-the-rich strategy won’t pass even if the party captures both chambers of Congress in 2020.

Wall Street Fears Elizabeth Warren For The Wrong Reasons
Nir Kaissar – Financial Advisor
Wall Street should fear Senator Elizabeth Warren, but not for the reason it thinks. Some of Wall Street’s biggest stars have howled recently about how Warren would wreck the U.S. economy and the stock market if she were elected president or merely continued to make strides in that direction. Billionaire Paul Tudor Jones predicted last week at the Robin Hood Investors Conference in New York that the S&P 500 Index would decline 25% and that U.S. economic growth would be cut in half if Warren were to win. Leon Cooperman, Rob Citrone and Jeffrey Vinik have also said that the market would react negatively.

Win dinner with me, Trump teases – but is it just another scam?
David Smith in Washington
A series of contests for donors to Donald Trump’s election campaign to win a prize of sharing breakfast, lunch or dinner with the US president have been condemned as a “fraud”.

International committee calls for pause on false political ads online
Alistair Smout, Elizabeth Culliford – Reuters
An international “grand committee” of lawmakers called on Thursday for a pause on online micro-targeted political ads with false or misleading information until the area is regulated.

Not So Fast, Mr. Trump! Relocating to a Low-Tax State Is Hard to Do; States can subject taxpayers who say they’ve moved away to intrusive audits that drag on and on
Laura Saunders – WSJ
Last week, President Donald Trump confirmed on Twitter that he’s switching his permanent residence from New York to Florida. Mr. Trump was born in New York City and lived there most of his life, and he has had a home in Palm Beach for more than three decades.


CFTC Orders Proprietary Trading Firm to Pay Record $67.4 Million for Engaging in a Manipulative and Deceptive Scheme and Spoofing; Result Is the Largest Total Monetary Relief Ever Ordered in a Spoofing Case
The U.S. Commodity Futures Trading Commission today issued an order filing and settling charges against Tower Research Capital LLC, a proprietary trading firm, arising from a manipulative and deceptive scheme, spanning nearly two years and involving thousands of occasions of spoofing in equity index futures products traded on the Chicago Mercantile Exchange (CME) and Chicago Board of Trade (CBOT). The order finds that Tower, by and through three former Tower traders, engaged in this unlawful activity while placing orders for, and trading futures contracts through, Tower accounts, which benefited Tower financially while causing $32,593,849 million in market losses.

HFT Tower Research Capital in $67 million settlement for spoofing futures; Tower Research Capital will pay the largest settlement to date for a spoofing scheme which resulted in $33 million in market losses.
Hayley McDowell – The Trade
High-frequency trading firm Tower Research Capital will pay $67.4 million to settle allegations of spoofing by three former traders, the largest settlement to date associated with the illegal activity.

CFTC Approves Transfer of trueEX LLC Swap Execution Registration to Tassat Derivatives LLC
The U.S. Commodity Futures Trading Commission issued an order on November 6, 2019, approving the transfer of the trueEX LLC swap execution facility (SEF) registration to Tassat Derivatives LLC. Tassat is a Delaware limited liability company located in New York City. trueEX was granted registration as a SEF by the CFTC on January 22, 2016.

CFTC Orders Mitsubishi Corporation RtM Japan Ltd. to Pay $500,000 for Spoofing
The U.S. Commodity Futures Trading Commission today issued an order filing and settling charges against Mitsubishi Corporation RtM Japan Ltd. (RtM Japan) for engaging in multiple acts of spoofing contracts on the New York Mercantile Exchange for platinum and palladium futures. The order finds that RtM Japan engaged in this activity through an inexperienced trader who used a trading platform located in RtM Japan’s Tokyo office. The order requires RtM Japan to cease and desist and imposes a civil monetary penalty of $500,000.

Opening Statement of Chairman Heath Tarbert Before the Energy and Environmental Markets Advisory Committee
Good morning. I am very pleased to be attending my first EEMAC meeting as CFTC Chairman. America’s energy markets are part of the bedrock of our economy. The United States is the world’s largest producer of both natural gas and oil.[1] It’s the second-largest generator of electricity overall.[2]

22 years of pension savings gone in 24 hours
Victims of pensions scams could lose 22 years’ worth of savings within 24 hours, according to the Financial Conduct Authority (FCA) and The Pensions Regulator (TPR).

Statement on MiFID II inducements and research
The FCA welcomes the US Securities and Exchange Commission’s (US SEC) extension of no-action relief relating to the Markets in Financial Instruments Directive II (MiFID II) inducements and research provisions.

Investing and Trading

Tips if you’re seeking financial advice; Our list of he top 100 advisers — and how they are ranked
Damian Fantato – FT
How can I find a good financial adviser? It’s a question that friends, family and FT readers frequently ask — so I hope the second annual ranking of the UK’s Top 100 Financial Advisers goes some way to providing the answer.

Investing in IPOs is an easy way to lose money; The struggles of Uber provide a stark lesson of the dangers of buying new issues
Merryn Somerset Webb – FT
The idea that the majority of the companies you know by name will disappear within a couple of decades is now standard stuff.

Central bankers are not climatologists; Challenges to a green energy transition do not come from shortcomings in policy
John Dizard – FT
The debate over the role of central banks and regulators is heating up as fast as a California forest. On one side is an array of climate activists in the institutions, in particular the Banque de France, Bank of England governor Mark Carney, IMF managing director Kristalina Georgieva and many green consultancies and academics. Up to now they have had the more assertive public presence and have dominated the green finance narrative.

How to find a financial adviser you can trust; Those who do not ask questions of new customers should be avoided
Lindsay Cook – FT
It seems British consumers have more confidence in train companies than regulated financial advisers.

Is it time for a shift in fiscal rules?
Toby Nangle, global head of asset allocation at Columbia Threadneedle Investments – FT
The question of when the next UK budget will take place, and who will be in government to announce it, remains very much open. But one thing that looks likely is a change to the UK’s fiscal rules.

AQR’s Asness says it is time to ‘sin a little’ in value stocks; Hedge fund founder argues that investors should dip into the bargain bucket=
Robin Wigglesworth – FT
Some corners of the stock market have become so unloved that AQR Capital Management is “sinning a little” and increasing its exposure to them, according to the hedge fund group’s founder, Clifford Asness.

New York Art Auction Sales Poised to Tumble as High-End Works Dry Up
Katya Kazakina and Allison McCartney – Bloomberg
The bellwether November art auctions next week in New York are poised for the biggest contraction in a decade.

Fears Are Mounting Over Darling Junk-Bond ETFs
Marianna Duarte De Aragao – Bloomberg
BlackRock’s IHYG fund posts outflows in 13 of past 14 weeks; Time to reduce holdings is ‘becoming quite limited’: SocGen
Investors showered love on Europe’s junk-bond exchange-traded funds during the first half of the year, enjoying stellar returns. The devotion is fading.

10-year, 30-year Treasury yield hits three-month high as trade optimism powers bond selloff
Sunny Oh – MarketWatch
U.S. Treasury yields jumped on Thursday after a resurgence of optimism about a U.S – China trade deal weighed on demand for safe haven assets such as government paper in a volatile week that has seen bond prices fluctuate in line with the ever-changing state of the trade talks.


Goldman Sachs teams up with Nutmeg to offer Isas in UK; Stocks and shares Isa product to be launched under Marcus brand
Leke Oso Alabi – FT
Marcus, the retail banking arm of investment bank Goldman Sachs, is set to enter the UK’s retail investment market by launching a stocks and shares Isa with Nutmeg, the UK online wealth manager.

Standard Chartered to cut pay packages of top 2 executives; Lender’s chief executive and chief financial officer agree to lower pension allowance
David Crow – FT
Standard Chartered has cut the pay packages of its top two executives by £384,000 in an attempt to quell investor unrest over the size of their pension allowances.

Citi, Deutsche get go-ahead to probe regulator witnesses in landmark cartel case
Byron Kaye – Reuters
Citigroup Inc (C.N) and Deutsche Bank AG (DBKGn.DE) may cross-examine four antitrust investigators involved in a criminal cartel prosecution against them, an Australian court ruled on Friday, a win for the defence in a closely watched legal battle.


Blackouts, Fires, High Gas Prices: Who Wants to Live in California Today? One crisis rolls into another in parts of Golden State; ‘If I wasn’t as old as I am, I would pack up and get the hell out’
Ian Lovett – WSJ
On the fourth morning without power, Carolyn Summers lay as still as possible in bed, trying to delay the moment when she ran out of oxygen.

China’s small lenders suffer bank runs as economy slows; Authorities respond to solvency rumours with arrests and denials
Sun Yu – FT
A spate of bank runs has highlighted the growing challenges facing China’s financial sector, with local lenders particularly vulnerable due to the slowing economy and a crackdown on shadow banking.

Saudi Aramco bankers dangle prospect of bonus payouts; IPO investors wooed with annual dividend that could exceed $100bn
Simeon Kerr and Anjli Raval – FT
Bankers for Saudi Aramco’s initial public offering have dangled the possibility of bonus payouts that could take the company’s annual dividend past $100bn in an effort to woo investors for a flotation tipped to be the biggest ever.

Julius Baer Hires Goldman’s Singapore Unit CEO for Asia Role
Chanyaporn Chanjaroen – Bloomberg
Julius Baer Group Ltd. hired Goldman Sachs Group Inc.’s Singapore unit chief Jason Moo as private banking head for Southeast Asia, a growing market for the Swiss firm.

China’s Pigs to Take Half a Decade to Recover From Killer Virus
Agnieszka de Sousa – Bloomberg
Imports won’t be enough to make up the shortfall: Rabobank; Even then, China’s pork sales to lose market share to poultry
China’s pig herd will take more than half a decade to recover from a deadly virus, and even then the nation’s meat consumption won’t be the same as before, according to Rabobank International.

Paschi Judges Set to Rule on Deutsche Bank, Nomura Sentences
Sonia Sirletti – Bloomberg
Banks, former executives prosecuted for market manipulation; Prosecutor alleges mirror trades helped Paschi cover losses
It’s finally happening. After three years and countless hours of testimony, judges in Milan will say on Friday whether executives at Monte Paschi di Siena SpA, Deutsche Bank AG and Nomura Holdings Inc. broke the law to help the Italian bank hide hundreds of millions of euros of losses from the market.

Nigeria’s Thirst for More Oil Revenue Could Hurt Investments
Elisha Bala-Gbogbo – Bloomberg
Country risks seeing as much as $15 billion going elsewhere; Energy companies concerned about impact on existing contracts
Nigeria’s newly signed law to govern deep offshore oil operations set a record for the fastest bill so far passed under President Muhammadu Buhari.

Big China Defaulter Hunts for Cash With $2 Billion Due Next Year
Bloomberg News
CMIG is on a mission to free up cash after defaults this year; Company has $4 billion outstanding in local and offshore bonds
China Minsheng Investment Group Corp. once sought to be the nation’s version of JPMorgan Chase & Co. Instead it’s the country’s biggest dollar bond defaulter this year. With $2 billion of debt maturing in 2020, the company is scrambling to raise cash. It’s slashed executive pay as much as 83% and is selling assets.


Boris Johnson accidentally made an incredibly compelling argument against his own Brexit deal
Thomas Colson – Business Insider
UK Prime Minister Boris Johnson just accidentally made the perfect argument for remaining in the European Union. Speaking in Northern Ireland, Johnson said his proposed Brexit deal would allow the province to keep free movement and access to the European single market and described this as a “great deal.” These benefits, however, will be lost by the rest of the United Kingdom. This prompts the obvious question as to why his deal denies this to the rest of the UK.

Smaller U.K. Parties Look to Disrupt Brexit With Election Pacts
Max Colchester – WSJ
As Brexit continues to reshape British politics, the country’s smaller political parties are breaking with precedent and pushing for pre-election nonaggression pacts in an effort to maximize their impact on next month’s general election. With Britain’s two-party system crumbling as voters abandon traditional party allegiances to vote along Brexit lines, a clutch of parties are in contention to receive millions of votes.

Boris Johnson Wants the Hardest of EU Trade Deals
Therese Raphael – Bloomberg Opinion
British voters are being hit over the head with the key message of Boris Johnson’s campaign for the Dec. 12 election: In speeches and on posters and on campaign flyers is the promise that his government would “get Brexit done” quickly and move on to other things. The Conservative Party is in a hurry. Johnson’s team is promising that Brexit will happen so fast that he won’t need the full time available to negotiate a trade deal with the European Union. Britain could if it wanted push this process out to 2022, but Trade Secretary Liz Truss tweeted this week that “we will not be extending the Brexit transition period beyond 2020.

United Kingdom might not exist in a decade, half of UK citizens think: poll
The United Kingdom might not exist in its current form in a decade’s time, half of its citizens believe, an Ipsos MORI poll found.


KPMG looks to close private members’ club; New tenant sought after UK chairman urges scrapping of lavish Number Twenty venue
Judith Evans and Tabby Kinder – FT
KPMG has instructed property agents JLL to seek a new tenant for its private members’ club in Mayfair after the accounting firm’s UK chairman personally pushed to offload the property.

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Past JLN Newsletters

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