Hits & Takes
John Lothian & JLN Staff
FIA’s IDX kicked off this morning with comments from FIA President & CEO Walt Lukken. He hit all the right notes about the industry’s and the world’s challenges, including the unjust war in Ukraine and the risk to our market from a populace dramatized by higher prices. The FIA team always does a great job of crafting this message just right and Walt does a great job of delivering it with his earnest Indiana smile.
The opening reception for IDX was held in Goldsmiths’ Hall, in one of the most beautiful rooms in London. It was well attended and it was great to see people out and about.
So far my trip is going well, though I will say that I am experiencing some manopause symptoms – hot flashes – from the hormone therapy from the prostate cancer treatment. Other than being a sweaty mess at times, I am doing well.
Today the SEC is celebrating the 88th anniversary of the signing of the Securities Exchange Act of 1934, with which Congress created the SEC. Gary Gensler is all over Twitter telling people about it and why it matters.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
The Futures Industry Association (FIA) today announced it has appointed its first ever female chair of the board, Alicia Crighton, global co-head of futures and head of OTC and prime clearing businesses at Goldman Sachs. Crighton has served on the FIA board of directors since 2018. FIA also announced new board members. ~SR
Tradier’s Kevin “Lex” Luthringshausen Talks Demand for Crypto, Portfolio Margining and What Today’s Traders are Looking For in JLN OIC 2022 Interview
Kevin “Lex” Luthringshausen is the senior vice president for business development at Tradier, an options-centric brokerage firm. Earlier in his career he was a floor trader, which is where he acquired the nickname “Lex,” which was the three letter acronym he chose to use for his trading badge on the floor of the Cboe.
JLN talked to the veteran trader, broker and options specialist at the 2022 Options Conference in San Antonio, Texas as part of the JLN OIC Industry Leader video series.
Boris Johnson survives but is weakened by no-confidence vote
Karla Adam and William Booth – The Washington Post
British Prime Minister Boris Johnson survived a cliffhanger vote of no confidence by his fellow Conservative Party lawmakers Monday evening, prevailing despite deep disgust over lockdown-breaking parties at Downing Street and broad discontent with his leadership, which one former ally branded a “charade.” Johnson won the party-only secret balloting by 211 to 148 — surpassing the simple majority of 180 votes he needed to remain in office. Though he held on to his job, the vote was remarkably close for a prime minister who helped the Conservatives win a landslide election in 2019.
****** Never underestimate Boris Johnson, unless you are…..~JJL
Thefts, Fraud and Lawsuits at the World’s Biggest NFT Marketplace; OpenSea, one of the highest-profile crypto start-ups, is facing a backlash over stolen and plagiarized nonfungible tokens.
David Yaffe-Bellany – NY Times
Chris Chapman used to own one of the most valuable commodities in the crypto world: a unique digital image of a spiky-haired ape dressed in a spacesuit. Mr. Chapman bought the nonfungible token last year, as a widely hyped series of digital collectibles called the Bored Ape Yacht Club became a phenomenon. In December, he listed his Bored Ape for sale on OpenSea, the largest NFT marketplace, setting the price at about $1 million. Two months later, as he got ready to take his daughters to the zoo, OpenSea sent him a notification: The ape had been sold for roughly $300,000.
***** If someone copied a theft like this, would they have aped it?~JJL
All phones must have the same charging plug, EU demands in major change
Andrew Griffin – The Independent
All phones and tablets must use the same charging ports, the EU has agreed. A new agreement will force all companies to make USB-C the common charging port on all their smaller electronic devices by Autumn 2024, the EU has announced. Laptops will be required to use the port some time after that.
*****USB-C here we come.~JJL
US trading firm Jane Street sues LME for nickel trade chaos; Lawsuit comes a day after similar action by Elliott against metals exchange over March trade halt
William Langley – FT
Jane Street, a top Wall Street market maker, has followed US hedge fund Elliott Management and launched a lawsuit against the London Metal Exchange over the nickel short squeeze fiasco. Jane Street filed the judicial review claim against LME and its clearing house on June 6, seeking $15.3mn after nickel trading was suspended and trades were cancelled on March 8, when prices surged as much as 250 per cent, the metal exchange’s owner Hong Kong Exchanges and Clearing said on Tuesday.
****** Joining the club and getting in line.~JJL
From new headsets to a VR bar — fantasy meets reality; Specialist venues offer fully immersive experiences, but for home play the technology still has growing pains ahead
Tom Faber – FT
From out on the street, Otherworld looks like the headquarters of a futuristic cult. Nestled under a railway arch in Haggerston, east London, its unmarked entrance gives on to a neon-lit corridor flanked by circular white pods that resemble vertical sensory deprivation tanks. In fact, their function is the polar opposite — at this virtual reality bar, these sci-fi cabins are a gateway to total sensory overload, a high-spec showcase for the potential of VR gaming.
****** I am wondering when I will be able to show up at Ceres in my VR headset while at home. ~JJL
Monday’s Top Three
Our top clicked items on Monday were the two pictures of opening day on the new Cboe options trading floor taken by our CIO, Jeff Bergstrom, for JLN. No. 1 was the crowded trading floor and No. 2 was the picture of Ed Tilly et al. standing near the opening bell for the exchange. Third was Chicago’s $20 Million Club packs ’em in as pay soars for local CEOs. (The first CEO pictured in the article is CME Group’s Terry Duffy.)
26,846 pages; 238,691 edits
Trading Technologies and Talos enter into strategic partnership, vastly expanding TT crypto offering
Initiative reflects TT growth into new asset classes
Trading Technologies International, Inc. (TT), a global provider of high-performance professional trading software, infrastructure and data solutions, and Talos, the premier provider of institutional digital asset trading technology, announced today that the firms have partnered to substantially and rapidly broaden TT’s cryptocurrency offering on a global basis by leveraging the Talos infrastructure and market connectivity from directly within the TT® platform. The agreement represents the first major strategic partnership propelling TT’s expansion into multiple asset classes, including cryptocurrencies, and provides a significant opportunity for TT’s global customer base to access Talos’ extensive, market-leading cryptocurrency trading solutions.
SEC Chairman Gary Gensler’s plans have drawn opposition from some Wall Street firms.
Paul Kiernan and Alexander Osipovich – WSJ
The Securities and Exchange Commission is preparing to propose major changes to the stock market’s plumbing as soon as this fall. Chairman Gary Gensler directed SEC staff last year to explore ways to make the stock market more efficient for small investors and public companies. While aspects of the effort are in varying stages of development, one idea that has gained traction is to require brokerages to send most individual investors’ orders to be routed into auctions where trading firms compete to execute them, people familiar with the matter said.
Oil Shock Devastates Poorer Nations as Shortages, Protests Mount
Elizabeth Low – Bloomberg
Developing nations are suffering the biggest hit from this year’s oil shock. Many are dependent on imported fuel and are being crushed by a combination of high international prices, weak currencies and competition from rich nations whose economies are rebounding from the pandemic. Higher fuel bills are exacerbating inflation in countries that are already struggling with soaring food prices. The combination is leading to unrest and protests from citizens, which democratic governments know from experience is one of the surest ways to lose popularity and power.
SEC chair Gary Gensler to set out overhaul of US equity market; Proposals include new auctions to decide which trading groups handle retail investors’ orders
Nicholas Megaw – FT
The Securities and Exchange Commission is exploring an overhaul of US stock market rules to strengthen competition and ensure individual investors are fairly treated after the explosion in retail trading during the coronavirus pandemic. The regulator has been reviewing equity market structure since last year, when chair Gary Gensler said the meme-stock frenzy — when traders organised online to drive up the shares of a handful of companies — highlighted “inefficiencies” in the market.
SEC Weighs Sending Retail Stock Orders to Auctions for Execution
Lydia Beyoud and Katherine Doherty – Bloomberg
The US Securities and Exchange Commission is weighing changes to stock-market rules that could force trading firms to directly compete to execute trades from retail investors, according to people familiar with the matter. A move by the SEC to press major wholesale brokerages to win auctions for orders by mom-and-pop investors would be a major change for the stock market. While nothing has been announced, the change is among those being considered by staff at Wall Street’s main regulator, said the people who asked not to be named discussing the plans which remain private.
FIA announces new board members, first female chair
London — FIA today announced the election of new directors to its Board of Directors, including the appointment of Alicia Crighton of Goldman Sachs & Co as its first-ever female Chair.
“Alicia’s appointment as the first female chair in FIA’s history is a well-deserved honor, and we hope it provides an example to the next generation of leaders in our industry,” said FIA President and CEO Walt Lukken. “We congratulate Alicia, and we thank her for taking on this leadership position at a very important time for cleared derivatives markets around the globe.”
Capturing opportunities in commodities, sustainability and digital assets
Opening remarks of Walt Lukken, President and CEO of FIA, at the International Derivatives Expo conference in London. As prepared for delivery.
Welcome to IDX! I’m SO excited to be back in London.
Time flies when you are having fun—or hibernating during Covid. Incredibly, this year marks my 10th anniversary at FIA, which means I only have 60 years to go to catch up with the Queen. In all sincerity, it was wonderful to arrive in London during the Queen’s Jubilee and mark her amazing 70 years on the throne.
Pension Funds Push for More Disclosure Rules for Private-Equity, Hedge Funds; SEC urged to proceed with a proposed rule that would ensure private-fund investors receive annual audits and quarterly statements, among other requirements
Heather Gillers and Paul Kiernan – WSJ
Pension plans and other institutional investors are embracing a federal proposal that would force hedge funds and private-equity funds to provide more disclosures to investors. University endowments, insurance funds and retirement funds serving teachers and firefighters are urging the Securities and Exchange Commission to move forward with a proposed rule that would ensure private-fund investors receive annual audits and quarterly statements. The rule, which has been heavily criticized by the private funds and Republicans, would also prohibit fund managers from passing along certain legal costs and limit the funds’ ability to insulate themselves from lawsuits.
Hedge Fund Run by Ex-Gold Trader Soars on Chinese Nickel Bet; Beijing Hede made gains with wager tied to Russian invasion; Short squeeze plunged nickel industry into chaos after surge
As the world was still guessing whether Vladimir Putin would invade Ukraine, a little-known hedge fund in Beijing was already betting that it would happen. Henry Li’s Beijing Hede Fund Management Ltd. analyzed Russian exports in the days leading up to the war and decided to buy futures of nickel, a crucial material for electric-car batteries, wagering that the threat of sanctions on the world’s third-biggest producer would disrupt global supply and drive up prices.
Boris Johnson’s Confidence Vote Win Means Tory Civil War
The prime minister lives to lead another day, but his party is stuck with the same dilemma it started with.
Therese Raphael – Bloomberg
How can the Tories dump a leader who has been as successful at winning elections and riding out controversy as Boris Johnson? And yet how can they stick with one whose character has become a liability, whom the public distrusts and whom many see as a threat to the integrity of governing institutions?
Citigroup Plans to Hire 4,000 Tech Staff to Tap Into ‘Digital Explosion’; Firm seeks to put more institutional client services online; Demand for tech workers has intensified across industries
William Shaw and Aisha S Gani – Bloomberg
Citigroup Inc. plans to hire more than 4,000 tech staff to help move its institutional clients online in the wake of the pandemic. More than 1,000 of the recruits will join the markets technology team as part of an aggressive growth strategy, Jonathan Lofthouse, head of markets and enterprise risk technology, said in an interview.
IOSCO To Launch 2022 World Investor Week On 3-9 October 2022
The International Organization of Securities Commissions (IOSCO) is preparing to launch its sixth annual World Investor Week (WIW) from 3 to 9 October 2022. Given the uneven evolution of the pandemic across the globe, jurisdictions this year can continue to choose any other week of October or November to promote financial and investor education, while adapting the format of their campaigns accordingly.
Explainer-Why the London Metal Exchange is fighting a lawsuit for cancelling nickel trades
Pratima Desai and Eric Onstad – Reuters
U.S. hedge fund Elliott Associates is suing the London Metal Exchange (LME) for $456 million for cancelling nickel trades after chaotic trading in March that forced the exchange to suspend its nickel market, the LME said on Monday. The legal action piles more pressure on the exchange, which is being probed by regulators and is struggling to restore trust and volumes in its nickel market, a key component in stainless steel and electric vehicle batteries.
US Probes Binance Over Token That Is Now World’s Fifth Largest; SEC investigating whether BNB was a security when sold in 2017; Agency has brought numerous cases over initial coin offerings
Tom Schoenberg, Matt Robinson, and Justina Lee – Bloomberg
US regulators are investigating whether Binance Holdings Ltd. broke securities rules by selling digital tokens just as the crypto exchange was getting off the ground five years ago, according to people familiar with the matter. The Securities and Exchange Commission’s review pries into the firm’s origins and those of its BNB token, which is now the world’s fifth-biggest. Investigators are examining if the 2017 initial coin offering amounted to the sale of a security that should have been registered with the agency, said the people who were granted anonymity to discuss the confidential probe.
Top crypto recruiters highlight red flags candidates should look out for when making the jump into the space as another crypto winter approaches
Carter Johnson, Bianca Chan, and Asia Martin – Business Insider
The past two years have been a boon for job-seekers looking to make the jump into crypto — and the recruiters who place them. At the peak of the crypto hiring frenzy, startups were doling out a bonanza of perks to lure new talent that ranged from shorter work weeks to sky-high salaries. Jonathan Pomeranz, head of recruiting firm True Search’s fintech practice, told Insider that crypto companies were forced to get “creative” as they tried to land sought-after talent during the boom months. Packages included four-day workweeks and stock options that vested in three years versus the four traditionally seen in fintech.
FTX launches licensed crypto exchange service in Japan
Osato Avan-Nomayo – THE BLOCK
Crypto exchange giant FTX has launched its Japanese cryptocurrency trading service called FTX Japan, the company announced on Thursday. FTX Japan is the result of FTX’s prior acquisition of Liquid Group in February. Liquid was the parent company of Quoine Corp., one of the first crypto exchange platforms licensed in Japan in 2017. The launch of the platform will see FTX able to migrate its existing customer base in Japan under the FTX Japan umbrella for crypto spot and perpetual contracts trading.
BGC Partners Appoints Jason W. Hauf as Chief Financial Officer
BGC Partners, Inc. (NASDAQ: BGCP) (“BGC Partners”, “BGC”, or the “Company”), a leading global brokerage and financial technology company, today announced the appointment of Jason W. Hauf as Chief Financial Officer (“CFO”), effective June 6, 2022. Mr. Hauf will replace Steven Bisgay, who will remain in his executive role as Chief Financial Officer and Executive Managing Director of Cantor Fitzgerald, L.P. (“Cantor”). Mr. Hauf will report directly to Howard W. Lutnick, BGC’s Chairman and Chief Executive Officer.
Remarks By Under Secretary Of The Treasury For Terrorism And Financial Intelligence Brian E. Nelson Marking The Fifth Anniversary Of The Terrorist Financing Targeting Center (TFTC)
Today, Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson delivered virtual remarks at the Terrorist Financing Targeting Center (TFTC) Five-Year Event in Riyadh, Saudi Arabia. This event marks the five-year anniversary of the TFTC, a multilateral body created to strengthen cooperation among seven countries – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, UAE, and the United States – to disrupt terrorist financing networks and related activities of mutual concern.
‘Liquidity is terrible’: poor trading conditions fuel Wall Street tumult; Small trades are triggering outsized price swings in the world’s biggest capital markets
Eric Platt, Joe Rennison and Kate Duguid – FT
Traders’ ability to seamlessly buy and sell stocks, bonds and other financial products on Wall Street has deteriorated sharply this year, adding fuel to the big swings on the world’s biggest and deepest capital markets. Liquidity across US markets is now at its worst level since the early days of the pandemic in 2020, according to investors and big US banks who say money managers are struggling to execute trades without affecting prices.
Russia’s Default Tussle With Bondholders Is Only Just Starting; It’s unclear if and how a default on bonds will be declared; Investors could be in for a long legal battle to get cash back
Giulia Morpurgo, Abhinav Ramnarayan, and Irene Garcia Perez – Bloomberg
Bondholders are in for a tangled mess of financial, political and legal wrangling if sanctions push Russia to a historic default. So far, Moscow has been able to navigate the restrictions to service its international debt, but that’s likely to change after the US closed another avenue to creditors, affecting about $100 million in payments due on May 27. The European Union has also sanctioned Russia’s central depository, which said it would suspend euro-denominated transactions.
Exchanges, OTC and Clearing
Cboe Opens New Trading Floor, Begins New Era of Open Outcry
Cboe Global Markets, Inc. (Cboe: CBOE), a leading provider of global market infrastructure and tradable products, today celebrates the grand opening of its new trading floor in Chicago at 141 W. Jackson Boulevard. Cboe’s new trading floor returns to the same space where it was founded in 1973 as the first listed options exchange in the U.S.
***** Here is The Trade’s version of this story.
J.P. Morgan Integrates With ICE ETF Hub Creating Connectivity for Its ETF Issuers
Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of data, technology and market infrastructure, today announced that J.P. Morgan’s Securities Services has integrated with ICE ETF Hub to facilitate connectivity for its ETF issuers.
“The integration of J.P. Morgan’s Securities Services business into the ETF Hub builds on our mission of improving ETF workflows by establishing connectivity for ETF issuers,” said Peter Borstelmann, President of ICE Bonds. “This integration broadens the ETF Hub’s community and brings greater efficiencies to our customers.”
Nasdaq to Acquire Metrio
Metrio’s data collection, analytics and reporting solutions to bolster Nasdaq’s portfolio of IR & ESG services
Expected to improve corporates’ ability to manage and unlock value from their data so they can make better decisions
Nasdaq plans to maintain Metrio’s headquarters in Montreal
Nasdaq, announced that it entered into an agreement to acquire Metrio, a privately-held provider of environmental, social and governance (ESG) data collection, analytics and reporting services based in Montreal. Nasdaq plans to integrate Metrio’s software as a service (SaaS) platform into its suite of ESG solutions.
Beiersdorf new to the DAX
Also changes in MDAX, SDAX and TecDAX
STOXX Ltd., the global index provider of Qontigo, has announced changes to the DAX index family effective June 20, 2022. The selection indices DAX, MDAX, SDAX and TecDAX represent the largest companies in the regulated market of the Frankfurt Stock Exchange. They are selected by free float market capitalization and reviewed every three months.
Euronext Tech Leaders – Initiatives in France with Euronext, CDC Croissance, Bpifrance, Mission French Tech and the Cliff
On the occasion of the launch of the Euronext Tech Leaders initiative, Euronext, Bpifrance, CDC Croissance, the French Tech Mission and the Cliff unveil a series of complementary initiatives intended to support the listing of fast-growing European Tech companies
HKEX – Participant & Members Circulars
Clearing House Limited (“SEOCH”)
SEOCH Participants are requested to note that the Securities and Futures Commission has
approved amendments to the Rules of SEOCH for the purpose of adjusting the minimum capital
requirement applicable to a General Clearing Participant which is not a registered institution.
Amendments to the Rules and Procedures of HKFE Clearing Corporation Limited
Clearing Participants of HKFE Clearing Corporation Limited are requested to note that the
Securities and Futures Commission has approved amendments to the HKCC Rules for the purpose of adjusting the minimum capital requirement applicable to a General Clearing Participant which is not a registered institution.
Amendments to the General Rules of CCASS (the “Rules”) of Hong Kong Securities
Clearing Company Limited (“HKSCC”)
CCASS Participants are requested to note that the Securities and Futures Commission has
approved amendments to the Rules for the purpose of adjusting the minimum capital requirement
applicable to a General Clearing Participant which is not a registered institution.
HKCC Participant Additional Deposit
Please be advised that HKFE Clearing Corporation Limited (HKCC) has recalculated the HKCC
Participant Additional Deposits (HPAD) pursuant to the HKCC Rule 705A and the Clearing House Procedures. The new total HPAD requirement of HK$1,284 million after the recalculation will be shared by all the Participants based on their daily average net margin liabilities during the period from 9 March 2022 to 6 June 2022 in accordance with Chapter 4 of the Clearing House Procedures for Futures/Options Contracts Traded on the Automated Trading System of the Exchange (“HKATS”).
Daily Price Limits to be Broadened : 1 issue
The following issue has fallen under the following (1) or (2) for two consecutive business days. As such, TSE wishes to bring to your attention that it will broaden only the upper (or lower) daily price limit on the next business day (June 8) as follows.
Regular Constituents Change in Korea Taiwan IT Premier Index in June, 2022
There will be regular constituents change in Korea Taiwan It Premier Index effective from June 13, 2022.
Regular Adjustment of CAP Factor in KOSPI 200 Sector etc
Regular Adjustment of CAP Factor will be effective in June 10th, 2022.
Trading On Moscow Exchange Markets
Moscow Exchange’s primary objective is to ensure the smooth operation of financial markets and reliable transactions for participants. In the face of new challenges, Moscow Exchange will continue to provide clients with access to all of its markets.
Miami International Holdings Reports May 2022 Trading Results;
Multiple Exchanges Set New Volume Records
Miami International Holdings, Inc. (MIH) today reported May 2022 trading results for its U.S. exchange subsidiaries – MIAX®, MIAX Pearl® and MIAX Emerald® (together, the MIAX
Exchange Group™), and Minneapolis Grain Exchange (MGEX™).
NYSE US Exchanges to Close in Observance of Juneteenth National Independence Day
In observance of Juneteenth National Independence Day, the New York Stock Exchange, NYSE American Equities, NYSE Arca Equities, NYSE Chicago, NYSE National, NYSE American Options, NYSE Arca Options, and NYSE Bonds markets will be closed on Monday, June 20, 2022.
Optiver joins Aquis Exchange
The electronic market maker will provide liquidity in pan-European shares on the exchange.
Annabel Smith – The Trade
Optiver has joined the Aquis Exchange as a member and will provide liquidity in pan-European shares.
FXall and Tradeweb Markets to collaborate on emerging market hedging solutions
The pair will develop solutions that link trading workflows in emerging markets bonds and emerging markets currency swaps.
Annabel Smith – The Trade
The London Stock Exchange Group’s (LSEG) FXall and Tradeweb Markets have set out to collaborate on hedging workflow solutions for the emerging markets.
Elon Musk threatens to abandon $44bn Twitter takeover; Tesla chief accuses social network of ‘material breach’, claiming it failed to provide details of fake accounts
Sujeet Indap, Ortenca Aliaj and Tim Bradshaw – FT
Elon Musk has threatened to walk away from his $44bn acquisition of Twitter, accusing the social media company of failing to provide enough information about fake accounts. Musk has repeatedly criticised Twitter’s claim that less than 5 per cent of its daily active users are bots, warning last month that his takeover “cannot move forward” unless the platform provides proof. In a letter to Twitter’s chief legal officer that was disclosed in a regulatory filing on Monday, Musk’s lawyers at Skadden, Arps, Slate, Meagher and Flom wrote that the Tesla chief believed the company had “refused to provide the information that [he] has repeatedly requested since May 9”.
Elon Musk looks like he’s trying to blow up his Twitter acquisition. Here’s how it may stick him with a $1 billion bill
Tristan Bove – FORTUNE
After weeks of disputes and delays, it looks like the person least excited about the Elon Musk – Twitter acquisition is Elon Musk himself. Ever since he clinched the deal to buy Twitter for $44 billion in late April, Musk has thrown doubt over the takeover with a number of tweets and accusations, mainly directed at Twitter’s alleged unwillingness to disclose the number of fake accounts on its service. In light of his concerns, Musk in May issued thinly veiled threats that he might lower his acquisition price and that his offer was “on hold.” But the centibillionaire seems to have now escalated the feud.
Musk’s ‘Buyer’s Remorse’ Won’t Get Him Out of Twitter Deal; Twitter and Musk are said to be cooperating behind scenes; Musk claims accurate information needed to secure financing
Kurt Wagner and Maxwell Adler – Bloomberg
Elon Musk formally and forcefully revived his assertion that Twitter Inc. has a serious bot problem, and threatened to walk away from his deal to buy the company if the social network doesn’t do more to prove its users are real people. Legal experts widely speculated that Musk is using the bot issue as an excuse to abandon or renegotiate the deal, which has looked better and better for Twitter as the broader stock market has taken a dive in recent weeks. In a securities filing on Monday, Musk said he thinks Twitter is breaching their agreement by not meeting his demands for more information about spam and fake accounts. But behind the scenes, the deal is proceeding, according to people familiar with the matter. Both sides have been meeting regularly and sharing information, said two of the people, who weren’t authorized to speak publicly.
Morgan Stanley Sees Crypto Equivalent of Quantitative Tightening
Will Canny – Coindesk
Weakness in crypto markets, the failure of a dollar stablecoin and a reduction in leverage in decentralized finance (DeFi) are resulting in the “crypto equivalent of quantitative tightening,” Morgan Stanley (MS) said in a report Tuesday. The recent collapse of stablecoin TerraUSD (UST) saw Tether (USDT) also lose its dollar peg intraday, and this caused crypto prices to drop further as some questioned the stability of the third-largest cryptocurrency, bank said.
The Anatomy of a Cyberattack; The former president of United Structures of America talks about what happened when his computer networks were held hostage
Dain Drake – WSJ
It is every executive’s nightmare. You come into the office one day and discover that your computer systems have been locked by cybercrooks—and they want you to pay up to get your network back. That is what happened to Dain Drake, president of steelmaker and design firm United Structures of America. In 2019, the Houston-based company’s network was held hostage by crooks. Even though the company paid the ransom, it got only a limited amount of its data back—the hackers demanded even more ransom to unlock the rest. The company struggled to reconstruct its data, and was eventually forced into bankruptcy.
IBM acquires offensive security startup Randori to bolster its cybersecurity toolkit
Carly Page – TechCrunch
IBM has announced that it’s acquiring Randori, a Boston-based offensive security startup that combines attack surface management (ASM) with continuous automated red teaming (CART) to help organizations bolster their cyber defenses.
Auto Cybersecurity Companies’ Challenge Is Now Proving Its Mousetrap Is Better
Steve Tengler – Forbes
Oddly seven years after his death (in 1889), Ralph Waldo Emerson was attributed with an even more succinct quote* than his original statement: “Build a better mousetrap, and the world will beat a path to your door” (*his original, long-winded quote talked about corn, pigs, knives and a “broad, hard-beaten road to [the] house”). Also ironically, there subsequently have been more than 4,400 patents issued by the U.S. Patent Office for mousetraps making it the “most frequently invented device in U.S. history.” And so choosing the better mousetrap would, in fact, be difficult, except the whiskered threat is both well-understood and consistent. Therein, 140 years after Emerson’s passing his prediction is accurate: the online shopper’s path is beaten to the door of the highest-rated product per user reviews.
Peters leads lawmakers’ long-awaited response on cybersecurity
Gopal Ratnam – Roll Call
Cybersecurity experts have implored Congress for years to act as criminal hackers and sophisticated intelligence operatives attacked computer networks at schools, local governments, critical infrastructure and federal agencies.
Lawmakers and the federal government needed not only a far greater understanding of attacks and threats but also to help local governments and school districts beef up defenses.
Bitcoin Adoption Accelerates As It Becomes Multilingual In Smaller Communities
Rufas Kamau – Forbes
Only 1.5 billion of the world’s eight billion people speak English natively or as a second language. Bitcoin’s whitepaper, major literature, and icons are mostly written or spoken in English. This does not correspond to the appropriate framework for global adoption. Bitcoin content must be translated into other languages in order to achieve hyperbitcoinization. Let’s look at how far Bitcoin has been translated around the world. Translating Bitcoin to world languages is increasing its reach and inclusivity. People who do not speak English can now learn, comprehend, and use Bitcoin in their native language. Even though translators have not been able to reach the entire world, the Bitcoin whitepaper, books about Bitcoin, Bitcoin wallets, and documentation are all included in the translations.
Most of Bitcoin Pandemic Gains Came While Stocks Were Closed
Vildana Hajric – Bloomberg
Most everyone knows that Bitcoin had a stellar two years when the pandemic broke out. But just about all of the coin’s gains since then have happened while US markets are closed. A strategy that buys the coin at the equity-market close — at 4 p.m. in New York — and sells it at the next day’s open — at 9:30 a.m. — would have yielded gains of roughly 270% going back to the start of 2020, according to Jake Gordon at Bespoke Investment Group. But doing the opposite — buying it at the US market open and selling it at the close — spits out negative returns.
Cosmos launches ethereum ETF in Australia; The launch follows debut of three physical crypto vehicles in the country last month
Sandra Heistruvers – FT
Australian digital asset manager Cosmos Asset Management has joined forces with Canada’s Purpose Investments for the launch of an ethereum exchange traded fund for Australian investors. The new Cosmos-Purpose Ethereum Access ETF, which was listed on Cboe Australia, invests directly in the Toronto-listed Purpose Ether ETF. The Canadian ETF holds physically settled ether tokens rather than derivatives and is backed by cryptocurrency custodian Gemini.
Huda Kattan on NFT investing: I’ve made money and ‘I’ve lost a lot of money’
Dave Briggs – Yahoo! Finance
As the founder and CEO of Huda Beauty — which has more than 50 million Instagram followers and a net worth of $500 million — Huda Kattan is one of the more influential people on the planet. “Our mission at Huda Beauty is to un-f*** the beauty standards,” Kattan told Yahoo Finance at Gary Vaynerchuk’s Web 3.0 conference VeeCon at US Bank Stadium in Minneapolis (video above). The beauty influencer is now shifting gears and bringing her success to the NFT realm. Kattan already owns hundreds of NFT’s, including the projects from World of Women, most of which she purchased on the marketplace OpenSea.
From the Big Short to the Big Scam (opinion)
Paul Krugman – NY Times
Remember “The Big Short”? The 2010 book by Michael Lewis, made into a 2015 film, told the story of the 2008 global financial crisis by following a handful of investors who were willing to bet on the unthinkable — the proposition that the huge rise in housing prices in the years before the crisis was a bubble, and that many of the seemingly sophisticated financial instruments that helped inflate housing would eventually be revealed as worthless junk.
How ‘Trustless’ Is Bitcoin, Really?
In myth, the cryptocurrency is egalitarian, decentralized and all but anonymous. The reality is very different, scientists have found.
Siobhan Roberts – NY Times
Alyssa Blackburn, a data scientist at Rice University and Baylor College of Medicine in Houston, has spent several years performing digital detective work with her trusty lab assistant, Hail Mary, a shiny black computer with orange trim. She has been collecting and analyzing leaks from the Bitcoin blockchain, the immutable public ledger that has recorded all transactions since the cryptocurrency’s launch in January 2009.
Russian menace brings abrupt end to the west’s ‘peace dividend’; In a reversal of the post-cold war era, Putin’s attack on Ukraine prompts Nato members to spend more on defence
John Paul Rathbone – FT
“The prospect of a Soviet invasion of Europe is no longer a realistic threat,” George HW Bush proclaimed in 1991 as he announced a 25 per cent cut in US defence expenditure and Russia’s menace dwindled at the end of the cold war. The then president’s comments signalled the optimistic era of the “peace dividend”. Western governments looked forward to funding priorities other than security, such as health and education or lower taxes, in a period of expanding free markets, liberal democracy and economic globalisation.
Proud Boys leader Tarrio, 4 lieutenants charged with seditious conspiracy; Indictments makes the Proud Boys the second group whose members face the rare charge in the Capitol attack
Spencer S. Hsu, Rachel Weiner and Tom Jackman – The Washington Post
Henry “Enrique” Tarrio, the former longtime chairman of the extremist group Proud Boys, was indicted on a new federal charge of seditious conspiracy with four top lieutenants on Monday. The charges expand the Justice Department’s allegations of organized plotting to oppose through violence the certification of President Biden’s election victory, culminating in the attack on the Capitol by a mob on Jan. 6, 2021. Tarrio, 38, was not in the District that day but allegedly guided activities from nearby Baltimore as Proud Boys members engaged in the earliest and most aggressive attacks to confront and overwhelm police at several critical points on restricted Capitol grounds. Another defendant, Dominic Pezzola of Rochester, N.Y., broke through the first window of the building at 2:13 p.m. with a stolen police riot shield, authorities said.
Pound Gains as UK Leadership Relief Outweighs Future Challenges; Sterling holds above $1.25 after Johnson wins confidence vote; Prime Minister suffers bigger rebellion than his predecessor
Greg Ritchie and Amelia Pollard – Bloomberg
The pound held gains after UK Prime Minister Boris Johnson survived a vote on his leadership of the ruling Conservative Party, even as the rebellion raises uncertainty over his position. Sterling rose 0.3% to $1.2532 as of 5:18 p.m. after 211 Tory MPs voted for Johnson compared with 148 against. The UK currency is the third-worst performer among Group-of-10 peers this year, trailing only the Japanese yen and Swedish krona.
Johnson Dangles Tax Cuts in Speech to Woo His MPs: Tory Update
Kitty Donaldson, Joe Mayes and Ellen Milligan – Bloomberg
UK Prime Minister Boris Johnson faces a confidence vote on Monday after scores of his MPs submitted letters calling for him to step aside. The secret ballot will be held between 6 p.m. and 8 p.m. in Westminster, with the result due to be announced at 9 p.m. Before that, Johnson had a chance to address his party, reminding MPs the Tories won their biggest election victory in 40 years on his watch and dangling the prospect of tax cuts.
UK Prime Minister Boris Johnson survives a no-confidence vote despite backlash over COVID-19 ‘partygate’
Kim Hjelmgaard – USA TODAY
Britain’s Prime Minister Boris Johnson survived a no-confidence vote Monday called by rebel lawmakers from his ruling Conservative party who wanted to oust him as leader, in part over allegations of drunken government parties held during COVID-19 lockdowns. Johnson’s critics failed to oust him in a 211-to-148 simple majority vote, a victory that means he can’t be challenged by his party for at least another year. However, the fact that the secret-ballot vote happened at all leaves him politically wounded. Johnson’s predecessor, Theresa May, survived a no-confidence vote in 2018 but resigned six months later.
U.S. SEC gets ready to propose changes to stock market operations- WSJ
The U.S. Securities and Exchange Commission (SEC) is preparing to propose big changes to the stock market that could reshape how it operates, the Wall Street Journal reported on Monday, citing people familiar with the matter. Staffers at the SEC have begun floating plans with market participants in recent weeks, with Chairman Gary Gensler planning to detail a few of the potential changes in a speech on Wednesday, the report said https://www.wsj.com/articles/sec-closes-in-on-rules-that-could-reshape-how-stock-market-operates-11654544799?mod=latest_headlines.
SEC Investor Advisory Committee to Discuss Non-Traditional Accounting and Climate Disclosure on June 9
The Securities and Exchange Commission’s Investor Advisory Committee will hold a virtual public meeting on June 9 at 10 a.m. ET. The meeting will be webcast on the SEC website.
ASIC disqualifies New South Wales recruitment director for five years
ASIC has disqualified recruitment director John William Anderson of Crows Nest, New South Wales, from managing corporations for five years after his involvement in two failed companies.
ASIC disqualifies former Strategic Alliance group director for three years
ASIC has disqualified Glenn Gaudet of Robina, Queensland, from managing corporations for three years due to his involvement in the failure of four companies.
Former CEO Akhilesh Kamkolkar charged with five criminal offences
On 7 June 2022, Mr Akhilesh Kamkolkar, of Surfers Paradise, Queensland, appeared at the Downing Centre Local Court charged with three counts of engaging in dishonest conduct and two counts of carrying on a financial services business without a licence.
Spaceship Capital director and responsible manager banned for two years
ASIC has banned Spaceship Capital Limited director, chairman and responsible manager Paul Ernest Dortkamp of Caringbah South, New South Wales, from performing functions as an officer and responsible manager of a financial services business for two years.
Richard Lloyd becomes Interim Chair of the FCA
Richard Lloyd OBE has become Interim Chair of the Financial Conduct Authority, as previously announced on 4 February 2022.
MAS Strengthens Financial Institutions Business Continuity to Address Evolving Threats
The Monetary Authority of Singapore (MAS) today issued revised Guidelines on Business Continuity Management (BCM) for financial institutions (FIs), to help FIs strengthen their resilience against service disruptions arising from IT outages, pandemic outbreaks, cyber-attacks and physical threats. The revisions take into account learnings from the handling of the COVID-19 pandemic and increased digitalisation in the financial sector.
SFC reminds investors of risks associated with non-fungible tokens
Securities & Futures Commission of Hong Kong
The Securities and Futures Commission (SFC) wishes to remind investors of the risks associated with investing in non-fungible tokens (NFTs), which have increased in popularity in recent years.
As with other virtual assets, NFTs are exposed to heightened risks including illiquid secondary markets, volatility, opaque pricing, hacking and fraud. Investors should be mindful of these risks, and if they cannot fully understand them and bear the potential losses, they should not invest in NFTs.
Investing and Trading
Goldman Says Oil Needs to Rally Further to Solve Market Deficit
Sharon Cho – Bloomberg
Oil prices are likely to extend gains as global crude stockpiles need to be rebuilt in the face of rebounding Chinese demand and reduced production from Russia, according to Goldman Sachs Group Inc. Brent crude will need to average $135 a barrel in the 12 months from July, up $10 from the bank’s previous forecast, for global inventories to normalize by late 2023, analysts including Damien Courvalin and Jeffrey Currie said in a note dated June 6. The global benchmark was trading at about $120 on Tuesday, and has risen more than 50% this year.
Fifth-generation cattle rancher aims to build biggest U.S. beef plant
Christopher Walljasper and Tom Polansek – Reuters
A fifth-generation cattle rancher and consultant plans to build the country’s largest beef plant in South Dakota with capacity to slaughter 8,000 head of cattle a day. The $1.1 billion project could help address the Biden administration’s concerns about rising food prices and a lack of competition in the meat sector, though it would not be up and running until at least 2026. The project is spearheaded by Kingsbury and Associates and Sirius Realty, both run by Megan Kingsbury of a South Dakota ranching family. She told Reuters she expects construction on the plant to begin in 2023 and take three years.
How Rockefeller’s Standard Oil Trust became Chevron, ExxonMobil, BP, and Marathon
Jared Blikre and Devan Burris – Bloomberg
While large tech companies are currently feeling the heat from regulators and Congress, over a century ago, the trustbusters had their sights on Big Oil. Around the turn of the twentieth century, Big Oil was John D. Rockefeller’s Standard Oil Trust. By 1904, the monopoly controlled 91% of the U.S. oil market and 85% of final sales. But it was in the early wildcat days of 1863 that Rockefeller first founded the company that would become synonymous with “black gold.”
De Beers Hikes Small Diamond Prices as Sanctions Cause Shortages
Thomas Biesheuvel – Bloomberg
De Beers has raised the price of smaller diamonds as sanctions on its Russian rival creates a growing shortage of some stones. The price of small rough diamonds, the type that would end up clustered around the solitaire stone in a ring, has surged since the start of March as cutters, polishers and traders struggle to source supply after the US levied sanctions on Russia’s Alrosa PJSC, which accounts for about a third of global production.
Biggest Macro Short Is Back as Traders Sell Yen Around the Clock
Ruth Carson and Michael G. Wilson – Bloomberg
When Brian Gould steps into his office at 120 Collins Street in Melbourne, he’s greeted with a slew of yen short trades. “Sell-yen orders are coming in around the clock. In the last couple of days we’ve seen a lot more volume,” said Gould, a three-decade currencymarkets veteran and head of trading at Capital.com. “People are still wanting to buy dollar-yen at 20-year highs.”
Environmental, Social and Corporate Governance
The SEC’s Continued Efforts to Dive Feet First into Climate Control and ESG Initiatives
Bryan Cave Leighton Paisner – JDSupra
The SEC began highlighting climate control and ESG concerns as a hot topic in February 2021. In that month, the SEC announced the appointment of Satyam Khanna in a newly created role of Senior Policy Advisor for Climate and ESG. The stated purpose of her new role was to advise the agency on ESG matters and to advance future SEC initiatives.
How ESG investing came to a reckoning
Harriet Agnew, Adrienne Klasa and Simon Mundy – Financial Times
The term ESG is less than two decades old, but it may already be coming to the end of its useful life.
The acronym dates back to 2004, when a report commissioned by the UN called for “better inclusion of environmental, social and corporate governance (ESG) factors in investment decisions”. In the wake of corporate scandals such as Enron and WorldCom, and the Exxon Valdez oil spill, financial institutions eagerly signed on to the “global compact”.
ESG Insiders Say It’s Time for Course Correction
Saijel Kishan – Bloomberg
With ESG being increasingly maligned these days from both the inside and the outside, some of the industry’s early devotees say it’s time for a course correction.
Jerome Dodson, the retired founder of one of the world’s largest ESG-focused investing firms, said a dedicated watchdog is needed to help police marketing claims. Marcella Pinilla, who’s worked in the business for 15 years, said environmental, social and governance issues need to be considered separately as opposed to lumped together under one acronym. And Matthew Kiernan, a pioneer of ESG corporate ratings, said both the industry and regulators need to double their efforts to stamp out exaggerated claims and root out bad actors.
Deutsche Bank’s DWS to Keep ESG Focus After Greenwashing Claims
Steven Arons – Bloomberg
Deutsche Bank AG’s investment unit will keep its focus on sustainability after facing claims of greenwashing that contributed to the resignation of the chief executive officer, according to DWS Group Supervisory Board Chairman Karl von Rohr.
The German lender backs “unconditionally the strategy and financial targets” of DWS, von Rohr, who’s also a deputy Deutsche Bank CEO, said in prepared remarks for the asset manager’s annual general meeting on Thursday. “We’re also keeping the focus on environmental, social and governance issues known as ESG.”
‘The Big Three’ must prioritize returns over ESG propaganda
Bryan Bashur – The Hill
Politics has subdued corporate boardrooms and hampered investment returns. Some asset management firms have lost focus on maximizing retirement plan returns and have become addicted to the public relations scam of “environmental, social, and governance” standards.
Investment advisers such as BlackRock, Vanguard and State Street (the Big Three) have prioritized their own public relations agenda and subverted their responsibility to maximize their clients’ returns.
A First Look At The SEC’s New ESG Funds Disclosure Rule
Shivaram Rajgopal – Forbes
I review the new rule and ask whether we need something similar for non-ESG funds as well. I worry whether funds can get still get away with vague disclosures unless the SEC ramps up enforcement.
Close on the heels of the climate disclosures for companies, the SEC has issued a much-needed proposal on standardizing ESG disclosures for ESG funds. I believe greenwashing is rampant in ESG funds as I have documented in academic papers with colleagues and in Forbes columns before. The DWS greenwashing scandal is potentially just the tip of the iceberg.
PSX Joins Sustainable Stock Exchanges Initiative
Pakistan Stock Exchange (PSX) has joined the Sustainable Stock Exchanges (SSE) Initiative.
Vanguard Case Study: Active vs. Passive Investing; What if Vanguard shareholders had invested actively, rather than with the company’s Growth and Value Index funds?
John Rekenthaler – Morningstar
This is the third and final installment of a series on Vanguard’s two style-based passive mutual funds, Vanguard Growth Index VIGRX and Vanguard Value Index VIVAX, which were innovations when they were launched in 1992. For the first time, investors could buy half of the S&P 500 index. Growth Index held the benchmark’s more glamorous but pricier companies, while Value Index contented itself with its potential bargains. The first article inquired if Vanguard’s customers have used those funds wisely or if they have attempted to time the stock market by buying the fund with the highest recent return. Happily, the answer is the former. To both shareholders’ credit and Vanguard’s—through their marketing, organizations can influence how their investments are used—cash flows into each fund have been steady. Aside from one early stretch, their shareholders have not chased performance.
Highflying Tiger Global Humbled by Unraveling of Giant Tech Bet; The New York firm was a heavy investor in technology stocks and startups when the market peaked. The downturn has vaporized years of its gains.
Eliot Brown and Juliet Chung
Tiger Global Management rode the tech boom like no other investment firm. It was funding more startups than any other U.S. investor when the market peaked last year, and had tens of billions of dollars from pensions, endowments and rich clients riding on some of Silicon Valley’s hottest stocks. With tech values plunging, the New York firm is humbled. The market rout has vaporized years of gains in a matter of months, calling into question Tiger’s big bets. Fueling Tiger’s rise was a double-barreled business: A stock-picking arm put money mostly into public companies, while its venture-capital funds invested in startups throughout the world. Both bet bigger on tech as the market crested, leaving the firm exposed on both fronts.
Deutsche Bank’s DWS to Keep ESG Focus After Greenwash Claims
Steven Arons – Bloomberg
Deutsche Bank AG’s investment unit will keep its focus on sustainability after facing claims of greenwashing that contributed to the resignation of the chief executive officer, according to DWS Group Supervisory Board Chairman Karl von Rohr.
Beijing Inches Closer to Zero Cases as Restrictions Eased; Capital reports two cases, lowest daily count since April 22; Public transport resumes, residents can move more freely
Beijing inched closer to zero Covid cases Monday as the capital rolled back virus restrictions. The city reported 2 cases, down from 6 on Sunday and the lowest tally since April 22. It’s a stark contrast to last month, when the capital was recording several dozen cases a day, stoking concern of a citywide lockdown. Instead, mass-testing and targeted measures such as movement restrictions and work-from-home orders in the worst affected areas helped bring the outbreak under control.
Pfizer and Moderna Won’t Get a Shot in the Arm From Toddlers; Approval of Covid-19 vaccine for children under five years old would be good news for some parents, but not necessarily for shareholders
David Wainer – WSJ
There could soon be as many as two approved Covid-19 shots for the littlest Americans. But investors in vaccine-makers’ shares, which have suffered amid a broader selloff in the biotechnology sector, won’t be able to breathe any easier. Some anxious parents are holding off on a full return-to-normal until their little ones get inoculated. One could therefore be forgiven for thinking there might be a sizable national market for Pfizer – BioNTech and rival Moderna, both seeking authorization from the U.S. Food and Drug Administration this month for children under five years old.
Latest Covid-19 Wave Expands to More of U.S.; Rising cases prompt more calls for precautions but not mandates in hot spots like New York City
Jon Kamp and Brianna Abbott
The latest Covid-19 case surge is expanding beyond the Northeast, with places from the Midwest to Florida and California under rising pressure. Fueled by highly contagious versions of the Omicron variant, the tide is posing a test of how much new infections matter in a changing pandemic. Though built-up immunity in the population has kept more people out of hospitals, federal health officials on Wednesday urged people in hot spots to take precautions, from booster shots to pre-gathering tests and masks, to limit the virus’ spread. “We’ve got to do what we can to prevent infections,” said Ashish Jha, the White House Covid-19 response coordinator. “We’ve got to do what we can to ensure that infections don’t turn into severe illness.”
China Traders Ditch Short-Term Bonds Fearing Liquidity Crunch
China’s bond traders are dumping short-term debt on concerns that easing Covid-lockdowns may boost demand for cash and lead to a liquidity crunch. The yield on one-year negotiable certificate of deposits sold by top-rated lenders rose the most since January 2021 on Monday while the yield on one-year China government bonds climbed above 2% for the first time in more than three weeks.
China Harvests Half of Wheat Crop With Favorable Weather Ahead
China’s farmers are making progress on government orders to bolster food security by ensuring this season’s wheat harvest goes smoothly. The country gathered 55% of its winter wheat crop as of June 6, passing the 50% mark two days earlier than last year, the Ministry of Agriculture and Rural Affairs said in a statement late Monday.
Africa needs better weather warning systems, urge experts
Wanjohi Kabukurul – Bloomberg
Better climate-related research and early warning systems are needed as extreme weather — from cyclones to drought — continues to inflict the African continent, said Sudanese billionaire and philanthropist Mo Ibrahim, who heads up his own foundation. “We don’t have a voice on global climate discussions as we lack strong research capabilities,” Ibrahim told The Associated Press. Ibrahim said that Africa must help “shape the agenda” at the upcoming United Nations climate conference in Egypt in November, known as COP27. He added that weather stations across the country were sparse and unevenly distributed, leading to “critical” gaps in climate data.