JPMorgan: “tens of thousands of episodes of unlawful trading”
Government Settles Complaint Against Banking Giant For Almost $1 Billion
Thom Thompson – John Lothian News
JPMorgan Chase and Co has agreed to pay the U.S. government $920 million in fines and disgorgement to settle spoofing charges. It is the largest payment ever agreed to by a defendant to settle a futures market manipulation charge.
In a case that has been brewing for the past several years, the U.S. Department of Justice, the Securities and Exchange Commission and the Commodity Futures Trading Commission announced a joint settlement with JPMorgan for spoofing in metals futures, U.S. Treasury futures, and the Treasury securities cash market for a period from 2008 to 2016.
As part of the settlement the DOJ has agreed to defer prosecution for three years, during which the bank is to report any violations involving it or its employees and to document and report all of its undertakings to remediate trading violations that occur or have occurred.
To read the rest of this story, go HERE.
Hits & Takes
John Lothian & JLN Staff
One has never seen everything, as the world is full of randomness and wonder. However, last night’s debate knocked something off the list, something I had never seen before. The U.S. presidential election debate between President Donald Trump and former Vice President Joe Biden was an absolute mess. My recommendation is for the other two debates to be cancelled. No good can come to the U.S., its children or the world from more of this type of chaos and disaster. See the lead story, a commentary from Jonathan Bernstein of Bloomberg, for his take.
In case you wonder what Sen. Kelly Loeffler‘s take on this debate was, here is one tweet from her: “@realDonaldTrump CRUSHED @joebiden tonight and proved exactly why he deserves #FourMoreYears.”
The FT has a story titled “How ‘Davey Day Trader’ stoked a bond market rally; Surge highlights the power of hype and a charismatic promoter.” Davey the Day Trader is a new one on me. But it makes you wonder who Scarlette the Scalper or Spencer the Spreader are. And of course there is Swen the Swing Trader.
The FT also has a story titled “Could rhymes prevent financial crimes? Poems are the latest weapon in the fightback against bank fraud.” My rhyme is “Roses are red, violets are blue, my money is green and I am hanging up on you.”
The UK has recorded the highest daily number of coronavirus cases since the pandemic hit and the largest number of deaths since July 1, the FT reported.
Registration for DC Fintech Week 2020 is now OPEN! Register now at dcfintechweek.org.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
MIAX PEARL, Miami International Holdings’ (MIH) first equities exchange, completed its first day of live trading yesterday. 16 member firms participated in the nascent exchange’s launch on September 29. 888 orders were sent, resulting in 30 trades for 2,075 total shares traded. According to an email statement by MIH Chairman and CEO Thomas Gallagher, the exchange experienced no operational or technical issues.~MR
Tracfin, the French ministry that tracks fiscal fraud, terror financing and money laundering, has arrested 29 people across France suspected of funding and providing logistical support to terror cells active in France. According to an ABC News report, the suspects used cryptocurrency vouchers as part of their money-laundering operations. The report said that two “main figures” of the operation, still at large, are likely hiding somewhere in Northwestern Syria.~MR
Cannabis sector outperforms S&P 500 as U.S. sales grow
Saleem Daya, analyst at Nasdaq corporate solutions in Toronto, updates John Lothian News on the Q2 performance of listed cannabis shares amid strong U.S. sales and waning COVID-driven volatility.
One Eurex: welcome to our refreshed branding
Since Eurex’s founding, innovation has been in our DNA. We are known in the market as pioneers – we disrupted European derivatives market when we launched in 1998 and we’ve continued to relentlessly innovate ever since. Our values haven’t changed. We remain ingenious, agile and resilient; shaping markets and delivering inventive solutions for our clients. Yet, as you can see reading this article on our website, something has now changed: our branding.
***** The site looks clean, clear and easy to use. I like it.~JJL
The new Website – what has changed?
Eurex refreshed its brand, resulting in new colors, imagery, typefaces, logos on the Website. We sat down with Cornelius Müller, Head of Marketing, to find out what else changed. A new design on the website. Anything else new? A new domain! We moved from Eurexchange.com to Eurex.com. This is now the leading site featuring all the Eurex services from Listed Derivatives, Clearing to Repo. A single domain reflects how we see ourselves and also how the market perceives us: One Eurex. This is also reflected in the branding where we have the same look and feel across the entire Eurex universe. And, fresh new visuals are applied throughout all pages – have fun discovering it.
***** The new website propagated this morning and is up and running.~JJL
Helen Reddy, Singer Behind ‘I Am Woman,’ Dies at 78; The Australian-born singer’s first No. 1 hit became a feminist anthem and propelled her to international stardom.
Anita Gates – NY Times
Helen Reddy, the Australian-born singer whose 1972 hit song “I Am Woman” became the feminist anthem of the decade and propelled her to international pop-music stardom, died Tuesday in Los Angeles. She was 78.
*****My childhood music is dying one singer at a time. Mac Davis also died yesterday.~JJL
Colleges Use Targeted Lockdowns, Online Classes to Preserve Fall Semester
Quarantines and short shifts to web instruction are last-ditch efforts before schools change course for the whole term
Melissa Korn – WSJ
Providence College put itself on lockdown last month, barring students who live on campus from traveling into town and telling those who live off campus to shelter in place, using food delivery services. Classes moved online. Students could socialize only with their roommates. The goal: save the semester.
****Tomorrow is the date I thought we would have some universities shut down due to the pandemic. Happily, I was wrong, but some are taking severe steps to fight COVID-19.~JJL
Tuesday’s Top Three
Our top story Tuesday was The Wall Street Journal’s Manhattan Offices Are Nearly Empty, Threatening New York City’s Recovery. Second was the
Financial Times’s HKEX announces interim chief as Charles Li hastens departure. Third was another story from The Wall Street Journal, How to Climb the Corporate Ladder While Working Remotely.
189,052,275 pages viewed; 24,436 pages; 226,140 edits
|CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.Recently Updated Pages
1,460 pages; 12,835 edits
Trump Embarrassed His Country and Himself; Campaign debates don’t have to be high-minded to be useful, but the Cleveland brawl served little purpose except to showcase the president’s unfitness for office.
Jonathan Bernstein – Bloomberg
I’ve watched a lot of presidential general election debates. This was the first time that I spent much of the time hoping that the feed to foreign nations was somehow disabled, because what we saw Tuesday night — what President Donald Trump did on Tuesday night — was so deeply embarrassing to the nation. Whether it was the constant interruptions, or the refusal to condemn right-wing violence, or the false claims about the voting process and how they undermine the democracy, or the steady stream of false statements, or the habit of casting blame on anyone and everyone except for himself, or the wild conspiracy-theory rantings, Trump spent 90 minutes demonstrating how he’s not fit for the office he holds.
JP Morgan hit with record $920 million penalty after admitting eight-year spoofing scheme; The US Department of Justice, CFTC, and SEC confirmed parallel actions against JP Morgan resulting in a record penalty for the years-long spoofing and manipulation activity.
Hayley McDowell – The Trade
US investment bank JP Morgan will pay a record $920 million after admitting its precious metals and US treasuries trading desks engaged in an unlawful spoofing scheme that spanned eight years.
How ‘Davey Day Trader’ stoked a bond market rally; Surge highlights the power of hype and a charismatic promoter
Robert Smith – FT
The staid world of debt investing is supposed to yield small-but-steady returns, not triple your money in months. But an American company raised a bond in May that is now trading at three times the face value it was issued at — or 300 cents on the dollar.
Could rhymes prevent financial crimes? Poems are the latest weapon in the fightback against bank fraud
Claer Barrett – FT
Plenty of people have turned to poetry as a source of solace during the pandemic — but could rhymes be used to prevent financial crimes? Santander, one of the UK’s biggest high street banks, certainly thinks so and has enlisted British poets Pam Ayres and Suli Breaks to lead the fightback against the fraudsters in a social media campaign.
Banker Walks Free From Insider Trading Charge After Deleting WhatsApp
Jonathan Browning – Bloomberg
FCA loses London case against banker for destroying messages; Juries acquit in cases involving deleted texts, hidden laptops
Konstantin Vishnyak did one thing else before he handed the second of his two iPhones to the police officer arresting him: he deleted Whatsapp. Two years later, a London jury acquitted him of destroying documents that he knew would be crucial to an investigation into his trading activity. The banker admitted removing the application from his phone, but said he did so to keep secret his friendship with one of the most wanted men in Britain.
UK records highest daily number of coronavirus cases; Johnson’s advisers want tougher measures to curb Covid-19, but face opposition from some Tory MPs
George Parker, Jim Pickard and Alice Hancock – FT
The UK has recorded its highest ever daily number of coronavirus cases and the largest number of deaths since July 1, increasing strains within the Conservative party over how to respond to the resurgence of Covid-19.
An Epic Moment of National Shame: The Debate Was an Embarrassment for the Ages; Trump shredded the rulebook and any sense of decorum.
John F. Harris – Politico
At frequent intervals on Tuesday night, the natural human reaction—lower the sound, wince and look away—took over, and the first presidential debate of the 2020 general election became nearly unwatchable. Those who did persist in watching were rewarded, in a perverse way: They witnessed history in the making. The proceeding was an epic spectacle, a new low in presidential politics, a new high watermark in national shame.
Liquidnet to be sold as TP ICAP confirms advanced discussions for acquisition; TP ICAP is looking to purchase the institutional trading network Liquidnet for up to $700 million after confirming advanced discussions.
Hayley McDowell – The Trade
Liquidnet is on the verge of being sold after interdealer broker TP ICAP confirmed it is in advanced discussions to acquire the institutional trading network for up to $700 million. TP ICAP said via a statement that the discussions are on the purchase of the entire issued share capital of Liquidnet and its subsidiaries for between $600 million and $700 million.
Failure to pay invoices on time puts recovery at risk; Answer to small businesses’ struggle for payment across world lies in mix of fintech and regulation
Andy Bounds – FT
Joanna Jensen learned something quickly when she started her own business: making sales is hard enough, getting paid for them is harder still. “There are some high-street retailers who will pay you on 75-day terms with a 2.5 per cent haircut if you want it earlier. I am staggered this is still allowed. I thought highway robbery was outlawed,” she says. UK retailers demand enough stock to sell nationally, but will only pay suppliers in arrears.
JPMorgan Paying $920 Million to Resolve Market Manipulation Probes; Settlement resolves investigations by DOJ, CFTC and SEC tied to manipulation of precious-metals and Treasury markets
Dave Michaels – WSJ
JPMorgan JPM -0.84% Chase & Co. agreed to pay $920 million and admit misconduct tied to manipulation of precious-metals and Treasury markets, regulators said Tuesday. The settlement resolves investigations by the Justice Department, Commodity Futures Trading Commission and the Securities and Exchange Commission. The fine is the largest the CFTC has ever imposed for spoofing, a type of market manipulation, the agency said.
Money-Market Fund Rules Likely Fall Short, Policy Makers Say; A bout of coronavirus-related market turmoil in March prompted the Federal Reserve to intervene
Paul Kiernan – WSJ
A pair of top U.S. policy makers said Tuesday that rules to make money-market mutual funds less susceptible to runs likely need to be improved after a bout of turmoil in March that prompted the Federal Reserve to intervene.
Silver Lake Launches New 25-Year Investment Strategy Backed by Mubadala; Abu Dhabi fund’s $2 billion contribution comes as buyout firm nears completion of new $18 billion-plus flagship fund
Miriam Gottfried – WSJ
Abu Dhabi sovereign-wealth fund Mubadala Investment Co. is making an investment in Silver Lake and contributing $2 billion to help the technology-focused private-equity firm launch a new long-term strategy, according to people familiar with the matter. Mubadala will take a stake of less than 5% in Silver Lake, buying roughly half of what Neuberger Berman Group LLC’s Dyal Capital Partners purchased in 2016, the people said.
ECB to Consider Inflation Overshoot in Echo of Fed Strategy
Alexander Weber and Piotr Skolimowski – Bloomberg
Lagarde says tactic could be powerful when interest rates low; Anchoring of market-based inflation expectations have softened
European Central Bank President Christine Lagarde said it’s worth examining a Federal Reserve-style strategy that allows inflation to temporarily rise above the institution’s target. A policy of committing to make up for low inflation after missing the goal for a while “could be examined” as part of the institution’s strategic review, Lagarde said at a conference in Frankfurt on Wednesday.
Robinhood Users Weren’t as Reckless as Portrayed During Rally
By Sarah Ponczek – Bloomberg
Working paper finds main retail trader holdings aren’t crazy; Individual dip buying likely eased, not aggravated, stocks
Bankrupt companies, obscure electric-vehicle makers, options fliers, SPACs — each has captured the attention of Robinhood users this year, prompting mockery and taunts from professional investors. But the image of the investing app’s clients spending their days loading up on fad stocks doesn’t accord with reality, according to a new working paper published by the National Bureau of Economic Research titled, “Retail Raw: Wisdom of the Robinhood Crowd and the Covid Crisis.” Rather, it seems, the typical Robinhood user’s portfolio is kind of boring, and evidence shows these small traders helped stabilize markets during the Covid-19 crash.
It’s No Time for ‘Chicken Licken’ Economics, BOE’s Haldane Says
Lucy Meakin – Bloomberg
The Bank of England’s chief economist has called out overly negative interpretations of the U.K. recovery, saying such anxiety could become self-fulfilling and as harmful to Britons’ wellbeing as Covid-19. Businesses and policy makers should be more balanced, Andy Haldane said in a speech Wednesday. He warned “now is not the time for the economics of Chicken Licken,” referring to a folk tale known as Chicken Little in other parts of the world, in which a bird believes the sky is falling because an acorn fell on its head.
Two more Chinese tech companies are delisting from U.S. exchanges in on-going exodus
Naomi Xu Elegant – Fortune
Two U.S.-listed Chinese Internet companies are delisting from New York exchanges and going private in multibillion dollar deals, joining a growing number of Chinese companies distancing themselves from U.S. exchanges as tensions flare between the U.S. and China.
IT Chiefs Address Growing Set of Collaboration Problems Tied to Remote Work; Companies focus on making remote work easier on their employees
Angus Loten – WSJ
Half a year into the coronavirus pandemic lockdown, information-technology leaders are tackling a new set of communication problems, as companies extend their remote-work infrastructure beyond business continuity and into employee well-being.
These Stocks Have Rallied More Than 400% This Year; Tesla and Zoom are among the big winners, as well as those benefiting from changing tastes during coronavirus pandemic
Gunjan Banerji and Peter Santilli – WSJ
The stock market’s star performers are shining brighter than ever and creating a stark divide with the rest of the pack. More stocks skyrocketed at least 400% at some point in the first three quarters of the year than in any comparable period since 2000, according to a Dow Jones Market Data analysis of companies that were worth at least $100 million to start the year.
Seven Airlines Close Billions of Dollars in Loans With Treasury; Treasury Secretary Steven Mnuchin urges Congress to approve more aid for airline workers
Alison Sider – WSJ
The U.S. Treasury said it has closed loans to seven passenger airlines and joined with the industry to call on Congress to extend more aid to prevent massive job cuts later this week. Airlines continue to grapple with a sharp drop-off in travel because of the coronavirus pandemic and accompanying restrictions. The loans were one of two major sources of aid to airlines under the Cares Act passed in March. Airlines also received $25 billion to continue paying workers through the summer.
Germany’s Battle With Pig Virus Worsens as Case Reaches New Area
Megan Durisin – Bloomberg
Brandenburg reports an infected boar outside of prior zone; Outbreak has grown to 38 animals since it began this month
Germany’s fight to contain a fatal pig virus is growing more difficult after an infected wild boar was found outside the recently affected area. Two additional boar were confirmed positive for African swine fever, bringing the outbreak to 38 wild animals since it first struck Europe’s top pork producer three weeks ago, the Agriculture Ministry said Wednesday. While all cases remain in the Brandenburg region, one of the new findings is in Maerkisch Oderland, outside the prior containment zone and near the Polish border.
‘Game Changing’ 15-Minute Covid-19 Test Cleared in Europe
Emma Court – Bloomberg
U.S. company plans to begin selling test at the end of October; Rapid antigen test to be sold in countries that accept CE mark
Becton Dickinson and Co.’s Covid-19 test that returns results in 15 minutes has been cleared for use in countries that accept Europe’s CE marking, the diagnostics maker said Wednesday. The test is part of a new class of quicker screening tools named for the identifying proteins called antigens they detect on the surface of SARS-CoV-2. Becton Dickinson expects to begin selling the test, which runs on the company’s cellphone-sized BD Veritor Plus System, in European markets at the end of October. It will likely be used by emergency departments, general practitioners and pediatricians.
Pandemic Threatens Long-Term Job Security After Hospitality Industry Layoffs
Laura Benshoff – NPR
Stephannia Swain, 52, has had the same job for almost her entire adult life, cooking at the Warwick Hotel in Philadelphia. “We only have six cooks and we’re all lifers,” she said. With 30 years of experience, Swain was the most senior, but others in the kitchen had been part of the team for nearly two decades.
How Do You Feel About Returning to the Office? We would like to hear how employees and employers are handling a return to their offices, even as others continue working from home.
The New York Times
Six months after the pandemic struck, the American workplace is in the midst of a transformation. Some workers are beginning to return to their offices, even as others choose to keep working from home or have been told by their employers not to return for several more months.
How the Coronavirus Crisis Threatens to Set Back Women’s Careers; A comprehensive new study by McKinsey and Lean In suggests that many women—especially mothers—may have to step back or away from jobs because of the pandemic’s impact on their lives
Lauren Weber and Vanessa Fuhrmans – WSJ
Kate Deisseroth spent two decades building a career as an orthopedic surgeon that now, in the Covid era, looks precarious. As the single mother of twin 10-year-olds in Lebanon, Pa., the Air Force veteran made pre-pandemic life run like clockwork with an intricate schedule of early school drop-off, after-school programs and babysitters who watched her sons when she was called to the hospital for emergencies.
Exchanges, OTC and Clearing
Electronic Dissemination of Rights Issue and Take-over Documents Extended to 30 June 2021; Joint Statement by Monetary Authority of Singapore, Securities Industry Council and Singapore Exchange Regulation
The Monetary Authority of Singapore (MAS), the Securities Industry Council (SIC) and the Singapore Exchange Regulation (SGX RegCo) announced that listed issuers and parties involved in rights issues and take-over or merger transactions will continue to have the option to electronically disseminate Offer Documents through publication on SGXNET and their corporate websites for another 9 months, until 30 June 2021.
Initial Listing of the Pork Cutout Futures and Options on Pork Cutout Futures Contracts
Effective Sunday, November 8, 2020 for trade date Monday, November 9, 2020, and pending all relevant CFTC regulatory review periods, Chicago Mercantile Exchange Inc. (“CME” or “Exchange”) will list th Pork Cutout Futures and Options on Pork Cutout Futures contracts (the “Contracts”) for trading on the CME Globex electronic trading platform (“CME Globex”) and for submission for clearing via CME ClearPort.
CME Group to Launch Pork Cutout Futures and Options on November 9
CME Group, the world’s leading and most diverse derivatives marketplace, today announced it will launch Pork Cutout futures and options on November 9, 2020, pending all relevant regulatory review periods.
Nasdaq to Hold Third Quarter 2020 Investor Conference Call
Nasdaq (Nasdaq: NDAQ) has scheduled its Third Quarter 2020 financial results announcement.
TMX Datalinx to Provide Yahoo Finance with Real-Time Market Data for Canada’s Premier Equities Markets; Yahoo Finance, the world’s leading source of business and finance news to bring TMX’s real-time market information to global audience
TMX Datalinx, TMX Group’s information services division, today announced a landmark agreement with Yahoo Finance, a unit of Verizon Media, to provide access to real-time intraday market data information for Toronto Stock Exchange (TSX) and TSX Venture Exchange (TSXV) and TSX Alpha Exchange (Alpha) across Yahoo Finance web properties and platforms.
Appendix 3Z – Peter Warne
Retirement of Peter Warne
The Board of ASX Limited (ASX) announces the retirement of Peter Warne effective from the end of the Annual General
Meeting today, 30 September 2020. Mr Warne has served for more than 14 years on the ASX Board and was a member of the Audit and Risk Committee, Nomination Committee and Remuneration Committee. ASX is pleased to confirm that Mr Warne will remain Chairman
Results of Annual General Meeting
The results of ASX Limited’s Annual General Meeting held on 30 September 2020 are set out in the attached document
Attached is a letter to shareholders from the Chairman and the Managing Director and CEO regarding ASX’s FY20 final
dividend and full-year financial results.
AGM addresses by the Chairman and the Managing Director and CEO
Attached is a copy of the addresses to be given by the Chairman and the Managing Director and CEO at ASX Limited’s
Annual General Meeting today.
Agilyx admitted to trading
The cleantech company Agilyx has today been admitted to trading on Merkur Market (ticker code: AGLX-ME). Agilyx has developed technologies and systems to recycle plastic. Recently, Agilyx raised NOK 300 million through a private placement. The placement attracted strong interest from existing shareholders in Agilyx, as well as high quality ESG focused institutional investors and was approximately ten times oversubscribed, announced Agilyx.
HKEX operating chief appointed interim CEO as Charles Li retires early; Charles Li will now retire in December with HKEX chief operating officer, Calvin Tai, set to take over as interim CEO as the search for a permanent chief executive is undertaken.
Annabel Smith – The Trade
Hong Kong Exchanges & Clearing (HKEX) has confirmed that its co-president and chief operating officer will succeed chief executive Charles Li in December following his decision to retire early. Calvin Tai will assume the role of interim chief executive while the search for a new permeant chief executive takes place. His appointment follows news in May that Li would retire as CEO of the Asian bourse in October 2021 as his contract ends.
Shenzhen Stock Exchange: Fully Support High-Quality Economic And Social Development Of Hubei After The Pandemic– Speech By Chairman Wang Jianjun At The 2020 Capital Conference For High-Quality Development Of Hubei
Distinguished Secretary Ying Yong, Executive Vice Governor Huang Chuping, Secretary Wang Zhonglin, Vice Governor Zhao Haishan, Mayor Zhou Xianwang, Chairman Hu Shuguang, Director Hu Lishan, Chairman Huang Hongyuan, and dear guests,
Shenzhen Stock Exchange Leverages Its Edges In Blockchain Platform To Facilitate Innovation Development Of Regional Equity Market
On September 28, Shenzhen Securities Communication Co., Ltd. (SSCC), a subsidiary of Shenzhen Stock Exchange (SZSE), and Beijing Equity Trading Center Co., Ltd. (BETC), a subsidiary of Beijing State-owned Capital Operation and Management Center (BSCOMC), jointly held a launch ceremony for the blockchain-based registration and custody system for the Beijing Regional Equity Market, and signed a letter of intent for cooperation on the research and application of the blockchain technology. Responsible persons from the Information Center of the China Securities Regulatory Commission (CSRC), SZSE, BSCOMC, and relevant institutions were present at the ceremony.
BME Launches A New Big Data Platform For Its TCA & Best Execution Service
BME yesterday launched a new Big Data platform for its TCA & Best Execution service through its Innovation subsidiary BME Inntech. This service is aimed at securities brokers and broker-dealers as well as fund managers.
Chief Information Officer Resigns From NZX
NZX yesterday announced that Chief Information Officer, David Godfrey, has resigned and will be leaving the company at the end of 2020. Mr Godfrey has held a range of IT leadership roles over more than 11 years with the company. He joined NZX in June 2009 through the M-co acquisition, and became IT Manager for NZX Energy Services. He subsequently headed up Regulated Systems & Operations, before leading the company’s full technology function as Head of IT in June 2011, and CIO since February 2016.
Bloomberg onboards Charles Taylor Investment Management to AIM OMS; US-based investment firm Charles Taylor has implemented the AIM OMS and PORT Enterprise analytics solution from Bloomberg.
Annabel Smith – The Trade
US-based Charles Taylor Investment Management has deployed the AIM order management system (OMS) from Bloomberg in a bid to enhance its investment workflows.
Whistleblower warned EY of Wirecard fraud four years before collapse; Exclusive: Employee at payments group’s longtime auditor flagged suspicious accounting and attempted bribery in 2016
Olaf Storbeck – FT
EY was warned in 2016 by one of its own employees that senior managers at Wirecard may have committed fraud and one had attempted to bribe an auditor. The revelation that an EY employee identified suspicious activity at Wirecard four years before the payments group imploded in Germany’s largest postwar corporate fraud will increase the pressure on the accounting firm, which audited Wirecard for more than a decade and provided unqualified audits until 2018.
Congress weighs crypto payments and fintech lending in hearing today
Kollen Post – Cointelegraph
In a hearing on Tuesday, the Congressional Fintech Task Force heard arguments on new rules that would potentially expand banking regulations to accommodate more technology firms providing financial services.
A subunit of the Financial Services Committee, the Fintech Task Force leads the committee’s examinations of emerging technologies. As Task Force Chair Stephen Lynch (D-MA) noted, “Banking is becoming less centralized. Consumers are facing more choices than they ever have.”
Giant Tech Firms Could Pose Dangers To Financial System, Warns House Fintech Task Force Chair
Ted Knutson – Forbes
Without mentioning Apple, Google and the like by name, House Fintech Task Force Chair Stephen Lynch warned today giant tech firms could pose dangers to the financial system.
“I see too-big-to-fail fintechs in the future in a big, big way,” cautioned the Massachusetts Democrat.
The share of loans involving nonbank fintech lenders has soared over seven-fold in five years to 38 percent in 2018 from 5 percent in 2013.
Goldman Sachs looking to round out digital assets team with new international hires
Frank Chaparro and Aislinn Keely – The Block
Investment banking giant Goldman Sachs is looking to round out its digital assets team with two new international hires, according to people familiar with the situation. The firm, which re-structured the digital assets team earlier this year, is seeking to fill a vice president position in the UK as well as a research and development software engineer in Singapore. The team has grown to about 10 people with the most notable recent additions including Oli Harris, whom the firm brought on from JPMorgan, and Amar Amlani, who previously was an executive director in cross assets financing at Goldman. The team also relies on support from other units at the firm.
FinCEN director warns banks about cryptocurrency risk exposure
Joshua Mapperson – Cointelegraph
The U.S. Financial Crimes Enforcement Network (FinCEN) director Kenneth Blanco has warned banks to think seriously about their cryptocurrency risk exposure. During the virtual 2020 ACAMS anti-money laundering Conference in Las Vegas this week, Blanco discussed the obligations of banks in implementing effective anti-money laundering (AML) policies. Current FinCEN regulations (FIN-2019-A003) state that it is the responsibility of all financial institutions to identify and report suspicious activity concerning how criminals and other bad actors exploit card verification checks for money laundering, sanctions evasion, and other illicit financing purposes. For many banks, it is still unclear how virtual currencies affect their institutions.
New Zealand Tax Office Collects Traders Data from Crypto Exchanges
Aziz Abdel-Qader – Finance Magnates
New Zealand’s tax authorities have seemingly got the green light to collect crypto investors’ information from local exchanges to see if they are paying their dues. The agency, in New Zealand called the Inland Revenue Department (IRD), announced Monday that it has asked all firms to pass on customers’ personal details. It will be the first time the country’s IRD will gain access to crypto traders’ data – information that includes trades, names and addresses, and the value and type of their crypto assets.
Coinbase Offers Severance Package to Employees Unsatisfied With ‘Apolitical’ Mission
Sebastian Sinclair – Coinbase
Coinbase CEO Brian Armstrong sent his employees a letter telling them to get in line with a new company “culture shift,” offering those unwilling to do so a “generous separation package.” Armstrong sent the letter, which CoinDesk obtained, to Coinbase employees on Wednesday, stating the time has come to have a “difficult conversation” over his recent clarification of Coinbase’s mission.
Ethereum 2.0 developers will run another testnet ‘Zinken’
Yogita Khatri – The Block
Ethereum 2.0 developers will run yet another testnet “Zinken” in the coming days as the Spadina testnet didn’t go smoothly enough. Danny Ryan, a core Ethereum developer, said Spadina suffered long waits to block finality and low participation from Ethereum 2.0 clients, or parties that run nodes to validate transactions. “Even though we expect moderately low participation on a short-lived non-incentivized testnet, small errors in the client release process great[ly] exacerbated this problem, resulting in ~1/3 participation in the first few epochs,” said Ryan. “In response to these issues, we’ll be hosting -at least- one more dress rehearsal — Zinken — prior to genesis.”
Coinbase Offers Staking Rewards for Cosmos
Tim Copeland – Decrypt
Coinbase has today added support for staking rewards of the Cosmos cryptocurrency, according to a release today. Cosmos is an ecosystem of proof-of-stake blockchains. Its goal is to create an “Internet of blockchains.” By using multiple blockchains, it hopes to provide a more scalable alternative to current popular blockchain platforms, such as Ethereum, which often struggle to support high numbers of transactions.
Menufy Accepts Six Additional Cryptocurrencies for Digital Food Orders
Restaurant e-commerce provider Menufy announces the availability of additional cryptocurrencies for the payment of online food orders at thousands of participating restaurants in the US. Along with Bitcoin (BTC) and Bitcoin Cash (BCH), customers can now also pay with Ethereum (ETH), Ripple (XRP), and four US dollar-pegged stablecoins: Gemini Dollar (GUSD), USD Coin (USDC), Paxos Standard (PAX), and Binance USD (BUSD). “We are once again pleased to expand the list of cryptocurrencies that our customers can use to pay restaurants. The more exposure and adoption crypto payments receive, the better, faster, and cheaper payment systems people all around the world will enjoy,” says Aleksandr Elesev, senior software architect and co-founder of Menufy.
NY Fed report: interest in non-bank digital payment options grew in pandemic era
MK Manoylov – The Block
With fears that cash could spread the coronavirus, digital payment options like Venmo and PayPal increased in prominence during the pandemic. But bankless options like Square’s Cash App appear to have users extra interested as well. A report from the Federal Reserve Bank of New York found that interest in peer-to-peer Cash App grew after April 15, once the U.S. government released coronavirus stimulus checks to citizens. Peer-to-business options like Google Pay and Apple Pay saw an accompanying decrease in interest.
Chinese Police Claim OTC Crypto Trader Laundered $73,500
Liam Frost – Decrypt
Chinese police are investigating an over-the-counter (OTC) cryptocurrency trader for facilitating a deal that involved $73,500 of illicitly gained funds, industry news outlet 8BTC reported today. According to the publication, the dealer helped undisclosed fraudsters to trade 500,000 Chinese yuan (roughly $73,500) for USDT stablecoins. The funds, which are reportedly part of an investment scam, were first deposited on crypto exchange OKEx. The exchange, authorities and the trader himself are “continuing to cooperate in the investigation,” the outlet added.
Is Reddit’s MOON Token Really 2,000x Bigger Than the Global Economy?
Paddy Baker – Coindesk
A token for rewarding content on a specific Reddit forum now has the unusual honor of being thousands of times bigger than the entire global economy … kind of. MOON, a community token for the r/Cryptocurrency subreddit, technically has a market cap of over $2.88 septillion (that’s 24 zeroes) at press time. That dwarves the global economy which, as per data from the World Bank, came to approximately $133 trillion in 2019. So on paper, a four-month old token, designed to reward good content on a subreddit, has “mooned” to become 2,000 times bigger than the value of everything else humanity has ever made, ever.
Novogratz Plows Ahead In DeFi Amid the ‘Gamifying’ of Crypto
By Olga Kharif – Bloomberg
Galaxy Digital becomes a shareholder in venture firm ParaFi; Other investors include Bain Capital Venture, Henry Kravis
Scams and get-rich-fast schemes in decentralized finance, or DeFi, are giving the crypto industry a black eye, according to Mike Novogratz, chief executive officer of Galaxy Investment Partners LLC. “The same way a lot of the ICOs gave crypto a bad name, there are plenty of these coins that became Ponzi-like,” Novogratz said in an interview. “It’s kind of gamifying money. There are still lessons we are going to get out of that, but it’s not great for the ecosystem.”
Regulated US Exchange Gemini Now Offers Confidential Zcash Withdrawals
Paddy Baker – Coindesk
Gemini, one of a handful cryptocurrency exchanges regulated in New York, has said users can now withdraw privacy coin zcash confidentially.
Postal Service workers quietly resist DeJoy’s changes with eye on election; Many USPS employees see recent cost-cutting changes that have slowed mail delivery as violating the spirit, if not the letter, of the law.
Jacob Bogage – The Washington Post
This summer, as controversial new procedures at the U.S. Postal Service snarled the nation’s mail delivery and stirred fears of how the agency would handle the election, rank-and-file workers quietly began to resist.
Trump Sent a Warning. Let’s Take It Seriously; Our democracy is in terrible danger — more than since the Civil War, more than after Pearl Harbor, more than during the Cuban missile crisis.
Thomas L. Friedman – NY Times
President Trump has made it unmistakably clear in recent weeks — and even more crystal clear at the Tuesday debate — that there are only two choices before voters on Nov. 3 — and electing Joe Biden is not one of them. The president has told us in innumerable ways that either he will be re-elected or he will delegitimize the vote by claiming that all mail-in ballots — a time-honored tradition that has ushered Republicans and Democrats into office and has been used by Trump himself — are invalid.
Profitable Losses, or How Trump Trimmed His Taxes
Lydia O’Neal – Bloomberg
How does a billionaire pay next to nothing in federal income taxes? The simple answer is by losing money. But a New York Times report on how President Donald Trump has consistently whittled down his tax liability, paying just $750 in 2016 and again in 2017, shows how complicated that approach can be in practice. Many of the tax breaks laid out in the Times’ Sept. 27 story are not only legal but common, raising questions of the fairness of the tax system in general.
Trump-Biden Debate Slips Into Chaos as Insults Drown Out Issues
Jennifer Epstein and Jennifer Jacobs – Bloomberg
Biden calls Trump ‘clown,’ ‘racist’ and ‘worst president’ ever; Trump refuses to condemn White supremacists like Proud Boys
President Donald Trump and Democratic nominee Joe Biden hurled insults and repeatedly interrupted each other in their first debate Tuesday, sparring over topics that included the coronavirus, the economy and their families as moderator Chris Wallace tried mostly in vain to control the conversation.
The Man Who Didn’t Want to Be a Trump Fed Governor; A previously unreported episode helps illustrate the difficulty Trump has experienced trying to lasso the central bank.
By Saleha Mohsin, Jennifer Jacobs – Bloomberg
One June morning in 2019, the White House called economist Marc Sumerlin. President Donald Trump had a pair of vacancies to fill on the Federal Reserve’s Board of Governors, and Sumerlin, a former aide to President George W. Bush, was a candidate for one of them.
Wilbur Ross’s Census Shutdown Is Against the Rule of Law; The Secretary of Commerce appears to be openly defying a court order. Has it really come to this?
By Noah Feldman – Bloomberg
Secretary of Commerce Wilbur Ross appears to be openly flouting the law in connection with the census — again. This is the same cabinet official who was slapped down by the Supreme Court for violating proper legal procedure in trying to introduce a citizenship question to the census. Now, Ross has announced his intent to end the census counting early, on October 5, even though a federal district judge ordered him last week to let the counting continue until the scheduled end date of October 31.
Boris Johnson Apologizes for Getting His Covid Rules Wrong
By Tim Ross – Bloomberg
PM confused over regulations for socializing in the north east; Government in talks with Tory rebels over new Covid laws
Boris Johnson apologized after wrongly explaining his own government’s coronavirus restrictions, in a gaffe that will fuel growing criticism of his response to the pandemic.
Trump’s $73 Million Tax Refund Stuck With Little-Known Panel
By Mike Dorning – Bloomberg
Staff of Joint Committee on Taxation scrutinizes big refunds; Reviews by committee established in 1920s after controversies
The details published about Donald Trump’s tax returns were a revelation to the public but not to a small group of attorneys who work for a little-known congressional panel. Trump has been in the middle of a dispute with the Internal Revenue Service over a 2010 claim of a $72.9 million tax refund, according to the New York Times, which obtained more than 20 years of the president’s tax data. The size of the refund claim brought it before the Joint Committee on Taxation.
FinCEN Files Scandal Is Unlikely To Change Anti-Money Laundering Rules Anytime Soon
Mayra Rodriguez Valladares – Forbes (opinion)
An impressive investigation by BuzzFeed and the International Consortium of Investigative Journalists (ICIJ) revealed what has been clear to many of us in the banking regulatory world. Existing regulations and bank compliance processes are insufficient. And unfortunately, new regulations to strengthen anti-money laundering are unlikely to be forthcoming any time soon.
ESMA releases statement concerning the applicability of Level 3 guidance under the Prospectus Directive
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has released a public statement concerning the applicability of level 3 guidance published under the Prospectus Directive.
ESMA Publishes Final Report for Guidelines on Internal Control
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has today published the Final Report for its Guidelines on Internal Control for Credit Rating Agencies.
Excessive Trading: When A Lot Becomes Too Much
For some investors, a high-volume trading strategy could be something they seek. For others, it might be a sign of “excessive trading.” But when does a lot become too much? What is a firm’s responsibility when it comes to supervising for this behavior?
SEC Charges Manitex International and Three Former Senior Executives With Accounting Fraud
The Securities and Exchange Commission today announced settled charges against Manitex International, Inc., a Bridgeview, Illinois manufacturer and distributor of cranes, forklifts and heavy equipment, and three of its former senior executives for two accounting fraud schemes that resulted in the issuance of materially misstated financial statements
SEC Charges Former Real Estate Executive With Misappropriating $26 Million in Ponzi Scheme
The Securities and Exchange Commission today charged the former president of a Marin, California real estate development and management company with operating a fraudulent Ponzi scheme and misappropriating over $26 million from more than 1,300 investors – many of whom were elderly and retired.
SEC Charges Ratings Agency With Internal Controls Failures in Connection With Ratings of CMBS and CLO Combo Notes
The Securities and Exchange Commission today announced that the credit ratings agency Kroll Bond Rating Agency Inc. (KBRA) has agreed to pay more than $2 million to settle separate charges relating to the rating of commercial mortgage-backed securities (CMBS) and of collateralized loan obligation combination notes (CLO Combo Notes).
SEC Charges Unregistered Brokers in Penny Stock Scheme Targeting Seniors
The Securities and Exchange Commission today charged three Florida residents with fraudulent sales of stock in NIT Enterprises Inc., a South Florida technology company. The SEC previously charged NIT Enterprises, its former CEO, and two SEC-barred brokers with allegedly defrauding over 100 retail investors, many of them seniors.
J.P. Morgan Securities Admits to Manipulative Trading in U.S. Treasuries
The Securities and Exchange Commission today announced charges against J.P. Morgan Securities LLC, a broker-dealer subsidiary of JPMorgan Chase & Co., for fraudulently engaging in manipulative trading of U.S. Treasury securities. J.P. Morgan Securities admitted the findings in the SEC’s order, and agreed to pay disgorgement of $10 million and a civil penalty of $25 million to settle the action.
SEC Charges Swedish National with Global Scheme Defrauding Retail Investors, Including Deaf Community Members
The Securities and Exchange Commission today charged a Swedish national living in Thailand with conducting a multi-million dollar online offering fraud that victimized thousands of retail investors worldwide, including hundreds of investors from the Deaf, Hard of Hearing, and Hearing Loss communities.
SEC Charges Companies, Former Executives as Part of Risk-Based Initiative; Interface and Two Former Executives Charged With Accounting and Disclosure Violations; Fulton Financial Corporation Charged With Disclosure Violations
The Securities and Exchange Commission today filed settled actions against two public companies for violations that resulted in the improper reporting of quarterly earnings per share (EPS) that met or exceeded analyst consensus estimates. The actions are the first arising from investigations generated by the Division of Enforcement’s EPS Initiative, which utilizes risk-based data analytics to uncover potential accounting and disclosure violations caused by, among other things, earnings management practices.
SEC Issues Two Whistleblower Awards for High-Quality Information Regarding Overseas Conduct
The Securities and Exchange Commission today announced two separate whistleblower awards for total payments of over $2.5 million.
SEC Charges Top Executive of California Microcap Company for Misleading Claims Concerning COVID-19 Test and Financial Statements
The Securities and Exchange Commission today charged Mark Schena, the President and Chief Science Officer of Arrayit Corporation, for making allegedly false and misleading statements concerning Arrayit’s development of a COVID-19 blood test and its intention to resolve its delinquency in filing required periodic reports with the SEC.
Commissioner Rostin Behnam to Participate in a Discussion on Developments in ESG Regulatory Policy at ESG & Derivatives, an ISDA Virtual Conference
CFTC to Hold an Open Commission Meeting on October 6
Commodity Futures Trading Commission Chairman Heath P. Tarbert today announced the CFTC will hold an open meeting on Tuesday, October 6, 2020 at 10:30 a.m. (EDT). The meeting will be held virtually in accordance with the agency’s implementation of social distancing due to the COVID-19 (coronavirus) pandemic.
CFTC Orders New Jersey Firm to Pay $300,000 for Supervision Violations
The Commodity Futures Trading Commission today issued an order filing and settling charges against registered futures commission merchant Gain Capital Group, LLC, of Bedminster, New Jersey, for supervision violations related to its handling of customer accounts introduced by an independent introducing broker that was subject to a prior CFTC enforcement action for fraud and other violations. The order requires Gain to pay a civil monetary penalty of $300,000 and cease and desist from violating CFTC Regulation 166.3.
CFTC Awards Whistleblower $250,000
The Commodity Futures Trading Commission today announced an award of approximately $250,000 to a whistleblower who provided significant information that caused the CFTC to open an investigation. The whistleblower also provided substantial assistance to staff throughout the investigation. The award was reduced, however, because the whistleblower did not promptly report the violations.
CFTC Charges Slovakian Men and Their Company with Spoofing in Crude Oil Futures Markets
The Commodity Futures Trading Commission today filed a civil enforcement action in the U.S. District Court for the Northern District of Illinois against Roman Banoczay Jr., Roman Banoczay Sr., and their company, BAZUR Spol. S.R.O., of Bratislava, Slovakia, charging them with spoofing and engaging in a manipulative and deceptive scheme in the crude oil futures markets.
Joint Statement of Concurrence of Commissioners Dawn D. Stump and Rostin Behnam Regarding JPMorgan Chase & Co., et al.
We concur with the Commission’s decision to accept the Offer of Settlement from JPMorgan Chase Bank, N.A.; J.P. Morgan Securities LLC; and JPMorgan Chase & Co. (the “Respondents”). We concur with the Commission’s findings that the Respondents engaged in unlawful spoofing, manipulation, and attempted manipulation in precious metals and treasuries markets, and that Respondent J.P. Morgan Securities LLC further breached its duty of diligent supervision, all in violation of the Commodity Exchange Act (“CEA”) and the Commission’s regulations.
Supporting Statement of Commissioner Dan M. Berkovitz Regarding Historic Penalty against JPMorgan and Opposing “Bad Actor” Waiver
I support today’s Commission action ordering JPMorgan to pay $920 million—the largest monetary settlement in this agency’s history—for manipulating the precious metals and U.S. Treasury futures markets. However, I oppose the CFTC’s determination that JPMorgan’s conduct should not result in any disqualifications under the “bad actor” provisions of the securities laws, for the reasons outlined below.
ASIC remakes two ‘sunsetting’ class orders relating to credit
ASIC has remade ASIC Class Order [CO 10/381] relating to notification requirements for unlicensed carried over instrument (COI) lenders which was due to end on 1 October 2020.
ASIC bans BGC Securities fixed income broker for ten years
ASIC has banned former BGC Securities (Australia) Pty Limited (BGC) broker David Moore, of Pullenvale, QLD, from providing financial services for ten years.
Kroll Agrees to Pay $2 Million to Settle Allegations It Broke Credit-Ratings Rules; SEC cites lack of ‘analytical method’ in how firm’s analysts rated commercial mortgage-backed securities
Cezary Podkul – WSJ
Kroll Bond Rating Agency Inc. agreed to pay $2 million in a settlement with the Securities and Exchange Commission for violating rules designed to make credit ratings accurate. The deal marks the regulator’s second such settlement in less than five months and comes amid rising concerns over rosy grades given out by ratings firms on tens of billions of bond deals backed by malls, hotels and other now-struggling commercial properties.
UK financial watchdog admits consumers confused by protection rules; Difficulties public face in grasping what regulator can and cannot police ‘remain key issues’
Matthew Vincent – FT
The UK financial regulator has admitted that people are still confused about which products are covered by its rules despite pledging last year to clarify its consumer protection role.
JPMorgan to pay $920m in largest-ever spoofing settlement; Bank admits it manipulated precious metals and Treasuries markets for eight years
Kadhim Shubber and Philip Stafford – FT
JPMorgan Chase has admitted manipulating precious metals futures and US government bond markets over eight years in a $920m settlement with US authorities over the practice known as spoofing.
Alberta Securities Commission Connect 2020 Brings Together Government And Industry Leaders For Insightful Conversations On Alberta’s Plan For Recovery
The Alberta Securities Commission (ASC) today announced its speakers for the fourth annual ASC Connect conference to be held on October 27, 2020. The theme of this year’s free virtual event is Adapting to New Market Realities and Fostering Resilience.
Investing and Trading
Shell to cut up to 9,000 jobs in effort to shave $2.5bn in costs; Pandemic adds to challenges facing industry grappling with shift to cleaner energy
Anjli Raval – FT
Royal Dutch Shell plans to cut up to 9,000 jobs as the pandemic accelerates a restructuring at the oil and gas producer while it shifts to an era of cleaner fuels. Ben van Beurden, chief executive, said on Wednesday that making Shell, which had 83,000 employees at the end of last year, a simpler organisation was expected to reduce annual costs by as much as $2.5bn by 2022.
UK GDP hit by largest fall on record; Revised data show economy shrank slightly less than feared yet still ranking worst among major international counterparts
Valentina Romei – FT
The UK economy shrank marginally less than initially estimated in the second quarter of this year, but still recorded its largest fall on record and the worst contraction among major economies.
Haldane Joins BOE Pushback on Negative Interest-Rate Speculation
Fergal O’Brien and Lucy Meakin – Bloomberg
Bank of England Chief Economist Andy Haldane said an analysis of negative interest rates will probably take months, reinforcing the central bank’s pushback against speculation about interest-rate cuts being imminent. Haldane said Wednesday the BOE’s decision to examine how to take the benchmark below zero wasn’t a signal about the likelihood of that happening. The comments come a day after Governor Andrew Bailey said the central bank hasn’t reached any judgment on whether to introduce the policy.
Cassini Systems Named Post-Trade Solution of the Year in Global Investor Group’s Investment Excellence Awards
Cassini Systems, the leading provider of pre- and post-trade margin and collateral analytics for derivatives markets, today won Global Investor Group’s Investment Excellence Award for Post-Trade Solution of the Year. A panel of judges composed of senior market participants selected the winners from shortlists identified by the Global Investor editorial team.
Increased Cooking at Home Lifts Sales at Frank’s RedHot Maker; McCormick & Co. sees trend continuing as pandemic has accelerated earlier shift toward consumers preparing more meals
Matt Grossman – WSJ
Spice and condiment maker McCormick & Co. logged higher revenue this summer as stronger sales to consumers outpaced weakened demand from commercial customers during the Covid-19 pandemic.
Danger Is Approaching for Coronavirus Vaccine Stocks; As the race for a Covid-19 vaccine enters the final stretch, investors should be more wary of common drug development pitfalls
Charley Grant – WSJ
The Covid-19 vaccine race appears to be entering the home stretch. For biotech investors, the trouble could be just beginning. Despite a recent pullback, biotech investors are pricing in multiple Covid-19 vaccine breakthroughs in the near future. Pfizer PFE -0.60% and its partner BioNTech BNTX 0.54% could have late-stage clinical data as soon as the end of October, while data from Moderna MRNA -0.04% is expected soon after. Johnson & Johnson JNJ -0.03% and Novavax NVAX -2.91% have also recently begun their own late-stage trials and could have data within a few months.
Environmental, Social and Corporate Governance
Oil traders rush to invest billions into renewables; Mercuria, Gunvor, Vitol and Trafigura speed up preparations for energy transition
David Sheppard, Neil Hume and Anjli Raval – FT
The world’s largest oil traders are rushing to plough billions of dollars into renewable energy projects in the next five years, as they speed up preparations for a dramatic shift in the world’s energy mix.
Fund Managers Seek to Plug Holes in ESG Data
Faye Kilburn – WatersTechnology
Fund managers always knew that picking investments on the basis of an ethical rating depends on flawed and fuzzy information. Now, the economic shock of the past six months has revealed new gaps in the data that quant investors rely on for their environmental, social, and governance (ESG) models.
Bladonmore ESG report: Europe’s biggest blue-chip companies failing to provide evidence to support their ESG agendas
A study of 100 of Europe’s largest blue-chip companies has found a significant gap between high-level ESG statements and evidence to support such claims in action.
Bladonmore, a London-based communications consultancy, reviewed the corporate websites of all the companies in the STOXX All Europe 100 index during August 2020. It found a significant gap between corporate ‘commitments’ around social responsibility and the content that backs it up.
Broadridge Research: Active Asset Managers Can Meet Rising Demand With New ESG Solutions
A new report from Broadridge Financial Solutions, Inc. (NYSE: BR), a global Fintech leader, reveals a growing investor demand for active managers to introduce new environmental, social and governance (ESG) funds to the market. In the U.S., net flows to long-term responsible funds quadrupled in 2019 to $20 billion, from $5 billion in 2018, and continued to grow during the first half of 2020 to reach $21 billion. A majority (68%) of ESG assets in the U.S. are now in actively managed funds.
BP Bets Future on Green Energy, but Investors Remain Wary; New CEO is tilting the British energy company away from oil, hoping to profit instead from wind and solar power
Sarah McFarlane – WSJ
BP BP -2.81% PLC has unveiled the most aggressive plans yet by a major oil company to pivot toward cleaner energy. But the revamp has so far failed to ignite enthusiasm among investors despite growing interest in renewables.
Women Founders of AI Startups Take Aim at Gender Bias; They see gender diversity in their companies as crucial in making sure the technology doesn’t penalize the underrepresented
Te-Ping Chen – WSJ
When Rana el Kaliouby was pitching investors in 2009 on her artificial-intelligence startup, Affectiva, she and her co-founder tried to steer clear of what she calls the “e-word”—emotion. They were both women, and though their startup was designed to detect emotion in technology, they were sensitive to how they would be perceived. They feared they might not be taken seriously because “emotion” wasn’t in the traditional lexicon of many companies and funders—and because it carried female connotations in a largely male industry.
Goldman Shuffles Consumer Banking, Asset Management Executives; Stephanie Cohen to become first woman to run a major division at the investment firm in years
Liz Hoffman – WSJ
Goldman Sachs Group Inc. GS -1.15% shook up its executive ranks on Tuesday as Chief Executive David Solomon continues to put his mark on the firm. Stephanie Cohen, who has been Goldman’s chief strategy officer since 2017, was promoted to co-run the bank’s consumer banking and wealth management division as part of a broader reshuffling two years into Mr. Solomon’s tenure. Her co-head will be Tucker York, a longtime executive in Goldman’s private bank, which caters to billionaires. The change marks the first time in years that a woman will run a major division at the firm.
‘Multi-strategy’ hedge funds show way forward for industry; Investors nowadays crave predictability and consistent results more than fickle brilliance and the occasional home run
Robin Wigglesworth – FT
Five years ago, the magazine cover curse hit Bill Ackman hard, when Forbes put the silver-haired hedge fund manager on the front, arms crossed and looking regal, with the fate-tempting headline: “Baby Buffett.”
TSB to shut a third of bank branches; Move by Spanish-owned lender will trigger loss of 969 jobs
Nicholas Megaw – FT
TSB will shut more than a third of its bank branches next year, becoming the latest of several European lenders to speed up closure plans in response to the coronavirus pandemic.
BlackRock performs volte-face with swap-based equity ETF; The world’s largest asset manager has launched its first synthetic ETF after years spent criticising the structure
Steve Johnson – FT
BlackRock has performed a volte-face and launched its first swap-based equity exchange traded fund, entering a market it had avoided for nearly a decade following chief executive Larry Fink’s vehement criticism of the structure.
Behind China’s Decade of European Deals, State Investors Evade Notice; Chinese government shareholders wield undetected influence in hundreds of deals, new research finds
Daniel Michaels – WSJ
China’s government has been deeply involved—often from behind the scenes—in a wave of acquisitions across Europe over the past decade. Of 650 Chinese investments in Europe since 2010, roughly 40% have high or moderate involvement by state-owned or state-controlled companies, including some in advanced technologies, according to new research by Dutch consulting firm Datenna BV. The analysts combed through millions of records in China’s company-registration databases.
Cuba on edge as government readies landmark currency devaluation; Government is forced to act as it faces a dire shortage of dollars and collapse of tourism
Marc Frank – FT
Cuba is stepping up plans to devalue the peso for the first time since the 1959 revolution, as a dire shortage of tradable currency sparks the gravest crisis in the communist-ruled island since the fall of the Soviet Union.
Amundi boss targets China’s wealth management boom; Europe’s largest asset manager has received regulatory permission to begin operating a joint venture
Chris Flood – FT
Yves Perrier, chief executive of Amundi, has predicted that China will become one of the EUR1.6tn French asset manager’s most important markets after it received regulatory permission to begin operating a wealth management joint venture with Bank of China.
Renminbi set for best quarter since global financial crisis; Preliminary US-China deal and higher bond yields attract investors
Hudson Lockett and Eva Szalay – FT
The renminbi is set to notch its best quarter since the global financial crisis, helped by a sell-off in the dollar and bets from traders that the worst of the tit-for-tat tariffs between Washington and Beijing have passed.
SNB Interventions Soared to $98 Billion as Virus Roiled Markets
Catherine Bosley – Bloomberg
Swiss release quarterly intervention data for the first time; SNB may be trying to head off U.S. pressure with publication
The Swiss National Bank spent 90 billion francs ($98 billion) on interventions in the first half of 2020, the most in years, amid a market rout in the early days of the coronavirus pandemic.
Singapore Regulator Orders Wirecard to Stop Local Services
Chanyaporn Chanjaroen – Bloomberg
German payments firm must return customer funds by Oct. 14; Asia Pacific accounted for almost 45% of group’s 2018 revenue
Singapore’s financial regulator ordered Wirecard AG’s local entities to cease their payment activities and return all customer funds by Oct. 14. The local unit of the embattled German payments company informed the Monetary Authority of Singapore that it’s unable to continue providing payment processing services to “a significant number of merchants,” MAS said in a statement on Wednesday.
Nigeria’s Oil Bill Proposes Free Market Pricing for Gasoline
Anthony Osae-Brown – Bloomberg
Nigeria’s latest proposed oil bill makes a provision for “unrestricted free market pricing” of petroleum products, permanently ending decades of government-subsidized gasoline if the bill becomes law. The legislation, which is currently before lawmakers, sets up a regulator to “provide pricing and tariff frameworks for natural gas in midstream and downstream gas operations and petroleum products based on the fair market value,” according to a copy of the documents seen by Bloomberg.
Amazon to Take Office Space From Citigroup in Singapore
Faris Mokhtar and Chanyaporn Chanjaroen – Bloomberg
Tech giant’s move comes as Chinese rivals expand in the city; Citigroup is among banks assessing post-virus work life
Amazon Inc. is planning to take over some of Citigroup Inc.’s office space in Singapore at a time when a number of the e-commerce giant’s Chinese tech rivals expand in the city state. The online retail giant will lease three floors covering about 90,000 square feet (8,360 square meters) at Asia Square Tower 1 in the heart of the financial district, according to people with knowledge of the plans. Staff will move into the new offices early next year, the people said, asking not to be identified because the plans aren’t public.
Turkey Cuts FX Purchase Tax in a New Step to Normalization
Tugce Ozsoy – Bloomberg
Turkey also lowers witholding tax on lira savings accounts; Lira jumped as much as 0.6% following the latest changes
Turkey cut a tax on foreign currency purchases — its latest step to ease market restrictions that hurt investor sentiment and failed to curb the lira’s decline. The tax on retail purchases of foreign currency, including gold, has been reduced to 0.2% from 1%, according to a presidential decree published in the country’s official gazette on Wednesday. The levy was reintroduced in 2019 to increase budget revenue and was raised earlier this year amid the Covid-19 pandemic.
HSBC, ICBC, Citi Hired for Turkish Wealth Fund’s Debut Eurobond
Kerim Karakaya and Asli Kandemir – Bloomberg
Turkey’s sovereign wealth fund mandated international banks including HSBC Holdings Plc, Industrial Commercial Bank of China Ltd. and Citigroup Inc. for its debut Eurobond sale, according to people with direct knowledge of the matter.
Kuwait monarch Sheikh Sabah Al-Sabah dies at 91
By Tamara Qiblawi, Mostafa Salem and Ghazi Balkiz, CNN
The Emir of Kuwait, Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah, has died at the age of 91 after ruling the Gulf state for 14 years, officials announced Tuesday.
The In-Laws Will Have to Wait: Covid Forces a Break From Stress-Filled Holiday; South Korean officials advise skipping trips to see relatives this year for Chuseok, the country’s version of Thanksgiving
Timothy W. Martin and Dasl Yoon – WSJ
South Korea’s version of Thanksgiving, where millions crisscross the country to see their families, has gotten a pandemic complication. “Don’t visit home,” the country’s prime minister recently pleaded.
Currency, Rates Traders See a Glimmer of Hope in Brexit Talks
Ven Ram – Bloomberg
Inflation breakeven rates, EUR/GBP decline amid ongoing talks; Bond moves reflect optimism about the outcome of negotiations
Traders appear less worried about crunch Brexit talks than in the past, and are positioning for an amicable outcome between the United Kingdom and the European Union.
Brexit: internal market bill passed by Commons despite Tory concerns
Peter Walker and Owen Bowcott – The Guardian
A controversial government Brexit bill that breaches international law has safely passed its final House of Commons hurdle, despite continued serious doubts among a number of Conservative MPs about the plan. The internal market bill, which primarily sets out technical post-Brexit details involving the devolved nations, also gives ministers the power to unilaterally rewrite elements of the withdrawal agreement with the EU. It passed its third reading on Tuesday night by 340 votes to 256 and will now go to the House of Lords.
Brexit: Blow to UK car industry in search for EU deal
Faisal Islam – BBC News
Britain’s car industry risks losing out even if there is a post-Brexit trade deal with the EU, according to documents seen by the BBC. Car parts from Japan and Turkey used in the UK will not be treated as British, so some exports may see higher tariffs. In a letter, Britain’s chief Brexit negotiator says the UK has failed so far to get the car parts deal it wants, and “obviously cannot insist on it”. Having enough parts sourced within the UK and EU is key to a free trade deal. In a letter to the car industry, seen by the BBC, chief negotiator Lord Frost says one of their key priorities – that parts and components from Japan and Turkey count as British in any deal – has been rejected by the European Commission.
Norway reaches fisheries agreement with UK ahead of Brexit
Norway and Britain have reached a bilateral agreement on fisheries, the Norwegian government said on Wednesday, before Britain leaves the European Union’s single market at the end of the year. The framework agreement, which takes effect on Jan. 1, will govern control measures, licences and research, and also facilitates a mutual exchange of quotas and access to each other’s waters, the Norwegian government said in a statement.