Wall Street Is Being Hunted by Futures Cops for Government Leaks; Wall Street Watchdog Joins Banks in Fretting About Zombie Libor

Dec 12, 2019

First Read

Hits & Takes
By JLN Staff

In October, the International Commodities & Derivatives Association, formerly the Swiss Futures & Options Association, decided to wind down the organization as of December 31, 2019. The reasons cited during the October 23 board meeting were related to existing members failing to pay their dues, falling returns from seminars and conferences and a lack of new members. The once powerful Burgenstock Conference had dwindled in attendance steadily over the years because of global competition. The last board members have resigned and chairman Dan Day-Robinson will resign, but will deal with the winding up process in accordance with Swiss regulations. The chairman will also attempt to collect outstanding membership fees due for 2017/2018 and 2019. The organization had a run of 39 years.~JJL

The Swiss Futures & Options Association had something to do with the initial launch of the John Lothian Newsletter as a paid offering. When I was invited to attend the Burgenstock Conference in 2004 (after turning down an invitation in 2003), I decided to start to charge for subscriptions to the newsletter to give me the revenue to be able to attend the conference and other such events. My wife and I attended the 2004 Burgenstock Conference (it was also my 15th wedding anniversary) and had a great time at the event. I returned to the conference for a number of years and was most recently at the “Burgenstock Conference” in Geneva in 2015.~JJL

Thank you to Dan Day-Robinson, Gary Delany and other board members for their leadership of the organization through the years.~JJL

A Chicago Tribune story reports the two Hollander boys caught in the volcano explosion are dead. Their parents, including my friend and former Price Group colleague Martin Hollander, are still reported missing.~JJL

Do you like to use your fingers to trade? Keyboard Trader has a new website.~JJL

According to this story from TNW, about $1.6 billion worth of bitcoin (BTC) have not changed wallets since 2017. For context, there are approximately 18 million bitcoins currently in circulation. Bitcoin’s total supply is fixed, so there can never be more than 21,000,000 BTC in circulation. You can read more about it on CryptoMarketsWiki.~MR

The Justice for Jitesh petition on Change.org now has over 2080 signatures on it.~JJL

What is going on with the Chicago versus Kansas City wheat spread


Keeping up with a growing industry: Trabue Bland of ICE Futures U.S.

Trabue Bland, president of ICE Futures U.S., discussed the growth of the FANG+ Index Futures, the impact of zero or low interest rates on ICE’s clearing members and other market participants, how traders use data now compared to decades ago, and more at FIA Expo 2019.

Watch the video »


Digital Asset Raises $35 Million in Series C Financing to Capture Smart Contract Market with DAML; Funding will be used to expand variety of partner platforms that run DAML applications
Digital Asset
Digital Asset, the creators of the open source DAML smart contract language, announced today that it has raised more than $35 million in Series C funding from new and existing investors. The latest financing round brings the total amount raised by Digital Asset since its establishment in 2014 to $150 million.

*****Digital Asset is back in business with this latest funding round with the help of $15 million from ASX. Very encouraging for the company to complete the ASX project.~JJL


London Stock Exchange raises £20m for derivatives challenger Curve; CurveGlobal will use the money to provide working capital and fund future growth
Samuel Agini – Financial News
The London Stock Exchange and a group of banks have put another £20m into a derivatives-trading venture they hope can challenge the dominant forces in European interest-rate futures.

*****That should put a little bend in the Curve operation.~JJL


Discovery battle between CFTC and Chicagoland software developer heats up
Brad Rosen, J.D. – Jim Hamilton’s World of Securities Regulation
In a recent filing, defendants Jitesh Thakkar and his firm, Edge Financial Technologies, Inc., renewed their motion for summary judgment which was initially filed in September 2019. At that time, the court ruled the motion was premature but indicated the defendants were free to raise it later in the proceeding. The renewed motion alternatively seeks relief in the event the CFTC claims that it needs additional discovery to respond to the defendants’ motion such that the agency should be required to provide a declaration or affidavit explaining what discovery is needed and for what purpose (CFTC v. Thakkar, December 4, 2019).

*****”Mr. Thakkar incurred significant expense to copy and produce to the CFTC more than 800,000 pages of documents that the DOJ produced to him in the criminal case.” Anyone ever pay to have copies made by a law firm? That is one big ouch!~JJL


Trading Charity on the Frankfurt Stock Exchange brings in 70,000 euros; St. Nicholas Day stock exchange fees will be donated to non-profit organizations / donation will be handed over this morning in the Börsensaal
Deutsche Börse
Deutsche Börse and the securities trading banks operating on the Frankfurt Stock Exchange (“Specialists”) today handed over the donations totaling 70,000 euros to this year’s Trading Charity.

****Nice work, my friends.~JJL


Wednesday’s Top Three
Ken Griffin was once again the subject of our top story, in Bloomberg’s Ken Griffin Has Another Money Machine to Rival Hedge Fund, about his Citadel Securities division. In second was The New York Times’ disturbing story This Is What Racism Sounds Like in the Banking Industry, about discrimination at JP Morgan. In third was the tragic news about a volcanic eruption in New Zealand, Whakaari/White Island eruption: Sydney family of four feared dead, from Stuff.


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Lead Stories

Wall Street Is Being Hunted by Futures Cops for Government Leaks
Matt Robinson and Benjamin Bain – Bloomberg
Probes into trades in Vanity Fair article found no wrongdoing; CFTC harnessing technology to pore through tons of market data
U.S. regulators are digging into a topic that has been the talk of Wall Street and Washington ever since a controversial Vanity Fair article suggested investors made billions of dollars trading ahead of market-moving news: Are government leaks fueling big profits in the futures market? For months, the Commodity Futures Trading Commission has been quietly ramping up efforts to hunt for suspicious transactions by using technology to pore through reams of market data, said three people familiar with the matter who asked not to be named because the examination isn’t public. The goal is to assess whether some traders are getting a heads up before the release of key economic statistics or federal agencies’ policy announcements.

Wall Street Watchdog Joins Banks in Fretting About Zombie Libor
Jesse Westbrook – Bloomberg
CFTC reviewing proposals to address issues that could arise; Agency’s chairman says he wants to avoid a ‘Libor apocalypse’
“Zombie Libor” and “Libor apocalypse” are probably phrases that send chills down the spines of Wall Street traders. It turns out the terms are also triggering anxiety among swaps regulators.

Chinese bitcoin miners control 65% of the crypto network’s processing power; Bitmain’s market share continues to decline
Yogita Khatri – Coindesk
Bitcoin miners in China now control 65% of the crypto network’s processing power (hash rate), according to research from CoinShares; China’s Sichuan province alone produces 54% of global hash rate; Bitmain’s market share by hash rate, however, continues to decline and now stands at around 66%
Bitcoin miners in China now control 65% of the cryptocurrency network’s processing power (hash rate), according to research by digital assets manager CoinShares.

ASX $15m boost to stake in blockchain start-up Digital Asset
Supratim Adhikari – The Australian
The ASX has added another $US10m ($15m) to raise its stake in blockchain start-up Digital Asset, which is supplying the distributed ledger technology that will eventually replace its Clearing House Electronic Subregister System, better known as CHESS.

Wanted: Libor Replacement for Europe’s $1.1 Trillion Loan Market
Jacqueline Poh – Bloomberg
High-grade loans need new benchmarks as Libor to end in 2021; Finding a solution may boost loan volumes after 2019 decline
Europe’s high-grade loan market has just two years left to resolve an about 1 trillion-euro ($1.1 trillion) question: how to replace Libor. The industry is struggling to find alternatives to scandal-plagued Libor because new reference rates, such as Sonia and ESTR, don’t match market requirements. Still, replacements are needed because Libor benchmarks — a key foundation for loan borrowing costs — will be abolished at the end of 2021. Success in devising new gauges may also prevent a second annual decline in market activity.

Robinhood Launches Its Cash Management Service, a Year After Botched Launch
Julie Verhage – Bloomberg
Robinhood Markets Inc. has finally launched its take on a bank account, albeit a very different version of the service it once hoped to offer. On Wednesday, the online brokerage firm rolled out Cash Management to a subset of users. The product will sweep the money customers don’t currently have in stocks into a separate account with 1.8% interest.

Banks face fresh collective action over forex manipulation; Specialist litigation firm Hausfeld latest to launch suit on behalf of investors
Eva Szalay – FT
One of the law firms that secured a $2bn settlement in the US over allegations of foreign exchange price manipulation filed a collective action in the UK on Wednesday, alleging that six banks participated in “unlawful” forex cartels.

NYSE renews push for direct listings that raise capital; Change would undercut traditional role of bank underwriters in equity financings
Miles Kruppa and Richard Henderson – FT
The New York Stock Exchange has made a new bid to secure US regulatory approval for raising capital in direct listings after a prior proposal was rejected.

China’s Xi to Unveil Plans to Make Macau Financial Hub, Reuters Says
Jihye Lee and Jinshan Hong – Bloomberg
Policies include setting up stock exchange focused on startups; President expected to mark 20th anniversary of colony’s return
Chinese President Xi Jinping plans to announce policies aimed at diversifying Macau’s economy beyond gaming, Reuters reported, in a nod of support as unrest continues to trouble neighboring Hong Kong.

Miami International Holdings and MidChains Sign Letter of Intent, Will Pursue Joint Technology and Crypto and Digital Asset Product Opportunities
Miami International Holdings, Inc. (MIH), the parent holding company of the MIAX Options, MIAX PEARL and MIAX Emerald options exchanges (the MIAX Exchange Group), and MidChains, an upcoming digital asset trading exchange based in Abu Dhabi Global Market (ADGM) seeking to operate under the Financial Services Regulatory Authority (FSRA) framework, today announced that MIH has agreed to purchase an equity stake in MEEG Holdings Limited, the parent holding company of MidChains. As part of the agreement, the parties will pursue joint technology licensing and product listing opportunities internationally, including in the Middle East and Bermuda, subject to regulatory approval.

Natural Gas Boom Fizzles as a U.S. Glut Sinks Profits
Chevron’s multibillion-dollar write-down of gas assets is the most recent sign that the gas supply has far outstripped demand.
Clifford Krauss – The New York Times
A decade ago, natural gas was heralded as the fuel of the future. In shale fields across the country, hydraulic fracturing uncorked a lucrative new source of supply. Energy giants like Exxon Mobil and Chevron snapped up smaller companies to get in on the action, and investors poured billions of dollars into export terminals to ship gas to China and Europe.

U.S. regulator homes in on climate risks to U.S. markets
Ann Saphir – Reuters
The first public report on climate-related risks to financial markets ever commissioned by a U.S. market regulator will be out in June, the head of the group charged with writing it said on Wednesday.
The report, by a 35-member panel formed last month by the Commodity Futures Trading Commission, “will address both the short-term financial risks that may be associated with the transition to a low carbon economy, as well as the current and future market and financial risks associated with the physical risks that will arise from a warming climate,” Bob Litterman, a partner at hedge fund Kepos Capital and the panel’s chair, said at a public meeting held at the CFTC’s Washington headquarters.

Fed Keeps Interest Rates Steady and Projects Little Movement Ahead
Jeanna Smialek – The New York Times
The Federal Reserve left interest rates unchanged at its final meeting of the year, and officials signaled that they would wait to see how the economy fared before making another move. Officials penciled in no rate changes next year, according to their latest set of quarterly economic projections, and saw only one move in 2021, followed by a second in 2022.

Germany sees 1.5 bln euro annual take from new financial transaction tax
Finance Minister Olaf Scholz expects a planned new financial transaction tax to generate annual revenues of around 1.5 billion euros ($551.10 million) initially in Germany, much of which will offset the cost of a new basic pension, a Finance Ministry document showed.

Expect more repo turmoil, says analyst who predicted September spike; Fed’s attempt to ease the strain in this market not seen as enough
Joe Rennison – FT
Few people anticipated the eruption in overnight borrowing costs that spilled through the US financial system in September. One of those who did, clearly articulated in research reports a month earlier, was Zoltan Pozsar at Credit Suisse.

Donald Marron Eulogized as a ‘Dealmaker’s Dealmaker’
Amanda L Gordon and Katya Kazakina – Bloomberg
His funeral draws Schwarzman, Kravis, Lauder, Paulson; The financier and art collector died of a heart attack
Leaders of business and society gathered Wednesday in New York for the funeral of Donald Marron, the financier, art collector and philanthropist who orchestrated Paine Webber’s sale to UBS, founded private-equity firm Lightyear Capital and aided in the Museum of Modern Art’s expansion.

Exchanges, OTC and Clearing

Exchange Council confirms appointment of Wolfgang von Rintelen as member of Exchange Management Board
On Thursday 5th December 2019, the Exchange Council of the European Energy Exchange (EEX) held its fourth and final meeting of 2019 in Vienna, chaired by Dr Michael Redanz, Managing Director of EWE Trading GmbH. In the course of the meeting, the Exchange Council discussed a number of topics including the appointment of Dr Wolfgang von Rintelen to the Exchange Management Board of EEX, the recent announcement that EEX Group has acquired the commodities business of Nasdaq Futures, Inc. (NFX), the integration of the natural gas markets and the registry services, both currently operated by Powernext, into EEX AG as well as EEX’s plans in relation to the upcoming changes to the trade registration process for MiFIR pre-trade transparency requirements.

CME Group Declares Annual Variable Dividend
PR Newswire
CME Group Inc. the world’s leading and most diverse derivatives marketplace, today declared its annual variable dividend, amounting to $2.50 per share. The dividend is payable January 15, 2020, to shareholders of record on December 27, 2019. The annual variable dividend of $2.50 per share to be paid in January 2020 totals approximately $900 million. Including today’s announced variable dividend and the previously announced fourth-quarter 2019 dividend of $0.75 per share to be paid in December, the total dividend yield for dividends announced during 2019 is 2.8% based on the average closing stock price in 2019 to date.

Euronext announces quarterly review results for the PSI 20
Euronext today announced the results of the quarterly review for the PSI 20. The changes due to the review will be effective from Monday 23rd December 2019.

Quarterly review of the BEL 20, BEL Mid, and BEL Small
Euronext today announced the results of the quarterly review for the BEL 20, BEL Mid, and BEL Small indices. The changes due to the review will be effective from Monday 23 December 2019.

Euronext announces quarterly review results of the AEX, AMX, AScX
Euronext today announced the results of the quarterly review for the AEX, AMX and AScX indices. The changes due to the review will be effective from Monday, 23 December 2019.


Trading Technologies Contracts with SBI Thai Online for Distribution of the TT® Platform from Thailand
Trading Technologies International, Inc.
Trading Technologies International, Inc. (TT), a global provider of high-performance professional trading software, infrastructure and data solutions, today announced they have contracted with SBI Thai Online, a Bangkok-based broker and subsidiary of SBI Group, to distribute the TT platform to the firm’s client base. Through this agreement, SBI Thai Online will provide international clients with access to the Thailand Futures Exchange (TFEX) via the exchange’s proprietary EMAPI API from within TFEX’s SET Data Center in Bangkok.

Itiviti voted best technology firm by proprietary traders
Itiviti, a leading technology and service provider to financial institutions worldwide, has been recognized at the 2019 FOW International Awards, presented last night in London by the Global Investor Group. Following an online vote Itiviti was named Best Technology firm/ISV for proprietary traders of the Year, marking the third straight year that Itiviti is recognized at the prestigious FOW Awards.

Fintech: the rise of the Asian ‘super app’; Demand for digital services poses a threat to traditional banks in the region but many start-ups are bleeding cash
Mercedes Ruehl and James Kynge – FT
Rice Basket Queen is the name of a stall run by Ruri Ruhyaty in a bustling suburb of Jakarta. A year ago it was typical of thousands of others. Ms Ruri would place her fish and vegetable dishes on banana leaves on the front counter and wait for customers to walk by.

R.J. O’Brien consolidates internal systems using Itiviti’s Managed FIX Service
PR Newswire
Itiviti, a leading technology and service provider to financial institutions worldwide, today announced that R.J. O’Brien & Associates (RJO), the largest independent futures brokerage and clearing firm in the United States, has successfully implemented Itiviti’s Managed FIX Service for the company and its affiliates.

Global data strategy head at Citi departs to launch FinTech firm; Bill Pryor had been with Citi for four years leading development of big data and cloud technology across custody fund services.
Jon Watkins – The Trade
An industry veteran who led product development for a big data, cloud-based platform at Citi has left the investment bank to launch a FinTech start-up.

Reports of suspicious transactions and orders surge under MAR; ESMA has called for greater supervision of STORS under MAR, as number of reports from firms surged 130% in 2017.
Hayley McDowell – The Trade
Regulators have seen a surge in the number of suspicious transactions and orders reports under the Market Abuse Regulation (MAR), prompting Europe’s watchdog to call for greater supervision of the reporting.

JPMorgan Rolls Out Robots to Scrutinize Banker Travel, Expenses
Michelle Davis – Bloomberg
JPMorgan Chase & Co. dealmakers on the road have another reason to resist the mini bar: The robots are watching. The bank has started using machine learning technology to process expense reports and determine whether they comply with company policies, according to Lori Beer, JPMorgan’s chief information officer.


2019: The Year Washington, Silicon Valley and Beijing Faced Off Over Crypto
Noelle Acheson, Galen Moore, and Christine Kim – Coindesk
2019 has been a historic year for cryptocurrency and blockchain technology. Global state leaders such as President of the People’s Republic of China Xi Jinping and the President of the United States Donald Trump have made public statements addressing the dynamics of this revolutionary tech. Traditional tech companies such as messaging app giant Telegram and social media giant Facebook have made bold promises to integrate crypto into their line of products and services.

Crypto Exchange BitMex Is Hit With $300 Million Investor Lawsuit
Olga Kharif – Bloomberg
RGB Coin, claiming to be angel investor, alleges fraud; BitMex didn’t immediately respond to a request seeking comment
BitMex, one of the world’s most popular cryptocurrency exchanges, and founder Arthur Hayes are being sued for $300 million for allegedly stiffing an early investor. Frank Amato and RGB Coin Ltd. claim to have been the first seed investor of BitMex in 2015. The $30,000 investment was supposed to later be converted into equity, currently valued at more than $50 million, but they weren’t granted the equity, the suit said. Amato claims BitMex, which has employees in California and is registered in the Seychelles, gave him false information.

Digital Asset raises $35M Series C as it looks to continue focus on smart contract offering
Yilun Cheng and Frank Chaparro – The Block
Digital Asset, the company behind the open source DAML smart contract language, has raised $35 million in Series C funding After open sourcing DAML in April, Digital Asset has secured a number of product partners including the $2 trillion Australian Securities Exchange (ASX) The company plans to use the new funds to expand DAML use case and, specifically, to promote its recent cloud-based product, project-DABL

NYDFS proposes new guidance for listing tokens on licensed crypto firms
Celia Wan and Frank Chaparro – The Block
The New York Department of Financial Services is preparing to introduce changes to the infamous BitLicense, and it could make the process for listing coins more rigorous. In a press release, NYDFS superintendent Linda Lacewell laid out the agency’s “first step” in its review of the license, which has been granted to digital asset firms operating in New York since 2015. Since then, at least 18 cryptocurrency companies have been granted the license, including Coinbase, Robinhood, Square, and Tagomi.

Banking giant ING said to be entering into crypto custody space
Yogita Khatri – The Block
ING, the largest bank in the Netherlands with over $980 billion in total assets, is said to be getting into a crowded cryptocurrency custody market.

Dutch Bank ING Reportedly Working on Crypto Custody Tech
Daniel Palmer – Coindesk
Netherlands-based banking multinational ING is developing technology for the custody of crypto assets, according to Reuters.

Binance Adds New Fiat Payment Options Through Integration With P2P Exchange Paxful
William Foxley – Coindesk
Binance has teamed up with peer-to-peer bitcoin exchange Paxful to add new ways to purchase bitcoin.

BitMEX adds native SegWit support for bitcoin withdrawals, helping users save on transaction fees
Yogita Khatri – The Block
Cryptocurrency exchange BitMEX has added support for native SegWit (bech32) addresses for bitcoin withdrawals, helping users save on transaction fees. Announcing the news Thursday, BitMEX said the native SegWit support is currently enabled only for bitcoin withdrawals and not deposits. “When depositing to BitMEX, you must still send to our Pay to Script Hash (P2SH) format addresses, due to our multi-signature wallet solution,” it said.

From SoFi Scandal to Blockchain Unicorn: Cryptocurrency’s Forgiveness of Sexual Misdeeds
David Z. Morris and Jen Wieczner – Fortune
The news last week that Figure, a lending startup based on blockchain technology, had raised $103 million with a unicorn valuation of $1.2 billion, wasn’t just proof that the blockchain industry is still very much alive and well. It also cemented the comeback story of Mike Cagney, who co-founded Figure after resigning as the CEO of SoFi a little more than two years ago amid sexual harassment allegations against him and the fintech company.

Binance Cryptocurrency Exchange Launches Latin American Fiat Gateway
Agustin Beltramino – Cointelegraph
Binance, the leading global cryptocurrency exchange by trading volume and users, today announced the launch of its fiat gateway for Latin America. The announcement was made during laBitConf, a major crypto event for Latin America held in Montevideo, Uruguay. The new platform, named Latamex, will operate under the Binance Fiat Gateway and will allow Binance’s Latin American users to purchase cryptocurrency directly in association with Settle Network, a Latin American digital asset liquidation network.

Kraken is the latest exchange to enter Staking as a Service
John Dantoni – The Block
Cryptocurrency exchange Kraken is the latest exchange to enter the staking landscape for cryptocurrencies. In a recent blog post, the exchange announced its staking service would begin December 13 for customers. Through this service, clients can tap into rewards offered by certain types of digital assets running on proof-of-stake networks. To start, it will allow clients to stake on the Tezos network and “earn a fixed rate of 6%.” Unlike some of its competitors, users will be able to start earnings rewards instantly rather than waiting the usual time period of approximately 21 days or 7 “cycles” in Tezos.

New York Regulator Details Changes to Contentious BitLicense
Nathan DiCamillo, Nikhilesh De – Coindesk
The New York Department of Financial Services (NYDFS) is getting specific about how it will update its controversial virtual currency license. Announced Wednesday by Superintendent Linda Lacewell at a breakfast held by Crain’s New York, the proposed guidance will modify the approval process for listing new cryptocurrencies. Under the current regime, NYDFS approves every cryptocurrency offered within the state on a case-by-case basis with individual exchanges.

Cryptopia’s Liquidator Claws Back $7.2M, But Identifying Crypo Ownership a ‘Mammoth Task’
Daniel Palmer – Coindesk
The liquidator for the collapsed New Zealand-based crypto exchange Cryptopia has retrieved $7.2 million on balance since the platform was hacked for possibly $16 million in January.

SEC charges Shopin for allegedly defrauding investors of $42 million in an unregistered ICO
Yilun Cheng – The Block
Cryptocurrency firm Shopin and its CEO Eran Eyal have been charged by the Securities and Exchange Commission (SEC) for allegedly defrauding hundreds of investors in a $42 million initial coin offering (ICO).

Netherlands Plans to Punish Crypto Scammers With Up to 6 Years in Jail
Daniel Palmer – Coindesk
The Netherlands is planning on bringing in harsher penalties for scams involving banking apps and cryptocurrencies.


Paul Volcker’s final warning for America
Donald Trump’s attacks on the Fed are helping to undermine faith in democratic institutions
Paul Volcker – The Financial Times (opinion)
This piece was written in September, three months before the author’s death on December 8, as the afterword to the forthcoming paperback edition of his autobiography.
the late summer of 2018, it was already clear that the US and the world order it had helped establish during my lifetime were facing deep-seated political, economic, and cultural challenges. Nonetheless, I drew reassurance from my mother’s reminder that the US had endured a brutal civil war, two world wars, a great depression, and still emerged as the leader of the “free world”, a model for democracy, open markets, free trade, and economic growth. That was, for me, a source of both pride and hope.

Germany Tells Trump Not To Meddle in Europe’s Energy Issues
Patrick Donahue – Bloomberg
EU policy ‘must be decided in Europe, not the U.S.,’ Maas says; U.S. Congress moving forward with long-awaited sanctions
Germany is pushing back on President Donald Trump’s moves to impose sanctions on the controversial Nord Stream 2 natural gas pipeline, with Angela Merkel’s top diplomat rejecting outside meddling.

Germany sees 1.5 bln euro annual take from new financial transaction tax
Finance Minister Olaf Scholz expects a planned new financial transaction tax to generate annual revenues of around 1.5 billion euros ($551.10 million) initially in Germany, much of which will offset the cost of a new basic pension, a Finance Ministry document showed.

William Barr Is Attacking His Own Department; The attorney general is undercutting the public’s trust in his own employees.
Noah Feldman – Bloomberg
When President Donald Trump appointed Bill Barr as attorney general back in February, it seemed like good news for the Department of Justice. The department had suffered some serious damage to its public reputation under attorney general Jeff Sessions — much of it inflicted by Trump himself.

Abuse of Power? Republicans Seem OK With It. Donald Trump’s allies are making an alarming argument in his impeachment defense.
Jonathan Bernstein – Bloomberg
Members of the House judiciary committee spent Wednesday night making opening statements in a hearing about two articles of impeachment — abuse of power and obstructing Congress — against President Donald Trump. Was there breaking news? Nope. But it was quite interesting anyway.

Don’t Fear the United States of Impeachment; The House’s narrow focus precisely describes Trump’s gross abuse of power.
Cass R. Sunstein – Bloomberg
Suppose that you believe (as I do) that President Donald Trump has abused his power and thus committed impeachable offenses. If so, you should take one concern very seriously: As the House of Representatives proceeds, there’s a risk that the nation will become the United States of Impeachment.

Report: U.S. Treasury staffer resigns. Mom is charged with cheating for him in college admissions scandal
Joey Garrison, USA TODAY
James Littlefair, a staff member for Treasury Secretary Steven Mnuchin, resigned from the department after his mother, Karen Littlefair, agreed to plead guilty in the nation’s college admissions scandal in a plot that involved his graduation from Georgetown University.

Bloomberg seeks to woo skeptical California on first visit as 2020 hopeful
Vivian Ho – The Guardian
New York mayor made his case to voters in the city of Stockton on Wednesday and announced the endorsement of the Stockton mayor, Michael Tubbs – a rising star in the Democratic party and the city’s first African American mayor.


Switzerland Investigates Metal Trader Over Congo-War Allegations
William Clowes – Bloomberg
Swiss prosecutor confirms probe that began in March 2018; Trade in conflict minerals helped spawn Dodd-Frank Act
Swiss prosecutors are investigating a trader of one of the world’s most sought-after-minerals over allegations he illegally dealt in metals during the Democratic Republic of Congo’s civil war.

ESMA reports on NCAs’ issuance of sanctions and administrative measures under MAR
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has published today the annual report concerning administrative and criminal sanctions as well as other administrative measures issued by National Competent Authorities (NCAs) under the Market Abuse Regulation (MAR).

ESMA issues second pan-EU overview on the use of supervisory sanctions for UCITS
The European Securities and Markets Authority (ESMA), the EU’s securities regulator, has issued today its second annual report on sanctions (penalties and measures) imposed by national competent authorities (NCAs) under the Undertakings for Collective Investments in Transferable Securities (UCITS) Directive. This report covers the year 2018.

ESMA calls for strengthened supervision on suspicious transaction reporting
The European Securities and Markets Authority (ESMA) has today published a peer review report on how national competent authorities (NCAs) handle suspicious transactions and order reports (STOR) under the Market Abuse Regulation (MAR). The Report sees a significant increase in suspicious transaction and order reporting and finds that national supervisors can do more to ensure all financial participants play their part in combatting market abuse.

ASIC takes steps to wind up Chris Marco’s alleged unregistered managed investment scheme
ASIC has filed an application seeking leave to apply for further orders in the Federal Court in Western Australia to wind up an alleged unregistered managed investment scheme, and a related company, operated by Mr Marco. ASIC is also seeking declarations that Mr Marco failed to hold an Australian Financial Services Licence (AFSL) whilst carrying on a financial services business.

SEC Charges Founder, Digital-Asset Issuer With Fraudulent ICO
The Securities and Exchange Commission today charged a digital-asset entrepreneur and his company with defrauding investors in an initial coin offering (ICO) that raised more than $42 million from hundreds of investors.

CFTC to Hold an Open Commission Meeting on December 18
U.S. Commodity Futures Trading Commission Chairman Heath P. Tarbert today announced the CFTC will hold an open meeting on Wednesday, December 18, 2019, at 9:00 a.m. EST at its headquarters in Washington, DC to consider the following:

Statement of Chairman Heath P. Tarbert on LIBOR Transition Before the Market Risk Advisory Committee Meeting
Good morning, and thank you all for being here. I want to thank Commissioner Behnam in particular for his tireless work on the LIBOR transition. Through his sponsorship of the Market Risk Advisory Committee (MRAC), he has helped drive a very productive dialogue among industry and the U.S. regulators. With all of your help as MRAC members, this dialogue has led us to what I believe will be a workable path forward.

Opening Statement of Commissioner Rostin Behnam before the Market Risk Advisory Committee
Good morning and welcome to the CFTC’s Market Risk Advisory Committee (“MRAC” or “Committee”) meeting. I want to thank Chairman Tarbert and Commissioners Quintenz and Stump for being here today. I also want to thank and acknowledge the MRAC members and invited speakers who will participate on the panels today.

Investing and Trading

Index investors should not be passive owners when it comes to ESG; From social housing to clean energy, asset managers can invest in solutions to pressing problems
Michelle Scrimgeour – FT
In the debate about the merits of environmental, social and governance (ESG) investing, asset managers must recognise one overarching fact: the success of companies over the long term is inseparable from the sustainability of the societies in which they operate.

Investment does not have to ruin the planet; We should not fall into the trap of blaming and demonising capitalism
Simon Edelsten – FT
Watching Eurasian spoonbills in the reed beds of Norfolk serves as a reminder of how climate change is reshaping our world. These birds used to appear on wildlife documentaries wading in ponds in exotic places as far south as Egypt and India. They have been nesting in Britain since 2010.

Investors should get ready for meddling governments; Intrusion from politicians, rather than central banks, will make for a volatile market
Seema Shah – FT
The era of hands-on central banks and hands-off governments is being overturned. With each monetary stimulus action proving less effective at boosting economic activity than the last, central banks are imploring governments to take the baton of economic policy. Their pleas are finally being heard as we head into 2020.

Continental Resources founder Harold Hamm steps down as CEO; The shale oil pioneer will move into the role of executive chairman
Gregory Meyer – FT
The shale oil pioneer Harold Hamm plans to step aside as chief executive of Continental Resources a half century after he founded it, the company said on Wednesday.

Short sellers under fire from investment boss of world’s largest pension fund; Mizuno of Japan’s GPIF explains decision to axe securities lending
Leo Lewis and Billy Nauman – FT
The chief investment officer of Japan’s $1.6tn government pension fund criticised the “short-termism” of short sellers, who seek to profit from falling share prices, linking their behaviour to the fund’s surprise decision to suspend stock lending.

World’s First Liquid Hydrogen Ship Debuts in Green Economy Boost
Dan Murtaugh – Bloomberg
The world’s first liquefied hydrogen carrier made its official debut at a shipyard in Japan, a small step toward tapping the carbon-free energy potential of the lightest element.

Palladium Is Now More Expensive Than Gold Has Ever Been
Elena Mazneva – Bloomberg
Palladium rose for a 15th day, heading for its longest run of gains on record, and exceeding the highest-ever price of gold. Spot palladium jumped Thursday to a record of $1,933.66 an ounce, extending its year-to-date gains to 53%. Prices have been driven by supply concerns as mines in South Africa, the world’s No. 2 palladium producer, were shut down for 24 hours this week because of electricity shortages. State power utility Eskom Holdings SOC Ltd. is still implementing rolling blackouts, although at a lower level.

AB Bev’s Labatt Will Sell CBD-Infused Tea in Canada
Jacqueline Thorpe – Bloomberg
Non-alcoholic sparkling drinks are set to follow early in 2020; AB InBev Labatt unit sees CBD as part of a ‘beyond beer’ push
The world’s biggest brewer will kick off its push into cannabis-infused beverages with a lineup of flavored teas — Lavender Chamomile, Vanilla Rooibos and Peach Ginger Green.


Former Credit Suisse Executive Alleges Bank Had Her Followed
Hugo Miller and Patrick Winters – Bloomberg
Dispute centered on Palantir-Credit Suisse joint venture; Woman says bank pressured her over accounting irregularities
A former Credit Suisse Group AG employee in the U.S. alleges that the Swiss bank had her followed after she was involved in an accounting dispute at a struggling technology joint venture, adding to the lender’s woes after a spying scandal earlier this year.

The Wall Street Bankers Who Burst Aramco’s $2 Trillion Bubble
Javier Blas, Dinesh Nair, and Matthew Martin – Bloomberg
Arguments between bankers and Aramco centered on valuation; Shares started trading in Riyadh today and jumped 10%
The chairman of the world’s biggest oil company was about to lose his temper. At a meeting in Riyadh on a sultry October evening, Achintya Mangla, one of JPMorgan Chase & Co.’s most senior bankers, had told Yasir Al-Rumayyan there was no way international investors were going to value Saudi Aramco — just weeks away from an initial public offering — at $2 trillion.

JPMorgan Top 2020 Trades Say Short Gold, Buy Raft of Stocks
Joanna Ossinger – Bloomberg
U.S. presidential election seen as biggest risk next year; The firm went into 2019 recommending equities versus bonds
JPMorgan Chase & Co. is recommending a risk-on investment allocation for 2020 as the global economy gathers momentum in the wake of the slowdown of recent months.

RJ O’Brien deploys Itiviti FIX service to consolidate internal systems; RJ O’Brien will use the managed FIX service from Itiviti to centralise monitoring and administrative processes across regions.
Hayley McDowell – The Trade
US futures broker and clearing firm RJ O’Brien has consolidated its separate regional systems with Itiviti’s managed FIX service.

Barclays sells equity options trading division to GTS; GTS has entered into a definitive agreement to acquire the equity options market making at Barclays for an undisclosed sum.
Hayley McDowell – The Trade
Electronic market maker GTS has confirmed it will acquire the equity options market making business of UK investment bank Barclays, which will see around 40 Barclays staff move to GTS.

Ex-Credit Suisse exec says she was fired and harassed when she wouldn’t bend accounting rules
Gretchen Morgenson – NBC
A former high-level Credit Suisse executive said she was terminated after refusing to mislead auditors scrutinizing a joint venture between the bank and the big-data firm Palantir Technologies, according to filings in a federal administrative action obtained via FOIA by NBC News.


Banks avoid mention of Hong Kong unrest in research for clients; Analysts at Wall Street and European lenders sidestep city’s political crisis for fear of upsetting Beijing
FT reporters – FT
Some leading Wall Street and European banks are avoiding mentions of Hong Kong’s anti-government protests in the research they supply to clients, out of fears they will upset Beijing and risk an increasingly important source of revenue.

Mark Zuckerberg’s Investment Firm Iconiq Lures Rich Brazilians
Cristiane Lucchesi, Sophie Alexander, and Felipe Marques – Bloomberg
Wealthy start investing in venture capital as rates tumble; Itau, BTG introduce their clients to San Francisco company
Rich Brazilians now have access to some of the same investments as Mark Zuckerberg.

China Suffers Biggest Dollar Bond Default By State-Owned Company in Two Decades
Bloomberg News
Tewoo Group’s investors take losses on $1.25 billion of bonds; Firm sets precedent for debt restructuring cases in the future
A major Chinese commodities trader became the biggest dollar bond defaulter among the nation’s state-owned companies in two decades, in a moment of reckoning for Beijing as it struggles to contain credit risk in a weakening economy.


Hedge or Be Damned Is the Election Mantra: Trading Brexit
Todd White – Bloomberg
FX traders snap up protective derivatives amid pound rally; Improved market sentiment lowers the bar for disappointment
Options traders are battening down the hatches for U.K. election day as the pound’s spirited rally suggests victory for Prime Minister Boris Johnson is potentially all but priced in.

‘Get Brexit done’: Boris Johnson’s effective but misleading slogan in the British election
Karla Adam – The Washington Post
The results of the United Kingdom’s general election will not be announced for hours, but already an apparent winner has emerged among campaign slogans: “Get Brexit done.” That has been the No. 1 talking point of Prime Minister Boris Johnson and his Conservative Party through the six-week election campaign. He has cited it repeatedly. On Wednesday, he tweeted it more than 20 times and was back at it on Thursday morning. Earlier in the week, he broke through a foam wall with a bulldozer emblazoned with the phrase.


Two Texas Billionaires Think They Can Fix Philanthropy;John and Laura Arnold are trying to give faster, bolder, and smarter.
Ben Steverman – Bloomberg
Billionaires aren’t too popular right now. As inequality surges, even the most generous of them are coming under attack. Philanthropy is just one more way the superwealthy grab too much sway over society, critics say, and there’s little check on their vast power.

Twitter seeks to build an open social media platform
Hannah Murphy – FT
Twitter has said it wants to solve the spread of harmful and fake content by open-sourcing how its platform works. Jack Dorsey, the social media site’s chief executive, said the company will pay an independent team of as many as five researchers to develop an “open and decentralised standard for social media”. Social media platforms such as Twitter and larger rival Facebook, which generate most of their revenues from advertising, have long come under fire for the way in which their computer programs reward extreme and provocative content because it captures the attention of users.

China Was Biggest Jailer of Journalists in 2019, Group Says
Blake Schmidt – Bloomberg
China eclipses Turkey with at least 48 people detained; Vast majority of journalists jailed are local reporters
China surpassed Turkey to become the biggest jailer of journalists in the world this year, according to a press watchdog group, as Chinese President Xi Jinping steps up efforts to control the media

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