Hits & Takes
John Lothian & JLN Staff
If Satoshi Nakamoto went as Satoshi Nakamoto for Halloween, would we be able to tell?
Happy 15th anniversary to Satoshi’s famous white paper that started crypto.
Any crypto companies that are tricking investors should start treating them to compliance with the securities laws.
Chairman Gensler did not spark a debate about the appropriateness of regulation for crypto; rather he was personally attacked by the crypto crowd, who portrayed him as a clown or addled elderly person. I shared my thoughts on Satoshi’s genesis block fortune and what it might mean that he has not cashed it in.
John Lothian Productions completed a project for CCP Global, formerly CCP12, about what is a CCP. The video is now up on its website HERE. CCP Global is a Friend level sponsor of MarketsWiki/John Lothian News.
Gary Flagler shared this bit of history of LinkedIn yesterday: The first records of operations of heritage National Stock Exchange (a predecessor to BMV, Bolsa Mexicana de Valores) date back to October 31, 1894, 16 years before the outbreak of the Mexican Revolution and when Porfirio DÃaz was still president. Filomena Mayeu, a wealthy widow in Mexico City, saw investors making transactions on the street and welcomed them into her bakery, “Vidua de Genin,” where she began to organize a formal trading venue. Although it seems like a long time ago, in reality Mexico had the first stock exchange almost 300 years after the first one was born: the Amsterdam Stock Exchange, founded in 1602.
The Commodity Futures Trading Commission Open Meeting scheduled for Wednesday, November 1, 2023 has been canceled. The matter under consideration is being handled through the commission’s seriatim process.
Tiaan Bazuin, the Chief Executive Officer Namibian Stock Exchange, shared on LinkedIn that he has started an additional position as Executive Chairman at Central Securities Depository limited Namibia.
The Wall Street Journal yesterday published a Halloween-inspired video for you real estate investors titled “How to Avoid Buying a Home That’s Haunted.”
FIA on LinkedIn welcomed Balyasny Asset Management L.P. as a new member of the association. Balyasny Asset Management L.P. is a global, multi-strategy investment firm that strives to deliver consistent, uncorrelated, absolute returns in all market environments.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
Adena Friedman, Chair and CEO of Nasdaq, will be among the 100 business leaders speaking at The Global Boardroom, a Financial Times digital event being held Nov 8-10 ahead of COP 28. This two-day event will focus on strategies for growth in the midst of geopolitical and economic uncertainty. Among questions addressed is: Will COP28 produce further concrete steps to address climate change? Participants can attend free with the Inspiration Pass or pay for a Professional Pass to access video on demand and end of day summaries. View the agenda and register here. ~SAED
Our most read stories yesterday on JLN Options were:
– Oil Options Imply High Risk of Big Price Moves from The Wall Street Journal.
– Equity hedge funds cut risk in portfolios, less confidence in rallies from Reuters.
– The Stock Market May Be Going Nowhere. These Income ETFs Could Benefit from Barron’s. ~JB
Subscribe to the JLN Options Newsletter HERE (it’s free).
Suzanne Sprague talks to JLN at FIA Expo 2023 about changes and challenges for clearing and post-trade services
At FIA Expo 2023, JLN’s Sarah Rudolph sat down with Suzanne Sprague, senior managing director, global head of clearing & post-trade services at CME Group, to talk about the panel Sprague was on called The Evolving Clearing Landscape. Sprague talked about CME moving to the cloud, and clearing houses moving to different margin models. She also discussed proposed regulations that could potentially impact clearing members.
Shortlist for the Deutsche Boerse Photography Foundation Prize 2024 announced: Valie Export, Gauri Gill & Rajesh Vangad, Lebohang Kganye, Hrair Sarkissian
The four finalists for the Deutsche Boerse Photography Foundation Prize 2024 have been chosen: VALIE EXPORT, Gauri Gill & Rajesh Vangad, Lebohang Kganye and Hrair Sarkissian. The influential prize, established in 1996 by the Photographers’ Gallery in London, annually honors artists for their projects that have made a significant contribution to photography in the past 12 months.
***** One of my favorite things to see is the photos from this contest.~JJL
Realtors must pay home sellers $1.8 billion for inflating commissions, jury finds
Kate Gibson – CBS News
The National Association of Realtors and several real estate companies were ordered to pay $1.8 billion in damages after a federal jury in Missouri on Tuesday ruled that they conspired to artificially inflate brokerage commissions. Beyond the realtors’ association, defendants in the case include Keller Williams, Berkshire Hathaway’s HomeService of America and two of its subsidiaries. The verdict came after a two-week trial in federal court in Kansas City.
****** It was so obvious.~JJL
Wave of Antisemitism Has European Jews Wondering if They Will Ever Be Safe; Israel-Hamas war sparks a rise in incidents that has many Jews thinking of leaving
Bojan Pancevski, Matthew Dalton, David Luhnow and Karolina Jeznach – The Wall Street Journal
A Star of David crudely daubed on the doors of Jewish homes in Berlin. An Orthodox Jewish man punched in the face on a London bus. Threatening letters sent to a prominent Jewish politician in France. Across Europe, where centuries of pogroms and the Holocaust nearly wiped out Jews, those who remain have taken a double blow. The first is the grief and shock from the Hamas attack on Israel that shattered an assumption that at least there, Jews were safe from the kinds of attacks that mark their history in Europe.
****** It is a question we can all ask to varying degrees – will we ever be safe? One of the questions is always – what is the cost of safety? ~JJL
FBI says Hamas attack on Israel inspiring ‘new level’ of terror threat against US; Christopher Wray says both Jewish and Muslim communities are at increased risk
Stefania Palma – Financial Times
The head of the FBI warned a congressional hearing on Tuesday that the Hamas attack on Israel has given terrorists inspiration “the likes of which we haven’t seen” since the rise of Isis a decade ago. Christopher Wray told the US Senate committee on homeland security and governmental affairs that while the terrorism threat had been high throughout 2023, “the ongoing war in the Middle East has raised the threat of an attack against Americans in the United States to a whole other level”.
****** See above.~JJL
Sam Bankman-Fried denies messy hair part of ‘tech genius’ persona during trial
Blake Montgomery and Victoria Bekiempis in New York and Lois Beckett – The Guardian
Sam Bankman-Fried testified in his own blockbuster crypto trial again Monday, with prosecutors grilling the one-time crypto mogul about the many discrepancies between his public and private claims about crypto-exchange FTX.
****** There is a distinct barnyard smell to this reply.~JJL
Tuesday’s Top Three
Our most-read story on Tuesday was the obituary for Patrick Birley, by his family, posted in John Lothian News. Second was Texting: Wall Street’s Latest Dilemma, from The Wall Street Journal. Third was the informative US daylight saving time: When do clocks change and why was it created? from Reuters.
World’s Safest Market Becomes a Magnet for Big Investors; US government debt was once among the sleepiest corners of finance. No longer.
Denitsa Tsekova and Liz Capo McCormick – Bloomberg
Vineer Bhansali doesn’t sleep much nowadays. Nor is he getting in as many of the long-distance runs that he loves. But he’s having the time of his life. Bhansali is the founder of LongTail Alpha LLC, a hedge fund in Newport Beach, California, and he’s newly obsessed with what was once among the sleepiest corners of finance: Treasury bonds. With volatility exploding in the long-placid market, he’s ordered his fund to shift away from other strategies and boost its focus on Treasuries. LongTail now buys and sells bonds constantly, he says, making four times as many trades as it did a year ago.
How Does the World’s Largest Hedge Fund Really Make Its Money? Ray Dalio’s investing tactics have always been a closely kept secret, even inside Bridgewater Associates. Several years ago, some of Wall Street’s biggest names set out to discover his edge.
Rob Copeland – The New York Times
For years, the whispered questions have passed from one Wall Street trading floor to the next. Bridgewater Associates, a global investing force, had $168 billion under management at its peak in 2022, making it not just the world’s largest hedge fund, but also more than twice the size of the runner-up. Bridgewater’s billionaire founder, Ray Dalio, was omnipresent in the financial media and said publicly that he had cracked what he termed “the holy grail” of investing, including a series of trading formulas bound to make money, “by which I mean that if you find this thing, you will be rich and successful.”
What Banker Pay Tells Us About Finance Rules; Regulators must beware the unintended consequences of their actions.
Marc Rubinstein – Bloomberg
In the wake of the 2008 global financial crisis, policymakers devised a raft of rules to make sure something similar couldn’t happen again. Some people worried about the consequences. “Has anyone bothered to study the cumulative effect of all these things?” JPMorgan Chase & Co. boss Jamie Dimon asked Ben Bernanke, then chairman of the Federal Reserve. It seems like no one had. Many of the rules didn’t perform as intended and, 15 years later, some are being reconsidered.
Hong Kong Should Tread Carefully Now That It’s Asia’s Crypto Capital; The city is boldly allowing retail access to digital assets, something its rival Singapore is discouraging. Dominance may come at a cost.
Andy Mukherjee – Bloomberg
Answer a few simple questions to show that you’re a knowledgeable investor. Bring in at least $1,400 from a bank account in any of the 16 countries allowed by the app, and tick the box that indicates that you have some stomach for risk. Bingo, you’re free to trade Bitcoin and Ethereum on a licensed Hong Kong platform.
Jobs, Rib-Eyes and Worries: How Exxon’s Giant Oil Discovery Is Transforming Guyana; The tiny country has become the next energy powerhouse, bringing a jarring new reality
Kejal Vyas and Collin Eaton – The Wall Street Journal
New supermarkets here are stocked with prime Texas rib-eyes. A recently opened waterfront hotel offers executive suites for $750 per night. The national cricket team, the Amazon Warriors, is getting a new stadium that begins construction next spring. Money is pouring into Guyana, which is quickly being transformed from one of the poorest countries in the Western Hemisphere into the world’s fastest-growing economy, according to the International Monetary Fund. The economic makeover is succinctly explained by the sponsor named on the cricket team’s jersey: Exxon Mobil, the oil giant based almost 3,000 miles to the north.
Sam Bankman-Fried Prosecutor, Defense to Make Final Pitches to Jury; Closing arguments set to begin Wednesday morning
Corinne Ramey – The Wall Street Journal
Closing arguments in the trial of onetime crypto billionaire Sam Bankman-Fried are set to begin Wednesday, following nearly a month of testimony about his role in the implosion of his FTX exchange. Prosecutors and defense attorneys said their final arguments would last several hours. Afterward, the judge will give the jury legal instructions. Jurors are likely to start their deliberations Thursday.
Sam Bankman-Fried took a big risk by testifying in his own trial. It did not go well
David Gura – NPR
With the trial turning against him, Sam Bankman-Fried took what could be the biggest gamble of his life: The disgraced founder of the cryptocurrency exchange FTX testified in his own defense. It did not go well.
The Ghost of FTX Haunts Formula One
Emily Nicolle – Bloomberg
I see dead logos. Watching Formula One’s United States Grand Prix earlier this month, you’d have been forgiven for thinking you were in a time loop, catapulted back before FTX’s demise and the spectacle of Sam Bankman-Fried telling a jury that poor management and not fraud was to blame for the collapse of his crypto exchange.
The Evolution of the Clearing Landscape and Challenges That New FCM Entrants Face
ION Markets – Traders Magazine
For a firm wishing to become a Futures Commission Merchant (FCM), it can sometimes take multiple years to obtain a license – that is, if they manage to pass the necessary and stringent regulatory requirements.
Sam Bankman-Fried has ‘regret’ for not probing $8 billion debt to FTX
Luc Cohen and Jody Godoy – Reuters
FTX founder Sam Bankman-Fried concluded his defense in his fraud trial on Tuesday, saying he felt “regret” for not looking into the $8 billion his hedge fund borrowed from the cryptocurrency exchange before it collapsed last November.
Bankman-Fried struggles in final day of court testimony
Former crypto tycoon Sam Bankman-Fried struggled on Tuesday to explain his behavior during the last days of his FTX empire, as prosecutors shone a light on his willingness to take massive risks.
Decreased mining power threatens crypto market quality, WFE Research Working Paper shows
World Federation of Exchanges
The market quality provided by crypto trading venues decreases with the aggregate blockchain computing power (the ‘mining power’) supplied by the miners, according to the first empirical study analysing the relationship between the mining power and the market quality offered by crypto trading platforms, published by the World Federation of Exchanges (WFE). Cryptocurrencies offer diversification benefits for investors, particularly those with short investment horizons. However, the new WFE Research Working Paper, titled “Blockchain mining power and market quality in cryptocurrency”, finds that the trading quality offered by blockchain-based crypto platforms is negatively correlated with the quality of the market, falling short of the fairness and well-functioning services offered by established exchanges. This aspect of the crypto markets has thus far been overlooked by stakeholders.
Panama Canal operators to cut ship crossings as drought worsens; Move will affect an important route for global trade
Christine Murray – Financial Times
The number of ships allowed to cross the Panama Canal each day will be slashed in the coming months as climate change increasingly rocks global trade. More than 3 per cent of world trade passes through the nearly 110-year-old canal, which relies on freshwater to operate its locks. It is experiencing one of the worst droughts on its record.
Bad Passwords Are Securities Fraud; Also beyond Bed Bath, SBF’s cross-examination, capital relief and 6,500 pounds of coins.
Matt Levine – Bloomberg
If you are a publicly traded software company, and your customers access your product through a server, and you provide them with a default password to log into the server, and the default password is “password,” is that securities fraud? You know the answer!
Orange juice prices hit all-time high amid bleak production outlook
Marcelo Teixeira – Reuters
rices for orange juice rose on Tuesday to the highest since future contracts started trading in New York in 1966 as an outlook for limited production in the United States, Brazil and Mexico boosted investors’ interest in the product.
Ukraine’s 4th Tank Brigade Has A Frankenstein’s Monster T-72 That Mixes And Matches Parts From Three Tanks
David Axe – Forbes
Nearly two years into Russia’s wider war on Ukraine, the Ukrainian army’s 4th Tank Brigade has settled on a pair of T-72 models as the main equipment for its four tank battalions, each of which has around 30 tanks. Some of the battalions have T-72AMTs: T-72As from the late 1970s that Ukraine extensively upgraded in the 1990s. Others have T-72M1s, which are T-72As the Soviet Union and other Warsaw Pact countries improved with additional armor.
Don’t expect instant success, Ukraine’s Zelenskiy warns as he rallies his troops
Maria Starkova and Ronald Popeski – Reuters
Ukraine’s attacks on the Russian Navy in the Black Sea have crippled Moscow’s war efforts, President Volodymyr Zelenskiy said on Tuesday, seeking to rally his troops even as the outside world expects instant successes. Despite Kyiv’s gruelling months-long offensive, the vast frontline in Ukraine’s east and south has moved little in the past year, spurring criticism and impatience among some of Ukraine’s Western allies.
Foreign Nationals Start to Leave Gaza at Egyptian Border; Departures are first since the start of the Israel-Hamas war
Saeed Shah and Summer Said – The Wall Street Journal
A group of foreign nationals began to leave Gaza for the first time since the start of the Israel-Hamas war, according to Egyptian officials, marking a breakthrough in efforts to bring some relief to the enclave’s humanitarian crisis as it reeled from another communications blackout.
Hunger Spreads in Gaza as Israel Tightens Blockade; Bakeries are shutting down and essential food supplies are running out; ‘We eat little’
Jared Malsin and Anas Baba – The Wall Street Journal
Hunger is spreading in Gaza as Palestinians living in the enclave grow increasingly desperate in their search for bread and other essential foods after Israel imposed a total siege on the enclave in response to Hamas’s deadly Oct. 7 attacks.
As Gaza crumbles, those speaking up for innocent Palestinians are being silenced and sacked
Owen Jones – The Guardian
What exactly was the offence of computational biologist Michael Eisen that led to him being sacked as editor of eLife, a prestigious peer-reviewed scientific journal for biomedical and life sciences? This Jewish-American with Israeli family shared a post from satirical website the Onion, headlined “Dying Gazans criticized for not using last words to condemn Hamas”.
Have war crimes been committed in Israel and Gaza and what international laws apply? The UN has said there is evidence that international humanitarian law may have been breached by both sides in the conflict
Chris McGreal – The Guardian
The United Nations has said “there is already clear evidence that war crimes may have been committed” by Hamas and the Israeli military since 7 October and that it is gathering evidence for potential prosecutions. Which laws apply to the Israel-Hamas war? All parties involved in the conflict are governed by a body of law drawn from a system of conventions, treaties and war crimes tribunal rulings known as “international humanitarian law” (IHL) or the “law of armed conflict”.
Exchanges, OTC and Clearing
Coinbase U.S. Customers Can Now Trade Crypto Futures
Vicky Ge Huang – The Wall Street Journal
Coinbase Global says its eligible retail customers in the U.S. can now trade futures contracts tied to bitcoin and ether. Futures contracts let traders speculate on price movements in markets such as for oil, wheat or the S&P 500. They are generally considered riskier than spot markets in digital assets given the notorious volatility of cryptocurrencies and the use of leverage, which can significantly amplify gains and losses. Coinbase says only customers with advanced trader status will be able to trade the contracts.
CME Expands Suite of Options On U.S. Treasury Futures
CME Group, the world’s leading derivatives marketplace, announced the expansion of its U.S. Treasury options suite with the launch of Monday expiries. In addition to the existing Wednesday and Friday expiries, Monday expiries can deliver more precise risk management around market-moving events.
LCH SA and GLMX complete integration to support clients with sponsored clearing; Connection set to help GLMX establish itself as the nexus of deep liquidity pools for its growing European buy- and sell-side network.
Wesley Bray – The Trade
Repo trading platform GLMX Technologies has completed its integration with LCH SA to support classic and sponsored clearing for the benefit of mutual clients in Europe. Founded in 2010, GLMX facilitates dealer to buy-side securities finance trading with over $1.7 trillion in daily balances. The firm has a network consisting of over 115 global clients as well as more than 20 third part OMS/EMS and industry utility, including Triparty agent and central clearing counterparty connections.
Nasdaq Completes Acquisition of Adenza
Nasdaq (Nasdaq: NDAQ) today announced the completion of its acquisition of Adenza, a provider of mission-critical risk management, regulatory reporting, and capital markets software to the financial services industry, from Thoma Bravo, a leading software investment firm. The acquisition advances Nasdaq’s transformation, further expanding the company’s capabilities to support the world’s financial institutions with mission-critical solutions designed to manage risk and compliance, strengthen integrity, and enhance market and trading infrastructure.
Renew Risk’s offshore wind insurance model to be adopted by GCube and integrated with Nasdaq’s risk modelling platform
GCube to use Renew Risk’s cutting-edge catastrophe risk model software for offshore wind assets to offer more tailored and competitive pricing. Renew Risk’s models are being integrated with Nasdaq’s catastrophe modelling platform. Renew Risk’s ground-breaking models consider a broad range of factors that affect the risk and liability of offshore wind assets. GCube Insurance (GCube), a leading underwriter for renewable energy projects, is partnering with Renew Risk, a leading Software-as-a-Service (SaaS) risk analytics provider, which will strengthen GCube’s capability in offshore wind risk analytics and modelling, benefiting its offshore wind clients.
Trading Overview in October 2023
Japan Exchange Group
Japan Exchange Group released Trading Overview in October 2023. Cash Equity Market: In October 2023, the daily average trading value for the Prime Market (domestic common stocks) was JPY 4.2079 trillion. The daily average trading value for the ETF market was JPY 264.4 billion.
Investments in money market exchange-traded funds exceeded 100 billion rubles
The net asset value of money market exchange-traded mutual investment funds (MUIFs) traded on the Moscow Exchange stock market exceeded 100 billion rubles. Today, more than 200,000 retail investors hold money market exchange-traded funds in their portfolios, nearly double the number at the end of 2022.
BMLL Awarded ISO 27001 certification; ISO 27001 awarded for demonstrating an ongoing and systematic approach to managing and protecting company and customer data
BMLL Technologies Limited, the leading independent provider of Level 3 Historical Data and Analytics for the world’s most sophisticated Capital Markets Participants company, today announced it has been awarded the ISO 27001 certification. As one of the most widely recognised and internationally accepted information security standards, ISO 27001 identifies requirements for a comprehensive Information Security Management System (ISMS), and defines how organisations should manage and handle information in a secure manner, including appropriate security controls.
FINTECH.TV Launches Crowdfunding Campaign Using the tZERO Securities Platform; FINTECH.TV Becomes First Offering Live on the tZERO Securities Platform Since tZERO ATS’s name change to tZERO Securities
tZERO Group Inc.
tZERO Group Inc., a leader in technology solutions for capital markets, is pleased to announce today the launch of FINTECH.TV’s crowdfunding campaign using the tZERO Securities platform. FINTECH.TV is a global media platform that provides cutting-edge insights into finance, blockchain, technology, sustainability, impact investing, SDGs and ESG.
MAS and SFA Announce Finalists for the 2023 Singapore FinTech Festival Global FinTech Awards
Monetary Authority of Singapore
The Monetary Authority of Singapore (MAS) and the Singapore FinTech Association (SFA) today announced the finalists of the 2023 Singapore FinTech Festival (SFF) Global FinTech Awards.
TS Imagine adds best execution module and analytics dashboard to OEMS to tackle compliance; The addition of the module to its TS One and TradeSmart OEMS platforms will provide users with a view of their trading activity, real-time comment capture and best execution reporting in one dashboard.
Wesley Bray – The Trade
TS Imagine has announced a new module within TradeSmart OEMS and TS One which enhances best execution compliance and reporting. The new offering will provide traders with a view of their trading activity, real-time comment capture and best execution reporting in one dashboard.
Leaders in Trading 2023: Meet the nominees for… FinTech of the Year; Meet the shortlisted nominees for The TRADE’s FinTech of the Year award, in partnership with Instinet, including Ediphy, Octaura, Saphyre and smartTrade Technologies.
Editors – The Trade
Next up in our Leaders in Trading 2023 shortlist write up series, we bring you the esteemed candidates fighting it out for The TRADE’s much-coveted Fintech of the Year award, in partnership with Instinet. This award recognises those trailblazers looking to revolutionise the way the industry operates by optimising workflows, creating new routes to market ,and offering up new and innovative technology to replace manual tasks.
Why The SEC Cybersecurity Disclosure Rules Will Improve Cybersecurity
Brian Contos – Forbes
The Securities and Exchange Commission’s stringent new set of rules on cybersecurity reporting for publicly traded companies can be seen in two ways: as another regulatory burden on the shoulders of companies or as an essential step toward improving cybersecurity across the board.
SEC sues SolarWinds for allegedly fraudulent cybersecurity statements
Adam Mazmanian – NextGov
The Securities and Exchange Commission filed a civil suit against SolarWinds and its chief information security officer on Monday, alleging fraudulent statements that misled investors about the company’s cybersecurity posture.
White House AI Executive Order Puts Focus on Cybersecurity
The Biden administration’s new executive order, which mandates the development of standards that promote the “safety and security” of artificial intelligence systems, orders federal agencies to take a closer look at how AI could potentially impact areas like vulnerability discovery or the ways that it could make critical infrastructure systems more vulnerable to cyberattacks.
‘Your Keys and Wallets Are Safe’, Says Telegram Bot Unibot Amid $640k Exploit; The Unibot team told users this morning that any losses due to the Telegram bot’s router “will be compensated.”
The latest victim in the ever-growing list of crypto hacks is Unibot, a popular trading tool on Telegram. Today, alarm bells rang after the project revealed a “token approval exploit” impacting Unibot. “Your keys and wallets are safe,” the project wrote, adding that all funds impacted by the bot’s “new router” will be compensated.
King Charles to Attend COP28 After Being Warned Off Last Talks; Monarch to open forum on sidelines of UN climate negotiations; UK government advised king not to attend previous COP27 summit
Jess Shankleman and Alex Morales – Bloomberg
Britain’s King Charles III will help open a fortnight of global climate change talks in Dubai, as urgency to phase out fossil fuels collides with backsliding on green-energy policies.
Apple Notifies Politicians, Journalists in India of ‘State-Sponsored’ Hack Threat; Indian government says it will seek Apple’s cooperation to investigate the threat notifications
Rajesh Roy and Tripti Lahiri – The Wall Street Journal
Apple notified a number of Indian opposition lawmakers this week that their phones were likely targets of state-sponsored attackers, prompting several of the individuals to express concern about the possible use of surveillance by the government of Prime Minister Narendra Modi.
Cancelled – CFTC Open Commission Meeting for November 1
The Commodity Futures Trading Commission Open Meeting scheduled for Wednesday, November 1, 2023 has been cancelled. The matter under consideration is being handled through the Commission’s seriatim process.
Statement of Commissioner Christy Goldsmith Romero In Support of the CFTC’s 2023 Annual Report on the Whistleblower Program and Customer Education Initiatives
As a former Inspector General who knows firsthand how important whistleblowers are, I wholeheartedly support whistleblowers and the CFTC’s Whistleblower Program, and am very proud of the Program’s outsized results. Cumulatively, the CFTC has awarded almost $350 million to whistleblowers, with more than $3 billion in enforcement sanctions ordered in cases associated with those awards. This includes $16 million in awards this year, including more than $15 million to two whistleblowers who provided significant information and assistance that led the CFTC to bring separate successful enforcement cases.
SEC Charges Four Long Island Men with Perpetrating $2 Million “Free-Riding” Scheme
The Securities and Exchange Commission today announced fraud charges against Eduardo Hernandez, Christopher Flagg, Daquan Lloyd, and Corey Ortiz, all currently or formerly of Long Island, New York, for perpetrating a multi-year “free-riding” scheme that generated more than $2 million in illicit profits.
SEC Charges SolarWinds and Chief Information Security Officer with Fraud, Internal Control Failures
The Securities and Exchange Commission today announced charges against Austin, Texas-based software company SolarWinds Corporation and its chief information security officer, Timothy G. Brown, for fraud and internal control failures relating to allegedly known cybersecurity risks and vulnerabilities. The complaint alleges that, from at least its October 2018 initial public offering through at least its December 2020 announcement that it was the target of a massive, nearly two-year long cyberattack, dubbed “SUNBURST,” SolarWinds and Brown defrauded investors by overstating SolarWinds’ cybersecurity practices and understating or failing to disclose known risks. In its filings with the SEC during this period, SolarWinds allegedly misled investors by disclosing only generic and hypothetical risks at a time when the company and Brown knew of specific deficiencies in SolarWinds’ cybersecurity practices as well as the increasingly elevated risks the company faced at the same time.
FINRA Announces Departure of Enforcement Deputy Head Christopher Kelly
FINRA announced today that after nine years in the Department of Enforcement, Christopher Kelly plans to leave FINRA on Nov. 1 to pursue other opportunities. In his most recent role of Senior Vice President and Deputy Head of Enforcement, Kelly oversaw the work of FINRA’s Enforcement attorneys throughout the country as well as Enforcement’s Litigation Group.
Cryptocurrency Founder “Bruno Block” Sentenced To Four Years In Prison
U.S. Attorney’s Office, Southern District of New York – Department of Justice
Damian Williams, the United States Attorney for the Southern District of New York, announced that AMIR BRUNO ELMAANI, a/k/a “Bruno Block,” the founder of the cryptocurrency “Oyster Pearl,” was sentenced to four years in prison, the maximum sentence allowed by statute, for tax offenses ELMAANI committed in connection with the Pearl token. ELMAANI had previously pled guilty on April 5, 2023, before U.S. District Judge Colleen McMahon, who imposed today’s sentence. In connection with his guilty plea, ELMAANI admitted that he had secretly minted and sold for his own gain Pearl cryptocurrency tokens, which caused the price of Pearl tokens to plummet, and that he did not pay income tax on certain cryptocurrency profits. ELMAANI agreed that he caused a tax loss of over $5.5 million.
Investing and Trading
SwapsInfo Third Quarter of 2023 and Year-to-September 30, 2023 Review
The latest ISDA SwapsInfo Quarterly Review shows that interest rate derivatives (IRD) traded notional and trade count increased in the third quarter of 2023 compared to the third quarter of 2022, while index credit derivatives trading activity declined over the same period.
‘Zombie’ companies already make up 11.5% of U.S. listed stocks
Joy Wiltermuth – MarketWatch
About 11.5% of listed U.S. stocks already belong to a large network of “zombie” companies that have consistently earned less than they owe in interest costs, according to a tally from Glenmede. While that might not sound ideal, higher bond yields or a recession could make a potentially ugly situation for investors even worse.
High-Grade Companies Raise $22.5 Billion in Bond Flurry
Olivia Raimonde – Bloomberg
US blue-chip companies unleashed a wave of bond sales on Monday and raised $22.5 billion as borrowers look to sell new debt in a week jam-packed with bond auctions, central bank meetings and fresh economic data.
Zillow Plunges After Verdict on Real Estate Brokerage Commissions
Patrick Clark – Bloomberg
Zillow Group Inc. and other real estate stocks plunged after a Missouri jury struck a fresh blow against the battered industry, finding that the National Association of Realtors colluded to maintain high brokerage commissions.
The Three Things That Can Save You Money-and Misery-on Your Benefits; Even if you’re planning to stick with the same benefits, you could lose out if you don’t put some work in
Alex Janin – The Wall Street Journal
The best way to make sure your doctors are still covered under your health insurance plan? Pick up the phone and call them. Each year, many workers learn the hard way that solely relying on your insurance provider’s online search tool to check on coverage during open enrollment doesn’t work. Those websites aren’t always up-to-date, benefits professionals caution.
Oil Options Imply High Risk of Big Price Moves
Bob Henderson – The Wall Street Journal
The Israel-Hamas war is driving up the costs to insure against big moves in oil prices. That’s even as prices have retreated to pre-war levels. A measure of the cost of placing a bet in the options market that prices will rise or fall by an unusually large amount over the next month has soared since Hamas’s attack on Israel on Oct. 7, according to derivatives exchange operator CME Group. The measure’s levels in recent days exceeded the levels from after Russia’s invasion of Ukraine early last year-and are comparable to the record highs last seen at the start of the pandemic in 2020, when oil prices briefly went negative.
This 100-Year-Old Pair of Levi’s Jeans Could Sell for $70,000
Eric Grossman – Barron’s
Druckenmiller Warns Rising US Debt Will Crowd Out Innovation; Billionaire investor sounds the alarm on US economy on CNBC; Doubles down on his criticism of Treasury Secretary Yellen
Sam Nagarajan – Bloomberg
US Slows Pace of Increase in Quarterly Long-Term Debt Sales; Upcoming quarterly refunding auctions to total $112 billion; Treasury advises one more quarterly bump in coupon sales
Liz Capo McCormick – Bloomberg
Environmental, Social and Corporate Governance
Future of fossil fuels leaves nations at odds ahead of UN climate summit; France, Spain, Ireland, Kenya and 11 other countries push for an end to new oil and gas projects
Attracta Mooney and Aime Williams – Financial Times
The world’s nations remained at odds over any agreement for an end to new oil and gas projects ahead of the upcoming UN climate summit, with France, Spain, Ireland, Kenya and 11 other countries calling for the phasing out of fossil fuel production at preliminary talks this week. After discussions over the past two days in Abu Dhabi in preparation for the COP28 summit that kicks off in the United Arab Emirates on November 30, the group of 15 nations known as the High Ambition Coalition joined a cohort of countries pushing for a global accord to dump oil and gas.
U.A.W. Strike Gains Could Reverberate Far Beyond Autos; Experts said the union’s new contracts could set precedents that give labor advantages when bargaining contracts and organizing workers.
Noam Scheiber – New York Times
Laying out a tentative contract agreement to end a six-week wave of walkouts at Ford Motor, the United Automobile Workers president made an unusual pitch to other labor unions. “We invite unions around the country to align your contract expirations with our own,” the U.A.W. leader, Shawn Fain, said Sunday night.
Offshore Wind Firm Cancels N.J. Projects, as Industry’s Prospects Dim; Denmark’s Orsted said it would be forced to write off as much as $5.5 billion as wind developers in the U.S. face wrenching financing costs.
Stanley Reed – The New York Times
Orsted, the Danish company that is a leading offshore wind farm developer, said on Wednesday that it would write off as much as $5.6 billion as it gives up on plans to build two wind farms off the coast of New Jersey. The charges were further evidence that offshore wind in the United States is going through a major shakeout, crimping Biden administration plans to make the industry a critical component of plans to reduce greenhouse gas emissions. High inflation and soaring interest rates are making planned projects that looked like winners several years ago no longer profitable.
*****This story from Bloomberg Orsted Takes $4 Billion Hit on Abandoned US Wind Projects and Politico Offshore wind company pulls out of New Jersey projects, a setback to Biden’s green agenda
Deep in Trump Country, Biden Plan Creates Hundreds of Green Jobs; In the reddest district in America, First Solar is building a $1.1 billion solar-panel factory.
Saijel Kishan – Bloomberg
The papermill in Courtland is gone. The railcar factory in Cherokee too. Here in north Alabama, people are worn out from watching good jobs disappear. “We’ve been beat on and beat on and beat on,” says Bobby Burch, who’s lived here his whole life. Which is why what’s happening these days off State Route 20 is so remarkable. Past the Dollar General store, the Wheeler Grove Baptist Church and Dot’s Soul Food restaurant, a new industry is coming to this corner of the Bible Belt. First Solar Inc. plans to start manufacturing solar panels near the cooperage that makes barrels for Jack Daniels Old No. 7 whiskey.
The Missing Equations at ExxonMobil’s Advanced Recycling Operation; The petrochemical giant promotes its new Baytown facility near Houston as a model for solving the world’s glut of used plastic. But Exxon Mobil won’t say how much goes into making new plastic-or ends up burned as climate-warming fuel.
James Bruggers – Inside Climate News
ExxonMobil’s vision of recycling plastic begins here at its massive petrochemical complex, and in many ways, so does that of the city of Houston and its nearly two-year-old recycling collaboration with the oil industry. It’s a vision that remains murky at best. The details are obscured by cheery promotional videos trumpeting environmentally friendly concepts and by corporate claims of the need to protect proprietary technology.
Dumped, Not Recycled? Electronic Tracking Raises Questions About Houston’s Drive to Repurpose a Full Range of Plastics; Revelations by a watchdog group reinforce doubts about chemical recycling, a technology promoted by the city in a collaboration with ExxonMobil and other companies.
James Bruggers – Inside Climate News
Temperature Scores Paint a Dark Investing Picture; Implied temperature rise, or ITR, is a new environmental gauge that’s hard to game.
Alastair Marsh – Bloomberg
Why Norway – the poster child for electric cars – is having second thoughts; Electric cars are crucial, but not enough to solve climate change. We can’t let them crowd out car-free transit options.
David Zipper – Vox
The Super-Rich Look to Boost Allocations to Alternative Investments
Abby Schultz – Barron’s
Wealthy individuals who work with a specialized portfolio advisory group at UBS are increasingly interested in private markets. In response, the advisory group has raised its recommended allocations to private equity, private debt, real estate, structured products, and hedge funds for these clients from about 16% to about 22% of their portfolios. A big reason for the uptick in interest is a proliferation of so-called evergreen, or perpetual, funds that allow individuals and institutions to invest cash immediately in private businesses, while offering lower minimum investment thresholds and more flexibility to withdraw assets, according to Daniel Scansaroli, head of portfolio strategy in UBS’ CIO Americas office. Scansaroli also oversees the portfolio advisory group that works with the bank’s ultra-high-net-worth and institutional clients.
Macro Hedge Funds Bounce Back After Heavy Losses in First Half; Uptick in volatility drove macro fund gains in third quarter; Traders were in ‘wait and see’ mode earlier in the year
Liza Tetley and Bei Hu – Bloomberg
Macro trades have bounced back to become the best performing hedge fund strategy in the third quarter, turning a page on a dismal first half that saw economic uncertainty weigh on managers. Asset-weighted returns for macro funds hit 3.07% in the three months through September, according to data from fund administrator Citco, which sees over $1 trillion of global hedge fund asset flows.
Work & Management
WeWork Plans to File for Bankruptcy as Early as Next Week; Once a venture capital-backed star with an astronomical valuation, the flexible-office-space provider is now preparing for chapter 11 protection
Alexander Gladstone, Akiko Matsuda and Andrew Scurria – The Wall Street Journal
WeWork is planning to file for bankruptcy as early as next week, according to people familiar with the matter, in what would mark a stunning reversal for the flexible-office-space venture that was once valued at $47 billion. New York-based WeWork is considering filing a chapter 11 petition in New Jersey, the people said.
After Pandemic Rush, South Florida Office Market Sees Steady Demand; Developers are adding amenities like wellness rooms and restaurants as competition for top buildings remains strong in Miami-Dade, Broward and Palm Beach Counties.
Lisa Napoli – The New York Times
For years, Angelo Bianco, a Florida developer, drove past the enormous, wooded IBM corporate campus off Interstate 95 in Boca Raton, Fla., without paying it much heed. But his interest was piqued when a broker informed him that the property was for sale.
Zimbabwe Starts Polio Vaccinations After Outbreak in Capital; Mass immunization campaign under way in schools nationwide; Government seeking WHO assistance to contain outbreak
Godfrey Marawanyika – Bloomberg
Zimbabwe began a polio inoculation campaign after an outbreak of the virus that can cause the crippling disease, the Ministry of Health said. Vaccine-derived poliovirus type 2 has been detected in three suburbs in the capital Harare, Health Minister Douglas Mombeshora said in an emailed statement on Wednesday. The rare strain stems from mutated live poliovirus, which is contained in the oral vaccine. In severely under-immunized populations, the virus can then pass between people who have not received the vaccine, allowing it to continue to change for a long period of time, and potentially regain its ability to paralyze.
How Music Can Be Mental Health Care; In music therapy, clients play and listen to music as treatment for stress, depression and anxiety. Here’s how it works.
Christina Caron – The New York Times
Her fingers, adorned with silver rings and black nail polish, are positioned to play the first chord of Lana Del Rey’s “Candy Necklace.” Then she starts to sing, her voice a melancholy, breathy soprano that seems to float across the room. White noise coming out of my brain Turns off for nothing Isobell’s therapist, Caitlin Bell, accompanies her on the piano. Although they are actually sitting in a medical clinic – the Louis Armstrong Center for Music and Medicine at Mount Sinai-Union Square in Manhattan – the space feels more like a musician’s living room, with sheet music on display and wooden bookcases that line the walls, each housing different instruments.
Yield Curve Control Joins the Living Dead; Japan’s Halloween decision to nix its official bond yield cap means ‘yield curve control’ has one foot in the grave-but it still has some bite nonetheless
Jacky Wong – The Wall Street Journal
Japan’s Halloween tweak to its monetary policy didn’t go as far as some yen bulls had hoped. But a stronger yen could still eventually spook global markets-especially if rising U.S. rates keep forcing the Bank of Japan’s hand. The Bank of Japan effectively abandoned its policy of capping 10-year government bond yields at 1% on Tuesday, saying that level will now be a reference only. But the central bank also said it would conduct “nimble market operations” in response to developments in economic and financial conditions.
Japan Faces Speculators on Two Sides as Yen, Bonds Struggle; BOJ buys bonds a day after loosening grip on debt yields; Top official warns repeatedly that intervention is possible
Ken McCallum – Bloomberg
The contradictions in Japan’s efforts to protect the yen while slowing the pace of rising bond yields was on clear display in currency and debt markets on Wednesday. The day began with the nation’s top currency official at the finance ministry giving one of the starkest warnings yet that authorities were ready to intervene in the foreign exchange market to stem the yen’s fall. By lunchtime the Bank of Japan was preparing to wade into the debt market to slow the speed of the 10-year bond yield’s ascent toward 1%.
China’s $7.8 Trillion Municipal Debt Crisis Began in 1994; A 29-year-old formula allowed Beijing to tax more than it spends, forcing regional governments to turn to shadow banks. Only a powerful politician like Xi can overhaul that arrangement.
Shuli Ren – Bloomberg
This must be a matter of deep frustration for President Xi Jinping. In 2015, during his first term, he conducted a thorough audit and cleanup of hidden municipal debt. Less than a decade later, local government borrowings have once again reached dangerous levels.
China’s Richest Person Made Billions Bottling Pristine Water; Zhong Shanshan built his Nongfu Spring empire by extracting water from some of the country’s most ecologically important rivers and mountains.
The misty, forest-carpeted Wuyi Mountains have stood almost untouched for millenniums in southern China. Ancient Taoist temples are one of the few signs of human settlement at the Unesco World Heritage Site, which is surrounded by dramatic river gorges and rainforests that are home to pangolins and clouded leopards. On the edge of the trees, a bright yellow rectangular factory sits amid the lush greenery, like a stray Lego left behind on a lawn. Emblazoned outside is the name Nongfu Spring, China’s most recognizable bottled water brand. More than 1 million tons of fresh water pumped from Wuyi’s primeval forests arrive each year at the facility, where it’s bottled, topped with the company’s signature red caps and trucked to convenience stores and supermarkets in the region.
London clean air zone expansion drives down polluting vehicle numbers; Mayor Sadiq Khan hails figures as vindication for decision to expand Ulez to capital’s outer boroughs
Philip Georgiadis and Jim Pickard – Financial Times
London mayor Sadiq Khan said his controversial decision to expand the city’s clean air zone “is working” after figures showed that the number of polluting vehicles driving in outer London has fallen. Transport for London on Tuesday said that 95 per cent of vehicles driving in outer London complied with pollution standards at the end of September, one month on from the expansion of the ultra-low emission zone (Ulez).
Turkey’s Move to Hyperinflation Accounting May Exclude Banks; Finance minister says financial institutions could be excluded; Banks’ profits are a valuable source of state tax revenue
Firat Kozok and Asli Kandemir – Bloomberg
A World Desperate for Sugar Sees It Pile Up in Brazilian Ports; More than 70 vessels are waiting to load at Brazil’s top port; Global dependency on Brazilian sugar is ‘frightening’: Alvean
Dayanne Sousa and Isis Almeida – Bloomberg
An ancient Egyptian book of spells to guide the dead in the afterlife was found buried with mummies
Marianne Guenot – Insider
Archaeologists excavating a 3,500-year-old cemetery have discovered an ancient Egyptian “Book of the Dead” filled with spells to guide the deceased in the afterlife. The scroll, which was revealed as part of a presentation of the latest archaeological finds from the Tuna al-Gebel cemetery in central Egypt, is estimated to be 43 to 49 feet long.