Hits & Takes
Yesterday, Trading Technologies welcomed 10 summer interns from @Illinois_Alma @CarnegieMellon @tayloru @UMich @NorthwesternU @UofA and @miamiuniversity who will be working across eight teams in their Chicago office. Sign them up for MarketsWiki Education World of Opportunity today. ~JJL
Fifty years ago, Robert Kennedy was killed in California. He was someone I came to greatly respect for the way he continued to learn and grow during his lifetime. He is one of many Roberts for whom my son Robby is named.~JJL
Speaking of Robby, yesterday at the opening reception of IDX he met the most interesting man in the world, a trombone player from Indiana University named Walt, and “Mr. Give-Up.” One walk across the floor of the reception elicited two internship offers for my 6’6″ son.~JJL
Nasdaq has a new podcast – Tomorrow’s Capital: A Podcast with Larry Summers, Former US Treasury Secretary.~SD
Gary Katz Reflects On His Career and “Active” Retirement
At the 36th annual Options Industry Conference (OIC) in Amelia Island, Fla., Gary Katz was honored with the Joseph W. Sullivan Award. His time running the first all-electronic options exchange, the ISE, might be over, but Katz is still a busy man, considering himself in a period of “active” retirement. In this video he talks about his career influences and the endeavors that currently occupy his time, including developing a new line of snack foods.
The mystery trader who roiled Wall Street
Miles Johnson and Robert Smith – Financial Times
For hedge funds that make their money gambling on whether companies will go bust, it was an opportunity too tempting to ignore. In 2015, brokers working on behalf of a mystery client in London, offered these funds the chance to make a trade they thought was impossible to lose: betting that a teetering Norwegian paper company would imminently default on its debt. The hedge funds snapped up hundreds of millions of dollars of the derivatives contracts that would pay out in the event of a default. By the time the buyers realised who was on the other side of the trade it was too late: they had been trapped. One hedge fund manager recalls receiving a call from a sympathetic contact pleading with him to exit a trade. “It was an off-the-record warning in order to protect me,” he says. “He basically told me who was on the other side. It was him.”
***** When you don’t know who the mark is at the poker game, you are it.~JJL
The world is running out of Japanese people
Dan Kopf – Quartz
Japan is shrinking. Fast. The health ministry recently announced that only 946,060 babies were born in Japan in 2017, the fewest births since official statistics began in 1899. At the same time, 1,340,433 Japanese people died last year. This means that the non-immigrant population declined by nearly 400,000 people.
***** Among economic statistics, this one stands out.~JJL
Monday’s Top Three
Our top story on Monday was Huffpost’s article (including a video), Renowned Economist Jeffrey Sachs Rips Trump As A Gibbering, ‘Delusional’ Threat. Next was Business Insider’s A top crypto hedge fund lawyer explains the 4 main trading strategies that funds use to make money. And in third was the Financial Times’s Banks and brokers suffer ‘dramatic’ fall in commissions
127,250,580 pages viewed; 23,142 pages; 213,268 edits
SEC Names Valerie A. Szczepanik Senior Advisor for Digital Assets and Innovation
Szczepanik also named Associate Director in Division of Corporation Finance
The Securities and Exchange Commission today announced that Valerie A. Szczepanik has been named Associate Director of the Division of Corporation Finance and Senior Advisor for Digital Assets and Innovation for Division Director Bill Hinman. In this newly created advisory position, Ms. Szczepanik will coordinate efforts across all SEC Divisions and Offices regarding the application of U.S. securities laws to emerging digital asset technologies and innovations, including Initial Coin Offerings and cryptocurrencies.
Regulators Back Threshold for Swap-Dealer Registration at $8 Billion; CFTC votes 2-1 for proposal that would permanently set level for triggering enhanced rules for swap dealers
Gabriel T. Rubin – WSJ
The top U.S. derivatives regulator proposed a rule on Monday that would allow many financial, energy and agricultural companies to avoid registering as swap dealers, providing a reprieve to some firms that use swaps to hedge risks.
NYSE buys business advice video group Radiate; Deal comes as exchange aims to boost services in corporate listings battle Radiate founder Betty Liu will join NYSE as executive vice-chairman on July 9 and have a seat on the NYSE Group board
Nicole Bullock and Andrew Edgecliffe-Johnson – Financial Times
The New York Stock Exchange is buying Radiate, a company which creates short videos of career advice from business leaders, to boost its services in the arms race for corporate listings in the world’s biggest equity market. Betty Liu, who founded Radiate and worked as a business journalist for outlets including Bloomberg Television and the Financial Times, will join NYSE as executive vice-chairman as of July 9 and have a seat on the NYSE Group board.
Fund Managers Are Ditching Wall Street for Florida
Lynnley Browning and Gillian Tan – Bloomberg
Officials are intensifying efforts following new $10,000 limit; Investment firm I Squared’s founders said to relocate to Miami
Florida’s long-running effort to lure Wall Street hotshots is gaining traction thanks to a provision in the federal tax law that hits residents of high-tax states.
SocGen Agrees to Pay $1.3 Billion to End Libya, Libor Probes
Fabio Benedetti Valentini , Gaspard Sebag , and Tom Schoenberg – Bloomberg
Legg Mason to pay $64 million for role in SocGen bribe scheme; SocGen unit to plead guilty to corruption charge in U.S.
Societe Generale SA will pay about $1.3 billion to resolve a probe into the bribery of Libyan officials and settle a U.S. investigation into interest-rate manipulation, drawing a line under two of the French bank’s biggest legal headaches.
CFTC orders French bank Societe Generale to pay $475 million penalty
The U.S. Commodity Futures Trading Commission on Monday ordered French bank Société Générale SA (SOGN.PA) to pay a $475 million penalty to resolve charges it manipulated the London Interbank Offered Rate, or LIBOR, and the Euro Interbank Offered Rate, or Euribor.
SEC fines New York firm deVere $8 million over UK pension advice conflicts
Jonathan Stempel – Reuters
The New York investment adviser deVere USA Inc agreed on Monday to pay an $8 million civil fine to settle U.S. Securities and Exchange Commission charges it failed to disclose conflicts of interest to hundreds of clients with UK pensions.
The Next EU-U.S. Battleground: Clearinghouses; EU dials back threat to force London clearinghouses to relocate to Europe after Brexit, but shift unlikely to satisfy U.S. regulators
Tom Fairless – WSJ
The European Union is dialing back a threat to force major clearinghouses in London to relocate to continental Europe after Brexit, in a move that could cool a lengthy, politically charged battle over a jewel in the City of London’s crown.
‘They are pulling things out of thin air’: The war tearing apart Wall Street has reached a fever pitch
Frank Chaparro – Business Insider
Now some exchanges are taking an aggressive stance against a proposal by the Securities and Exchange Commission that would eliminate rebates in certain cases.
A proposal to shake up stock trading in the US has been tearing apart Wall Street, and now the infighting has reached a fever pitch.
Crypto Exchange Coinbase Plans Expansion With Japanese Office
Lily Katz – Bloomberg
Former Morgan Stanley investment banker will lead operation; Exchange is in active talks with Japanese regulators
Coinbase Inc., one of the largest U.S. digital-currency exchanges, is expanding into one of the world’s hottest crypto markets.
Are the U.S. and China Making the World Safe for Fraud?; As the two countries break away from the rules of governance, preventing and finding wrongdoing has become a far more difficult endeavor.
Anne Stevenson-Yang – Bloomberg
China and the U.S. are presenting themselves as exemplars of opposite models of political governance. China has laid out its vision for a rejuvenated nation: a socialist planned economy, built on data and analytics, that will displace market economies. The U.S. is taking the opposite route: withdrawing government from the marketplace, deregulating the economy through executive orders, starving regulators of funds, and appointing agency heads with records of antagonism to their own agencies’ missions.
Chinese stock suspensions a ‘visceral’ issue for investors; MSCI seeks to assuage worries by imposing restrictions on inclusion in EM index
Emma Dunkley in Hong Kong – FT
The president of MSCI has admitted that the ability of Chinese companies to suspend trading in their shares is a “visceral” concern for investors, whose exposure to China’s equity market expanded this month after the index provider added more than 200 stocks to its flagship emerging markets index.
Cinnober’s Minium signs Marex Spectron as its first client
Milestone achievement for Cinnober as it seeks to broaden its real-time clearing and risk management offering to banks and brokers
Cinnober’s wholly owned subsidiary Minium Financial Technology Ltd (“Minium”) today announces that it has been selected by Marex Spectron (“Marex”) to deliver a cloud-based real-time risk management platform to support Marex’s growth in exchange-traded derivatives and FX.
Cinnober sells 60% stake in Irisium to KRM22
Cinnober has sold a 60% stake in its market surveillance unit Irisium to KRM22, an investment vehicle created to undertake a roll up of software companies providing risk management tools to the capital markets industry.
Exchanges, OTC and Clearing
CME Group Reached Average Daily Volume of 20.1 Million Contracts in May 2018, Up 22 Percent from May 2017
CME Group, the world’s leading and most diverse derivatives marketplace, today announced it reached average daily volume (ADV) of 20.1 million contracts during May 2018, up 22 percent from May 2017. Open interest at the end of May was 126 million contracts, an increase of 2 percent from the end of May 2017, and up 16 percent from year-end 2017.
Intercontinental Exchange Names Betty Liu Executive Vice Chairman Of The New York Stock Exchange; NYSE to Acquire Radiate, Inc; Entrepreneur and trailblazing journalist will build a community for the NYSE’s network of global leaders, listed companies and entrepreneurs
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, announced today that Betty Liu, an award-winning business journalist and entrepreneur, is joining the New York Stock Exchange as Executive Vice Chairman. Her appointment takes effect July 9. Liu will also join the NYSE Group Board.
“Record volumes across the board.”
The current political situation in Italy keeps the markets busy. Lee Bartholomew, Head of Fixed Income & FX Product Research and Development at Eurex, discusses recent developments in Eurex’ interest rate markets.
BlueCrest and Virtu Join Eris as Equity Partners
Eris Exchange (Eris), a US-based futures exchange group offering swap futures as the leading exchange-based alternative to over-the-counter swaps, announced today that BlueCrest Capital Management and Virtu Financial have joined Eris as equity partners. As part of the partnerships, both BlueCrest and Virtu have commenced trading Eris Swap Futures. BlueCrest is trading Eris to manage and express interest rate risk, and Virtu has started streaming two-sided electronic markets. Additionally, Doug Cifu, Virtu CEO has joined the Eris Board of Directors.
DTCC Adds Two New Members to Board of Directors
The Depository Trust & Clearing Corporation (DTCC), the premier post-trade infrastructure for the global financial services industry, today announced the election of two new members to its Board of Directors during the firm’s Annual Shareholders Meeting. The new directors are Claudine Gallagher, Americas Regional Head for the Securities Services business of BNP Paribas, and Joseph Molluso, Executive Vice President and Chief Financial Officer of Virtu Financial.
Japanese Commodity Markets; MONTHLY VOLUME & OPEN INTEREST
New Research Shows European Demand For U.S. Equity Options Remains Strong
The Options Industry Council (OIC), an industry resource funded and managed by OCC, the world’s largest equity derivatives clearing organization, today announced the results of the study, European Demand for U.S. Exchange-Listed Equity Options 2018, conducted by Burton-Taylor International Consulting and commissioned by OIC.
Intercontinental Exchange Chairman and CEO Jeffrey C. Sprecher and NYSE President Stacey Cunningham to Present at the Sandler O’Neill Global Exchange and Brokerage Conference
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, announced today that ICE Chairman and CEO Jeffrey C. Sprecher will present at the Sandler O’Neill Global Exchange and Brokerage Conference on Thursday, June 7 at 10:00 a.m. ET. Additionally, NYSE President Stacey Cunningham will participate in the Equity Market Structure: Shifting Focus to Action panel on Wednesday June 6 at 3:00 p.m. ET. The events will be available live and in replay via webcast and can be accessed in the investor relations section of ICE’s website at http://ir.theice.com/.
Nasdaq May 2018 Volumes
Nasdaq (Nasdaq:NDAQ) today reported monthly volumes for May 2018, on its investor relations website.
Goldman moves to automate London trading division; Wall Street giant is aggressively hiring tech staff for team to help roll out its high-tech Marquee platform in the UK
Paul Clarke – Financial News
Goldman Sachs is taking radical action to replace traders with computers in London. The Wall Street giant is launching its flagship automated trading platform in the UK, a move that is likely to lead to job cuts among its high-powered traders in the country and could revolutionise the way the bank deals with European clients.
TTG Capital Ltd Contracts with Trading Technologies to Use the TT Platform
TTG Capital Ltd (TTG), a leading London-based global proprietary trading group, and Trading Technologies International, Inc. (TT), a global provider of high-performance professional trading software, today announced TTG has contracted with Trading Technologies to use the TT futures trading platform. In doing so, TTG will further scale its business and infrastructure technology with access to all TT features and technology, including Autospreader, ADL, charting, functionality for options trading and analytics, and connectivity to all TT-supported markets through TT’s global network of colocated data centers.
CrossCheck One is Born Technology’s Unified Solution for Buy-Side MiFID II Surveillance and Reporting’
Born Technology is pleased to announce the introduction of CrossCheck One, a unified tool for MiFID II surveillance, reporting and data management. This turnkey solution enables buy-side firms to meet multiple MiFID II, MAR and PRA requirements – all via a single vendor and cost-efficient platform.
What’s Next: Trading Technologies’ Expansion in the Asia/Pacific Region
TT via Medium
Last week, we exhibited at LME Week Asia in Hong Kong, where we demonstrated TT’s latest developments, including our enhanced options offering, advanced execution services and our trade surveillance solution, TT® Score.
BNP Paribas distributes Fidessa’s derivatives platform to buy-side clients; BNP Paribas’ clients globally will gain access to Fidessa’s GT multi-broker workstation and derivatives trading platform.
Hayley McDowell – The Trade
BNP Paribas has entered into an agreement to provide its buy-side clients across all regions with Fidessa’s futures and options derivatives trading platform.
A stock exchange behemoth is quietly powering crypto markets across the world
Frank Chaparro – Business Insider
Nasdaq may not have launched its market for bitcoin futures yet, but it has been quietly powering crypto markets across the world.
Ella Zhang of Binance Labs Says the Crypto Bubble Needs to Burst
Osato Avan-Nomayo – Ethereum World News
Ella Zhang, the head of Binance Labs believes there is a cryptocurrency bubble that needs to burst before true blockchain utility can emerge. Zhang recently announced that Binance was investing $1 billion in support of cryptocurrency and blockchain technology startups.
Denmark Joins EU Blockchain Partnership, Plans to Implement Tech in Shipping
Molly Jane Zuckerman – CoinTelegraph
Denmark has signed a declaration to join a total of 24 European Union member states that support pan-EU blockchain standards and solutions, local news outlet Finans Watch reported June 4.
The EU blockchain partnership was formed on April 10 as part of the European Commission’s Digital Day with the intention of enhancing cooperation among member states for developing blockchain tech.
ThinkCoin And GMEX Announce Partnership To Develop Blockchain-Based Multi-Asset Exchange
Pioneering cryptocurrency firm ThinkCoin is pleased to announce it has entered into a partnership with GMEX Group, a leading provider of exchange and post-trade solutions. GMEX is the latest company to join the ThinkCoin project after the recent addition of cloud storage pioneers 0chain.
GMEX’s Fusion platform combines GMEX’s traditional centralised trading systems, which are currently live in multiple exchanges and post-trade venues, with the latest blockchain technology offering the best of both worlds for exchanges, clearing-houses and other institutions.
GMEX Fusion’s suite of capabilities will be combined with the TradeConnect multi-asset trading network, using ThinkCoin, the bespoke digital trading token unit of exchange.
Apple Co-Founder Steve Wozniak: “Only Bitcoin is Pure Digital Gold”
Andrius Vaškevicius – ToshiTimes
Apple co-founder Steve Wozniak has joined an increasing list of tech luminaries, advocating for a future, where bitcoin is a dominant global currency. Although he admitted not being convinced that bitcoin will replace national currencies, he hopes that sometime further down the road this will be the case.
Cryptocurrency Trading Platform Blockbid Separates From The Pack To Stop Fraudsters And Money Launderers
Secure cryptocurrency trading platform Blockbid adds increased fraud prevention security and bank-grade know your customer (KYC) solutions, in a move to be one of the first exchanges that exceeds user expectations and voluntarily meets stringent global anti-money laundering requirements. Blockbid announced today its selection of solutions provided by the newly combined LexisNexis® Risk Solutions and ThreatMetrix®, a part of RELX Group.
This move aligns with the Blockbid vision to ensure its users ‘Trade with Confidence’ with the most secure trading experience available and positions it on the global stage, as a burgeoning worldwide cryptocurrency exchange.
Shift Cryptosecurity Announces BitBox Basecamp, a Hardware Security Platform for Crypto Exchanges
The BitBox Basecamp solution makes it virtually impossible for hackers to steal private keys. It also allows exchanges to implement custom features such as phishing-resistant connection to their platform, offloading of private key storage, and end-to-end branding of their services to increase customer loyalty and retention.
Former SEC Chair to Represent Ripple in XRP Lawsuit
Stan Higgins – Coindesk
Court records show that distributed ledger startup Ripple is being represented by two former Securities and Exchange Commission (SEC) officials – including its onetime chairwoman, Mary Jo White – in an ongoing civil matter.
Ripple Pumps $50 Million Into Academic Research on Blockchain
Daniel Palmer – Coindesk
Ripple has announced it is setting aside millions of dollars to fund university-based research into blockchain and cryptocurrencies.
Chanos Calls Bitcoin ‘Last Thing I’d Want to Own’ in a Crisis
Will Mathis – Bloomberg
Short seller Jim Chanos, who predicted the fall of Enron Corp., has developed a view of Bitcoin: It would fail in a crisis.
So the crypto, where we at?
Jamie Powell – FT
You’d be forgiven for thinking that all has gone a quiet on the crypto front. Since December’s giddy highs, Bitcoin and Ether, the leading lights of the cryptocurrency revolution, have shed more than half their respective values as the world tries to figure out, well, what the point of it all is. (And not just in an existential sense).
Total virtual currency sales jump in 2018 but monthly trend slows: report
Gertrude Chavez-Dreyfuss – Reuters
Virtual currency sales ballooned to $9.1 billion so far this year, exceeding the $6.6 billion total for all of 2017, a financial technology data provider reported on Monday, but it said the monthly trend actually showed a slowdown if the two biggest offerings are excluded.
Binance’s Venture Fund Head Is Waiting for ICO Bubble to Burst
Camila Russo – Bloomberg
Crypto trading platform plans $1 billion in investments; Ella Zhang says good projects will emerge from the carnage
Ella Zhang is in charge of investing $1 billion in blockchain-related businesses, yet her view on the market isn’t too rosy.
Trump’s Presidency Isn’t for Everyone. Just Listen to Him.; His failure to even attempt to represent the whole nation is a departure from his predecessors.
Jonathan Bernstein – Bloomberg
Many Republicans felt that Barack Obama and Bill Clinton made no attempt to be president of the whole nation – and many Democrats believed the same about George W. Bush and Ronald Reagan. They were wrong. Those partisans were projecting their own antipathy towards one or another president onto those presidents.
Americans Will Pay a High Price to Save Coal; The Trump administration needs to show the math.
Editorial Board – Bloomberg
An interesting question raised by President Donald Trump’s misguided order to prop up uneconomical coal and nuclear power plants in the name of national security is: How much is this going to cost?
Promoting Europe’s Conservatives, U.S. Envoy Upsets Germans
Melissa Eddy – WSJ
Richard Grenell is the United States’ top diplomat in Berlin, but Germans were questioning his diplomatic skills on Monday, after he said that he wanted to empower conservative leaders in Europe who dared to challenge what he called “the failed policies of the left.”
***** The best and the brightest, this is not!~JJL
US ambassador to Germany seeks to ’empower’ Europe’s right wing; Berlin requests clarification after Trump loyalist Grenell breaks diplomatic etiquette
Tobias Buck in Berlin – FT
Germany has asked the US to clarify the latest inflammatory statement made by its new ambassador to Berlin, after Richard Grenell said he was planning to “empower” conservative political movements across Europe.
Trump’s Presidency Is Built Upon Double Standards; A record of falsehoods and misdeeds that never would have been countenanced before.
Albert R. Hunt
Setting the standard. Photographer: Jim Watson/AFP/Getty Images
Donald Trump and his always enabling press secretary Sarah Sanders charged there was a “double standard” when a television network apologized for a racist comment made about a top aide to Barack Obama but didn’t apologize to the current president for its critical remarks about him.
Trump Is Closing Doors to World’s Smartest People; The right response to China’s theft of U.S. ideas is to admit more of its top students, not fewer.
On June 6, 1944, American soldiers stormed the beaches of France, beginning a campaign that would roll back Nazi Germany’s control of Western Europe. It was an unprecedented display of military might and organizational prowess for the U.S. The man who led that heroic effort was himself of German descent — general and future president, Dwight D. Eisenhower. Eisenhower’s family, which changed the spelling of the name from Eisenhauer (meaning “iron miner”), was originally from an area called Nassau-Saarbrücken — ironically, one of the territories the general would go on to liberate.
Conservative Koch Groups Plan Pro-Trade Blitz, as the Issue Splits Republicans
Jim Tankersley – WSJ
The conservative Koch political network said on Monday that it would begin a multimillion-dollar advertising campaign to promote free trade, sharpening a disagreement with President Trump over tariffs and highlighting a growing rift between conservative donors and the Republican base on trade issues.
Starbucks’ Schultz Hints Political Career May Be Brewing
Leslie Patton and Craig Giammona – Bloomberg
Starbucks Corp. Chairman Howard Schultz will leave the coffee chain later this month, fueling speculation that the billionaire may be mulling a presidential run in the age of celebrity leaders.
In the memo Monday announcing his exit, Schultz said that he is “thinking about a range of options for myself, from philanthropy to public service, but I’m a long way from knowing what the future holds.”
Opening Statement of Chairman J. Christopher Giancarlo before the Open Commission Meeting
Good morning. This meeting will come to order. This is a public meeting of the Commodity Futures Trading Commission (CFTC). I am pleased to be joined today by my colleagues, Commissioners Brian Quintenz and Rostin Benham in our first public meeting together as a Commission.
***** There was as doppelgänger for Chris Giancarlo at the restaurant in London where I had lunch yesterday. Very confusing.JJL
FIA Members Seek Clarity from UK and EU27 to Help Brexit Contingency Planning
FIA today released survey results that provide a high level snapshot into clearing brokers’ progress with their Brexit contingency plans, the issues they face when structuring and executing such plans, and the policy proposals that would help address these issues. A primary concern expressed by a number of EU27 clearing firms is that they may be forced to close some or all of their client clearing business if UK CCPs are not recognised under EMIR and/or fail to retain their QCCP status under the EU’s Capital Requirements Regulation.
FIA comments on foreign investment proposals in China
On 4 June, FIA submitted comments to the China Securities Regulatory Commission (CSRC) on its proposal to increase foreign investment limits for Chinese futures companies. The CSRC proposals are available here.
CFTC Commissioner Quintenz Announces TAC Subcommittees
Commodity Futures Trading Commission (CFTC) Commissioner Brian Quintenz issued the following statement regarding the establishment of subcommittees for the Technology Advisory Committee:
Former U.S. Federal Prosecutor Named Director of U.K. SFO; Lisa Osofsky appointed to a five-year term and will work with other U.K. authorities to tackle economic crime
Margot Patrick – WSJ
Lisa Osofsky, an American former federal prosecutor and high ranking FBI attorney, was named as the director of the U.K. Serious Fraud Office Monday, a fraud-fighting agency whose future has been under threat because of a low rate of convictions.
Indonesian Regulator Gives Green Light for Crypto Futures Trading
Wolfie Zhao – Coindesk
Indonesia’s Futures Exchange Supervisory Board (Bappebti), a commodities market regulator under the country’s Ministry of Trade, has reportedly ruled that cryptocurrencies are commodities that can be traded on the country’s futures exchange.
US regulators increasing oversight of UK finance industry; ‘Size of the Atlantic Ocean’ does not mean UK financiers are safe from US regulators
Lucy McNulty – Financial News
US regulators are ramping up their scrutiny of UK financial services executives, according to data compiled by City law firm RPC.
US derivatives regulator moves to ease swaps dealer rules; CFTC looks to soften Dodd-Frank regulation by keeping threshold for supervision at $8bn
Kadhim Shubber in Washington – FT
The US derivatives regulator is planning to cement a threshold at which swap dealers become regulated, a move that would exclude smaller companies from rules that would be subject to tougher supervision.
CFTC Orders Société Générale S.A. to Pay $475 Million Penalty to Resolve Charges of Manipulation, Attempted Manipulation, and False Reporting of LIBOR and Euribor ,
The Commodity Futures Trading Commission (CFTC) issued an Order today filing and settling charges against Société Générale S.A. (Société Générale or the Bank) for attempted manipulation of and false reporting in connection with the London Interbank Offered Rate (LIBOR) for U.S. Dollar, Yen and Euro, and the Euro Interbank Offered Rate (Euribor), certain instances of manipulation of Yen LIBOR, and aiding and abetting traders at another bank in their attempts to manipulate Euribor.
U.S. CFTC proposes rule to keep higher threshold for swap dealers
Pete Schroeder – Reuters
The U.S. derivatives regulator on Monday proposed maintaining the existing cutoff for U.S. firms to register as swaps dealers, backing off an earlier plan that would have subjected more firms to stricter oversight under the 2010 Dodd-Frank financial reform law.
SEC Charges Investment Adviser and Two Former Managers for Misleading Retail Clients
The Securities and Exchange Commission today announced that New York-based investment adviser deVere USA, Inc. has agreed to pay an $8 million civil penalty related to its failure to disclose conflicts of interest to its retail clients. The settlement will result in the establishment of a Fair Fund for distribution of the penalty to affected clients. The SEC also announced the filing of a litigated action against two deVere USA investment adviser representatives, one of whom was the CEO of the firm.
FCA urged to investigate impact of IT blunders; Customers of TSB, Aviva and Phoenix Wealth have suffered from computer glitches
Josephine Cumbo, Pensions Correspondent – FT
The City watchdog is being urged to investigate a series of IT failures which have seen hundreds of thousands of customers locked out of their bank accounts or not paid their pensions on time.
ASIC cancels AFS licences of BBY Advisory and SmarTrader and further suspends AFS licence of BBY Ltd
ASIC has cancelled the Australian financial services (AFS) licences held by SmarTrader Limited (SmarTrader) and BBY Advisory Services Pty Ltd (BBY Advisory), effective from 18 May 2018 and 22 May 2018 respectively.
Remarks of Commissioner Rostin Behnam at the BFI Summit
“Fostering Open, Transparent, Competitive, And Financially Sound Markets” United Nations Plaza
Good evening. The United Nations has played a special role in my life. I grew up close by, about 20 miles away in northern New Jersey. More importantly, my Aunt is the founder and president of the International Health Awareness Network (IHAN), which works in consultative status with the Department of Public Information of the United Nations.
Investing and Trading
Think Soros Is Right? Traders Chase 76% Returns Shorting Europe
Yakob Peterseil – Bloomberg
Listed structured products help juice bets on stocks, forex; Double-digit coupons also possible for bears on euro project
George Soros says the euro area is in “existential danger” — and the world’s biggest banks are flogging a flurry of products to parlay his warning into tantalizing returns.
This wealth adviser aims to win the industry’s M&A race
Lynne Marek – Crain’s Chicago Business
Chicago investment advisory firms are scrambling to find their place in the industry’s acquire-or-be-acquired landscape, and one is determined to be a survivor. RMB Capital, which has become the second-largest independent advisory firm in the state, absorbed three firms last year, nearly doubling its assets under management and extending its geographic reach. This year, the 200-employee firm is adding space at its Chicago headquarters after opening a Minneapolis outpost in March, and it has plans to open a St. Joseph, Mich., office this year.
Value Investors Face Existential Crisis After Long Market Rally; Shares of fast-growing companies such as Apple and Netflix find a spot in value portfolios. ‘Our approach to value has evolved’
Michael Wursthorn – WsJ
Hunting for cheap stocks has been out of favor for so long that some self-proclaimed “value” investors are embracing a broader mandate, a potentially costly move in the later stages of an economic cycle.
Wall Street Hunkers Down for Summer of Rising Volatility
Natasha Doff and Sid Verma – Bloomberg
Andrew Sheets recommends neutral positioning and paring risk; Italian politics a wild card as populist coalition takes reins
Wall Street strategists have a word of warning for investors hoping to recuperate this summer after a tumultuous stretch of market trading: Don’t rest on your laurels.
FX buy-siders look to reduce human touch on trading desks; Survey by WBR ahead of TradeTech FX conference finds automation is the biggest priority for buy-side FX trading desks.
Hayley McDowell – The Trade
Senior foreign exchange (FX) asset management participants consider the reduction of human touch a top priority for trading desks, according to recent survey.
‘I was framed by UBS’: Tom Hayes’ letters from prison; Incarcerated former trader blames himself for trusting colleagues and superiors, laments his inability to push his side of the scandal in the press during the trial
Lucy McNulty – Financial News
Tom Hayes has many regrets. Manipulating Libor is not one of them. In a two-month epistolary correspondence with Financial News, Hayes, who is serving an 11-year sentence in a Nottinghamshire prison for his role in the Libor scandal, blames himself for trusting colleagues and superiors, laments his inability to push his side of the scandal in the press during the trial, and even claims he was “framed” by UBS, a charge his former employer declined to comment on.
SocGen chair quashes UniCredit merger rumours; According to reports over the weekend the Italian bank is seeking to merge with its French rival
Lucy McNulty – Financial Newx
The chair of Societe Generale has dismissed speculation over a possible merger with Italian banking rival UniCredit.
‘Black swan’ worries resurface on Deutsche Bank stumbles; Sceptics say bank’s myriad problems unlikely to pose systemic threat
William Watts – Financial News
Just when stock-market bulls thought it was safe to go back in the water after Italy’s political crisis stirred a bout of global turmoil, some wary investors and market watchers are ringing alarm bells over Deutsche Bank.
Bill Browder: ‘Twitter may have saved my life’; Former hedge fund boss and Putin critic quickly took to Twitter following his arrest earlier this week
Chris Newlands – Financial News
Bill Browder, the outspoken critic of Russian President Vladimir Putin, says Twitter may have saved his life after the former hedge fund manager was able to send out two tweets before being arrested by Spanish police on Wednesday.
Twitter Inc to join the S&P 500, replacing Monsanto
Twitter Inc. will replace Monsanto in the S&P 500, S&P Dow Jones Indices said on Monday.
Twitter About to Be Even More Ubiquitous With S&P 500 Inclusion
Lu Wang – Bloomberg
S&P Dow Jones Indices also to put Netflix in megacap S&P 100; Twitter’s 58% gain would rank fifth-biggest in the benchmark
Twitter Inc. was a stock market swamp for three years after going public, saddling investors with as much as $32 billion in equity losses. It took another step Monday toward putting that era behind it.
A Once-Hot Fidelity Fund Is Outperforming Again. Investors Still Don’t Care; Magellan used to be America’s biggest mutual fund. Now it’s dwarfed by the company’s own index fund.
Charles Stein – Bloomberg
Jeff Feingold runs Fidelity Magellan, once the most famous mutual fund in the world. But there’s a good chance you’ve never heard of Feingold, which says a lot about the plight of active money managers these days.
Pimco Rises Under a New Team at the House That Bill Gross Built; It’s tempting to see Manny Roman and Dan Ivascyn as a clichéd odd couple running the firm. But their collaboration is more complicated than that.
John Gittlesohn – Bloomberg
The sun hasn’t yet lit up the California sky when Daniel Ivascyn and Emmanuel “Manny” Roman join each other at side-by-side desks on the 20th-floor trading room of Pacific Investment Management Co. From their aerie overlooking a luxury shopping mall in tony Newport Beach, the pair brace for another grinding day in the market. Together, they are in charge of the $1.77 trillion fixed-income colossus built by Bill Gross, the vaunted “Bond King.” But things are different since Gross decamped four years ago, pushed out in an awkward coup. For one thing, the era of one-man rule is over, replaced with a partnership whose approach is far less monarchical.
Algebris has launched an ‘end of the world fund’
Dan McCrum – FT
Algebris Investments, the EUR12bn asset manager, has launched an “end of the world fund” pitched as a solution to the nagging fears of institutional investors that another financial-market meltdown or crisis might be overdue.
Goldman Sachs has ‘more engineers than bankers’ in some divisions, says chairman; Jose Manuel Barroso said at Money 20/20 in Amsterdam this week that Goldman Sachs is hiring professionals in artificial intelligence.
Jon Watkins – The Trade
Goldman Sachs now has more engineers than bankers in some of its divisions due to an increasing focus on technology, according to its chairman Jose Manuel Barroso.
Mexico anti-trust agency orders Monsanto-Bayer to disinvest in cotton, vegetable seeds
Mexico’s anti-trust agency said in a statement on Monday it ordered a partnership between major agriculture companies Monsanto and Bayer to disinvest in their GMO cotton seed b
Mideast Bets on $100 Billion Industry as Oil-Use Outlook Dims
Mohammed Sergie – Bloomberg
Petrochemical makers account for a fifth of Gulf-listed shares; Aramco, QP plan chemical plants to wring more profit from oil
They are the building blocks of our daily stuff, from sports shoes to computer keyboards, created when oil and natural gas molecules are split, or cracked, to produce ethylene, propylene and other chemicals.
China Revives Its Push to Make the Yuan Go Global
Tian Chen – Bloomberg
Yuan strength, rising foreign reserves give officials room; China’s currency accounts for just 1.7% of global payments
After more than two years on the back-burner, there are signs that China is once again focusing on its efforts to increase the yuan’s status in global finance.
Italy turmoil shows banking ‘doom loop’ still a powerful force; National banks exposed but Eurozone lenders also have large sovereign debt holdings
Martin Arnold and Judith Evans in London – FT
A clear lesson from last week’s sharp sell-off in Italian bond markets: the “doom loop” that creates a direct link between eurozone countries and their banking systems is still a powerful force.
One of the World’s Safest Places for Banking Is Rocked by Scandals; Australia’s financial intelligence agency levels $530 million fine against Commonwealth Bank
Robb M. Stewart – WSJ
The thousands of dollars that had moved in and out of an account at Australia’s biggest bank was unusual. The account’s holder had not only left the country in 1999 and not returned since, but had also been charged in Lebanon in 2004 with belonging to a terrorist organization and planning terror attacks.
France wants tighter foreign investment bank access to EU ahead of Brexit
Huw Jones – Reuters
Foreign investment banks must not get a blank check to operate in the EU and should face tighter controls, France has told the bloc’s member states in a document seen by Reuters.
Barnier Rejects Freezing Brexit Talks If No Irish Progress
Zoltan Simon – Bloomberg
The European Union’s chief Brexit negotiator said failure to reach a deal on the Irish border will increase the risk of a messy divorce but ruled out resorting to punishment measures such as freezing talks with the U.K.
Corporate social responsibility and the dehumanisation of people; A look at CSR in light of the tensions between analytic and empathic reasoning in our brains
Gareth Craze – London School of Economic and Political Science
One of the hallmarks of moral and ethical progress in the world of business has been the increasing recognition of just how embedded organisations are in the wider social, cultural and physical environments that they occupy. It might seem a trite notion to many now, but the idea that firms influence – and are influenced by – the wider world around them represents a hard-fought dialectical engagement which is still very much a work in progress. It wasn’t long ago that many companies were allowed to routinely pollute the physical environment with impunity and engage in labour relations practices that would strike us as a form of borderline indentured servitude these days. We’ve come a long way to be sure, even if there is still much important work to be done in particular industrial, organisational and national contexts.