First Read
Hits & Takes
JLN Staff
A big thank you to the JLN staff for all the hard work to get CryptoMarketsWiki.com launched on Wednesday. Matt Raebel and Thom Thompson led the page development, with the graceful editorial help of JLN Managing Editor Sarah Rudolph. Jeff Bergstrom led the effort to build the new wiki from a technical standpoint and put in long hours to make it work. Chuck Mackey was indefatigable in searching for sponsors. Thank you to Jim Falvey for his help with legal questions surrounding the project and Tom Cashman for his help navigating legal and regulatory issues as well. Thank you to the rest of the JLN team for their support of the effort.~JJL
The Crypto Evolved event in New York on Wednesday was the best look at the crypto world I have seen to date. Congratulations to Chris White and Tim Reed and the Viable Markets team for a great event. Each session peeled back the onion another layer and showed the complexity of the challenges of bringing Wall Street and institutional investors and Silicon Valley and the crypto world together.~JJL
Come visit Lab CFTC during their office hours in NYC July 18-19, and share your vision of the next best thing to enhance the market. Email today to secure your spot: LabCFTC@cftc.gov
On July 1, the DAX celebrates its 30th anniversary. In case anyone is wondering, pearl is the gift for a 30th anniversary.~JJL
According to the SEC, “the over 1,900 ETFs represent nearly 15% of total investment company assets.” See more from the SEC on ETFs in our regulation section.~SD
Wedbush Futures is a proud sponsor of CryptoMarketsWiki,” says Bob Fitzsimmons, executive vice president of Wedbush Securities. “As one of the first firms to launch Bitcoin Futures through Cboe and subsequently through CME, we understand the value of making sense of the growing crypto economy. John and his team have an innate ability to decipher and interpret the labyrinth of the markets and we couldn’t be happier to support the launch of JLN’s CryptoMarketsWiki.”~JJL
Two years ago, the cost of a cup of coffee in Venezuela was 450 bolivars. It now costs 1 million bolivars ($0.29 according to the article). ~SD
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FintTank WealthTech Chicago Event
By Chuck Mackie, JLN
FinTank, the Chicago-based fintech incubator, extended its recent run of successful financial conferences, this time teaming with Morningstar to take a look at the changing landscape of wealth management at WealthTech 2018. Topics covered included robo-advising and AI, but the meat of the material focused on the area of cryptocurrencies, with separate panels on crypto exchanges and ICOs. As is so often the case with panel discussions on these types of topics, there were tempting tidbits of information and some interesting observations but a lack of clarity and cohesion in the final analysis. You simply can’t do a complex and rapidly evolving technology justice with four panelists weighing in for 30 short minutes.
For the rest of the story, click HERE.
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FIA IDX 2018 – Euro-denominated Clearing Outside London
JohnLothianNews.com
In preparation for Brexit, Eurex is offering an alternative to euro-denominated clearing in London. In this video, Eurex Chief Strategy Officer Matthias Graulich talks about the exchange’s Brexit preparations and the new clearing endeavor.
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SEC Celebrates Lesbian, Gay, Bisexual and Transgender Pride Month
SEC
The Securities and Exchange Commission this week concluded its month of special events and guest speakers – at its Washington, D.C. headquarters, as well as in regional offices around the country – in honor of Lesbian, Gay, Bisexual and Transgender (LGBT) Pride Month.
/goo.gl/4Rkz4K
****Chairman Clayton: “During LGBT Pride Month, we celebrate our friends and family who have contributed to our nation over the years, including those who unfortunately were not always afforded those protections and recognitions. The SEC remains committed to recruiting and retaining a workforce that reflects the diversity of our country, including members of the LGBT community, while also protecting all investors, regardless of their family composition.” More statements like this please!~SD
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Eventus Systems Appoints First Outside Directors with Three Industry Veterans
Eventus
Eventus Systems, Inc., a regtech software firm announced it has appointed three highly acclaimed industry veterans as the first outside directors on its Board, Kim Taylor, former President, Clearing and Post-Trade Services at CME Group; Fred Hatfield, former Commissioner of the U.S. Commodity Futures Trading Commission; and D. Keith Ross, Jr., Executive Chairman of PDQ Enterprises, parent company to broker-dealer and independent Alternative Trading System CODA Markets.
/prn.to/2yOwW9x
***** Eventus has terrificus taste in board selections.~JJL
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CO2 shortage creates crumpet crisis; Baker Warburtons said it had suspended crumpet production at half its factories
Camilla Hodgson in London – FT
Crumpet eaters became the latest victims of the European carbon dioxide shortage on Friday, as family baker Warburtons announced it had suspended crumpet production at two of four of its factories.
/jlne.ws/2Kg7e2V
***** This is enough to make me cry in my tea.~JJL
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All the Ways You Can Lose Your Bitcoin; The bad things that can happen, some of which would be your own damn fault.
By Lily Katz, Andre Tartar – Bloomberg=
There are lots of opportunities for cryptocurrency to go missing—some inherent to buying internet money, some involving crime. Below, a few common ways of going virtually broke.
/jlne.ws/2IBZHpn
***** I don’t think this is a complete list. There will be a new way to lose it tomorrow.~JJL
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Thursday’s Top Three
Our top read story from Thursday was the New York Times’ The People Leading the Blockchain Revolution. Second was another New York Times piece, Demystifying the Blockchain. Third was CBS News’ report Families earning $117,000 now qualify as “low income” in California’s Bay Area
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MarketsWiki Stats
128,757,304 pages viewed; 23,171 pages; 213,781 edits
MarketsWiki Statistics
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Lead Stories
Traders Are Still Haunted by the VIX Five Months Later
Lu Wang and Elena Popina – Bloomberg
A gain in the S&P 500 masks creeping volatility below; ‘It’s not an investor’s market anymore. It’s a trader’s’
It’s summer. But in the Florida offices of Raymond James & Associates and at brokerages around the U.S., February is still in the air.
/jlne.ws/2ID4iHY
Investors Can’t Get Enough of Wall Street’s Sucker’s Bets; Funds that have lost money consistently keep attracting inflows. Is it investing or gambling?
Spencer Jakab – WSJ
People who compare Wall Street to a casino are usually just bitter about a bad experience. When it comes to some wildly popular products, though, the description fits.
/jlne.ws/2Kgswxe
Bitcoin Bloodbath Nears Dot-Com Levels as Many Tokens Go to Zero
Adam Haigh and Eric Lam – Bloomberg
Largest cryptocurrency falls to lowest level since November; Intensifying regulatory scrutiny, exchange hacks hurt demand
Bitcoin’s meteoric rise last year had many observers calling it one of the biggest speculative manias in history. The cryptocurrency’s 2018 crash may help cement its place in the bubble record books.
/jlne.ws/2KfD9AB
Light or dark? Six months on, MiFID 2 rules divide equity traders
Helen Reid – Reuters
Six months after sweeping changes to the way European equity trading is regulated came into effect, a debate is raging among investors over whether the reform has succeeded in making market activity more transparent.
The European Union’s Markets in Financial Instruments Directive, or MiFID II, was introduced in January with the aim of pushing more trading onto regulated public exchanges where prices and participants can be seen by all.
/reut.rs/2Kxu2u8
Bridgewater Plans to Become a Partnership as Ray Dalio Takes a Step Back
Michael J. de la Merced and Andrew Ross Sorkin – Bloomberg
Bridgewater Associates, the world’s largest hedge fund, has long been tightly controlled by its founder, Ray Dalio, and his top two lieutenants. That is about to change.
/jlne.ws/2Kklisj
How to get away with financial fraud; Some of the world’s biggest scandals have gone unspotted for years.
Dan Davies – The Guardian
‘Guys, you’ve got to hear this,” I said. I was sitting in front of my computer one day in July 2012, with one eye on a screen of share prices and the other on a live stream of the House of Commons Treasury select committee hearings. As the Barclays share price took a graceful swan dive, I pulled my headphones out of the socket and turned up the volume so everyone could hear. My colleagues left their terminals and came around to watch BBC Parliament with me.
/jlne.ws/2Ks9iEe
Fed Test Slaps Wall Street Titans, Unleashes Record Payout
Yalman Onaran – Bloomberg
More than 20 banks announce higher dividends after stress test; Goldman, Morgan Stanley freeze total payouts at earlier levels
Tougher Federal Reserve stress tests forced some of Wall Street’s top banks to rein in ambitious plans for pumping out cash to shareholders. But even those diminished returns spell a record payout to investors.
/jlne.ws/2KyWN9S
Exchange operator IEX blasts NYSE for criticism of SEC fee plan
John McCrank – Reuters
U.S. stock exchange operator IEX Group took issue with a claim by the New York Stock Exchange that a plan by regulators to test lowering exchange fees and rebates would cost investors at least $1 billion, calling it “false and unfounded.”
/reut.rs/2KvCsPN
Bank Stress Tests Don’t Instill Confidence; Setbacks are minor for Morgan Stanley and Goldman Sachs, but gaps with the Fed’s view raise concerns
Aaron Back – WSJ
Goldman Sachs GS 1.47% and Morgan Stanley MS 2.33% were dealt an embarrassing setback by the Federal Reserve on Thursday. The damage will be minor, but investors deserve an explanation about what went wrong.
/jlne.ws/2KimCvG
Deutsche Bank’s U.S. operations fail second leg of Fed stress tests
Michelle Price – Reuters
Deutsche Bank AG’s U.S. subsidiary failed on Thursday the second part of the U.S. Federal Reserve’s annual stress tests due to “material weaknesses” in its data capabilities and capital planning controls.
/reut.rs/2IB5sUa
SEC looks to modernise regulatory framework for ETFs; The SEC has proposed rule changes for ETFs which would make it easier for new products to come to the market.
Hayley McDowell – The Trade
The US financial securities watchdog is moving forward with plans to modernise and reform the regulatory framework for exchange traded funds (ETFs).
/jlne.ws/2KqL1P5
Exchanges, OTC and Clearing
Happy birthday: 30 years of DAX
Eurex
1 July 2018 marks the 30th birthday of the DAX, Deutsche Börse’s blue chip index for the German stock market. Internationally recognized, the benchmark comprises the 30 largest and most actively traded German companies. Moreover, the index has served as an underlying for financial products from the start, and asset managers who want a targeted exposure to Germany – an economic powerhouse in Europe – rely on our derivatives on the DAX index family.
/jlne.ws/2KsZnhD
SGX RegCo reprimands Oriental Group Ltd, its former and present Directors and its former Group Financial Controller
SGX
Public Reprimand: Breaches of Catalist Rules
/jlne.ws/2Kga4VD
Exchange Seeks Views on Proposed Rule Changes relating to Backdoor Listing, Continuing Listing Criteria and other Rule amendments
HKEX
Exchange proposes to tighten the reverse takeover (RTO) Rules and continuing listing criteria to address concerns about backdoor listings and shell activities; Proposed Rule changes are targeted at shell activities and aim to maintain a quality market; they are not intended to restrict legitimate business expansion or diversification by listed issuers; Exchange also published a guidance letter on listed issuer’s suitability for continued listing
/jlne.ws/2KvbpY6
AKASOL AG new at the Frankfurt Stock Exchange; First exchange price at 48.80 euros / 13th IPO this year
Eurex
AKASOL AG (ISIN: DE000A2JNWZ9) is listed on the Prime Standard of the Frankfurt Stock Exchange today. The shares of the Darmstadt battery manufacturer noted at the start of trading at 48.80 euros after an issue price of 48.50 euros. The current number of IPOs in Frankfurt since the beginning of the year thus rises to 13.
/jlne.ws/2KjIuXx
Fintech
City veteran Michael Spencer invests millions into a biometric fintech startup
Emily Nicolle – City AM
Founder of NEX Group and serial entrepreneur Michael Spencer has led a $16.5m series B fundraising round into a biometric fintech startup called Veridium.
/jlne.ws/2KfjYXs
California Passes Sweeping Law to Protect Online Privacy
Daisuke Wakabayashi – NY Times
California has passed a digital privacy law granting consumers more control over and insight into the spread of their personal information online, creating one of the most significant regulations overseeing the data-collection practices of technology companies in the United States.
/jlne.ws/2KsxaYj
AI Invasion of Wall Street Is Reshaping BofA’s Currency Research
Ivan Levingston – Bloomberg
Bank of America is jumping on the AI bandwagon. For the first time, the bank’s currency strategists are using machine-learning programs — which enable computers to comb through vast amounts of data to draw inferences and make predictions on their own — to tell clients what to buy and sell. They began producing AI-based research last month, as political turmoil in Italy roiled financial markets and sparked fears of another existential crisis in Europe.
/jlne.ws/2Km5F3p
TD gives away fintech in hopes of getting new business
Bryan Yurcan – American Banker
The competition for small and midsize business clients is fierce again among banks, as commercial-and-industrial lending rises thanks to business owners’ increased confidence on the prospects for growth.
To attract and retain these clients, some banks are investing in more digital services for this segment or offering more consultative services. For Toronto-based TD Bank, it will begin offering a digital platform it says is a bit of both — and making it free to use.
bit.ly/2KsBJSr
London’s Next Step In Fintech: Cybersecurity, AI and AR
Madhvi Mavadiya – Forbes
UK Government Digital Secretary Matt Hancock has been busy this past month, developing new initiatives which are sure to benefit the financial technology in the fintech hub that is the city of London.
This week, the London Office for Rapid Cyber security Advancement (LORCA) opened its doors in East London, which will be run by the technology innovation center Plexal and was launched by Hancock himself.
bit.ly/2Ky53qP
Fintech lending throws banks another curveball
Antony Currie – Reuters via Nasdaq
Fintech is throwing banks another curveball. Kabbage on Thursday outlined how it has handed over around a fifth of the $5 billion it has lent to small businesses since 2009 at night or over the weekend. It’s one more way technology is upending the industry.
bit.ly/2Kz5l0s
Nodal Exchange to Provide CQG’s Trading Platform as Trading Screen for Nodal Contracts
Business Wire
Nodal Exchange LLC and CQG announced today that Nodal Exchange has contracted with CQG to supply the exchange’s trading participants with CQG’s trading solutions.
/jlne.ws/2MsP0aU
Cryptocurrencies
Crypto startup to acquire US broker-dealer; Crypto platform Uphold will buy broker-dealer JNK Securities and will apply to operate an alternative trading system (ATS) in the US.
Hayley McDowell – The Trade
Cryptocurrency trading platform Uphold has confirmed plans to buy broker-dealer JNK Securities in a bid to enter more regulated markets and reach institutional investors
/jlne.ws/2KgwDta
Crypto Coin Tether Defies Logic on Kraken’s Market, Raising Red Flags
Matthew Leising, Mira Rojanasakul, Demetrios Pogkas and Brandon Kochkodin – Bloomberg
In the traditional world of securities exchanges, it would be akin to defying gravity. But at Kraken, one of the most popular venues for trading cryptocurrencies, a coin called Tether does it again and again.
/jlne.ws/2KjhdVi
Crypto Coin Graveyard Fills Up Fast as ICOs Meet Their Demise
Olga Kharif – Bloomberg
More than 1,000 coins declared dead by website Coinopsy; Investors have already lost billions to failed crypto projects
That mournful sound you hear? It’s the funeral procession of yet another cryptocurrency. As the digital money frenzy of the past few years cools, the crypto coin graveyard is filling up. Dead Coins lists around 800 tokens that are bereft of life, while Coinopsy estimates that more than 1,000 have bought the farm.
/jlne.ws/2KlUWpX
Crypto Industry Frustrated by Haphazard Regulation
Laura Shin – NY Times
In a parable from ancient India, six blind men touch different parts of an elephant, like its trunk, leg or tusk, and come up with wildly divergent ideas about what the animal is — a snake, for example, or a tree or a spear.
/jlne.ws/2KhjboZ
Digital Currency Group Leads List of Top 50 Blockchain VCs
Nick Bastone – ThirtyK
Many industries have “best of” lists and rankings that insiders love to peruse. Now venture capitalists focused on blockchain technology have one of their own.
Digital Currency Group came out tops in the first iteration of Crypto Fund Research’s list of the top 50 blockchain venture capital firms in the world.
bit.ly/2Ks46Ap
Hackers Switch Ransomware on Cryptojacking – Coindoo
Adriana Midrigan – Coindoo.com
Ransomware is more a blackmail measure rather than a malware infection. Once users have accessed the malicious link usually received by mail, the computer becomes infected. Thus, the software has access to all the documents on the device, threatening the user to delete them. To prevent this, hackers ask for a reward, usually in Bitcoin (BTC).
According to the report, cases of ransomware attacks have been halved lately, indicating that hackers are more interested in crypto mining malware. We should not be surprised once mining activities are more profitable.
bit.ly/2KxstMM
Bitcoin has fallen more against the dollar than almost every other currency this year
John Detrixhe – Quartz
It’s been a tough year for just about every currency except the US dollar. The euro and Swiss franc are down against the greenback, to say nothing of Argentina’s collapsed peso. But you know what’s faring even worse? Bitcoin. To find a currency that’s depreciated more against the dollar this year, you have to look to Venezuela’s bolivar, the near-worthless money printed by a hyperinflationary state.
/jlne.ws/2IBSmpK
Bitcoin price manipulation puts trust in cryptocurrencies at risk
The Conversation
Cryptocurrencies like bitcoin have grown in popularity in large part because they can be bought and sold without a government or other third party overseeing everything. But there’s a flipside: Unlike in markets for other assets such as stocks or bonds, it makes it much harder to uncover price manipulation and fraud.
/jlne.ws/2MysvS3
Politics
Freaked Out Americans Desperately Seek to Escape the News; Camping trips, home renovation shows and even a film about Mr. Rogers help citizens tune out what most are calling the nation’s lowest point in history.
Claire Suddath – Bloomberg
Last week, Jen Wrenn, a children’s literacy advocate in San Diego, attended her first political protest after reading about the Trump administration policy of separating small children from their immigrant parents at the border.
/jlne.ws/2Khkwfn
Why Trump Shouldn’t Meet Putin; Americans should worry when the two men are in any kind of one-on-one negotiation.
Eli Lake – Bloomberg
This must not happen again.
After announcing that there will indeed be a U.S.-Russia summit in the coming weeks, National Security Adviser John Bolton issued a challenge to the skeptical scrum of reporters at his Moscow press conference. “I’d like to hear someone say this is a bad idea,” he said.
/jlne.ws/2KvCcmP
President Trump announces a major U.S. Steel expansion — that isn’t happening
Glenn Kessler – Washington Post
Trump says ‘six major [steel] facilities’ are opening; President Trump referenced a phone call with the “head of U.S. Steel” during a roundtable on June 20.
/jlne.ws/2Kg5oix
Trump is trying to destabilize the European Union
Josh Rogin – Washington Post
As President Trump heads to Europe next month for the NATO summit and then a historic meeting with Russian President Vladimir Putin, his personal attacks on the European Union and other pillars of the Western order are overshadowing his own administration’s attempts to reassure allies that the United States still believes in the transatlantic project it has led since the 1940s.
/jlne.ws/2KkOq2s
How the ‘Bad Boys of Brexit’ forged ties with Russia and the Trump campaign — and came under investigators’ scrutiny
Manuel Roig-Franzia, Rosalind S. Helderman, William Booth and Tom Hamburger – Washington Post
On Aug. 19, 2016, Arron Banks, a wealthy British businessman, sat down at the palatial residence of the Russian ambassador to London for a lunch of wild halibut and Belevskaya pastila apple sweets accompanied by Russian white wine.
/jlne.ws/2ICbvYM
Regulation
SEC Proposes New Approval Process for Certain Exchange-Traded Funds
SEC
The Securities and Exchange Commission today voted to propose a new rule and form amendments intended to modernize the regulatory framework for exchange-traded funds (ETFs), by establishing a clear and consistent framework for the vast majority of ETFs operating today. ETFs that satisfy certain conditions would be able to operate within the scope of the Investment Company Act of 1940 and to come to market without applying for individual exemptive orders. The proposal would therefore facilitate greater competition and innovation in the ETF marketplace, leading to more choice for investors.
/goo.gl/nomEuw
SEC Proposes Rule To Undermine Whistleblowers
National Whistleblower Center Press Release
Today, the Securities and Exchange Commission (SEC) issued a proposed rule to reduce the size of whistleblower rewards in cases in which the US recovers $100 million or more. This proposed rule was will discourage high ranking and well-compensated employees at large financial institutions from blowing the whistle.
/goo.gl/gGDqt7
FINRA Updates the OTCBB/OTC Equities High Price Dissemination List
FINRA
FINRA is publishing its quarterly OTCBB/OTC Equities High Price Dissemination List for the first quarter of 2018. This updated list of OTC equity securities eligible for trade report dissemination for trades of fewer than 100 shares is effective as of June 29, 2018. To view changes, visit the Daily List: Security Attribute Changes page, select the “Unit of Trades” filter and enter June 28, 2018 as the “Start” date and June 29, 2018 as the “End” date.
/jlne.ws/2KxHZIO
Firms Elect Securities America Financial Corporation’s Jim Nagengast to FINRA Board of Governors; Nagengast Elected to Fill One of Three Large-Firm Seats on FINRA Board
FINRA
FINRA announced the results of voting by its large firm members that took place at its Special Meeting on June 28 to elect one Large-Firm Governor to the FINRA Board of Governors. Jim Nagengast, Chief Executive Officer (CEO) of Securities America Financial Corporation Inc. and President of Securities America Inc., was elected as a Large-Firm Governor.
/jlne.ws/2KhM7gO
SEC Approves Final and Proposed Rules in Latest Open Meeting
SEC
The Securities and Exchange Commission today voted on several final rules and rule proposals that together represent material progress toward many Commission priorities.
/jlne.ws/2KisaGw
SEC Proposes Whistleblower Rule Amendments
SEC
The Securities and Exchange Commission today voted to propose amendments to the rules governing its whistleblower program. The whistleblower program was established in 2010 to incentivize individuals to report high-quality tips to the Commission and help the agency detect wrongdoing and better protect investors and the marketplace.
/jlne.ws/2KgaMlL
SEC Adopts Targeted Changes to Public Liquidity Risk Management Disclosure
SEC
The Securities and Exchange Commission today adopted amendments to public liquidity-related disclosure requirements for certain open-end funds. Under the amendments, funds would discuss in their annual or semi-annual shareholder report the operation and effectiveness of their liquidity risk management programs. This requirement replaces a pending requirement that funds publicly provide a quantitative end-of-period snapshot of historic aggregate liquidity classification data for their portfolios on Form N-PORT.
/jlne.ws/2KuKsUk
SEC Adopts Inline XBRL for Tagged Data
SEC
The Securities and Exchange Commission today voted to adopt amendments to eXtensible Business Reporting Language (XBRL) requirements for operating companies and funds. The amendments are intended to improve the quality and accessibility of XBRL data.
/jlne.ws/2KsyqL1
SEC Expands the Scope of Smaller Public Companies that Qualify for Scaled Disclosures
SEC
The Securities and Exchange Commission today voted to adopt amendments to the “smaller reporting company” (SRC) definition to expand the number of companies that qualify for certain existing scaled disclosure accommodations.
/jlne.ws/2KuYiGk
SEC and CFTC Announce Approval of New MOU
SEC
The Securities and Exchange Commission and the Commodity Futures Trading Commission (CFTC) announced today that the two agencies have approved a Memorandum of Understanding (MOU) that will help ensure continued coordination and information sharing between the two agencies.
/jlne.ws/2KisULO
Podcast: CFTC Talks EP049: JO ANN BAREFOOT, BAREFOOT INNOVATION GROUP
CFTC
This week on CFTC Talks, we speak with fintech innovation expert Jo Ann Barefoot from Barefoot Innovation and co-founder of Hummingbird Fintech. Ms. Barefoot has been a regulator, a Senate staffer, and industry consultant and a volunteer in the financial regulatory and consumer movement space. We discuss why she believes we’ve been doing it all wrong and what are the best practices for these areas: fintech, regtech and innovation.
/jlne.ws/2KkqoEU
Federal Court in Nevada Orders Commodity Futures Software Vendor to Pay More than $674,000 for Solicitation Fraud and Failing to Register with the CFTC
CFTC
The Commodity Futures Trading Commission (CFTC) announced today that the Honorable Gloria M. Navarro of the U.S. District Court for the District of Nevada (Las Vegas) entered an Order of Summary Judgment against Defendant Mirko (Mick) Schacke of Brentwood, California (formerly Antioch, California), and a Default Judgment against Schacke’s company, TradeMasters USA, LLC of Las Vegas, Nevada.
/jlne.ws/2KhMubc
CFTC Proposes Amendments to Ease Regulatory Burdens for Self-Regulatory Organizations
CFTC
The Commodity Futures Trading Commission (CFTC) announced today that it has unanimously approved proposed amendments to its regulations to simplify obligations imposed on a self-regulatory organization (SRO) when carrying out its financial surveillance program for futures commission merchants (FCMs).
/jlne.ws/2tTmVCj
Former Equifax Manager Charged With Insider Trading
SEC
The Securities and Exchange Commission today charged a former Equifax manager with insider trading in advance of the company’s September 2017 announcement of a massive data breach that exposed Social Security numbers and other personal information of approximately 148 million U.S. customers. This is the second case the SEC has filed arising from the Equifax data breach. In March, the former chief information officer of Equifax’s U.S. business unit was charged with insider trading.
/jlne.ws/2KkPALm
Employees at Dozens of Leading Banks Face German Probe
Karin Matussek – Bloomberg
Prosecutors are examining deals at top global finance houses; Hundreds of investors, bankers, brokers, traders involved
Prosecutors in Cologne are preparing their first indictments in a tax-evasion probe involving some of the biggest names in finance that cost the German treasury billions of euros, according to people familiar with the matter.
/jlne.ws/2Khh5oZ
Investing and Trading
Wall Street Left Reeling as 2018 Upends Almost Every Bet
Natasha Doff and Todd White – Bloomberg
Favorite emerging-market stocks, bonds crumble under dollar; ‘People woke up to a different world,’ says Aberdeen’s Athey
The half that began with “melt-up” euphoria ended with melt-down fear.
/jlne.ws/2MzL0p4
4 million-dollar investing myths you need to stop believing
Paul A. Merriman – MarketWatch
I’m continually amazed at the investment misconceptions that lure people into cheating themselves out of long-term returns.
/jlne.ws/2ID5URR
U.S. Funds Remain Cautious Faced With Trade War Threat: Reuters Poll | Investing News
Rahul Karunakar – Reuters
U.S. fund managers in June replicated defensive recommendations from the previous month with slightly more cash, a Reuters poll showed, underscoring worries that a U.S. trade conflict with China and some of its own allies will hurt global growth.
With no let-up in the U.S. administration’s protectionist campaign, stock markets, and particularly emerging markets, are in retreat, causing bond yields to fall despite the Federal Reserve’s intention to keep raising interest rates.
bit.ly/2Kv1H84
How to find a competent, ethical financial adviser
Jack Waymire and Jonathan Dash – MarketWatch
You want financial security during your working years, retirement years and late in life when you need it the most. You need a competent, ethical financial adviser who can help you achieve these goals.
/jlne.ws/2IBP7Ph
Equity funds lose $30 billion as investors flee U.S. and EM stocks: BAML
Helen Reid – Reuters
Equity funds suffered their second-largest weekly outflows ever this week, with $29.7 billion pulled out of risky assets, Bank of America Merrill Lynch (BAML) strategists said on Friday as fears about rising U.S. protectionism continue to weigh.
/jlne.ws/2ICti1W
Institutions
Bank ‘Stress Tests’ Results Clear Way for Wall Street to Reward Investors
Emily Flitter and Jim Tankersley – NY Times
The Federal Reserve on Thursday gave clean bills of health to most of the largest American banks, allowing them to return money to shareholders, but it forced Goldman Sachs and Morgan Stanley to freeze such payouts around last year’s levels.
/jlne.ws/2KiW0un
Bridgewater to Give Employees More Control as Dalio Steps Back
Katia Porzecanski and Erik Schatzker – Bloomberg
New Structure will provide more staff with a say in management; Changes come as founder Dalio prepares for succession
/bloom.bg/2IEEw6k
Millennium Churns Pool of External Managers
Hedge Fund Alert
Millennium Management’s investment in Teza Capital earlier this year marked the fifth time in 12 months that the multi-strategy giant hired an outside manager to run money for its $36 billion fund.
/goo.gl/uUXv5G
Why Have Bank Stocks Had Such a Bad Two Weeks? A Flattening Yield Curve
Jamie Condliffe – NY Times
Now is supposed to be a good time to be a bank.
The largest lenders in the United States are enjoying ballooning profits. The Trump administration has removed rules on banks, and more deregulation is likely to come. The economy is in one of its strongest patches since the financial crisis, and the Federal Reserve is raising rates.
But it would be hard to tell all that by looking at their share prices over the past two weeks.
/nyti.ms/2KuTnSo
Index Reshuffle Could Cut Deutsche Bank Off From Billions; The German lender’s share price has dropped by more than 40% this year
Mike Bird and Jenny Strasburg – WSJ
Some more bad news looms for Deutsche Bank AG DB 0.87% : The sharp drop in its market value could mean an exit from a major European index, jeopardizing its inclusion in the giant funds that track that benchmark.
/jlne.ws/2Ku7Tx3
Goldman Sachs, Morgan Stanley Dinged in Fed Stress Tests; The two banks can’t raise shareholder payouts beyond recent levels after falling below minimum ratios on exams
Liz Hoffman and Lalita Clozel – WSJ
Regulators cleared most of the largest U.S. banks to increase their dividends and share buybacks, but forced two Wall Street titans, Goldman Sachs GS 1.47% Group Inc. and Morgan Stanley , to freeze those payouts at recent levels.
/jlne.ws/2KgQjx3
Lloyd’s of London CEO Beale to step down; Inga Beale has led a drive for modernisation
Oliver Ralph, Insurance Correspondent – FT
Inga Beale, the first female chief executive of Lloyd’s of London, is to step down next year after five years in the job.
/jlne.ws/2KkmtrG
Credit Suisse Gives Rogue Banker Unlikely Boost in Appeal
Hugo Miller – Bloomberg
Bank challenges mismanagement charge against Lescaudron; Bank appeal of his conviction may help limits its liabilities
Five months after a former Credit Suisse Group AG banker was convicted of orchestrating a near decade-long scheme to hide growing losses from his clients, the financier has got an unlikely boost from his one-time employer.
/jlne.ws/2Kfi5dk
Why Deutsche Bank Can’t Just Shake Off Its Problems
Steven Arons – Bloomberg
It would be an understatement to say Deutsche Bank AG is going through a difficult period. It chalked up its third straight annual loss in 2017. The new chief executive officer, Christian Sewing, has unveiled the bank’s fourth turnaround plan in as many years, yet its shares have fallen to a record low. Almost daily, senior executives are being pushed out or are jumping ship. The U.S. Federal Reserve has placed the lender on its list of troubled banks. And its U.S. unit was the only bank to fail the Fed’s annual stress measuring the adequacy of its capital and risk controls, pushing back the day when shareholders will see any upside from its biggest foreign operation.
/jlne.ws/2lu8EIe
Lehman on stage: making a drama out of the financial crisis; For 10 years, politicians have been grappling with the collapse of Lehman Brothers. Now, it’s the turn of the theatre
Sarah Hemming -FT
In a tiny store in Montgomery, Alabama stands a man surrounded by bolts of cloth. The floor is creaky and the door handle sticks. The stock is plain: wool, flax, hemp, cotton. “Nothing flashy,” he says. “In Alabama, you don’t work to live. You live to work.”
/jlne.ws/2KAEFwi
Deutsche Bank’s US unit fails Fed stress test; Goldman Sachs and Morgan Stanley told to freeze payouts as rivals prepare for jump in dividends
Alistair Gray in New York and Barney Jopson in Washington – FT
Deutsche Bank has failed the US Federal Reserve’s latest stress test and Goldman Sachs and Morgan Stanley have been ordered to strengthen their balance sheets by freezing dividends and share buybacks.
/jlne.ws/2Kim5Kc
Citi Bets on 32-Year-Old Goldman Trader to Rescue Junk-Bond Desk
Sridhar Natarajan and Alastair Marsh – Bloomberg
Sam Berberian given task of rebuilding high-yield team; Recent defections have hollowed out junk-bond trading desk
Goldman Sachs Group Inc. senior executives tried to keep Sam Berberian. But the prospect of putting together his own bond-trading team lured the affable 32-year-old Jersey guy to Citigroup Inc.
/jlne.ws/2MsNpSs
Regions
Australians Can’t Get Enough of the Barefoot Investor
Amelia Lester – NY Times
After 26 years of uninterrupted economic growth, possibly the longest stretch of any developed country in modern history, you’d expect Australians to feel pretty relaxed about their pocketbooks. Yet the biggest-selling nonfiction title on record in Australia concerns — of all things — personal finance.
/jlne.ws/2KrXtOx
China Opens Up More of Its Economy to Foreign Investors
Bloomberg News
NDRC updates sectors where overseas investment is restricted; Rules relaxed for banking, insurance and raft of commodities
China is slowly following through on pledges to open up to foreigners, as an impending trade war with the U.S. focuses attention on Beijing’s grip over doing business in the world’s second-largest economy.
/jlne.ws/2KvHcrK
Venezuela Hyperinflation Index Reaches the One Million Mark
David Papadopoulos and Fabiola Zerpa – Bloomberg
A cup of coffee now costs one million bolivars in Caracas. It’s an astonishing sum of money.
/jlne.ws/2IFXCJ0
Brexit
The irremediable folly of a ‘no deal’ Brexit; Claims that leaving the EU will boost growth rest on questionable assumptions
Martin Wolf – FT
Important businesses are losing patience with the UK government over progress — or rather lack of it — in the Brexit negotiations. With just 10 months to go before Britain leaves the EU, that is entirely comprehensible. Airbus, for example, has threatened it might pull out of the UK altogether if no trade deal were agreed. Amazingly, Jeremy Hunt, health secretary, responded that it was “completely inappropriate for businesses to be making those kind of threats”. Is this the “party of business”?
/jlne.ws/2KwuJE9
EU reprimands UK over pace of Brexit talks beset by ‘huge differences’; Hint that EU could improve terms if UK dropped ‘red lines’
George Parker and Guy Chazan in Brussels – FT
Michel Barnier, EU chief Brexit negotiator, has warned that “huge and serious” differences have to be overcome on exit talks, and warned Theresa May the EU would not accept any move to keep Britain in a single market-style arrangement for goods only.
/jlne.ws/2KurFsd
U.K. Lawmaker Calls for Inquiry Into Hedge Funds’ Use of Private Brexit Polling
Gavin Finch – Bloomberg
Bob Seely says first impression is the case is “concerning”; Seely is among several lawmakers calling for a probe
U.K. lawmaker Bob Seely called for a parliamentary inquiry into the use of private polling data by some of the world’s biggest hedge funds betting on the 2016 European Union referendum.
/jlne.ws/2IAugMk
Miscellaneous
Deloitte Leadership Battle Leaves CEO’s Future in Question
Gretchen Morgenson, Michael Rapoport and Joann S. Lublin- WSJ
Deloitte LLP has told partners Chief Executive Cathy Englebert hasn’t been renominated for a new term, touching off a behind-the-scenes leadership dispute at the Big Four accounting firm.
Ms. Engelbert, the first woman to run one of the Big Four firms in the U.S., is three-plus years into a four-year term as Deloitte’s CEO. But Deloitte’s U.S. partners were told in a recent email that she wasn’t being renominated for a second term at this time as the firm begins its every-four-years CEO-election process, according to people familiar with the matter. Ms. Engelbert is eligible for another term, but Deloitte’s board didn’t support her renomination, one of the people said.
/on.wsj.com/2Kvz6fB
Shooting Suspect Had Bitter History With Maryland Newspaper
Denise Lavoie – The Associated Press
A man who police say opened fire at a Maryland newspaper office Thursday, killing five and injuring two others, had a long, acrimonious history with the newspaper, including a lawsuit and years of harassment of its journalists on Twitter.
/jlne.ws/2KjFt9F
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