Forefront Communications

Forefront Week in Review: December 16, 2018

Forefront

Sam Belden

Sam Belden

After last week’s whirlwind of press releases, media appearances and panels at the WBR Equities Leaders Summit, the past few days have been relatively quiet in terms of Forefront client news. Visible Alpha appointed a new CRO, and OpenFin announced a new partnership with genesis, but beyond that, it was business as usual for most of our clients.

For our Week in Review subscribers, that’s probably just as well, because the news cycle showed no signs of slowing down as we approach the holiday season. One word that has been on everyone’s mind is “volatility” — price moves that exceed margin limits have become increasingly common among the world’s major derivatives contracts, occurring about once a week in 2018, according to figures compiled by J.P. Morgan. As a result, clearinghouses across the globe are making adjustments — but those come with their own set of risks. On Tuesday, Gunjan Banerji and Telis Demos of the Wall Street Journal took a deep dive into what has become the unsettling new normal for these markets.

In other news, Robinhood faced user backlash when its options trading services went offline for a period Wednesday, Two Sigma saw a significant shakeup on its leadership team, and investigative reporting by The Block’s Frank Chaparro revealed Blockchain Terminal leader Shaun MacDonald is actually Boaz Manor, a convicted hedge fund fraudster.

This week’s Week in Review features stories by Banerji and Demos, Chaparro, Anna Irrera of Reuters and Dan DeFrancesco of Business Insider, among others. Keep scrolling for more, and don’t forget to subscribe to the Forefront Trading Digest if you’re not on our list already.

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Broker News

Robinhood’s Options Trading Stopped Working, and Customers Are Furious Over the Money They Say They Lost
Business Insider | Dan DeFrancesco

Robinhood faced significant outages with its options trading services Wednesday, keeping customers out of their accounts and preventing them from closing out open positions. Some Robinhood customers attempting to access options trading Wednesday morning received a message stating “Account Deactivated” and were directed to the company’s support email address without given further explanation of the issue. A Robinhood spokesperson told Business Insider the outage impacted “a smaller percentage of customers” and trading was limited, “as a precautionary measure.”

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Exchange, ATS and Clearing News

Market Volatility Leads to Fresh Focus on Machinery Beneath Trading
Wall Street Journal | Gunjan Banerji & Telis Demos

At least 49 times this year, major derivatives contracts globally have seen price moves that exceeded margin limits, according to figures compiled by JPMorgan Chase. These breaches essentially mean that the amount of money traders put up to cover potential losses on trades was insufficient, one of several incidents putting a spotlight on how prepared clearinghouses are for the return of volatility. The uncertainty is yet another example of how investors are struggling to pivot from years of calm, gently rising markets to a new period marked by sudden, big lurches in asset prices.

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Vendor News

OpenFin And genesis Partner To Digitise Capital Markets
Markets Media | Staff

genesis, the international capital markets software firm and OpenFin are pleased to announce their partnership, to provide clients with scalable and interoperable technology and desktop solutions, built and deployed at great speed. The partnership helps drive front to back office digital transformation projects across capital markets – from the server to the desktop – bringing together genesis’ ability for agile software development and OpenFin’s application interoperability across financial desktops.

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Buy Side News

Leadership Shake-Up at Two Sigma Advisers
Institutional Investor | Leanna Orr

Two Sigma Advisers is changing leaders, according to an investor letter obtained by Institutional Investor. Chief executive Nobel Gulati will move into a new position as head of strategic investments, according to the letter sent to clients last week. The Two Sigma Advisers division runs much of the quant firm’s asset management business. Gulati will not be directly replaced with another CEO. Instead, two existing executives have been tapped to take over as co-heads: current chief investment officer Geoffrey Duncombe and investor relations leader Carter Lyons.

[minti_button link=”https://www.institutionalinvestor.com/article/b1c6l6q7wgb25t/Leadership-Shake-Up-at-Two-Sigma-Advisers” size=”small” target=”_blank” lightbox=”false” color=”orange” icon=””]Read More[/minti_button]

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M&A/Investment News

Goldman Sachs, JPMorgan and Others Back Risk Management Startup AccessFintech
Reuters News | Anna Irrera

Goldman Sachs, JP Morgan, Citigroup and Credit Suisse have invested $17.5 million in AccessFintech, a startup that sells technology to help financial firms better handle business errors, the companies said on Thursday. Israel-based AccessFintech has created a network that aggregates and helps resolve so-called business “exceptions”, or errors that financial institutions make when carrying out business activities and that require interventions to be resolved. AccessFintech’s technology will help reduce the time and resources needed to resolve these issues by helping financial institutions communicate with each other.

[minti_button link=”https://www.reuters.com/article/us-banks-fintech/goldman-sachs-jpmorgan-and-others-back-risk-management-startup-accessfintech-idUSKBN1OC1GR” size=”small” target=”_blank” lightbox=”false” color=”orange” icon=””]Read More[/minti_button]

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Regulatory & Legal News

Citadel Securities, Natixis and MUFG Fined $6 Million for Blue Sheet Data Failures
The TRADE News | Hayley McDowell

Broker-dealers Citadel Securities, Natixis Securities and MUFG Securities have been fined a combined $6 million by the US financial regulator for submitting incomplete and inaccurate blue sheet data. The SEC said that over a period of several years all three firms made numerous deficient blue sheet submissions, which the watchdog uses to investigate potential insider trading and other fraudulent activity. The SEC added that the firms admitted the findings in its cease and desists orders, and agreed to pay penalties of $3.5 million for Citadel Securities, $1.25 million for Natixis, and $1.4 million for MUFG.

[minti_button link=”https://www.thetradenews.com/citadel-securities-natixis-mufg-fined-6-million-blue-sheet-data-failures/” size=”small” target=”_blank” lightbox=”false” color=”orange” icon=””]Read More[/minti_button]

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Blockchain & Crypto News

Two Identities, One Man: The Story of $800 Million Hedge Fund Fraudster Boaz Manor Who Led the Alleged $31 Million Blockchain Terminal ICO
The Block | Frank Chaparro

BCT looked good on paper. In reality, BCT was a scam and that founding investor, a bearded Canadian with a quiet demeanor, was not who he claimed to be. In fact, they said, he was a known financial criminal. Those employees requested to speak anonymously, citing fear of reputation risk and physical danger. At the heart of the venture is a man once jailed for running one of the most notable financial frauds in Canadian history: Boaz Manor. Working under the pseudonym Shaun MacDonald, Manor tricked BCT employees, investors, and potential customers and, in the process, created the definitive grift of this nascent crypto tech bubble.

[minti_button link=”https://www.theblockcrypto.com/2018/12/10/two-identities-one-man-the-story-of-800-million-hedge-fund-fraudster-boaz-manor-who-led-the-alleged-31-million-blockchain-terminal-ico/” size=”small” target=”_blank” lightbox=”false” color=”orange” icon=””]Read More[/minti_button]

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That’s all for this week. Don’t forget to subscribe to the Forefront Trading Digest for more headlines like these.