Episode Transcript
[00:00:06] Welcome to the John Lothian News daily update podcast for May 31, 2024. I am your host, John Lothian. This podcast is brought to you by John Lothian News, the home of markets wiki and markets wiki education. Thank you for joining us. Here are the hits and takes comments from today's JLN.
[00:00:25] Huda Haarb, senior product manager at ASX, the Australian securities Exchange, shared on LinkedIn the sad news that Maurice Farhart has passed away. Maurice was the head of international sales at ASX and had been with the exchange since 2012. He also had a previous ten year stint at the exchange from 1999 to 2009. He joined ASX in 1999 as its treasurer and was then responsible for introduction of new interest rate futures products and customer management.
[00:01:04] The judge in the Langer versus CME Group lawsuit issued an agreed order on May 29, 2024 in the Circuit Court of Cook County, Illinois Chancery division in the case of Sheldon Langer, Ronald M. Yermac and Lance R. Goldberg v. CME Group and the Board of Trade of the City of Chicago, Inc. The court acknowledged the receipt of the partys briefs on the defendants motions for summary judgment, class D certification and the exclusion of the plaintiffs expert testimony. The court will soon provide potential dates for a hearing on these motions. The parties have scheduled a mediation for July 11, 2024, and will submit a status report within one week of the mediation, either in writing or by scheduling a status hearing. Amid this order being issued, membership and lease prices at the CME group have ticked up. One of the buyers of multiple memberships was longtime CBO team member George Hanley, who emailed me this statement about the lawsuit. I think a fair settlement could be a win win for the exchange and the members to clean this up and put this behind us.
[00:02:28] Several major investors and proxy advisory firms, including institutional shareholder services, ISS, glass, Lewis and company, the California State Teachers Retirement System, that's Calstrs and the Council of Institutional investors, or CII, are urging Tesla shareholders to vote against the compensation package for Elon Musk. This package could result in Musk earning up to $55.8 billion over the next decade without any performance conditions tied to the company's financial performance. The opposition to this package is based on concerns that it is excessive and lacks clear performance metrics to ensure that Musk's interests are aligned with those of other shareholders. This vote can be seen as a test of how many Tesla shareholders are unwaveringly loyal to Musk, often referred to as Musk fanatics. The outcome will indicate whether these shareholders prioritize the company's governance and financial performance over their admiration for Musk's vision and leadership. The vote is significant because it highlights the tension between the interests of Musk and those of other shareholders. If the package is approved, it may signal that a substantial number of shareholders are willing to overlook concerns about corporate governance and compensation practices as long as Musk remains at the helm. On the other hand, if the package is rejected, it could indicate that shareholders are becoming more critical of Musks compensation and are demanding greater accountability and alignment with the companys overall performance. Ultimately, the outcome of this vote will provide valuable insights into the dynamics between Teslas leadership, its shareholders and the broader market. It will also serve as a benchmark for future compensation packages and corporate governance practices in the industry. The International Swaps and Derivatives association, or ISDA, is hosting the treasury forum in New York on June 5, 2024 at et cetera venues by convene, 360 Madison Avenue, fifth floor. The event will feature keynote addresses by Gary Gensler, chair of the US securities and Exchange Commission, or SEC, and Michelle Neal, head of markets at the Federal Reserve bank of New York. Other notable speakers include Jason Grannette, chief investment officer at BNY Mellon, and Chris McAllister, managing director and global head of derivatives trading at Prudential Financial. The forum will cover sessions on SEC rules, the outlook for US treasury markets and the impact of Basel III. Full details and the agenda are available on ISDA's website.
[00:05:38] In May, CME Microsoft Equity futures celebrated five years since they launched. They have achieved significant success with over 2.6 billion cumulative contracts traded, including more than 1 billion contracts each for the micro, e, mini S and P 500 and the Nasdaq 100. In 2024, the average daily volume, or Adv, exceeded 2.4 million contracts. Remarkably, trading volume in the fifth year, May 2023 to April 2024, surpassed 590 million contracts, more than double the first year volume of 214 million. Additionally, 24% of trading occurs outside us hours, with participation from over 600 firms and 785,000 unique accounts in the past year, according to Paul Wolman, CME groups global head of equity index products.
[00:06:46] In a LinkedIn article from earlier this month, the US Department of Justice issued a press release reporting that two estonian nationals, Sergei Potapenko and Ivan Trojan, were extradited to the United States to face charges in a $575 million cryptocurrency fraud and money laundering scheme. They were arrested in November 2022 and are accused of running a Ponzi scheme through their company hashflare by selling fraudulent cryptocurrency mining contracts. Between 2015 and 2019. Customers from around the world invested over $550 million, but hashflare allegedly lacked the mining equipment and conducted minimal mining activities. Potapenko and Turgene are also accused of raising $25 million for a virtual currency bank, Polybias, which never materialized. They allegedly used shell companies to launder proceeds buying real estate and luxury cars. Both face multiple charges, carrying a maximum penalty of 20 years in prison.
[00:08:06] In another DOJ case, disbarred California attorney David Cagle, 85, pleaded guilty to operating a $9.5 million cryptocurrency Ponzi scheme. Kaggle and his co conspirators fraudulently induced victims to invest in programs promising high returns through AI trading bots. They falsely claimed Kaggle had $11 million in bitcoin as escrow to guarantee investments. Cagle admitted using victims funds for personal benefit and providing fraudulent letters to gain trust. Charged with conspiracy to commit commodity fraud, Cagle faces up to five years in prison with sentencing scheduled for September 10. Co conspirators David Gilbert Safran and Vincent Anthony Mazzada, junior await trial in August for their roles in the scheme. Today we have part two of our interview with former CQG president Joe Schroeder for the path to electronic trading video series. Look for part three, to be published on the johnlothianews.com website later today. We also have an interview from our FIA Boca coverage with EPTA general secretary peab tebum over the last eleven days. These are some of the new pages that have been added to markets wiki by Sarah Rudolph, Laura Oatney and myself Pboom Paul Woolman Edward Wyscic John Willick Matthew Horace European Systemic Risk Board Jean Paul survey romance scams money mules T one Christopher Larkin Marta Polzuk Samantha Desere Bitcoin Pizza Day Tracy Rucker Wilson Eric Chern, Alex Albert, Isaac C. Hunt Junior London's Big Bang of 1986 and fix commission system our most read stories from our previous edition of JLN Options work Wall Street's faster trade settlement sees some temporary bumps from Reuters derivatives trading in 2024 opportunities and data scalability from fow and NYSE to launch cash settled index options tracking XBX from finance feeds. Subscribe to the free JLN Options newsletter with a link in today's JLN. Here are more stories from the first read section of today's JLN.
[00:10:50] Here's the Schroeder video Joseph Schroeder reflects on CQG's transformation and the evolution of electronic trading in derivatives markets. Part two of the path to electronic trading interview with former CQG president Joseph Schroeder the former president of CQG shares his insights on the company's journey and evolution of electronic trading in the derivative trading markets. You watch this video on johnlothiannews.com.
[00:11:20] and then heres our Boca video.
[00:11:26] European principal traders gain strategic edge with new advisors and leadership aims to enhance market transparency and competitiveness the FIA European Principal Traders association has more punching power now, said its general secretary, Pum, after the traders group added two advisors to its team. T Boom was interviewed by John Lothianus at the FIA International Futures Conference in Boca Raton, Florida, in March for the JLN industry video series sponsored by Wedbush. You can watch this video on johnlothianews.com.
[00:12:05] heres a story from Bloomberg. The headline Donald Trump becomes the first former us president guilty of crimes New York jury convicts Trump of all 34 counts of falsifying records sentencing set for July 11, four days before GOP convention Donald Trump was found guilty in the first criminal trial of a former us president in the nations history, a verdict that could reshape the political landscape five months before Election day. After two days of deliberation, a jury of twelve New Yorkers found Trump guilty of all 34 counts of falsifying business records to conceal a hush money payment to a porn star, a conspiracy that prosecutors said deprived voters of vital information before the 2016 election. My comment? You have to say one thing for Donald Trump. He continues to make history. Here's another story, this one from the New York Times. The headline?
[00:13:08] How Trump's team blew it by Renato Mariotti the criminal trial of Donald Trump didn't have to end this way. The prosecutor's case had flaws that couldn't be wallpapered over, even with weeks of testimony, over 200 exhibits, and a polished, persuasive presentation by Alvin Bragg, the Manhattan district attorney, and his team. If Mister Trump's lawyers had played their cards right, they would most likely would have ended up with a hung jury or a misdemeanor conviction. The defense lost a winnable case by adopting an ill advised strategy that was right out of Mister Trumps playbook. For years, he denied everything and attacked anyone who dared to take him on. It worked until this case. My comment? I think I would have hired Renate. Heres another story, this one from Bloomberg.
[00:14:06] Amazon is expanding us drone service after regulators nod Amazon.com Incs prime air drone program has been cleared by us regulators to fly devices beyond the visual line of sight of pilots, increasing range and giving more customers access to the service. The approval, which means pilots won't need to be able to see the drones with their own eyes, will allow prime air to scale deliveries in the US. Amazon said on its website Thursday the company will expand the area it services with unmanned aerial vehicles in college station, Texas, and will start integrating such shipments into its same day delivery network this year. My comment interestingly, the new Amazon drones are small and shaped like cicadas. Here are the top three stories from Thursdays JLN our top story Thursday was Joe Schroeder on transforming Sukijiv for the digital age from humble beginnings to market leader. Part one of a John Lothian news video interview with Schroeder for JLN's path to electronic trading video series. Second was JJ Kinahan of IG North America discusses options, trading and regulatory changes, a JLN video from OIC 2024 and third was cryptocurrency and regulatory landscape insights from Cat attorneys, a JLN video interview from FIA Boca 2024. Here are the top three stories from the lead section of todays JLN. The first story is from Bloomberg. The headline how rage, boredom and Wall street bets created a new generation of young american traders. An excerpt from Nathaniel Popper's forthcoming the Trolls of Wall street by the end of 2011, Jamie Rogozinski, 29, had fallen into a rut. He spent his days in front of a computer screen in a windowless office in the inter American Development bank in Washington, DC, where he had an unexciting job helping to maintain the endless databases of economic statistics that the executives used. After work, he took the train home to his bland condo in the suburbs that he hadn't bothered to decorate. When he came in at night, he generally made a beeline for his bedroom, where he spent more hours in front of a different computer screen, scrolling through the dribs and drabs of other people's lives on social media.
[00:16:49] Here's another story, this one from the Wall Street Journal European Union approves new financial crime agency the creation of a new Frankfurt based watchdog comes as part of a major package of anti money laundering measures. The European Union has approved the creation of a new anti money laundering watchdog, a move aimed at closing loopholes for illicit cash flows in the 27 member union. The Council of the European Union, a legislative body, said Thursday that it had adopted a package of anti money laundering measures, including one creating a Frankfurt based authority to oversee the most high risk financial entities. The agency, to be called authority for anti money laundering and countering the financing of terrorism or AmLA will start its work in mid 2025 and will have direct supervisory powers over some finance companies, the council said. The new agency will also be empowered to levy fines.
[00:17:58] Here's the last story, this one from the Financial Times. The headline the world needs a new financial architecture a system established in the middle of the last century must be reinvented to deal with the risks of this one. What sets humans apart from animals is that we tell stories to drive collective action. The international financial architecture is one of the central narratives that have shaped our economic thinking for the past eight decades. Its institutions, rules and central actors affect the way economies, governments, firms and individuals interact financially. This architecture can catapult economies onto the path of progress, just as it can leave entire regions stuck and marginalized. It is crucial, therefore, that we ask ourselves what the ultimate purpose of the IFA is, who its beneficiaries are, and who is actually telling the story.
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