Episode Transcript
[00:00:06] Welcome to the John Lothian News Daily Update podcast for October 14, 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 I don't know if it's the long hours, the hurricane, the evacuation, bad search technique, or aging and losing my memory, but I totally screwed up my recollection of the timeline of the DRW CFTC scuffle. I apologize for the error. SEC Chairman Gary Gensler was at the helm of the CFTC as chairman in 2013 when it filed its case against DRW and Don Wilson.
[00:01:00] Timothy G. Massad succeeded gensler starting on June 5, 2014 and leaving on Inauguration Day in 2017. January 20 J. Christopher Giancarlo succeeded Chairman Massett and was the one who inherited the case late in the process as the trial took place in December of of 2016 and the decision rendered in 2018.
[00:01:31] There is a link in today's newsletter for the original press release from the CFTC in 2013 announcing the charges. CFTC charges Donald R. Wilson and his company DRW Investments LLC with price manipulation and there is a story From Reuters from 2018 reporting DRW winning the case. U.S. cFTC loses case against prominent trader Don Wilson and DRW DRW Cumberland issued a statement via Twitter that I have printed in its entirety below that does embody the spirit I expected from them that they will fight. They also explained in detail how they engaged with the SEC and have no plans to change their business model. Here is DRW Cumberland's statement Today we became the latest target of the SEC's enforcement first approach to stifling innovation and preventing legitimate companies from engaging in digital assets. This comes despite bipartisan pushback on this approach in the most recent House Financial Services Committee hearing in which the SEC was called a rogue agency, cited for its failure to work with Congress and taken to task for abusing its power. At issue in our case is the SEC's view that some of our transactions involving certain crypto assets were securities transactions. We have engaged in five years of good faith discussions with the SEC on this point.
[00:03:20] On our end, we've shared dozens of written summaries and statements, produced thousands of pages of material, and made our senior management and compliance personnel available for many hours of interviews. Today's complaint is the first time the SEC has outlined the specific transactions at issue.
[00:03:42] The SEC asserts these transactions required us to register as a broker dealer. While we strongly disagree, we took that step and acquired a registered broker dealer in 2019. Only then, despite Chairman Gensler's call to just come in and register, we were told we could only use our broker dealer to trade BTC and eth, both commodities and not under the jurisdiction of the sec.
[00:04:12] This naturally calls into question whether the guidance to come in and register was provided in good faith. We are not making any changes to our business operations or the assets in which we provide liquidity as a result of this action by the sec. We are confident in our strong compliance framework and disciplined adherences to all known rules and regulations, even as they have been a moving target. It wasn't long ago ETH was claimed to be a security we have proven before our firm's willingness to defend ourselves against overzealous regulators wielding their power in ways that harm rather than benefit the market. We did it when Chairman Gensler was Chair of the CEO cftc, with the court finding its case against DRW based on little more than an Earth is Flat style conviction.
[00:05:13] This time the SEC's approach seems to be a game of catch 22 where the ability to come in and register, unquote, is just a mirage. We're ready to defend ourselves again.
[00:05:30] Lance Glynn, who replaced Josh King as the host of Inside the Ice House, which is now part of NYSE tv, interviewed Synchrony President and CEO Brian Doubles on a decade of success and strong culture, Bloomberg Reports Wholesaler True Value Company filed for bankruptcy in Delaware on Monday as it seeks to sell its business to rival Do It Best Corp. Upon inspection of my roof of my home in Florida this morning, it was found that half of the roof's upper layer is missing. I have more work to do here in Florida than I thought.
[00:06:14] Our most read stories from our previous edition of JLN Options were CBO Shifts Edge, a Equities Exchange to Maker Taker Model from CBO via Traders Magazine the Rise of the Quick Buck ETF from Bloomberg and Acuity and SGX Group Launch Global Derivatives Market Sentiment Index from Acuity. Subscribe to the free JLN Options newsletter with a link in today's jln.
[00:06:45] Here are more stories from the first Read section of today's JLN News. Avoiders Here's a story from the Financial Times. The headline News Avoiders Relinquish Their Democratic Privilege Our fractured algorithm driven attention economy is all too easily exploited when people aren't paying attention.
[00:07:10] I have something of a confession to make. I really love listening to the kinds of podcasts that if they were titles in a bookshop would be found in the most ugly sounding of sections. Self help, I suppose. I listen on and off to a good half dozen or so of them. They keep me company when I'm doing chores, they motivate me, and they often give me fresh ways of thinking about my life and even about some of the subjects I write on my Comment thank you to all of you who stay on top of the news along with me. Here's a story from Reuters the headline Nobel Economics Prize Goes TO inequality researchers Three US based academics won the 2024 Nobel Economics Prize on Monday for research that explored the aftermath of colonization to understand why global inequality persists today, especially in countries dogged by corruption and dictatorship. Simon Johnston, James Robinson, both British American and Turkish American Darren Acemoglu were commended for their work on how institutions are formed and affect prosperity, the Royal Swedish Academy of Sciences said. My comment See my comment about being treated with respect, equality and justice. Those are the ingredients of a strong community, society, economy and civilization.
[00:08:54] Here's a blog post from Joe Schroeder Useful Quarterly Business Reviews he wasn't that bad. He got the information out there. Hey, do you have a template I can fill out? I got my deck down to 20 slides. We don't really do a formal business review, we just add it as an agenda item at the end of each quarter.
[00:09:19] I was speaking with a CEO client this week about the next round of his company's version of business plan reviews, BPRs and QBRs. He was scrambling to give people detail of what to include in their presentations and anticipating guidance he already knew he wanted to give. He couldn't remember much about the reviews in late July. My comment Former CQG President Joe Schroeder's latest post to his blog.
[00:09:53] Here's another story, this one from the Wall Street Journal. The headline Is the stock market open today? These are the Columbus Day trading hours.
[00:10:04] Columbus Day falls on Monday, October 14th this year, but only some financial markets will be closed. The US Holiday observed on the second Monday in October commemorates Christop for Columbus Landing in North America in 1492. In some states, however, it has been renamed Indigenous Peoples Day to honor the resilience of the group as it dealt with losses from colonization.
[00:10:34] President Joe Biden was the first to observe this holiday at the White House in 2021. My comment Even though today is not October 10th, Columbus Day for me will always be the day that Revco announced its problems, which started its quick downfall. Here are the top three stories from Friday's JLN Our top story Friday was the SEC press release, SEC charges Cumberland DRW for operating as an unregistered dealer in the crypto assets market. Second was Hurricane Milton, scenes of damage and rescue efforts from Florida from the South Florida Sun Sentinel. And Third was the LinkedIn post from Gary Siegel, managing editor at the Bond Buyer, sharing the sad news that his friend and colleague Chip Barnett passed away on Monday. Here are the top three stories from the lead section of today's jln. The first story is from the Financial Times. The headline King of the How Alex Gurko Built a British Trading Titan XTX markets conquered Foreign Exchange trading and made a Russian born Founder a Multi Billion Pound fortune if Alex Gurkho had struck with his Plan A, he might have stayed a Russian academic rather than becoming one of Britain's wealthiest billionaires with an estimated $12 billion fortune. After gaining a math PhD in Moscow, however, Gurkho concluded he could not be world class as an intellectual. Instead, he moved to London where, with the help of an icelandic supercomputer and 25,000 AI chips, he built XTX Markets, an algorithmic trading firm and part of a new elite that has rewired financial trading.
[00:12:41] Here's another story from the Financial Times. The headline London AIM market should be axed for failing to win Tech Floats, Sundays think tank UK's exchanges are not fit for purpose and require radical overhaul, says Tony Blair Institute and Onward, London's junior stock exchange should be scrapped as part of a radical overhaul needed to attract fast growing firms firms and rejuvenate the UK's capital markets. Two influential think tanks have warned the UK's capital markets are not fit for purpose and require radical surgery. The report from the Tony Blair Institute and the center right think tank Onward said London was once the world's largest stock exchange but now ranks sixth while it has failed to win a number of major new listings from tech companies.
[00:13:46] Then finally another story from the Financial Times. The headline Banks and fund managers call on EU to commit to shorter settlement plan Industry lobby groups urge Brussels to set timetable for modernization of securities market European banks and fund managers have urged Brussels to publicly commit to shortening the window for settling EU stock and bond trades as the US and UK press on with plans to modernize their own markets. A task force representing 18 market lobby groups on Monday called on EU authorities to make a formal commitment to reform settlement times. The task force, led by the association for Financial Markets in Europe, also called for the bloc to set a time frame to to guide the industry in its preparations we're grateful for your attentive listening to the John Mothian News Daily Update. Please spread the word about our podcast among your friends. We would greatly appreciate it if you could spare a moment to leave a review on Apple Podcasts or whatever platform upon which you access this podcast. Your reviews play a crucial role in introducing our content to new listeners. Also, if you haven't subscribed to the daily John Lothian Newsletter, email yet, you can Enjoy a complimentary 90 day trial by visiting john lothiannews.com trial thank you for your valued support.
[00:15:27] Have a great day and stay safe. Treat people the same way you want to be treated with respect, equality, and justice.
[00:15:39] This has been John Lothian Goodbye. This podcast has been produced by Andrew Lothian.
