New York attorney general takes deep dive into ‘dark pools’ (Reuters)
New York Attorney General Eric Schneiderman is seeking information from exchanges and alternative trading platforms about their relationships with high-frequency trading firms, as part of its probe into allegedly unfair trading practices on Wall Street, sources have previously told Reuters. Broker-run trading systems known as dark pools, where participants are anonymous and trading information is hidden until after the trades are completed, are a key focus, said Chad Johnson, head of the agency’s Investor Protection Bureau. “We remain highly interested in this area,” he said at a conference held by Sandler O’Neill and Partners.
Wall Street Adjusts to the New Trading Normal (WSJ)
Trading volume on the major U.S. exchanges last month tumbled to its lowest level for May since the financial crisis. A daily average of 5.7 billion shares changed hands, the least for the month since 2007, according to Credit Suisse Trading Strategy. The slowdown in trading comes as investors see little reason to make big changes to their portfolios amid an expanding but unspectacular U.S. economy, lackluster first-quarter earnings reports, and above-average stock valuations as a share of projected company earnings.
Exclusive: Deutsche Bank cap hike delay due to court bottleneck – sources (Reuters)
Deutsche Bank’s plans for an 8 billion euro ($11 billion) capital hike came to an abrupt halt on Wednesday when a procedural bottleneck in a German court forced Germany’s flagship lender to delay the issue by several days. The bank’s biggest investor, Sheikh Hamad Bin Jassim Bin Jabor Al-Thani of Qatar, has made his first contribution to the capital hike, paying 1.75 billion euros for 60 million shares, but a Frankfurt court has taken longer than expected to enter the purchase into the shareholder registry, three market sources told Reuters. Until that paper jam is cleared, the second part of the capital hike plan – a 6.3 billion euros rights issue – cannot proceed, putting the whole 8 billion euro exercise on hold but not threatening it in any way, the sources said.
Australian Investors Sell Bank Stocks Before Capital Rules (Bloomberg)
“The story for the banks is not as positive as it was before,” said Shane Oliver, who oversees about $133 billion as Sydney-based head of investment strategy at AMP Capital Investors Ltd. “It does make sense to have a decent exposure to the banks, but not at the same level as before. As time goes by, it’s going to be difficult to increase the dividends because of the capital adequacy ratio.”
Citigroup doesn’t have to admit wrongdoing (NYP)
Citigroup doesn’t have to worry about being forced to admit wrongdoing in a three-year-old regulatory settlement after a federal appeals court on Wednesday ruled it didn’t matter. The Securities and Exchange Commission has wide latitude to settle cases and allow defendants to sidestep the issue of guilt, the appeals court ruled. “Trials are primarily about the truth,” the court ruled in a much-anticipated 28-page ruling. “Consent decrees are primarily about pragmatism.” The appeals court ruling overturns a decision by trial court judge Jed Rakoff — who refused to rubber-stamp Citi’s $285 million settlement with the SEC because, without addressing guilt, he couldn’t know if the penalty fit the crime. The appeal court ordered the case back to Rakoff — who is now expected to approve the settlement.
Regis: I was Einhorn’s best summer intern ever (CNBC)
Taking up a recent offer for a summer internship at David Einhorn’s Greenlight Capital, television legend Philbin revealed what his day was like Tuesday on CNBC’s “Fast Money.” “Yes, so I went up to the David Einhorn offices, met everybody,” he said. “Happens to be a very nice guy. We had a long, long talk. And I tell you how it ended: They thought I was the best summer intern they ever had.” Last week, Einhorn said on air that he had been impressed by one of Philbin’s winning stock picks and offered the former TV show host an internship. Known as “the hardest working man in show business,” Philbin said that his duties at the firm consisted of doing legwork on three companies. “I suggested to David that we call Micron Tech, MolyCorp, Lululemon, and we had some very interesting conversations with the Micron Tech people,” he said. “And incidentally, I don’t think it’s going to bounce down much anymore. I think it’s on its way to at least $30. I think it almost touched $29 today.” [...] Einhorn had been rumored to be short LULU, although his most recent 13F filing does not show a position. Philbin said that they had called three different Lululemon locations—”and not one of them answered!” “I’m still in the stock, but I’m very disappointed that they didn’t take the calls when we made them, for crying out loud,” he added.
British Bank Regulators Pine to Win a Big Case (Dealbook)
Stung by a string of public losses and missteps, including a botched investigation into two property developers who are now suing the agency for 300 million pounds, about $500 million — more than seven times its £38 million annual budget — the Serious Fraud Office has yet to put forth a blockbuster case to restore its tattered reputation. “They need some success stories down there,” said Barry Vitou, head of corporate crime and investigations at Pinsent Masons, a British law firm. “People like to be associated with success, not failure, and they have had a series of high-profile failures.”
Amazon Planning to Unveil Smartphone to Vie With Apple’s (Bloomberg)
Amazon tweeted yesterday that it was holding an event in Seattle on June 18 hosted by Chief Executive Officer Jeff Bezos for a product unveiling. The post included a picture of a black, thin device with Amazon’s name in silver emblazoned on it. Mary Osako, a spokeswoman for Amazon, didn’t return a call for comment.
Hedge funds bet on euro decline (FT)
Hedge funds that specialise in anticipating central bank policy have ramped up their bets that the euro will fall as markets price in aggressive action from the European Central Bank to weaken the single currency. So-called global macro hedge funds, which invest in a wide range of assets in line with their forecasts and analysis of economic and market trends, have raised their net short position in the euro against the dollar from about 14 per cent of net assets to about 18 per cent during the past month, according to data compiled by Lyxor, a $21bn hedge fund investor. Reversing the euro’s appreciation has become a top priority for the ECB as it battles to prevent the eurozone falling into a dangerous deflationary spiral.
County to Woman: No More Cartwheels at Meetings (Newser)
A Phoenix woman says she has received an “intimidating, threatening, and defaming” letter ordering her to stop performing cartwheels at local government meetings. The letter to Dianne Barker from the Maricopa Association of Governments planning agency states that she has “from time to time suggested that MAG cannot prevent you from performing cartwheels during your comments. That position is incorrect.” Barker says she performs gymnastics to highlight the benefits of walking and using public transit, but officials say the cartwheels are disruptive and could result in injury to Barker or other people.