Barclays Dark Pool Drew Early Alarms (WSJ)
Trading firms and employees raised concerns about high-speed traders at Barclays PLC’s dark pool months before the New York attorney general alleged in June that the firm lied to clients about the extent of predatory trading activity on the electronic trading venue, according to people familiar with the firms. Some big trading outfits noticed their orders weren’t getting the best treatment on the dark pool, said people familiar with the trading. The firms began to grow concerned that the poor results resulted from high-frequency trading, the people said. In response, at least two firms—RBC Capital Markets and T. Rowe Price Group Inc.—boosted the minimum number of shares they would trade on the dark pool, letting them dodge high-speed traders, who often trade in small chunks of 100 or 200 shares, the people said. Meanwhile, a number of Barclays employees privately expressed concerns to top stock-trading executives that the firm was giving high-frequency traders too much access to its dark pool without fully informing clients, according to people familiar with the complaints. Investment firms worry that high-speed traders can detect their orders in dark pools and trade elsewhere using the information, moving the price against the companies.
Barclays Dark Pool Volume Fell 66% Week After Lawsuit (Bloomberg)
About 66 million U.S. shares were traded in the dark pool in the week of June 30, down 66 percent from about 197 million in the previous week, according to data from the Financial Industry Regulation Authority. The drop follows a 37 percent decline from 312 million in the previous week, data show. Barclays lied to customers and masked the role of high-frequency traders as it sought to boost revenue at one of Wall Street’s largest private trading venues, New York Attorney General Eric Schneiderman said in a complaint filed June 25. Barclays Chief Executive Officer Antony Jenkins, in a memo to staff, said the lawsuit represents “serious charges that allege a grave failure to live up to our values.”
U.K. Prosecutors Open Foreign-Exchange Rigging Investigation (Bloomberg)
U.K. prosecutors opened a criminal investigation into alleged manipulation of foreign-exchange benchmarks. “The Serious Fraud Office has today opened a criminal investigation into allegations of fraudulent conduct in the foreign exchange market,” the London-based agency said in an e-mailed statement today. Authorities around the world have been investigating whether traders rigged the $5.3 trillion-a-day currency market after the Financial Conduct Authority, the British markets regulator, began a review last year. Regulators and prosecutors are scrutinizing allegations that dealers at the world’s biggest banks traded ahead of their clients and colluded to rig the WM/Reuters rate, a benchmark that pension funds and money managers use to determine what they pay for foreign currencies.
Australia Regulator Censures Royal Bank of Scotland (WSJ)
Australia’s securities regulator has censured Royal Bank of Scotland Group PLC after the bank found some of its traders likely tried to influence the daily setting of the country’s benchmark interbank lending rate. As a result, an independent compliance expert will review the bank’s record with rules on contributions to interest-rate benchmark settings and will report back to the Australian Securities and Investment Commission, the regulator said. RBS also agreed to steps including a review of its communications-surveillance systems and giving refresher training to traders.
Kim Kardashian, Kanye West pay $500,000 for baby body double: report (NYDN)
British glossy magazine Grazia claims the couple held “auditions” in Los Angeles at a specialist agency to find a child who is the spitting image of North, according to The Mirror. The magazine also reports that the couple hired a body double nanny.
Ghosts of 2008 Haunt SEC’s ‘Outsider’ Pushing Tough Rules (Bloomberg)
As the Securities and Exchange Commission worked overtime to finish the Volcker Rule last year, a new arrival warned her colleagues they were botching one of the key parts of the new U.S regulatory machine. Commissioner Kara M. Stein, who had recently moved to the SEC after a career on Capitol Hill, said the text was full of potential loopholes for banks to dodge the ban on proprietary trading. She let it be known she might vote against it, bottling up the rule and embarrassing SEC Chair Mary Jo White…Since becoming one of three Democratic appointees on the five-member commission in August, Stein has criticized the SEC – – and by extension, White — for weaknesses in rules for crowd-funding and overseas swaps trading. She’s also questioned whether White’s plan to cut risks in money-market mutual funds, coming to a vote this week, will do more harm than good.
Unsolicited Bidders Get Unwanted Appraisal (WSJ)
Deal making isn’t just getting busier. It also is getting messier. Last week, announced global deal volume crossed the $2 trillion mark. But many of the discussed tie-ups have been far from friendly. Several big bids from potential corporate buyers have been unsolicited, meaning the targeted company isn’t eager to sell. Meanwhile, a greater percentage of bids lately includes stock as part or all of the makeup of an offer. That combination can prove volatile when it comes to the jousting that often ensues when a determined buyer is on the hunt. The use of stock in deals gives reluctant sellers extra ammunition to deflect overtures, as they can question the value of the stock they would be receiving.
Time Warner CEO to get $80M if company is sold (NYP)
Other investors joining CEO Bewkes in the windfall include: Mario Gabelli and his clients at Gamco Investors, owners of a $350 million stake…Bewkes’s so-called parachute payment, representing the value of added equity awards and items such as life insurance, is described in the company’s annual proxy filing and based on the Dec. 31 stock price, which has since advanced 31 percent. As of Feb. 28, he owned 225,517 Time Warner shares outright, according to the filing, now worth about $19.7 million. As of late April, he had exercisable options on 3.86 million shares.
Man Sets World Record With Most Homer Simpson Tattoos (HP)
The 27-year-old New Zealand man has set a Guinness World Record for “most tattoos of the same cartoon character tattooed on the body” with his Homer Simpson sleeve. According to Guinness World Records: Lee has 41 tattoos of Homer in total, each representing Bart’s dad in various states, including Homer as a jack-in-the box, the Grim Reaper, in an elephant suit, as the Hulk, and even Homer as a donut. The UK’s Daily Mirror noted that Weir decided to get the tattoos in part because his father, who he described as a “real-life Ned Flanders” (Homer’s annoyingly nice neighbor on the long-running animated series), forbade him to watch the show as a kid. Weir told Guinness that he paid for the tattoos with money he saved abstaining from booze for a year.