U.S. to Sanction Russia, Expel Diplomats Over Alleged Election Interference, Hacking [WSJ]
Using a new executive order, the measure will expand the existing prohibitions on U.S. banks trading in Russian government debt, two of the people said. Previous prohibitions targeting portions of Russian sovereign debt shook Russia’s markets and added to its economic woes.
That order prohibits U.S. financial institutions from buying new bonds directly from Russia’s central bank, finance ministry and the country’s massive sovereign-wealth fund after June 14…. Russia’s foreign-intelligence service, the SVR, will be formally accused of carrying out the so-called SolarWinds hack of U.S. government and corporate computer systems.
NATO Wargame Examines Cyber Risk to Financial System [WSJ Pro]
The North Atlantic Treaty Organization is running its annual Locked Shields exercise from April 13 to April 16 through its Estonia-based Cooperative Cyber Defence Centre of Excellence. The wargame includes scenarios exploring how widespread attacks on a fictional nation’s infrastructure might strike at activities critical to keeping the global financial system functioning, such as payments and settlement operations…. The Bank for International Settlements, NatWest Group PLC, Mastercard Inc., the Financial Services Information Sharing and Analysis Center, and the Swiss Computer Emergency Readiness Team, Switch-Cert, took part in planning the Locked Shields scenarios.
Thermo Fisher Nears Deal to Buy PPD for More Than $15 Billion [WSJ]
Through its Patheon business, acquired in 2017, Thermo already provides services including clinical-trial logistics, and buying PPD would augment that.
Thermo has been on the hunt for acquisitions. It agreed to buy molecular-diagnostics company Qiagen NV for about $10.1 billion in March 2020. It subsequently sweetened the bid but in August terminated the agreement after failing to get shareholder approval. Thermo now has more than $10 billion in cash.
Hedge fund Elliott builds up multibillion-pound stake in GSK [FT]
Elliott’s investment comes as GSK shareholders have become increasingly disillusioned with the leadership of chief executive Dame Emma Walmsley, who is breaking up the company from next year by separating the consumer health business from its pharma and vaccine division…. One person familiar with the mood of some GSK shareholders suggested that, although Walmsley was unlikely to be pushed out given the imminent business split, they would prefer her to head the consumer health business — taking advantage of her background in that field — rather than her stated intention of running the demerged pharma business.
Hedge funds rethink after GameStop pain [FT]
“In the current environment, you are being negligent if you don’t measure and manage your exposure on the short side to both crowding and retail interest,” says Bruce Harington, head of equity long/short strategies at Stenham Asset Management, which invests in hedge funds…. The head of one multibillion-dollar US hedge fund, who asked not to be named, says it is “absolutely” looking at forums such as WallStreetBets: “We’re monitoring that extremely closely.”
FASB Gives Certain Companies an Accounting Break on Lease-Contract Losses [WSJ]
Under current accounting rules, lessors have to recognize a loss at the beginning of certain types of leases even if they expect the arrangement to be profitable overall…. “This accounting doesn’t reflect the reality of the transaction,” board member Gary Buesser said. He added that companies don’t enter agreements “expecting a loss.”
Under the new standard, lessors are no longer required to recognize the accounting loss in those contracts.