Brokerage, CEO face market-manipulation charges | Hedge funds work on AI traders with "human" brains | Supreme Court accepts securities-fraud case
March 28, 2017
NYSSA SmartBrief
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Brokerage, CEO face market-manipulation charges
The Financial Industry Regulatory Authority and some exchanges have filed charges against Lek Securities and its CEO, Samuel Lek, saying they helped a client with an alleged market manipulation involving high-frequency trades. The client is said to have engaged in layering, in which multiple orders were placed in various venues, then canceled, to distort and inflate the true value of the trade.
MarketWatch (3/27) 
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Industry Update
Hedge funds work on AI traders with "human" brains
Hedge funds are said to be developing and testing trade-capable computers with neural networks that operate on principles similar to those of the human brain, although they are not overclaiming ability. Numerous ventures in this field have proved unsuccessful, but deep learning, which is used by companies such as Google, Tesla and Amazon, is attracting interest and experimentation.
Bloomberg (3/27) 
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Supreme Court accepts securities-fraud case
The US Supreme Court has agreed to hear an appeal brought by a group of pension funds that sued a company accused of not disclosing an overbilling scheme and kickbacks involving former employees. The appeal was filed by Leidos, previously known as SAIC, which said appeals courts have made conflicting rulings on the law that applies to the case.
Pensions & Investments (free access for SmartBrief readers) (3/27) 
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Bond buying surges as "Trump rally" stalls
Growing skepticism that the Trump administration can bring about promised economic growth has sparked a rally in the relatively safe haven of US government bonds. After the administration's health care bill failed, yield on the benchmark 10-year Treasury note dropped to 2.373% Monday, which denotes a rise in bond prices.
The Wall Street Journal (tiered subscription model) (3/28) 
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Banks reportedly eye joint venture to cut costs
Major banks intent on lowering operational costs are discussing a joint venture to share trade technology and processes, sources say. Early talks reportedly have happened among banks including Bank of America, Goldman Sachs and Morgan Stanley.
The Wall Street Journal (tiered subscription model) (3/27) 
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New York Focus
Financial district to keep Fearless Girl a year
The famous Fearless Girl statue, placed in New York City's financial district to mark International Women's Day, was set to be removed next week, but Mayor Bill de Blasio has announced the statue will remain until March 8, the next International Women's Day.
The New York Times (free-article access for SmartBrief readers) (3/27) 
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N.Y. Legislature split on several issues
New York lawmakers remain far apart on several issues as the deadline approaches for budget adoption. Gov. Andrew Cuomo says the Legislature might need to pass an extender of the existing budget, rather than enact a new one.
The Wall Street Journal (tiered subscription model) (3/27) 
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People & Personalities
PIMCO to pay Gross $81M to settle lawsuit
PIMCO to pay Gross $81M to settle suit
Gross (Mark Wilson/Getty Images)
PIMCO co-founder Bill Gross has accepted an $81 million settlement after a dispute with the firm from which he was ousted in 2014. His lawsuit against PIMCO, which had assets under management of $1.5 trillion at the end of 2016, appears to have ended amicably, and the firm has promised to open a Founders Room at its office to honor Gross and other founders.
Bloomberg (3/28),  CNBC (3/27),  The Wall Street Journal (tiered subscription model) (3/27) 
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Ex-FDIC head Bair takes China bank directorship
Sheila Bair, former head of the US Federal Deposit Insurance Corp., has been appointed a nonexecutive director at Industrial and Commercial Bank of China, the country's largest commercial lender.
Reuters (3/27) 
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Financial Products
ProShares launches 2 leveraged crude oil futures ETFs
ProShares has brought to NYSE Arca exchange-traded funds giving investors triple-leveraged exposure to crude oil futures and the inverse of those futures. The UltraPro 3X Crude Oil EFT is designed to deliver 300% of the performance of the Bloomberg WTI Crude Oil Subindex, while the UltraPro 3X Short Crude Oil ETF seeks to deliver 300% of the inverse of that subindex.
ETF Trends (3/27),  The Wall Street Journal (tiered subscription model) (3/27), (3/27),  Barron's (free content) (3/27) 
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Attracting Institutional Assets
Join us Thursday, March 30, at 6 p.m. in the NYSSA Conference Center for our event, where we will explore the importance of operational due diligence to expose potential risks before they can cause harm. This program will serve to enhance a manager's perspective of due diligence and how it can help attract institutional assets. Topics covered will include the key components that comprise the operational due diligence process, best practices for managing a fund's operational risk and the specific issues that institutional investors consider "knock-out factors" for investment. Learn more about this event.
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