Wells Notice

These SEC Insider Emails Reveal Why No Bankers Have Gone To Jail

Now that we are gearing up to bring a handful of cases in this area, I suggest that we keep in mind that the vast majority of the losses suffered had nothing to do with fraud and the like and are more fairly attributable to lesser human failings of greed, arrogance and stupidity of which we are all guilty from time to time.”

Frontrunning: March 22

  • Brussels Rocked by Deadly Attacks With Blasts at Airport, Subway (BBG)
  • Death count climbs in Brussels blasts (Reuters)
  • Europe on High Alert After Blasts in Belgium (WSJ)
  • Brussels Phone Users Urged to Text Not Call as Networks Jammed (BBG)
  • U.S. Embassy Urges Citizens in Brussels to Shelter in Place (BBG)
  • Oil prices swept lower after Brussels blasts spook investors (Reuters)

Global Markets, S&P500 Futures Fall After Brussels Bombings

This morning's Brussels suicide attacks have led to risk-off sentiment across European asset classes, with Bunds higher and equities firmly in the red, although if the Paris terrorist attacks of November are any indication, today's tragic events may be just the catalyst the S&P500 needs to surge back to all time highs. FX markets have also been dominated by events in Brussels, with USD and JPY strengthening, while EUR and GBP softening throughout the European morning.

Frontrunning: July 24

  • EU to weigh extensive sanctions on Russia (FT)
  • U.S. lifts flight ban to Israel (Reuters)
  • Russia says will cooperate with MH17 probe led by Netherlands (Reuters)
  • Norway faces ‘concrete and credible’ terrorist threat (FT)
  • Don’t Tell Anybody About This Story on HFT Power Jump Trading (BBG)
  • But... but... PMI: Unilever Sales Growth Misses Estimates on Asian Slowdown (BBG)
  • World’s Biggest Wealth Fund Reviews $8 Billion Russian Stake (BBG)
  • Qualcomm latest US tech company to reverse in China (FT)
  • Hamptons Home Sales Rise as Buyers Find More Inventory (BBG)

Frontrunning: June 30

  • Facebook Researchers Manipulated News Feeds in 2012 Study (BBG)
  • Argentina at Brink of Default as $539 Million Payment Due (BBG)
  • Hedge fund correlation risk alarms investors (FT)
  • As China Flexes Muscle, Obama Frets Over Rival’s Weakness (BBG)
  • As caliphate declared, Iraqi troops battle for Tikrit (Reuters)
  • Dubai Caps Worst Month Since 2008 as Real Estate Stocks Tumble (BBG)
  • Russian Advisers Ready Iraq to Use New Combat Aircraft (BBG)
  • Blackstone Readies Big-Bet Hedge Fund (WSJ) - so what was GSO?
  • Pope says communists are closet Christians (Reuters)
  • Thomson Reuters revising FX trading standards (Reuters)

Frontrunning: April 24

  • Ukraine forces kill up to five rebels, Putin warns of consequences (Reuters)
  • Obama to Russia: More sanctions are 'teed up' (AP)
  • Vienna Banks Bemoan Russia Sanctions Testing Cold War Neutrality (BBG)
  • GE’s $57 Billion Cash Overseas Said to Fuel Alstom Deal (BBG)
  • GM posts lower first-quarter profit after recall costs (Reuters)
  • Apple Stock Split Removes Obstacle to Inclusion in Dow (BBG)
  • U.S. regulators to propose new net neutrality rules in May (Reuters)

Frontrunning: October 10

  • The ice breaks; fiscal talks set (The Hill); Ryan steps up to shape a deal (The Hill), as predicted here yesterday
  • Republicans consider short-term U.S. debt ceiling increase (Reuters)
  • Shutdown Standoff Shows Signs of a Thaw (WSJ)
  • JPMorgan Clients in Cash as Schwab’s Options Hedge Default (BBG)
  • Mitch McConnell, Senate GOP search for way out (Politico)
  • Meredith Whitney Winds Down Brokerage Unit After Setting Up Fund (BBG)
  • Washington Budget Chaos Keeps Fed Rates Low for Longer (BBG)
  • Chinese Premier Outlines US Debt Concerns (FT)
  • Saudis brace for 'nightmare' of U.S.-Iran rapprochement (Reuters)
  • Obama Urges Action on Yellen’s Fed Nomination (Reuters)
  • Libyan Prime Minister Ali Zidan Freed After Kidnap (WSJ)

JP Morgan Has Zero Trading Losses In The First Quarter

Earlier it was Bank of America reporting a perfect trading quarter, with profitability on 60 out of 60 trading days, and now it is JPMorgan's turn. Moments ago, Jamie Dimon's firm filed a 10Q in which, among other things, it announced than in the quarter ended March 31, it was profitable on 63 out of 63 trading days and had one day in which it gained more than $200 million, or said simply another case of trading perfection unmatched anywhere in the known universe except perhaps by sellers of newsletters on Twitter. It was not immediately clear why JPM got a freebie of three extra profitable trading days in the quarter compared to BofA, although we suspect Jamie Dimon's presidential cufflinks may have something to do with it. What is clear is that the probability of one firm trading without error for an entire quarter, let alone two (and soon more as other banks file their 10-Qs) is slim to quite slim. Although not nearly as slim as whoever the hot chick is on Dancing with the Stars this season, which we are confident is the only thing the bulk of the population cares about. For everyone else, there's E(rror free)-trade.

Frontrunning: December 7

  • Bundesbank cuts growth outlook as crisis bites (Reuters)
  • Strong quake hits off Japan near Fukushima disaster zone (Reuters)
  • Greece to Buy Debt It Already Owns to Reach Target (BBG)
  • Draghi’s Go-to ECB Seen Risking Credibility Through Overload (BBG)
  • Judge urges Apple and Samsung ‘peace’  (FT) ... Alas only the US government has a Magic Money Tree; others need profit
  • Fed Exit Plan May Be Redrawn as Assets Near $3 Trillion (BBG)... make that $5 trillion this time in 2014
  • Level Global, SAC Fund Managers Ruled Co-Conspirators (BBG)
  • Egypt demonstrators reject Mursi call for dialogue (Reuters)
  • Japanese Dealerships in China Retrench in Wake of Dispute (BBG)
  • Apparel factory fire reveals big brands' shadowy supply chainsa (Reuters)
  • Republican Defectors Weigh Deal on Tax-Rate Increase (BBG)

Netflix' CEO Receives Wells Notice, SEC Alleges "Reg FD" Violation

The antics of the world's most cartoonish CEO, that would be NFLX' Reed Hastings of course, who once upon a time posted on Seeking Alpha telling naysayers not to short him, bro, (only to continue sell his company's stock even as NFLX proceeded to use corporate money to buyback its own stock in the $200+ area), before promptly collapsing to multi-year lows, has finally been called to task by none other than that other most cartoonish of organizations: the SEC, which is now desperate to clean up its image as the bulk of the most coopted personnel are jumping ship, and will likely end up in various Wall Street companies.

Gold Falls Just 1.3% Despite Massive, Odd 3.5 Million Ounce Sell Orders

As ever, it is very difficult to pinpoint exactly why gold and all precious metals fell in price. Interestingly, oil fell by even more - NYMEX crude was down by 1% and was down by more than 1.7% at one stage. The CME Group, which operates the U.S. COMEX gold futures market, said Wednesday's plunge in gold was not the consequence of a "fat finger" or a human error. The trading wasn’t even fast enough to trigger a pause on Globex, said CME.  One thing that we can say for certain was that there was massive, concentrated selling as the New York stock markets opened with some 35,000 lots sold which is equivalent to 3.5 million ounces and saw the price fall from $1,735/oz to $1,711/oz between 0825 and 0830 EST. One sell order alone was believed to be 24 tonnes or 770,000 troy ounces.  Incredibly there was 35% daily volume in just 60 seconds. The selling, like all peculiar, counter intuitive, sharp sell offs in recent months, was COMEX driven with COMEX contracts slammed leading to further stop loss selling. The selling may have been by speculative players on the COMEX. It may have been algo or computer trading driven or tech selling – although this is less likely. Informed commentators questioned the nature of the selling as a large institutional COMEX trading entity would normally gradually sell a position of this size in order to maximise profit.

Frontrunning: November 29

  • As this has been priced in since September 13, it should come as no surprise to anyone: Fed Stimulus Likely in 2013 (Hilsenrath)
  • Bowles Says Fiscal Cliff Deal Unlikely by End of Year (Bloomberg)
  • Argentina debt repayment order frozen (FT)
  • Obama Is Flexible on Highest Tax Rates (WSJ)... not really
  • Geithner deployed for fiscal cliff talks (FT)
  • Audit firms Deloitte and KPMG sued in HP's Autonomy acquisition (Reuters)
  • Euro-Zone Budget Proposal Is Unveiled (WSJ)
  • EU Nations Clash on Thresholds for Direct ECB Oversight (Bloomberg)
  • LDP leader Abe: BOJ must ease until inflation hits 3 percent (Reuters)
  • SNB’s Jordan Says High Swiss Franc Burdens Many Companies (Bloomberg)
  • EU to launch free trade negotiations with Japan: EU officials (Reuters)

SAC Receives Wells Notice

It turns out the topic of today's much expected conference call originating at 72 Cummings Point Road Stamford, is what many already knew yesterday, namely that the SEC has warned SAC that after years and years of pursuits, the enforcer is finally getting close in for the kill, and has sent a Wells Notice, usually a first step before civil charges are filed.

  • SAC SAID TO TELL CLIENTS IT GOT WELLS NOTICE FROM SEC LAST WEEK

The notice will be filed against the holdco, implying Cohen himself will be implicated, instead of just the CR Intrinsic OpCo where Martoma worker. Usually the SEC does not file Wells Notices without sufficient backing, so this may finally get interesting. But we are not holding our breath. One needs to simply recall how the SEC bungled its CDS insider trading case vs Millennium and Deutsche to see how the endgame here could well be another epic humiliation for the soon to be Schapro-less regulator.