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Global Macro Strategy, People Profiles, Tech Talk

Goldman Sachs Goes Crypto; Opens Bitcoin Trade Desk

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Goldman Sachs, the venerable investment bank and trading house, has been called lots of things, including “Squid.” But nobody on Wall Street can dispute the fact that $GS is uniquely innovative and perhaps, a firm that can smell the trail of money better than its peers and explains why Goldman is opening a bitcoin trade desk. While JPMorgan CEO Jamie Dimon has repeatedly said bitcoin and other cryptocurrencies are at worst, the foundation to a Ponzi scheme, and at best, a passing fad, Goldman’s CEO Lloyd Blankfein has a different, more open-minded view. As evidenced by last week’s announcement, Goldman is opening a digital asset trade desk to accommodate a growing spectrum of hedge funds, endowments and foundations that already own digital assets or intend to deploy funds to the alt currency asset class. The new digital asset desk will be led by a fellow named Justin Schmidt, an MIT quant jock who previously worked at several quantitative investment management firms, including a hedge fund connected to The Schoenfeld Group.

jason-schmidt-crypto-trader
Jason Schmidt, Goldman Sachs Crypto Trader

As reported by NYT reporter Nathan Popper, “…While Goldman will not initially be buying and selling actual Bitcoins, a team at the bank is looking at going in that direction if it can get regulatory approval and figure out how to deal with the additional risks associated with holding the virtual currency….Rana Yared, one of the Goldman executives overseeing the creation of the trading operation, said the bank was clear-eyed about what it was getting itself into…”

Ms. Yared said the bank had received inquiries from hedge funds, as well as endowments and foundations that received virtual currency donations from newly minted Bitcoin millionaires and didn’t know how to handle them. The ultimate decision to begin trading Bitcoin contracts went through Goldman’s board of directors.

Whether your company is a fintech startup planning a private placement offering, a crypto concern with a custom token offering that is seeking to raise capital from qualified or accredited investors via an Initial Coin Offering (ICO), a Securities Token Offering (STO)or if you are fast growth firm setting the stage for an initial public offering (IPO), a properly prepared offering prospectus or offering memorandum is required by your investors and industry regulators that govern securities offerings. Issuers seeking expert, yet affordable investor document solutions rely on experts at Prospectus.com.

Goldman has already been doing more than most banks in the area, clearing trades for customers who want to buy and sell Bitcoin futures on the Chicago Mercantile Exchange and the Chicago Board Options Exchange.

In the next few weeks — the exact start date has not been set — Goldman will begin using its own money to trade Bitcoin futures contracts on behalf of clients. It will also create its own, more flexible version of a future, known as a non-deliverable forward, which it will offer to clients.

To read the full NYT story, click here.

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People Profiles, Tech Talk

SEC Subpoena Smackdown: ICO Issuers & Enablers Get Pinned

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An SEC subpoena is not exactly what any Issuer (or stock promoter) puts on the top of their birthday wish list. And, for crypto cool kids who are either already a member of the ICO Issuers Club, or who have applied to become part of the dapper dapp crowd that is floating digital coin or digital token offerings, its time to make sure that you have set aside real cash (or crypto-currency) for defense counsel fluent in engaging with the SEC.

According to multiple news outlets, the top US securities regulator has launched a series of cluster bombs in the form of SEC subpoena aimed at ICO Issuers and respective enablers. Included in the SEC’s ‘outreach” are  ‘consultants, advisors, promoters, and other actors who have played a role in helping blocktech start-up companies raise what industry experts believe to be billions of dollars through initial coin offerings. Of that figure, forensic investigators believe at least $200 million raised by several dozen ICO companies during the past year  has “gone south.”

As noted by investor document preparation firm Prospectus.com, “According to multiple news outlets, in recent weeks the SEC has sent subpoenas to dozens of blocktech companies and individuals who are involved in cryptocurrency, including crypto crowd thought-leader Patrick Byrne, the founder of Overstock.com and his company’s cryptocurrency-focused subsidiary, tZero. When Overstock announced in early November they would be launching an ICO, the company’s shares skyrocketed from the the mid $20’s to nearly $90 per share in a manner of days. When it was revealed this week that Overstock (NASDAQ:OSTK) was one of multiple companies that have received SEC subpoenas, its share price plunged 20% in two days.

“ICO Issuers are compelled to understand the term “Caveat Venditor”, lest they be moved to the top of the SEC’s ICO Subpoenas list.”

The targets of the initial coin offering crackdown subpoenas include potential SEC enforcement actions against companies that have launched ICOs, the cryptocurrency equivalent of IPOs, as well as their lawyers and advisers. The subpoenas reportedly include requests for information on how ICO sales and pre-sales are structured, according to anonymous sources to WSJ. The SEC is also requesting the identities of the investors who bought digital tokens, The New York Times found. The SEC declined to comment.

caveat-venditor-ico-issuersPeter Berkman, a Florida-based securities attorney and US Federal Bar Association member who also advises investor document preparation firm Prospectus.com, stated “Nobody should be ‘shocked’ that regulators are stepping up their scrutiny of ICOs given that many have the characteristics straight out of “Boiler Room 4.0.” There’s a cadre of bad actors and so-called promoters who are preying on the naivete of start-up entrepreneurs as well as the greed profile of unsophisticated investors,” stated Berkman.

There are steps that ICO issuers can take to stay inside the regulatory goal posts, or at very least, under the radar given that SEC rules for ICOs remain in the ‘forming stage. Attorney Berkman advocates ICO Issuers should be compelled to understand the term “Caveat Venditor”, unless they want to be moved to the top of the SEC’s ICO Subpoenas list. Prospectus.com thought-leaders were arguably early to opine that among other ICO compliance guidelines to follow, accredited investor guidelines should be embraced by ICO issuers. The firm has provided multiple crypto cool kids and start-up entrepreneurs with a best practice approach to raising capital in the course of advancing  digital token and digital coin offerings.

To continue reading via blog post at Prospectus.com, click here

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Tech Talk

Memo to Asset Managers : Get on the Blockchain Bus or Get Run Over

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Asset Management Industry is Notorious for Waste: Its About Blockchain, You Blockheads. NOT Bitcoin,

Blockchain Dapps Can Mitigate Risk of “Death By Drop Copy”

Any asset manager in today’s world who has more than $500 of AUM does not need to be fluent in the language of fintech, blocktech or be able to explain ‘the internet of things’ to understand the benefits of embracing blockchain dapps and the power of distributed ledger technologies. Any asset management firm that claims to be operating in the world of institutional fund management does need to get on the blockchain bus–or risk getting run over by it.

(courtesy of Prospectus.com LLC) As part of ongoing series “Its About Blockchain, Blockhead, Not Bitcoin!”, FT reporter Attracta Mooney hit the yellow zone of the target in a recent column profiling the how, where and why investment industry asset managers in UK, Ireland, Luxembourg, Hong Kong, Singapore, Taiwan and Australia could enjoy nearly $3billion in annual savings were they to embrace blockchain’s distributed ledger powered processes. After all, the new ‘internet of things’ blockchain value proposition for securities industry purposes is specifically designed to deliver at very least, greater efficiency in work flow, greater trust in the information being shared, enhanced transparency among trade processing constituents and more effective use of human capital resources.

Where? Let’s focus on the back office, the central place where administration of transaction reporting, accounting, trade processing and related legacy “drop copy” tasks take place. How? Distributed Ledger dapps leveraging the blockchain ecosystem are intended to mitigate duplicitous human interactions within the context of transaction affirmation, transaction processing, transaction reporting and transaction documentation.

If the above is confusing to you, or if you have not yet interrogated any of the thousands of simple-to-understand primers and tutorials on this topic (including the growing assortment of content pieces published in the news section of Prospectus.com) then you should

  • schedule a call with a fellow named George Chrisafis, who oversees fintech merchant bank SenaHill Partners’ Emerging Tech and Infrastructure Advisor Group. George is an IT industry grey beard with 30 years of domain expertise and his CV includes senior roles at the world’s biggest banks. When it comes to distributed ledger—as well as AI applications being developed for the securities industry, George is a reliable source of insight.
  • bring a high school or college-aged family member to your office and have them deliver a 5 minute dissertation on the topic of blockchain and distributed ledger, and to limit the cryptocurrency explanation to 1 minute. For some, the topic is confusing, but this is confusing, there is no shortage of simple primers and tutorials that frame the value proposition of distributed ledger.

Why Asset Managers Should Embrace Blockchain applications Barring above steps to independently confirm the thesis put forward in the FT article (excerpt and link below), let’s jump straight to the topic that best defines the purpose of asset managers: MONEY. Now let’s delve into the real cost and real expenses associated with their role(s) from both a human capital perspective and IT angle. [The information cost (research) and marketing expense components can be addressed in a different opinion piece}.

From a human capital expense perspective, transaction reporting tasks are notorious for their duplicative and redundant steps spread across various internal departments; many back-office professionals lament the high risk of Death by Drop Copy, simply because much of their time is spent drop-copying one file from one software application into an unconnected software application that performs a different task. From an IT perspective, let’s opine that most investment management firms are spending considerable sums each year on software licenses, software maintenance, and software administration. Succinctly, blockchain applications can save tens, if not hundreds of thousands of dollars to an established asset management firm—in turn enabling a firm to deploy those cost savings to revenue producing initiatives and recalibrating how internal human capital resources are better utilized.

If you’ve got a hot insider tip, a bright idea, or if you’d like to get visibility for your brand through MarketsMuse via subliminal content marketing, advertorial, blatant shout-out, spotlight article, news release etc., please reach out to our Senior Editor  or email: cmo@marketsmuse.com.

 

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People Profiles, Tech Talk

BlockTech Bid Repeats via Bloomberg: Its About Blockchain, NOT Bitcoin

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(MarketsMuse fintech and blocktech curators extend our thanks to Prospectus.com LLC for the following contribution)-Bloomberg Intelligence reporter Jonathan Tyce wins the Valentine’s Day Award for Very Good Framing courtesy of his latest piece “Blockchain is Coming Everywhere, Ready or Not” –one of a series of articles by Tyce that puts the blockchain value proposition into proper perspective. Without suggesting there is any IP underlying the thesis advanced by Tyce,  the opening sentence speaks volumes to those who are crypto challenged and have the misinformed view that blockchain = bitcoin=all kinds of bad things, including but not limited to ‘investment bubble”, Ponzi scheme, “pump and dump” ICOs where the Issuer is now hiding in the ‘dark web’ or sun-tanning in Belize, and lastly, ‘one of the things that lets people create crazy currency that isn’t even fungible’. Bid repeats: Its all about the blockchain, blockhead. Not bitcoin. Welcome to BlockTech.

Without intending to invite the BloombergLP copyright cops to castigate this blog for infringement violations, this blog has posted a series of original articles themed with the same title of this post. With that disclaimer, we’ve responsibly stayed within the goal posts and merely excerpted select portions of Tyce’s piece to advance smart thinking and give credit where due…

The applications of blockchain technology will spread in 2018 far beyond bitcoin and, perhaps more surprisingly, way beyond financial services. Significant disruption and new business opportunities are on the menu. Four of the most-critical benefits from distributed-ledger technology can be encapsulated within trust, transparency, cost and speed. Where will the disruption occur?

Blockchain is now a familiar term to many, though in most cases, its meaning will be inextricably linked to bitcoin after a 10-fold price surge in 2017 valued the cryptocurrency at more than $180 billion.

This is only one strand of the story for Europe and globally. The applications of blockchain technology will spread in 2018 far beyond bitcoin and, perhaps more surprisingly, way beyond financial services.

For starters, huge improvements in efficiency and transaction speeds, cost savings and enhanced security are on the menu, with significant disruption and new business opportunities likely to follow.

Distributed-ledger technology

Putting the semantics to bed early, blockchain is the name designated to a string or chain of transaction records (blocks), cryptographically signed with “hashes,” or digital signatures. Though undoubtedly the most high-profile application of blockchain, the bitcoin network is just one example of how cryptocurrencies and other transactions can use this technology.

Blockchain is effectively the means to create tamper-proof records of data and transactions — whether that is a money transfer, vote cast, medical record or change of property ownership. It is just one of a variety of decentralized database technologies that exist across multiple locations. These are known as distributed ledgers, and it is within these so-called DLT technologies that great opportunity exists.

To continue reading, please visit Prospectus.com LLC blog

If you’ve got a hot insider tip, a bright idea, or if you’d like to get visibility for your brand through MarketsMuse via subliminal content marketing, advertorial, blatant shout-out, spotlight article, news release etc., please reach out to our Senior Editor  or email: cmo@marketsmuse.com.

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Global Macro Strategy, People Profiles

MiFID II : Sell-Side Research Analysts Unwanted Thanks to Unbundling

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(MarketsMuse blog post image courtesy of Institutional Investor)–Thanks to MiFID II, Sell-Side Research Analysts are not only unwanted, they will become increasingly underemployed in terms of compensation, or simply unemployed. This increasing view is bleak for investment bank research wonks, but provides for a career re-purposing on the part of experienced research analysts. At least that’s one thesis, as advanced by Institutional Investor’s Amy Whyte. (link to article below).

Wall Street’s investment bank research analysts, the folks who have long been notorious for peddling buy recommendations on companies in which their respective firms serve as the lead or co-lead underwriter to the company whose shares and/or bonds they tout are now facing a new professional career dilemma and its directly related to MiFID II, the EU’s revamped financial industry regulatory framework. Part of the new regs that rolled out at the beginning of 2018 require investment banks to charge their clients separately for research provided, as opposed to bundling the cost of research within trade execution fees/commissions charged to clients. This is actually a very big deal, as it now puts the onus on investment banks to not only justify the “value” of their manufacturing buy recommendations, but opens Pandora’s Box insofar as institutional investor clients of those banks can now measure the value of that research in a granular fashion.

MiFID II’s negative impact on investment bank research analysts is one that is perhaps bigger than the reputational crisis they suffered consequent to the bursting of the internet bubble during the turn of this century. Back then, research analysts were castigated for peddling grotesquely overvalued dot com stocks–many of which imploded within less than 2 years of their banks underwriting the IPOs of the same companies.  For those not familiar with history, a simple revisit to the wikipedia page of former Merrill Lynch Analyst Henry Blodget provides a case study in conflicted commentary peddled by analysts back in those days (keep reading below for the Blodget story). Point being-sell-side research analysts were (deservedly) thrown under the bus for being conflicted in their recommendations, leading to a short-lived surge in startup independent research firms. Now, investment bank research analysts are facing another career crisis thanks to unbundling research regulations introduced by MiFID II.

Unbundled pricing models will change research market forever (Bloomberg Intelligence Aug 2017)
Banks are adjusting their pricing models for investment research in preparation for EU reforms that will prevent research from being paid for directly using dealing commissions. In an unbundled world, based on execution-only commission rates where payments for research are separated, competition in equity research, as well as fixed-income, currency and commodities research, is likely to rise. Managers may look beyond traditional sources, triggering fragmentation. They may also move research in-house.

But all is not as bad as it sounds for the research analyst community at large. Sell-side research analysts who have strong pedigrees are presumably well-positioned to take on similar roles at buy side firms, or as the II article suggests, these folks are nicely qualified to serve as Investor Relations professionals for corporations. For US-based analysts, the urgency to repurpose is not as severe as it might be for their EU counterparts, as the US SEC has provided a reprieve for the time being according to one expert.

MiFID 2 regulations require investment research to be paid for in one of two ways: from a fund manager’s own account, which may be recoverable by raising fees, or via a ring-fenced client research-payment account. While regulators will permit research charges to be collected alongside transaction commissions, subject to strict conditions, there should be no link to transaction value or volume. The move to an unbundled research model will limit the long-held use of commissions and is being disruptive to the industry globally.

Henry Blodget
Henry Blodget

Flashback to Blodget….Putting into context, he was the 1990’s icon for being a dot com MarketsMuse. The likes of Henry Blodget made no bones promoting dot com stocks underwritten by his former employers Oppenheimer & Co and then Merrill Lynch. Blodget was ultimately barred for life from the securities industry for his egregious touting and to make sure the door didn’t slam his butt on the way out of Wall Street, he paid a $2mil fine and agreed to give back another $2mil that he earned while being the most prolific stock promoter of his generation.  Good news-Blodget repurposed himself and is co-founder/CEO, Editor-in-Chief and publisher of financial industry rag Business Insider.

If you’ve got a hot insider tip, a bright idea, or if you’d like to get visibility for your brand through MarketsMuse via subliminal content marketing, advertorial, blatant shout-out, spotlight article, news release etc., please reach out to our Senior Editor  or email: cmo@marketsmuse.com.

Here’s the article from Institutional Investor

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ETF News, Tech Talk

ETF Broker Rolls Out Quote Capture Tool for Block Trades

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JERSEY CITY, N.J., Jan. 17, 2018 /PRNewswire/ — ETF broker WallachBeth Capital, a leading institutional brokerage firm, has announced the Phase I roll out of its internal proprietary Quote Capture platform. The platform further enhances WallachBeth’s commitment to providing institutional clients the highest degree of transparency throughout the ETF execution process.

WallachBeth has always leveraged the advantages of a competitive quote model to source liquidity for outsized ETF block trades, providing price improvement and increased liquidity in often hard-to-trade and/or illiquid products. In light of clients’ interest in the transparency provided by RFQ (“Request for Quote”) platforms, WallachBeth’s Quote Capture tool allows clients to quantify and validate their price discovery process and satisfy compliance obligations.

The foundation of WallachBeth’s ETF execution business is providing institutional clients high touch access to a full suite of execution strategies, coupled with agnostic advice throughout the trade lifecycle. WallachBeth continues to be increasingly relevant to the broadening number of institutions using ETF products and strategies to achieve their investment mandates. Andrew Mcormond, Managing Director, ETF Trading Solutions, at WallachBeth Capital states, “We always emphasize that best price often goes beyond a block trade. True best execution requires a comprehensive plan that includes experienced consultation, pre- and post- trade analysis and the invaluable expertise of seasoned ETF traders.”

About WallachBeth Capital LLC

WallachBeth Capital is a leading provider of institutional execution services, offering clients a full spectrum of solutions to help them navigate increasingly complex markets. The firm’s expertise includes ETF and equity trading, derivatives, and capital markets. Operating on a fully disclosed, agency-only basis, the firm is committed to facilitating all client needs with transparency and integrity. The firm’s website is located at www.wallachbeth.com.

If you’ve got a hot insider tip, a bright idea, or if you’d like to get visibility for your brand through MarketsMuse via subliminal content marketing, advertorial, blatant shout-out, spotlight article, news release etc., please reach out to our Senior Editor  or email: cmo@marketsmuse.com.

 

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ETF News, Tech Talk

Blockchain ETFs Debut-It’s About The Blockchain, Blockhead, Not Bitcoin!

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What’s Next for exchange-traded-fund land? Blockchain ETFs! Duh?! Aside from the efforts by the Winklevoss Boys and a cadre of others to introduce a Bitcoin ETF, Blockchain companies (now known as ‘blocktech’ firms) fall into the sweet spot for fintech investors and public companies that are pivoting, re-purposing or adding to their value proposition with a blockchain-based approach to enhancing e-commerce, big data applications or other tools are top candidates for an exchange-traded fund dedicated to the world of crypto and distributed ledger.

As noted by ETF.com, “..Today sees the debut of two Blockchain ETFs focused on blockchain technology, the first blockchain exchange-traded funds of their kind. The actively managed Amplify Transformational Data Sharing ETF (BLOK) lists on the NYSE Arca and comes with an expense ratio of 0.70%, while the index-based Reality Shares Nasdaq NexGen Economy ETF (BLCN) lists on the Nasdaq and comes with an expense ratio of 0.68%…”

In case you’ve been hiding under a brick for the past many weeks, blockchain technology is in the spotlight due to the mania surrounding bitcoin and other cryptocurrencies. If you were not aware, blockchain technology is the engine that powers the sauce that goes into cryptocurrencies. To coin the phrase (pun intended, courtesy of MarketsMuse top pundit), “Its all about the blockchain, Blockhead! Not the bitcoin!” –meaning the blockchain is foundation to wider applications, not just supporting digital money. In other words, blockchain serves as a “distributed ledger” that provides a secure and unalterable record of transactions that have taken place and other key pieces of information, storing them in linked blocks of data. Think of blockchain as a multi-dimensional spread sheet that lives in real-time and is refreshed with every interaction by those who are enabled to access the application. The bitcoin or token element is therefore the key or passport to accessing the spread sheet. So, it seems to make sense that as more companies seek to leverage this new generation technology, there will be more prospective candidates for blockchain ETFs, which are likely to morph.

ETF.com commentary profiling the new listings continues with “..BLOK was actually the first blockchain ETF to go into registration. The fund can invest in domestic and non-U.S. securities, including depositary receipts, according to the prospectus. It will focus primarily on firms that are developing or using blockchain or similar technologies.

According to Christian Magoon, founder and CEO of Amplify ETFs, developments among the companies in his firm’s Amplify Online Retail ETF (IBUY) alerted him to the fact that cryptocurrency was an emerging trend.

“That started to get us interested in the blockchain equities side of things given the potential of blockchain technology to disrupt; it certainly seems to have potential that is almost similar to the internet’s,” Magoon said.

The range of companies allowed in the portfolio covers those engaged in research and development, and the implementation of blockchain and similar technologies; those profiting directly and indirectly from demand for such technologies; those partnering with companies engaged in blockchain research, development and implementation; and those that belong to consortiums or groups formed to explore the potential of such technologies. Companies must also meet minimum size, price and liquidity thresholds.

Further, the portfolio managers consider the depth of the involvement of companies when selecting them for inclusion in the portfolio, classifying those that are selected as either “core” or “secondary” companies based on their activities, the prospectus said.

Magoon describes the fund’s strategy as “skating where the puck will be.”

“We think companies that are leaders today in researching, investing in or receiving revenue from blockchain are going to be well-positioned for tomorrow—similar to companies that engaged in internet technology early on,” he said.

Magoon’s firm offers actively managed and index-based ETFs, but he believes active management is particularly important for a fund such as BLOK.

“Our key differentiator is that we believe you have to be active when you engage in this space. In order to capture the upside and manage downside risk, you have to be, on a daily basis, looking at this and adjusting your portfolio,” he said, noting that a manager can slowly build or unwind positions, whereas index funds tend to make very binary decisions regarding including or selling a company. Further, while an index fund must wait until its scheduled rebalancing to reflect changes in the market, an active fund’s manager can react immediately.

 

Keep reading the story directly from the source..

If you’ve got a hot insider tip, a bright idea, or if you’d like to get visibility for your brand through MarketsMuse via subliminal content marketing, advertorial, blatant shout-out, spotlight article, news release etc., please reach out to our Senior Editor  or email: cmo@marketsmuse.com.

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bond-market-transparency
Fixed Income, People Profiles, Tech Talk

SEC Chair Jay Clayton Axe: Greater Corporate Bond Market Transparency

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Corporate Bond Market Transparency 4.0 MarketsMuse fixed income fintech curators, who have been on the beat for better than 8 years, were keen to cover this week’s inaugrual meeting of FIMSAC.  e-Bond trading system founders, fixed income fund managers and fintech aficionados who have long lamented the limited degree of US corporate bond market transparency and less-than-likeable liquidity when trading corporate bonds in the secondary market and who ‘get the joke’ insofar as the benefits of embracing electronic trading platforms for corporate bonds might have a new advocate: SEC Chair Jay Clayton. At least that’s the way it appears based on comments Clayton made on Thursday while speaking to members of the Fixed Income Market Structure Advisory Committee (FIMSAC) during the group’s first meeting in Washington DC.

Whether Clayton does a typical White House walk-back after financial industry lobbyists turn up the heat in effort to preserve their legacy role controlling order flow and pricing remains to be seen. Because Clayton’s axe is less focused on institutional participants versus retail investors when stating “Main Street investors want liquidity; it is a sign of stability and resiliency..” he may not understand how the corporate bond works or the process by which individual investors become holders of corporate debt within their portfolios. If that’s the case, he’s perhaps perfectly suited to be a member of the present White House administration.

The importance of fixed income markets is “difficult to overstate,” Clayton said, noting the value of outstanding corporate bonds rose 76 percent between 2006 and 2016, compared to equity market cap growth of 40 percent.

“Individual investors are key participants in these markets, both directly and indirectly through pension funds and other pooled vehicles,” Clayton said, adding that he intends for the commission to continue focusing on these investors.

Courtesy of Law360 coverage: “Concerns regarding liquidity, or the ease with which buyers and sellers can match up in a given market, have been raised by bond market investors in recent years as big banks that serve as bond dealers and market makers, acting on new regulations imposed in the wake of the 2009 financial crisis, have reduced their balance sheets to cut costs and rein in risk.

The banks have shrunk their balance sheets by scaling back on the large bond positions they once held and used for creating markets for bond investors.

Some bond market participants have said the smaller balance sheets have led to reduced liquidity because it’s now harder to match buyers and sellers. That’s raised concerns that investors could lose lots of money should they need to quickly sell a large block of bonds into a market with few buyers.

Companies seeking to raise capital via private placement of debt instruments and in need of offering prospectus document preparation services turn to investor document specialists at global consultancy Prospectus.com

The wider concern is that if liquidity is already fragile it could essentially freeze during a time of financial stress when lots of investors choose to sell their bonds. When that happens, as it did in 2007, a domino effect kicks in which, given the size and reach of global bond markets, poses a threat to the world’s economy.

Committee member Gilbert Garcia, managing partner of Houston-based bond manager Garcia Hamilton & Associates, said he trades daily and has firsthand knowledge of a lack of liquidity during normal trading conditions, especially for large blocks of bonds.

“What we need to do is be ready for the next crisis,” Garcia told other members of the committee.

Scott Krohn, Verizon Communications Inc.’s treasurer and also a committee member, raised a concern that yields on Verizon’s highly liquid bonds could be vulnerable to extreme volatility during periods of financial stress as investors flee riskier securities in favor of safer ones, such as Verizon’s corporate debt.

To read the full article from Law360, click here

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People Profiles, Tech Talk

Bitcoin Barista of the Day Award: BnkToTheFuture

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When it comes to corporate monikers, MarketsMuse fintech curators are big fans of catchy names and have made it a New Year’s resolution to compile and share a weekly list of firms that earn special recognition within the burgeoning world of blockchain, bitcoin and crypto handles. And, the winner for the first week of 2018 is”BnkToTheFuture.” No, its not a futuristic bank run by Doc Brown and no, Marty McFly is not the crypto credit lending officer. Its a current generation “cool kids only investment bank” that appears to be based in Hong Kong and staffed by the now ubiquitous-to-the-industry line-up of slick looking folks from UK, HK and of course, Eastern Europe. Arguably, the management team can be considered blockchain industry pioneers given this firm was formed way back in 2011.

Our thanks for guidance to this “Global FinTech, Bitcoin and blockchain online investment platform” goes to TradersMag Senior Editor John D’Antona  who pushed this release to us, which is chock full of  mentions of ‘crypto industry celebrities’ who recently joined the firm’s advisory board. Our compliance desk loved the “About BnkToTheFuture” section of their press release; it conforms beautifully with global financial industry best practice protocols: “The platform is in line with international financial regulations and over $200m has been invested in deals listed on its platform.”  Below is an excerpt of the news story:

simon-dixon-banktothefuture
Simon Dixon, CEO BankToTheFuture

BnkToTheFuture today announced its token sale advisory board, with executives from Civic, Smith + Crown, Abra, BitAngels, and more signing on to help BnkToTheFuture launch a tokenized secondary market and due diligence platform for equity tokens. BnkToTheFuture’s online investment platform already brings vetted deals to qualifying investors and has invested in many of the most valuable companies in the sector, and will now incorporate its BFT cryptocurrency token to reward due diligence, deal flow analysis and investor relations on prospective and current deals.

“Investors in today’s burgeoning ICO landscape are seeking more professionalism, accountability, and compliance, while equity investors are seeking greater liquidity and trading,” said Civic CEO and BnkToTheFuture Identity/KYC Advisor Vinny Lingham. “BnkToTheFuture provides this gap in service, and I’m excited to see this project grow through its next phase.”   The company’s press release includes: “The platform is in line with international financial regulations and over $200m has been invested in deals listed on its platform including BitFinex, BitStamp, Kraken, ShapeShift and over 100 others.”

Joining BnkToTheFuture’s advisory board alongside Lingham are Jonathan Smith, Civic Co-Founder and CTO; Bill Barhydt, CEO of Abra; Diego Gutierrez Zaldivar, CEO and Co-Founder of Rootstock (RSK), Michael Terpin, CEO of Transform Group, Founder of CoinAgenda, and Co-Founder of BitAngels; Sunny Ray, President of Unocoin; David Johnston, Chairman of Factom and Co-Founder of BitAngels; Li Huo, Director at Huobi; Adam Vaziri, Blockchain lawyer and Director at Diacol; Brian Lio, CEO at Smith + Crown; Matt Chwierut, Researcher at Smith + Crown; Tony Simonovsky, CEO of InsightCryp.to; and David Drake, Chairman at LDJ Capital. BnkToTheFuture will continue to list new advisors here.

Whether your company is a fintech startup that is planning a private placement offering, a crypto concern with a custom token offering that is seeking to raise capital from qualified or accredited investors via a Initial Coin Offering (ICO), or if you are fast growth firm setting the stage for an initial public offering (IPO), a properly prepared offering prospectus or offering memorandum is required by your investors and industry regulators that govern securities offerings. Issuers seeking affordable investor document solutions rely on experts at Prospectus.com.

“While building BnkToTheFuture’s advisory board for our upcoming token launch, we sought leaders in the blockchain industry and those who have been consistently involved advocating for Bitcoin from very early on to help guide our efforts to further develop a transparent platform compliant with regulatory requirements,” said Simon Dixon, CEO of BnkToTheFuture. “We’re confident that our advisory team of experts will be instrumental in this process.”

Already popular as an online investment platform with 45,000 qualifying investors and over $200 million invested in rounds listed on its platform including companies like Kraken, BitFinex, BitStamp, ShapeShift and others, BnkToTheFuture will incorporate blockchain technology to allow for the trading of equity tokens and will issue its own token, BFT, to support deal flow analysis, due diligence and investor relations on the platform. BFT will be available in a public token sale in February 2018.

If you’ve got a hot insider tip, a bright idea, or if you’d like to get visibility for your brand through MarketsMuse via subliminal content marketing, advertorial, blatant shout-out, spotlight article, news release etc., please reach out to our Senior Editor via cmo@marketsmuse.com.

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ETF News, Global Macro Strategy, Strike Price, Tech Talk

Crypto Hedge Funds: Greenwich Crowd Buying Into Bitcoin Trading

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Crypto Hedge Funds Get Their Greenwich On. If the MarketsMuse curators have avoided bidding on and publishing tick-by-tick coverage of “crypto mania” and bitcoin bubblelicious bytes akin to our media industry brethren, its only because we were arguably a pioneer when, starting in 2014, we first started framing the bitcoin and distributed ledger evolution under the label fintech. OK, one of our editors was conflicted–having purchased a few bitcoins back when paying $100 for the cryptocurrency caused laughter from peers with CT license plates on their Teslas. What a difference a day makes (ok, lets call it a few hundred days).

Every famous hedge fund wonk, from Steven Schonfeld to “Stevie” Cohen, and tens of dozens of others have either carved out a crypto trading strategy or are planning to do so. After all, volatility is every trader’s elixir and now that CME, CBOE, NASDAQ and as of Dec 20 announcement, NYSE ARCA have all blessed bitcoin, the opportunity to trade crypto derivatives on a regulated exchange is impossible to resist for the ‘hedgies.” Even Thomas Peterffy, the hard-charging Republican and multi-billionaire founder of Interactive Brokers, has walked back on his earlier position in which he said he would not allow IB customers to trade bitcoin products; now they can when they post the required margin. Hey, Thomas’s membership fees at Mar-a-Lago are going up and if bitcoin trading can create a new commission silo for the “Professional’s Gateway to the World’s Markets”, it makes sense to get in on the action. (Breaking News: NYSE ARCA TO LIST 2 BITCOIN ETFS).

As reported by WSJ’s Dec 20 column, “Big Hedge Funds Want In On Bitcoin”-— Already, there are around 20 funds, managing a total of roughly $2 billion in assets, that solely or predominantly trade cryptocurrencies, as tracked by an index compiled by Chicago-based data group HFR. The asset total highlights how it has largely been smaller funds that have traded bitcoin, though HFR President Kenneth Heinz says the number of funds could double in size in the first quarter of 2018.

OK $2b is “Peanutsville” when it comes to the trillion dollar  hedge fund industry which deploys capital across multiple asset classes and strategies.  But, according to the WSJ story, as well as off-line conversations with HF titans,  lots of folks who might have been allergic to peanuts are now looking to put on spreads with LEAP style maturity dates.

Lest one  forget, a whole bunch of smarty pants types in VC land dismissed two twins by the name of Winklevoss for claiming to have been the brains behind Facebook. Even their lawyers laughed at them when they insisted on taking then private shares in FB instead of $50m in cash when Mark Zuckerberg offered to settle the ‘misunderstanding.’ The shares soon became worth $300m and the twins then parlayed some of that into buying up 1% of the bitcoin market. The Winklevoss boys were laughed at again when they were the first to file for a bitcoin-based exchange-traded fund (ETF).  As their initial $10m stake in bitcoin blossomed into $1 Billion (on paper), those twins also created what is viewed as the most robust electronic exchange in the bitcoin ecosystem and is arguably worth as much as $1b also–just because someone would likely pay that much to take over the system.

Evan Fisher of Prospectus LLC, a global consulting firm that provides hedge fund set up guidance, business plan writing services, preparation of investor offering documents and more recently, whitepaper writing and ICO offering documents, sums it up by saying, “The calculus for hedge fund players allocating risk to this new asset class is pretty simple, if their peers are diving in, they need to.”

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ETF News, People Profiles

Another Old-Style Quant Jock Embraces ETF-Style Passive Investing

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Former LTCM Guru Gives Up the Ghost; Converts From Convergence Trading to Passive Investing Armed with ETFs

Proving that old traders never die, they simply re-invent themselves, yet another highly-seasoned hedge fund guru whose pedigree extends back to Salomon Brothers and thereafter, senior partner at the now infamous hedge fund Long Term Capital (LTCM) has become a convert to the world of ETFs and passive investing through the use of index-based exchange-traded funds. With $500mil AUM via London-based Elm Partners Management LLC, Victor Haghani is a new man with a big bankroll and is extolling the virtues of exchange-traded funds.

“..A man once at the center of a world-rattling hedge-fund collapse believes you should think twice before trying to beat the market.”

For those in the industry who were barely out of diapers when Long Term Capital rose among the ranks of the world’s most famous funds and then fell like a rock in the midst of the Russian ruble devaluation in the late ’90s, LTCM was the Greenwich, CT-based quant shop /hedge fund created by Nobel Prize winners and credited with minting money by deploying highly-levered, quantitative-based “convergence trading” strategies. What made the firm go from famous to infamouse was its rapid demise in 1998 when the Russia Flu found the hedge firm’s holdings in Russian bonds suffering from from severe-mark-down syndrome, creating a domino effect of losses across Wall Street prime brokers, and ultimately required a $3.6billion bailout by the Federal Reserve Bank of New York.

But, as any astute follower of hedge fund gurus will attest, if you haven’t lost a bundle along the way, then you’re probably not a big shot deserving of another swing at the bat. The mere fact that 55-year old Haghani has eschewed exploiting opaque markets and instead, is now embracing passive investing schemes via index-based strategies, speaks volumes to the impact that ETFs have had in transforming the investment management landscape.

MarketsMuse editors extend a “hats off” to WSJ’s Sam Goldfarb for the reincarnation story below.

Victor Haghani, a veteran of the legendary Salomon Brothers trading floor, is probably best known as a founding partner of Long-Term Capital Management LP, the hedge fund that posted huge returns using leveraged bets in the mid-90s before collapsing 19 years ago so spectacularly that the Federal Reserve deemed it a threat to the financial system.

That experience dramatically altered the course of Mr. Haghani’s life, leading to a roughly decade long break from full-time work, during which he seriously considered a career in another field, such as arbitration or academia.

Now, 55-year-old Mr. Haghani is back as a presence in the financial world, a person both familiar and different from the one last seen in public. The relentlessly quantitative side of him is still very much intact. The “volatile, impulsive streak” identified in “When Genius Failed,” Roger Lowenstein’s 2000 book about LTCM, is hard to detect.

Since 2011, Mr. Haghani has run, from a small office near his home in London, Elm Partners Management LLC, an investment firm that now manages around $550 million of assets. Using a simple algorithm, the firm takes into account valuations and momentum to invest in index and exchange-traded funds across different asset classes. Index funds, as of Sept. 30, accounted for 43% of U.S. stock-fund assets, up from 12% in 2000, according to the Investment Company Institute. Many on Wall Street believe that the proliferation of technology and information means there are simply fewer opportunities than there used to be to find market-beating returns.

If you’ve got a hot insider tip, a bright idea, or if you’d like to get visibility for your brand through MarketsMuse via subliminal content marketing, advertorial, blatant shout-out, spotlight article, news release etc., please reach out to our Senior Editor via cmo@marketsmuse.com.

Index funds, as of Sept. 30, accounted for 43% of U.S. stock-fund assets, up from 12% in 2000, according to the Investment Company Institute. Using index funds and ETFs, Elm Partners’ baseline allocation is 75% risk assets, such as stocks, and 25% fixed income, with about two-thirds from the U.S. Allocations to specific buckets such as European stocks, which normally would represent 12.3% of the total portfolio, can be dialed up or down by up to two-thirds based on their valuations or one-third if current prices depart from their one-year moving average, suggesting short-term momentum

Along with giving Mr. Haghani something to do in the morning, Elm has given him a platform, which he has used in part to make a forceful case for the merits of passive investing. In journal articles, blog posts and videos, he has explored, among other issues, the different ways that people fail to maximize their savings, such as by trusting their intuition or overestimating their abilities.

It is, perhaps, the perfect role for him, as his former success as a trader lends him credibility while his famous failure provides an example of what can happen to even the savviest investors. To keep reading the WSJ story, click here

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ETF News, Global Macro Strategy, Tech Talk

SEC Aims to Rein In and Reign Over Initial Coin Offerings – Duck Test 3.0

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Initial Coin Offerings [Finally] Get SEC Attention; The Duck Test 3.0.

For those who believe the US SEC is slow to react when reining in and/or reigning over new-fangled investment products, the evidence indicates you are accurate. After all, recent history regarding sub-prime debt sold to unwary investors, Madoff-style investment management scams, payment-for-order schemes advanced by exchanges, and high-octane exchange-traded notes unsuitable for retail investors are just a few of the topics that made it out of the gate and far into the fields before investor advocates rang the alarm bells at the front door of the US Securities & Exchange Commission.

There have been more than 160 of these ICOs this year, which have collectively raised more than $3 billion, according to data from research firm Coindesk. Before this year, ICOs had raised a total of about $300 million going back to 2014.

sec-ico-initial coin offering
SEC Chair Jay Clayton Photo: Andrew Harrer/Bloomberg News

In defense of the bureaucrats based in Washington, their job description is arguably less a function of evaluating investor-suitable products and Wall Street selling practices as opposed to their primary role of chasing the horse after its out of the barn. After all, the folks who offer SEC staff with new investment product insight and regulatory recommendations (and tickets to concerts and sports events) are highly-paid lobbyists who represent Wall Street investment banks that have an agenda–to make fees from selling investment products and to ensure there is as little as possible regulatory oversight on their activities. Thanks for reinforcing that view, Mr. Trump!

But, in the case of the latest innovative product known as initial coin offerings, where innovators are raising money for an assortment of business models through issuance of bitcoins vs traditional shares in a company, Wall Street banks are finding themselves short of having a controlling role in the underwriting, sale and secondary market trading of these ‘instruments.’ Whilst the likes of Goldman Sachs and other fintech-friendly firms are racing to find their sweet spots in the digital ledger, blockchain and bitcoin space, suffice to say those investment banks are not happy about losing out on what would have been tens of millions of dollars in underwriting fees that could have been generated from the more than 160 private placement offerings that raised nearly $3billion since the beginning of the year, as well as potentially hundreds of millions of dollars in potential underwriting fees based on the pipeline of ICO deals in the pipeline.

So, it should come as no surprise that despite the ongoing string of announcements about new ICO issuance, the SEC has seemed to be asleep at the wheel for months insofar as issuing any regulatory edicts, leading some cynics to suggest that lobbyists from Wall Street have more recently whispered into the ears of SEC Chair Jay Clayton and compelled him to assert the power of SEC over those conducting initial coin offerings.

MarketsMuse readers are directed to coverage by Prospectus.com, “SEC Invokes Duck Test for Initial Coin Offerings-ICO Alert” via this link

If you’ve got a hot insider tip, a bright idea, or if you’d like to get visibility for your brand through MarketsMuse via subliminal content marketing, advertorial, blatant shout-out, spotlight article, news release etc., please reach out to our Senior Editor via cmo@marketsmuse.com.

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Global Macro Strategy, Tech Talk

CME Group Says: Bitcoin Future Depends On…Bitcoin Futures Exchange

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CME Aims to Legitimize Bitcoin Marketplace via..What Else? A Bitcoin Futures Mart!!

Any and every credible financial market veteran will argue that any credible financial instrument can only be credible when there is a legitimate marketplace in which buyers and sellers can express their view as to the value of that instrument. Bitcoin enthusiasts have long advocated that digital currencies aka cryptocurrencies-those that are presented as ‘coins’ or ‘tokens’ represent a revolutionary form of currency and deserve to be represented as such within the context of yet another instrument within the global financial market ecosystem. To date, those enthusiasts have flocked to unregulated ‘exchanges’ that make it easy to purchase these instruments, but only a very few of those people can actually implement hedging techniques that enable ‘shorting’ bitcoins.

For those not aware what ‘shorting’ means, you’re better off going to a different blog site–but before you leave, shorting allows a speculator to bet against an upward movement in the value of the instrument by borrowing the asset from an existing holder, paying that holder a ‘borrow cost’ and agreeing to return that asset at a later date.

ICO’s aka Initial Coin Offerings are all the rage, right? Thought leaders at Prospectus.com offer sober guidance and insight via this link

The thesis of shorting is therefore to borrow the instrument, wait until the bubble bursts and purchase the instrument at a lower price and profit from the difference between the original short sale price and the ‘cover the short price’. But the vast majority of bitcoin enthusiasts can’t ‘short; there is no borrow mechanism for most market players without having to put up nearly 10x margin on the underlying value, which means posting $50,000 in collateral for a single coin that is priced at $5000, whereas any other financial instrument ‘margin requirement’ to sell short ranges from as little as 10% of the value to perhaps 50%, not 500 %. The vast majority of speculators therefore can only ‘go long’ and hope the price goes higher, at which point they can sell and make a profit. The CME Group, one of the world’s leading futures markets, wants to change that and provide a legitimate platform in which optimists and pessimists can meet in a regulated marketplace and transact–in turn creating a true market that reflects a realistic current market value.  CME’s announcement below tells the latest story:

CHICAGO, Oct. 31, 2017 /PRNewswire/ — CME Group, the world’s leading and most diverse derivatives marketplace, today announced it intends to launch bitcoin futures in the fourth quarter of 2017, pending all relevant regulatory review periods.

The new contract will be cash-settled, based on the CME CF Bitcoin Reference Rate (BRR) which serves as a once-a-day reference rate of the U.S. dollar price of bitcoin.  Bitcoin futures will be listed on and subject to the rules of CME.

cme-group-bitcoin-futures-exchange
Terry Duffy, CME Group

“Given increasing client interest in the evolving cryptocurrency markets, we have decided to introduce a bitcoin futures contract,” said Terry Duffy, CME Group Chairman and Chief Executive Officer.  “As the world’s largest regulated FX marketplace, CME Group is the natural home for this new vehicle that will provide investors with transparency, price discovery and risk transfer capabilities.”

Since November 2016, CME Group and Crypto Facilities Ltd. have calculated and published the BRR, which aggregates the trade flow of major bitcoin spot exchanges during a calculation window into the U.S. Dollar price of one bitcoin as of 4:00 p.m. London time. The BRR is designed around the IOSCO Principles for Financial Benchmarks. Bitstamp, GDAX, itBit and Kraken are the constituent exchanges that currently contribute the pricing data for calculating the BRR.

“We are excited to work with CME Group on this product and see the BRR used as the settlement mechanism of this important product,” said Dr.Timo Schlaefer, CEO of Crypto Facilities. “The BRR has proven to reliably and transparently reflect global bitcoin-dollar trading and has become the price reference of choice for financial institutions, trading firms and data providers worldwide.”

CME Group and Crypto Facilities Ltd. also publish the CME CF Bitcoin Real Time Index (BRTI) to provide price transparency to the spot bitcoin market.  The BRTI combines global demand to buy and sell bitcoin into a consolidated order book and reflects the fair, instantaneous U.S. dollar price of bitcoin in a spot price. The BRTI is published in real time and is suitable for marking portfolios, executing intra-day bitcoin transactions and risk management.

Cryptocurrency market capitalization has grown in recent years to $172 billion, with bitcoin representing more than 54 percent of that total, or $94 billion.  The bitcoin spot market has also grown to trade roughly $1.5 billion in notional value each day.

If you’ve got a hot insider tip, a bright idea, or if you’d like to get visibility for your brand through MarketsMuse via subliminal content marketing, advertorial, blatant shout-out, spotlight article, news release etc., please reach out to our Senior Editor via cmo@marketsmuse.com.

For more information on this product, please visit cmegroup.com/bitcoinfutures.  Continue reading →

People Profiles

Weinstein Saga Snags Company’s Co-CEO Glasser

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(Courtesy of BrokerDealer.com) Whilst most of the news media coverage of the travails of Harvey Weinstein have been dedicated to sordid details and otherwise extoling the newly-appointed (or interim) corporate chiefs, it leads one to wonder whether investigative journalism is losing cache…But, lo and behold, one Hollywood news journalist has peeled back the onion to discover what could be an episode from “Arrested Development” starring Weinstein & Co. President & COO David C. Glasser, who was elevated to share the CEO suite with Harvey’s brother Bob Weinstein as the Hollywood mogul sex scandal unfolded last week. According to Variety’s Gene Maddaus, Glasser, who started his Hollywood career as a child actor, turns out to be in Wall Street parlance, a “bad actor.” It seems that Glasser has been a “person of interest” in more than a few financial fraud investigations extending back two decades. And, according to court judgments extending back many years, Glasser has been ordered to pay millions of dollars in restitution to victims who bought into ‘film finance deals’ promoted by Glasser.

According to Maddaus’ reporting, “Glasser has long been dogged by legal issues that date back more than two decades. In the most serious case, Glasser’s former film finance company was used by the now defunct penny stock broker-dealer Hanover Sterling Securities to launder the proceeds of a massive stock manipulation scheme which, according to federal prosecutors, was connected to the Genovese crime family.” While Glasser managed to dodge the bullets of federal prosecutors in that incident, in an exclusive reveal, Glasser’s inglorious film finance history includes a long trail of yet-to-be paid civil court judgements in various jurisdictions for defrauding investors in an assortment of “pre-production finance deals.”

To be fair and balanced, Hollywood is as notorious for its deal makers advancing “the Art of The Steal” as it is for casting couch hi-jinks for which Harvey Weinstein has been “reputation-ally cremated.” Just as Harvey is no lone wolf for gaslighting aspiring (and well-established) actresses and coercing them to observe (or enable) his sexual deviant behavior, Weinstein & Co.’s co-CEO David Glasser is not the only film finance aficionado who has played the deviant game of “hide the banana from investors.” The industry-common scheme is taking investors’ money, then later informing them the projects they backed either ‘died on the vine’ or courtesy of using two sets of accounting books, produced meager returns. One classic case study is the Academy Award winning film and box office blockbuster “Crash”, coincidentally produced by David Glasser and industry titan Bob Yari.  This was a small-budget project investors backed but “somehow” didn’t produce any profits for distribution to those investors. For the record, the film Crash, written and directed by Paul Haggis, was produced on a budget of $7.5mil and brought in $250mil in ticket sales. According to Glasser’s partner Yari, the film was not profitable. According to a civil court finding, it was, and the producers were ordered to disgorge millions.

The connection between Glasser in that case, seems more than ‘tangential’, a phrase Glasser has invoked multiple times to investigators when being named a ‘person of interest’ in film funding schemes that have gone sideways under his watch. Glasser was also a target in a convoluted criminal investigation into the 2001 financing behind a remake of “Devil and Daniel Webster,” the first and last directorial debut for Hollywood bad boy Alec “Bloviator” Baldwin, who also starred in the film with among others, Sir Anthony Hopkins and Jennifer Hewitt.  The story behind Glasser’s role in the financial shenanigans and the ensuring investigation is the topic of a novel making its second way around book publishing circuits, but upon closer look, that case is part of a longer trail in which Glasser has found to have defrauded investors.

Entrepreneurs seeking to raise capital for an innovate product or industry disruptive business model need to follow two first steps: assembling a compelling business plan that is complemented by investor offering documents that comply with securities laws and regulatory guidelines relating to private placements to accredited investors. A leading firm that specializes in the full spectrum of capital formation documents and collateral is Prospectus.com

david-glasser-weinstein-fraudAs evidenced by interrogating pacer.gov–Glasser is better cast as a serial financial fraudster who has racked up multiple civil court judgements in various jurisdictions, -each of which determined Glasser had perpetrated fraud relating to ‘pre-production film financing’ schemes in which investors lost all and restitution awards were mandated by the various courts. As best as can be determined, those restitution awards, totaling several millions of dollars, remain unsatisfied. In 2004, in the midst of various litigation, Glasser transferred ownership of his $2.8mil home in Hollywood’s Calabasas community to a ‘trust’ held by him and his wife.  Why the complicated 3 Card Monty game to shield title to that asset? One could conclude (as many have already) the ‘former child actor’ is a notorious bad actor, as evidenced by at least half a dozen cases.

Here’s 1 example http://caselaw.findlaw.com/tn-supreme-court/1651031.html.
A quick trip to court record database www.pacer.gov provides more insight to cases back in ’05 ’06 and ’14 (search civil court module). Three other cases prior to ’05 are not available in the pacer.gov dbase, but through a stealth investigations, those records are purportedly being held pending what could prove to be a blockbusting class action law suit against Glasser.  For full details and links to the actual court cases, click here

If you’ve got a hot insider tip, a bright idea, or if you’d like to get visibility for your brand through MarketsMuse via subliminal content marketing, advertorial, blatant shout-out, spotlight article, news release etc., please reach out to our Senior Editor via cmo@marketsmuse.com.

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People Profiles

Investor Solicitation 3.0 – Start-Ups Squared Away w Investor Offering Documents

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You’re an emerging fund manager, an entrepreneur vying to create a real estate development platform or you’re a fintech guru aiming to alter the current payment processing landscape with Ethereum that didn’t get the memo titled  “If you don’t have properly-pared Investor Offering Documents that comply with securities regulator regimes, you’re not likely to pass Go and collect $200, and certainly not the $2mil or even $20mil that you think you need to fund your business.”

For entrepreneurs  seeking capital, whether for a fintech initiative that envisions an “ICO”,  a real estate development project, a fund formation or any other unique, innovative or disruptive company, the investor solicitation “rules of the road” beyond initial stage “friends and family round” include a properly prepared business plan and fully ‘squared-away’ investor offering documents. Without these basic elements, capital formation campaigns will get stuck in neutral. More likely, without having the proper document file, inclusive of a offering circular, offering memorandum and/or offering prospectus that complies with securities industry regulatory regimes and local securities laws, those capital raising goals will get totally grounded.

(via Broker Dealer LLC-re-published with permission)

Private Placement Offerings Surge as Demand for Offering Memorandum Document Experts Follows Along

Whether due to improving economic conditions in the US as well as various other parts of the world, or due to technology advancements that serve as the catalyst to innovative products and services that solve legacy business challenges, the global private placement marketplace is surging. With this new era of entrepreneurship, the need for investor offering memorandum experts is likewise cascading. In Wall Street parlance, the demand for such experts is nearly “over-subscribed,” meaning the supply of capable professionals who specialize in preparing fully-compliant investor offering documents is being stretched thin. But, at least one firm within the professional services sector is addressing the investor documentation needs of forward-thinking business enterprises and they are situated neatly within the “curl of the wave”-all you need to find them is a search engine and the right key words/phrases.

Operating under the web banner OfferingMemorandum.com, the firm behind this portal is NY-based Broker Dealer LLC and with footprints in various cities across the global financial services ecosystem, they are leading the pack by making it simple and easy for broker-dealers*, captive business advisors and corporate lawyers for companies of any size and located in nearly every geographic location of the world to engage local securities law professionals and investor offering document experts who specialize in preparing preliminary offering memorandums, red herrings and final offering prospectus documents that conform to financial industry best practices and comply with local regulatory guidelines that govern investor solicitations. (*For various reasons, registered broker-dealers do not prepare the investor offering memorandum or an offering prospectus, and it is therefore incumbent on the Issuer to provide the investor offering documents.)

ryan-gorman-prospectus.com

Ryan Gorman

Prospectus.com

According to Ryan Gorman, a PR-IR-Corporate Communications expert who works with many startup companies, “While some capital markets  professionals will attribute the continued spike in private placement issuance to the ‘Trump Bump”,others will credit the evolution of the JOBS Act [the US legislation spearheaded by former President Obama intended to make the regulatory steps more simple for small companies in the US to raise capital], global macro gurus point to the rising economic tides in various regions of the globe. That said, nobody disputes the number of new companies and latter-stage funding initiatives for small, medium and large companies remains in an unobstructed uptrend.

Private Placement offerings are surging and direct IPOs are gathering steam. But, for those seeking to raise capital for a start-up or to fuel expansion for a fast-growing business, any entrepreneur worth his salt knows their first step is preparing a cogent business plan, then consolidating that blueprint into a short-form ‘pitch deck’ and once prospective investors have expressed interest in the investment opportunity, the enterprise seeking capital (aka “Issuer”) provides the investor with an offering memorandum or an offering prospectus. Simple as this process might sound, offering memorandum preparation is non-trivial and is typically performed by securities attorneys who specialize in investor offering documents. Also known as an “OM”, the offering memorandum is perhaps the most critical document, as it frames the terms and conditions of the investment, and when prepared within the context of best practices, the offering memorandum is the document that both Issuer and Investor can hang their hats on. Somewhere in the mix, the enterprise that seeks funding (also known as the Issuer) might engage a registered broker-dealer to serve as a placement-agent aka underwriter for the financing round, or the Issuer may already have identified investors and has determined there is no need to engage a broker-dealer.

*Registered broker-dealers generally serve as a placement agent or underwriter for a capital raise, but typically defer to the Issuer to provide them with the investor offering documents, as such it is the obligation of the Issuer or their corporate counsel to create an offering memorandum or a prospectus. In most instances the Issuer will engage their law firm to prepare these documents, and increasingly, law firms that do not have a securities law practice will outsource or sub-contract to firms that dedicated to this type of work. As the number of private placement offerings and direct IPOs via Regulation A+ continues to grow, portals such as OfferingMemorandum.com and Prospectus.com provide a unique solution.

If you’ve got a hot insider tip, a bright idea, or if you’d like to get visibility for your brand through MarketsMuse via subliminal content marketing, advertorial, blatant shout-out, spotlight article, news release etc., please reach out to our Senior Editor via cmo@marketsmuse.com.

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ETF News, Global Macro Strategy, People Profiles

Canada Stock Exchanges Weigh Walk-Back re Cannabis Share Listings

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Canada stock exchange regulators appear to be suffering from a pot-hangover, as exchange execs and regulators re-visit criteria for cannabis share listings. Its a high-flying industry for sure; 69 publicly-traded cannabis companies with aggregate market cap of USD $6.4bil have their shares listed on the Toronto Stock Exchange, the smaller TSX Venture Exchange and the Canadian Securities Exchange. According to private placement specialist firm Prospectus.com, during the most recent 2-3 years, upwards of 300 ‘established entities’ have advanced private placement offerings that have raised nearly $1bil from private equity firms, venture capital shops and other sophisticated investors. When considering that North American sales of legal cannabis, which generated $6.7 bil in 2016  is growing at a rate of 30% YoY, its no surprise that cannabis entrepreneurs and their investors are stoking for public share listings, an avenue that provides a publicly-traded currency for them to expand and acquire others, and enables investors to benefit from greater liquidity of their holdings. That said, according to senior attorneys at Phoenix OTC Services,  “Cannabis share listings are certainly being sought by a broad spectrum of private companies, but Canada stock exchanges, which host the majority of public cannabis companies, appear to be suffering from a “pot hangover” as senior exchange executives and Canadian regulators are now weighing a walk-back on listing criteria to address fears these companies could be violating US securities laws.”

cannabis-etf-HMMJ
Horizons Medical Marijuana Life Sciences ETF

While some ETF industry players continue to plot courses behind the scenes to follow the path of TSE-listed Horizons Medical Marijuana Life Sciences ETF (TSE: HMMJ) in an effort to create their own cannabis-flavored exchange-traded funds, some cannabis industry legal experts are bracing for Canadian securities regulators to try and “put the genie back in the bowl” and possibly de-list companies that are viewed to be running afoul of US laws.

According to 14 Sept story in the WSJ,  the parent company of the Toronto Stock Exchange and an umbrella organization of Canadian securities regulators are looking at cannabis companies with U.S. operations—including growers, medical-marijuana distributors and pharmaceutical firms whose products include marijuana ingredients—to determine whether trading in their shares should be allowed to continue on Canadian exchanges.

The regulatory attention comes as the Toronto Stock Exchange and its smaller rival, the Canadian Securities Exchange, have been actively courting marijuana company listings from around the world. At present, roughly half the trading activity on the Canadian Securities Exchange is sourced from marijuana-based businesses, a high-growth sector that is expected to become a $50 bil global industry within the next 7-10 years. (Source: WSJ)

If you’ve got a hot insider tip, a bright idea, or if you’d like to get visibility for your brand through MarketsMuse via subliminal content marketing, advertorial, blatant shout-out, spotlight article, news release etc., please reach out to our Senior Editor via cmo@marketsmuse.com.

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ETF News, Global Macro Strategy

Nasdaq Bets on Blank-Check Co. IPOs To Boost Listings; SPACs are Sizzling

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Competition for listings is a contact sport in the world of major stock exchanges as evidenced by the assortment of US bourses vying to increase market share in exchange-traded fund (ETFs), which represent nearly 2000 securities or more than half of all equities listed on major US stock exchanges.  While the NYSE has long been the place-to-list for issuers of ETFs, Nasdaq has proven to have sharp elbows in not only soliciting ETF issuers (with BATS taking a distant third), Nasdaq now has another card up its sleeve-the exchange operator is aiming at another listing product known as blank-check companies and is aggressively biting at the heels of Intercontinental Exchange Inc.’s NYSE, which has carved out a niche in the listing of these companies, more formally known as Special Purpose Acquisition Companies aka SPACs ™. In an effort to grab market share in this product away from NYSE and boost IPO listings (and hence more fees from Issuers and more revenue from distributing market data) Nasdaq recently filed proposed new rule changes with the SEC that will make it easier for SPACs ™ to list on that platform.

According to reporting by Alexander Osipovich of the WSJ, 22 blank-check companies have floated IPOs so far this year, raising nearly $7bil.

Special Purpose Acquisition Vehicles are shell companies that raise funds via a public offering whereby the proceeds are managed by a pre-selected team of industry-specific executives who receive an equity stake in the shell and are charged with acquiring an existing private company or in some cases, several private companies and roll those companies into the existing publicly-traded entity. In the event an acquisition cannot be identified and approved by an overwhelming majority of the shareholders within [typically] 24 months of the IPO, 95% of the funds raised are returned to the shareholders.

The investment vehicle construct was first created in the 1970’s, but soon fell out favor after regulators uncovered widespread abuse by operators of  blank check company managers, which led to multiple cases of securities fraud charges against many different firms.  The blank check model was later refined in the early 1990’s by GKN Securities, whose principals created a much tighter construct and trademarked the SPAC™ acronym. GKN successor firm boutique investment bank Early Bird Capital since carried the torch of its predecessor; during the past ten years, Early Bird has underwritten and/or co-managed nearly 75 SPAC™ IPOs that have raised over $4bil.

Early Bird’s early success has not gone unnoticed by leading Wall Street firms; 6-pack investment banks Goldman Sachs, Merrill Lynch, and Deutsche Bank among others have crowded into the space that Early Bird Capital forged. In 2017 alone, SPACs™ have raised nearly $4bil for an assortment of acquisition-minded firms.

According to Paul Azous, CEO of Prospectus.com, a consultancy that assists companies throughout the course of preparing investor offering documentation and via a captive network of securities attorneys, the firm also advises companies seeking to list on stock exchanges, “The blank-check concept is in vogue once again, and we’re working with at least two clients who have targeted specific industries that are seemingly ripe for roll-up.” Added Azous, “With Nasdaq easing the listing burdens, strategy of creating a public shell that can with reasonable ease, roll a private company into that publicly-listed entity should provide a good shot-in-the-arm to IPO activity, which has experienced fits and starts in each of the last several years.”

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You Know The Equities Markets Will Move Lower When…

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If you’ve been a professional trader for ‘more than 15 minutes’ (i.e. years, if not decades), you know the equities markets will move lower when (a) complacency prevails, a sense of calm is seemingly endless and equity market indices quietly creep higher and higher or (b), business news front page stories profile ‘amateur day traders’ who are minting millions of dollars by betting against volatility, and ‘selling short’ the risk of increased volatility by using VIX-centric products to capitalize on the complacent nature of markets. If this were a high school history class (or an advanced math lesson titled “revert to the mean”), the correct answer to above would be both (a) and (b). That said, professional traders who have ‘seen it all’ and are programmed to take a contrarian stand –in this case, by betting against complacency- have been suffering for months, both intellectually and P&L wise.

But when the front page of the NYT business section profiles home grown trading wizards, including a twenty-something former store manager at Target Corp who quit his day job to become a day trader, and has since made as much as 20x his prior annual income (and accumulated an eight-figure nest egg) “simply” by selling short new-fangled “VIX-flavored” financial instruments-those that measure market volatility, its no surprise that a shoe will drop and hit those folks in the head quickly and decisively. Not to suggest that MarketsMuse curators were shocked this morning when, after finishing their read of the aforementioned NYT story, US equity markets sold off by nearly 1% in early Tuesday trading. The question becomes, why is today different than other day within the context of the past 9 months, when equity market sell-offs have had a shorter shelf life than a freshly made souffle?

Out of every crisis comes opportunity, and Hurricane Harvey portends to provide a re-building boon for those areas in Texas that have been tormented by one of the country’s greatest natural disasters. Prospectus.com provides a full menu of feasibility study services for entrepreneurs who will be working to make Houston, Austin and surrounding areas great again.

US Equities, along with a discrete universe of non-US equity markets have been in a north bound trajectory for multiple months, despite ever-increasing geopolitical concerns and crises that have not merely seemingly right-minded global macro investment strategies, but have confounded highly-trained portfolio managers focused on equities markets and nearly every other asset class. Existential threats to the equities markets are served for breakfast, lunch and dinner every day, and include but are not limited to North Korean missile launches, catastrophic environmental events (e.g Hurricane Harvey), terror-wreaking incidents advanced by a faction of fools who have hijacked the Islamic faith and actually believe that after blowing themselves up, they will spend eternity with 7000 virgins as a reward, and of course, the chaos-inducing cackle that comes straight out of the mouth of the current US President–aka He-Who-Must-Not-Be Named further as it will only enhance his ‘ratings’.

Who do you call to distill whether equities markets are actually poised to ‘revert to the mean’ after achieving 20% gains in less than 12 months? MarketsMuse curators who connect with top gun traders and investment managers (and have collectively spent multiple decades working in/around trading desks on both sides of the aisle) have a default go-to investing guru. Will our favorite top gun, who advances a uniquely RareView have all of the right answers all of the time? Most likely not, but its better to be right more often than wrong, and better still to achieve solid performance on a consistent basis vs. flying blindly with the notion ‘keep calm and carry on’ , especially when that approach inevitably leads to undesirable outcomes..

If you’ve got a hot insider tip, a bright idea, or if you’d like to get visibility for your brand through MarketsMuse via subliminal content marketing, advertorial, blatant shout-out, spotlight article, news release etc., please reach out to our Senior Editor via cmo@marketsmuse.com.

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