Asia Times — US kills Chinese-led takeover of Chicago exchange

The US Securities and Exchange Commission (SEC) Has Rejected a Bid by a Chinese-Linked Consortium to Acquire the Chicago Stock Exchange, Amid Widespread Political Opposition to the Deal.

The Exchange, Which Handles Less Than 1% of Daily US Stock Trading, Was Hoping the Sale Could Be a Springboard to a Brighter Future, Attracting New Listings and Investments From China.

Unfortunately for the Institution, the Deal Came at a Complicated Time in US-China Relations When It Was First Proposed During the US Presidential Election Campaign of 2016.

On the Campaign Trail, Donald Trump Repeatedly Cited the Transaction as a Sign of America’s Declining Competitiveness. “China Bought the Chicago Stock Exchange — China, a Chinese Company,” Trump Said in a Speech in 2016. “They Are Taking Our Jobs. They Are Taking Our Wealth. They Are Taking Our Base.”...

At the same time, the US wants open access to China.

Another paradox of liberalism.

Asia Times

US kills Chinese-led takeover of Chicago exchange

Pam and Russ Martens — Technological Incompetence Appears to be Intentional at Wall Street’s Top Cop

When we created the website for Wall Street On Parade, it took us about 30 minutes to add a free plug-in function so that our readers could search the text of every article we have ever written. (See Search box in upper right-hand corner of our menu at the top of this website.) But at Wall Street’s top cop, the Securities and Exchange Commission (SEC), if one wants to search corporate filings, one is limited to a four-year text search. This bizarre restriction inhibits investigative journalists from capably doing their job and connecting dots. 

This might sound like a small complaint were it not part of a larger pattern of technological failures by the SEC which have allowed Wall Street firms to run amok for decades.

The biggest technological failure, of course, is the SEC’s inability to launch a Consolidated Audit Trail (CAT) over the 83 years of the SEC’s existence in order to spot manipulative or illegal trades by some of the most highly sophisticated trading houses in the world. While JPMorgan brags about having “more software developers than Google, and more technologists than Microsoft,” and Goldman Sachs is hiring the best Russian coders, Wall Street’s top cop is still driving a horse and buggy.…

In April of 2014, Kidney spoke with NPR on the demoralization of public servants at the SEC. Kidney said: “Washington has become — and I think everybody knows it — a bathtub full of cash. As long as you just go in the bathtub you’re going to come out with cash stuck on you – if you’re at least a certain, have certain jobs and have certain roles. And that’s why the revolving door is such a problem. It’s cultural, it’s the culture of Washington, it’s the culture of Wall Street and it hollows out the civil service…”...

Watching the U.S. devolve into a third-world-level of corruption and cronyism is deeply painful for those who love their country. It’s time for those collective voices to demand a formal, independent Federal investigation of the SEC. No other industry in America has done more to bankrupt the U.S. than Wall Street and no other cop on the beat has done less to stop it....

Wall Street On Parade
Technological Incompetence Appears to be Intentional at Wall Street’s Top Cop
Pam Martens and Russ Martens

Jen Wieczner — What the SEC Bitcoin ETF Decision Means for the Future of Cryptocurrency

… the SEC made a decision Friday to prevent the proposed ETF, the Winklevoss Bitcoin Trust, from joining a stock exchange, citing "concerns about the potential for fraudulent or manipulative acts and practices" in Bitcoin trading. The sponsors of the ETF, the Winklevoss twins known for their controversial role in the founding of Facebook (FB, +0.40%)), had proposed that the Bitcoin-only fund would trade like a regular stock under the ticker symbol "COIN."...

Fortune
What the SEC Bitcoin ETF Decision Means for the Future of Cryptocurrency

Jen Wieczner

Crybaby billionaire casino magnate, Steve Wynn, who hates gov't interference, now wants gov't to help his stock

These crybaby billionaires.

When they're on top of the world it's because they're smarter than everyone and self-sufficient and makers, not takers, right?

Steve Wynn has railed about government interfere in the past, decrying Obama as a "socialist."

But now, when his stock is under pressure from short sellers, he's whining that the government is not in there, helping him out.

He lamented that the SEC hasn’t done anything about high frequency traders.

“I have very little respect for the integrity of the trading on the exchange in most stocks. And I have particular disdain for the fact that the SEC has failed to deal with high-frequency traders who are doing nothing more than taking advantage of inside information, a buy or a sell order, because of technology advantages,” he said. "If you read Flash Boys, it's all spelled out for you. And if I execute an order, I'll use the IEX. I'll use Brad Katsuyama if I was buying something, so that I couldn't be fronted by the high-frequency traders. But there's an awful lot of that going on."

Maybe these short sellers know something, like his Macau casino's are not doing so well. And he wants to tell the government to make them stop.

Waaaaaa....waaaaaaa

Bill Black — CEO Compensation: “Cheaters Prosper”

Background from Wikipedia:

[Michael] Jensen's best-known work is the 1976 paper he co-authored with William H. Meckling, Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure,[3] one of the most widely cited economics papers of the last 30 years. Besides reigniting interest in the theory of the public corporation as an owner-less entity made up of only contractual relationships (a field pioneered by Ronald Coase), the paper laid the foundation for the widespread use of stock options as executive compensation tools.
It was a 1990 Harvard Business Review article CEO Incentives: It's Not How Much You Pay, But How[4] by Jensen and Kevin J. Murphy that prescribed executive stock options in order to maximize shareholder value. The justification they gave was that shareholders were the "residual claimants" of the corporation, meaning that they had the sole right to profits. This idea that shareholders are residual claimants was later rejected by legal scholars (e.g., Stout 2002).

After Jensen and Murphy (1990), Congress passed a law,[5] making it cost effective to pay executives in equity. As a result, executives focused their efforts on increasing stock price. In the short run, many executives manipulated accounting numbers (e.g., Enron, Global Crossing).NYT article 2005 In the long run, executives outsourced labor to reduce costs, then used the cost saving to repurchase stock; thus, increasing their own compensation. Over the last 20 years, stock buybacks total a few trillion.[6

Bill comments:

In some ways, however, it was remarkable that the intellectual father of modern executive compensation, Michael Jensen, has turned on his creation. Further, he turned on it vehemently – in 2001. Subsequently, scholars whostudy executive compensation have agreed that it has created perverse incentives.

New Economic Perspectives
CEO Compensation: “Cheaters Prosper”
William K. Black | Associate Professor of Economics and Law, UMKC

Felix Salmon — Yes, the SEC was colluding with banks on CDO prosecutions

Not only colluding but also lying about it.

Reuters
Yes, the SEC was colluding with banks on CDO prosecutions
Felix Salmon

(h/t Charles Hayden)

Janet Tavakoli — SEC Omitted Evidence Damaging to JPMorgan's Jamie Dimon

During his widely reported April 13, 2012, earnings call, Dimon not only misinformed the public, he dismissed credible prior news reports about huge credit derivatives positions and mounting losses in JPMorgan Chase's Chief Investment Office unit. He not only dismissed disturbing news, he didn't disclose the size of the losses already known to him, and the numbers were whopping. He reportedly knew of $700 million in losses and the losses were increasing.

Senate Investigation Showed JPMorgan Executives Misinformed the Public
The SEC is still investigating this case, but Senator Carl Levin (D-MI) and Senator Charles Grassley (R-IA) criticized the SEC for not sanctioning individual managers. Both are keen for enforcement for the way the bank communicated with investors.

The Huffington Post Blogs
SEC Omitted Evidence Damaging to JPMorgan's Jamie Dimon
Janet Tavakoli | President, Tavakoli Structured Finance

Matt Taibbi on judge's smack down of SEC deal with Citi

Matt Taibbi of Rolling Stone discussed Monday on Countdown with Keith Olbermann the “unusual” decision of a judge to reject settlement Citigroup made with U.S. regulators over its marketing of mortgage securities.

New York federal court judge Jed Rakoff scolded the Securities and Exchange Commission (SEC) for agreeing to a deal that he called inadequate and not in the public interest.

“He came out basically and said that the SEC and Wall Street have been in a wink-wink, nudge-nudge arrangement for years,” Taibbi explained.

“For Judge Rakoff to not only reject the settlement but to reject it in such an aggressive fashion with this very strong rebuke and very strong ruling is very sobering for the SEC,” he added.

Read the rest and watch video at Raw Story

Matt Taibbi explains ‘judicial butt-kicking’ of Citigroup deal with SEC (with video)

by Eric W. Dolan