Sunday, May 25, 2014

Fw: U.S. charges 5 Chinese military officers with cybertheft

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From: "CFA Institute Financial NewsBrief" <>
Date: Tue, 20 May 2014 05:02:19 -0500 (CDT)
To: <>
Subject: U.S. charges 5 Chinese military officers with cybertheft

Credit Suisse pleads guilty to aiding Americans' tax evasion | LSE reportedly in exclusive talks to acquire Russell | FINRA pursues 170 algorithmic-trading investigations
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20 May 2014
CFA Institute: Financial NewsBrief

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U.S. charges 5 Chinese military officers with cybertheft
The U.S. Justice Department obtained an indictment that charges five members of a special Chinese army unit with launching cyberattacks on American companies. The FBI and U.S. intelligence agencies determined the hacking originated at a tower near the Shanghai airport that is used by China's military, one U.S. official said. However, the Justice Department's move was seen as largely symbolic because China is not expected to turn over those named in the indictment. China has denounced the charges and said the U.S. is being hypocritical. Reuters (19 May.), The New York Times (tiered subscription model) (19 May.), (China) (19 May.), Los Angeles Times (tiered subscription model) (19 May.), BBC (20 May.), (19 May.)
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Credit Suisse pleads guilty to aiding Americans' tax evasion
Credit Suisse has become the first major bank in about 20 years to plead guilty to a criminal charge. The Swiss bank agreed to pay about $2.6 billion in fines as it acknowledged that it helped American clients evade taxes. Reuters (19 May.), The New York Times (tiered subscription model)/DealBook blog (19 May.), Financial Times (tiered subscription model) (19 May.)
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LSE reportedly in exclusive talks to acquire Russell
London Stock Exchange Group has become the preferred bidder for Russell Investments, sources say. The deal reportedly could be worth $3 billion. Russell is an asset manager and index compiler best known for equity benchmarks. Reuters (19 May.), Financial Times (tiered subscription model) (20 May.)
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FINRA pursues 170 algorithmic-trading investigations
The Financial Industry Regulatory Authority is looking into 170 instances of abusive algorithmic trading or failure by financial firms to supervise advisers' use of algorithms, CEO Rick Ketchum said. FINRA is focusing on the use of algorithms in illegal market-manipulation techniques such as "spoofing," in which large numbers of orders are initiated and quickly canceled to deceive market participants into believing there is demand for a security. Reuters (19 May.)
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Japan, U.S. must bring urgency to trade talks, Amari says
Japan and the U.S. are committed to taking the lead in turning the proposed Trans-Pacific Partnership trade agreement for Asia into a reality, said Akira Amari, Japan's minister for negotiations on the trade deal. "It is important that each country have a sense of urgency so as not to let the negotiations drift," he said. The Japan News by The Yomiuri Shimbun/Jiji Press (19 May.), ABC (Australia) (19 May.), New Straits Times (Malaysia) (19 May.)
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Defense contractor Cobham agrees to $1.46B deal for Aeroflex
British defense firm Cobham said it has signed a deal to pay $1.46 billion for Aeroflex Holding, a Plainview, N.Y., company that designs and produces microelectronic components and measuring equipment used in military, avionics and aerospace equipment. Aeroflex stockholders will receive $10.50 a share. The total purchase price includes assumption of existing Aeroflex debt. Reuters (20 May.), Bloomberg (20 May.), The Wall Street Journal (tiered subscription model) (20 May.)
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Most Asian-Pacific markets advance amid cautious trading
Asian-Pacific markets mostly rose Tuesday, but declaration of martial law in Thailand and the beginning of the Bank of Japan's two-day policy meeting introduced a mood of caution. Japan's Nikkei 225 gained 0.5%. Hong Kong's Hang Seng Index rose 0.6%. Australia's S&P/ASX 200 and China's Shanghai Composite each edged up 0.2%. South Korea's Kospi slid 0.2%. India's Sensex was up 0.3%. CNBC (20 May.), The Economic Times (India) (20 May.)
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CBRC expects 100 more IPOs this year
The China Securities Regulatory Commission expects that 100 initial public offerings will be held from June through year-end. "To stabilize market expectations, we plan for about 100 companies to go public, with a roughly balanced number of IPOs each month," Chairman Xiao Gang said. Reuters (19 May.)
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China close to relaxing exchange-rate controls
China will soon allow greater two-way exchange-rate flexibility as part of measures to boost the slumping trade sector, according to the Ministry of Commerce. In coming months, export-tax refunds will be accelerated, and special assistance will be provided to small and privately held businesses, the ministry says. Market News International (19 May.)
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Russia may soon sign $400B gas deal with China, Medvedev says
Russian Prime Minister Dmitry Medvedev said his country is almost ready to sign a $400 billion deal to sell natural gas to China. The proposal has been under negotiation for more than a decade. "It's time we reached an agreement with the Chinese on this issue," Medvedev said. "It is very likely that there will be a contract, which means long-term contracts." Bloomberg (19 May.)
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Brazil to give farmers line of credit
Brazil will make a $70.5 billion line of credit available to farmers as a part of its 2014-2015 Sugarcane Harvest Plan. The government will provide additional financial aid to farmers if the initial allocation is insufficient, President Dilma Rousseff said. Latin American Herald Tribune (Venezuela) (19 May.)
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Study: More advisers view social media as important tool
Financial advisers increasingly see social media as important to their practices, but few are confident they're using it to their best advantage, according to a study by American Century Investments. Among advisers participating, 56% said social media has potential for business, compared with 44% in 2010. Only 30% said they are doing a good job of using social media. American City Business Journals/Kansas City, Mo. (19 May.)
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FSOC mulls options for addressing possible asset-manager risks
The Financial Stability Oversight Council is considering a range of possibilities for addressing possible risks posed by the asset-management industry, says Mary Miller, U.S. Treasury undersecretary for domestic finance. One option is to take no action, Miller said. The industry is concerned certain asset managers may be designated as systemically important financial institutions, which would subject them to tougher regulations. Reuters (20 May.), Market News International (19 May.), The Wall Street Journal (tiered subscription model)/MoneyBeat blog (19 May.), Financial Times (tiered subscription model) (20 May.)
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U.S. authorities question FSB's role in SIFI decisions
U.S. legislators and regulators are raising concerns about the influence the Financial Stability Board, an international body, has brought to bear on the Financial Stability Oversight Council in designating American companies as systemically important financial institutions. They want to see more transparency in how the FSB draws its conclusions. (subscription required) (19 May.)
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Polls: U.K. support increases for remaining in EU
Two polls indicate that the number of people in the U.K. who want Britain to stay in the EU is growing and that if a referendum were held today, EU supporters would win. A poll by Ipsos MORI found that 54% of people would vote to stay in the EU, while 37% would favor leaving. A survey by the Pew Research Center found that 50% of respondents want to remain in the EU, while 41% want to withdraw. (France) (19 May.)
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SEC lacks consensus on fiduciary rule, official says
Securities and Exchange Commission members might not be able to reach a consensus on a uniform fiduciary rule for retail stockbrokers and investment advisers, said Stephen Luparello, director of the Division of Trading and Markets. However, the idea remains "a live topic of conversation," he said. Reuters (19 May.), InvestmentNews (free registration) (19 May.)
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FINRA is reworking trading-surveillance system
Richard Ketchum, CEO of the Financial Industry Regulatory Authority, says the agency is redesigning the Comprehensive Automated Risk Data System. Market participants have opposed the proposed trading-surveillance system because of concerns about privacy and data security. Bloomberg Businessweek (20 May.), InvestmentNews (free registration) (19 May.)
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Tibor faces scrutiny by Japanese legislator
Japanese lawmaker Mikishi Daimon is questioning recent movement of the Tokyo Interbank Offered Rate and has requested more oversight of the benchmark. Financial Times (tiered subscription model) (19 May.)
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Financial Products
ETF Securities launches fund for Chinese A-shares
ETF Securities, in partnership with E Fund, has brought to the London Stock Exchange an exchange-traded fund that buys China's A-shares. The ETFS-E Fund MSCI China A GO UCITS ETF picks stock from the MSCI China A Index. The ETF also will be listed on NYSE Euronext Amsterdam and Deutsche Boerse. ETF Trends (19 May.)
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