The CFTC filed an enforcement action charging a trader with defrauding a large FCM (his employer) by intentionally concealing from the FCM the true size, risk, and potential profits and losses associated with the SP 500 e-mini futures contracts position in an account controlled by the trader. As a result of the trader's concealment, the complaint charges that the firm lost almost $120 million. Lofchie Comment: Firms being brought down by rogue traders is a recurrent drama. I would guess that there are more episodes of this than there are of failures through algos gone bad. Click hereto view

Euroclear UK Ireland, operator of the CREST system for UK and Irish uncertificated securities, is seeking guidance from market participants on the treatment of complex transactions for settlement finality purposes, following discussions with the Financial Services Authority and the Bank of England. In particular, Euroclear is encouraging industry feedback and views on the current approach to determining the point at which a transfer order for a transaction enters a CREST-designated system. This issue is especially significant as the protections of the EU Settlement Finality Directive are

The Federal Reserve Board launched the 2013 capital planning and stress testing program, issuing instructions to firms with timelines for submissions and guidelines. The goal is to ensure that large, complex banking institutions have robust, forward-looking capital planning processes that account for their unique risks, and to that end, such institutions have sufficient capital to continue operations throughout times of economic and financial stress. The program includes the Comprehensive Capital Analysis and Review (CCAR) of 19 firms as well as the Capital Plan Review (CapPR) of an additional

Commissioner Bart Chilton delivered a speech to the Globalization and Energy Markets: Investment and Commodity Price Cycles Conference at Rice University, Houston, Texas. Commissioner Chilton begins by discussing the "sin-orgy" culprits (regulators and, what Chilton refers to as, the captains of Wall Street) responsible for the financial meltdown. Chilton then goes on to discuss the following topics: Dodd-Frank, and the three main goals of the CFTC; Position Limits, and the problem with Massive Passives (i.e., traders with a long-term passive investment strategy); Provisions to place

Further to the entry into force of the regulation on short selling and certain aspects of credit default swaps on November 1, the Financial Services Authority has continued to update its website with information for market participants, most recently with new web pages on: its powers to prohibit short selling and measures available to it for this purpose; and current prohibitions on short selling in the European Union. Lofchie Comment: As we have previously noted, the FSA takes a broad view of its jurisdiction; i.e., it takes the view that it has jurisdiction over U.S. investors trading