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'Spoofing' probe to expand; Cboe withdraws bitcoin ETF; SEC OKs Volcker 2.0

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'Spoofing' probe to expand; Cboe withdraws bitcoin ETF; SEC OKs Volcker 2.0

Federal prosecutors and regulators are widening the scope of their investigations related to "spoofing," or the practice of manipulating a commodity's futures contract and share prices to gain from certain trading positions, in the precious metals market to other markets and more financial firms in the U.S., CNBC reports. Led by the U.S. Department of Justice and the Commodity Futures Trading Commission, the expanded probe happens on the heels of the indictment of three JPMorgan Chase & Co. metals traders and is in part due to information received from traders who were questioned over spoofing charges.

Cboe BZX Exchange Inc. filed to withdraw its proposed rule change that would have enabled it to list and trade SolidX Bitcoin Shares issued by the VanEck SolidX Bitcoin Trust. Cboe BZX Exchange's proposal was filed in January, but the SEC has postponed making a decision about it a number of times. Earlier in September, Van Eck Associates Corp. and SolidX Management LLC disclosed that they plan to start selling shares in a limited version of a cryptocurrency ETF. The move marks the industry's latest attempt to bring cryptocurrency investment to mainstream investors, though this route only allows shares to be sold to certain institutional buyers.

A coalition of civil rights groups urged House Democratic leaders to defer their consideration of a cannabis banking bill, saying "it is a mistake to move this issue forward while many of the other consequences of marijuana prohibition remain unresolved." The groups argued that the approval of the Secure and Fair Enforcement Banking Act, or the SAFE Banking Act of 2019, will "undermine broader and more inclusive efforts to reform" the U.S. marijuana laws. Signatories to the Sept. 17 letter include the American Civil Liberties Union, the Center for American Progress and the Human Rights Watch.

The SEC adopted amendments to the Volcker rule, joining fellow regulators Office of the Comptroller of the Currency, Federal Deposit Insurance Corp. and Commodity Futures Trading Commission. The amendments to the Volcker rule, which prohibits banks from engaging in proprietary trading, now await approval from only the Federal Reserve.

Wall Street banks are looking at selling more of their research services to offset the decline in demand from their asset management clients, the Financial Times reports. Companies like Goldman Sachs Group Inc. and Morgan Stanley are competing to engage other companies outside of their usual research consumers due to recent fee pressures and new EU regulations. Banks, therefore, are recalibrating their research offerings to cater to other clients, such as executives at smaller companies, in addition to traditional investment industry customers to add investment banking revenues, the FT notes.

Rockefeller Capital Management LP agreed to acquire Mountain View, Calif.-based multifamily office Financial Clarity Inc., which oversees about $2.3 billion in client assets. The transaction is expected to close early in the fourth quarter.

Former Cetera Financial Group Inc. CEO Robert Moore, who stepped down from the company earlier in the year due to health reasons, is now back in the financial services sector with the launch of Mortgage REIT Investment Advisors, InvestmentNews reports, citing the firm's Form ADV. The newly registered firm will buy and hold real estate investment trusts.

In other parts of the world

Asia-Pacific: US Fed cuts rates; DBS Bank eyes Thailand in AUM expansion plans

Europe: Deutsche, Barclays named in German tax fraud trial; Nordea CFO to depart

Middle East & Africa: Saudi Arabia, UAE cut rates; Banque Centrale Populaire H1 profit up

Now featured on S&P Global Market Intelligence

Largest US banks lose deposit ground to high-rate payers: JPMorgan, Bank of America and Wells Fargo appear to be losing ground to banks that have paid aggressive rates to attract deposits. Per FDIC data, all three national banks saw year-over-year declines in their market share as of June 30.

Student loan companies ready to roll with the political punches: Private student loan company executives downplayed the prospective risks to their business models from various proposals by Democratic presidential campaigns that would overhaul the U.S. higher education finance system.

Fed faces key balance sheet decisions as liquidity crunch hits markets: Recent spikes in short-term borrowing rates reflect looming liquidity shortages that the Federal Reserve may soon have to address, even if a long-term solution may not be needed right away.

The day ahead

Early morning futures indicators pointed to a lower opening for the U.S. market.

In Asia, the Hang Seng dropped 1.07% to 26,468.95, and the Nikkei 225 rose 0.38% to 22,044.45

In Europe, around midday, the FTSE 100 was up 0.59% to 7,357.54, and the Euronext 100 climbed 0.25% to 1,091.33.

On the macro front

The jobless claims report, the Philadelphia Fed business outlook survey, the current account report, existing home sales report, leading indicators report, the EIA natural gas report, the Fed balance sheet and the money supply report are due out today.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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