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Fed reviewed Amazon's facility; Cboe Q2 profit up; Envestnet faces $100M suit


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Fed reviewed Amazon's facility; Cboe Q2 profit up; Envestnet faces $100M suit

The Federal Reserve in April officially examined tech giant Inc.'s Virginia facility for resiliency and backup systems and the visit could be the first of a possible ongoing review of major cloud providers that store sensitive banking information, sources told The Wall Street Journal. The visit to Amazon happened around the same time as a hacker in Seattle allegedly stole Capital One Financial Corp.'s data from Amazon's cloud storage, according to the report. Technology companies like Amazon run the databases that hold customer credit scores and Social Security numbers and analyze risk for banks traders and process payments, and hence are an important part of the U.S. banking system, the Journal noted.

Cboe Global Markets Inc. reported second-quarter net income allocated to common shareholders of $87.6 million, or 78 cents per share, up from $82.4 million, or 73 cents per share, in the year-ago period.

The Securities and Exchange Commission charged Waltham, Mass.-based investment adviser and broker/dealer Commonwealth Equity Services LLC d/b/a Commonwealth Financial Network with failing to disclose material conflicts of interest related to revenue sharing. Commonwealth, between July 2014 and December 2018, received more than $100 million in revenue sharing from the broker related to client investments in share classes of "no transaction fee" and "transaction fee" mutual funds, according to the complaint.

Bob Sullivan, the founder of fintech startup FinancialApps, is suing and seeking $100 million in damages from another fintech startup, Envestnet Inc., for allegedly stealing proprietary technology and trade secrets, InvestmentNews reports. FinancialApps alleged that Envestnet's Yodlee division approached it for a supposed strategic partnership in 2016 and licensed its technology to jointly develop a new platform to be called "Risk Insight." However, Yodlee used the license to develop its own platform instead of developing it through the partnership.

Dawn Bennett, a former financial adviser and the founder of Bennett Financial Group Services, was sentenced to 20 years in federal prison after being found guilty of all 17 federal charges tied to a $20 million Ponzi scheme, InvestmentNews reports. The judge also ordered Bennett to pay restitution of $14.5 million and forfeiture of $14.3 million, according to the report.

Payments company Square Inc. agreed to sell its food delivery platform, Caviar Inc., to California-based on-demand food delivery startup DoorDash Inc. for $410 million in cash and DoorDash preferred stock. The deal, under which DoorDash will leverage Caviar's outreach and technology, is set to close in 2019.

Citigroup Inc. has eliminated 50 employees from the trading division at its New York office and about 25 people in London, and more trading job cuts are expected to happen in 2019, Bloomberg News reports.

The Investment Company Institute and the Council of Institutional Investors threw their support behind the U.S. Securities and Exchange Commission's "Transaction Fee Pilot," which aims to see how stock exchange fees and incentives affect brokers' trading habits, Reuters reports. The two trade groups representing many large asset managers said in a legal filing Aug. 1 that such study is in the best interest of investors and should go ahead.

In other parts of the world

Asia-Pacific: S&P outlook on APAC financial firms to remain stable; Bank of China enters India

Europe: Crédit Agricole profit falls; RBS' £1.7B dividend; Aviva mulls sale of Asian ops

Middle East & Africa: Samba profit down; Ecobank names CFO; Qatar, Jordan central banks cut rates

Now featured on S&P Global Market Intelligence

Regional banks that protected net interest margins in Q2 reap stock gains: Several regional banks that reported relatively stable NIM or detailed hedging strategies that protect against margin compression have seen their stocks appreciate by 7% or more since the money-center banks kicked off earnings season July 16. That compares to a 3.7% gain for the SNL U.S. Bank and Thrifts index and a 0.0% total return for the S&P 500.

US community banks see earnings slide in Q2: Profitability at U.S. banks with less than $10 billion in assets has declined in the second quarter, according to an analysis of results reported through July 26.

The day ahead

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

In Asia, the Hang Seng dipped 2.35% to 26,918.58, and the Nikkei 225 declined 2.11% to 21,087.16.

In Europe, around midday, the FTSE 100 was down 1.69% to 7,456.63, and the Euronext 100 was down 2.42% to 1,060.63.

On the macro front

The motor vehicle sales consensus, the employment situation report, the international trade report, the consumer sentiment report, the factory orders report and the Baker-Hughes Rig Count 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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