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Monday Express: Marcato Capital to shut down; SEC probes Citadel, GTS


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Monday Express: Marcato Capital to shut down; SEC probes Citadel, GTS

* San Francisco-based activist hedge fund Marcato Capital Management will shut down, due to shrinking assets after two years of poor returns, sources told Reuters. Marcato Capital's spokesperson declined to comment to the news outlet. Marcato founder and CEO Richard McGuire expects to send investors their money back quickly as the portfolio now largely comprises cash, the report noted, citing one of the sources.

* The Securities and Exchange Commission is probing at least two trading firms, including Citadel Securities and GTS, asking for documents in relation to an investigation into IPOs and direct listings going back five years on the New York Stock Exchange, Reuters reports, citing a person familiar with the matter. Spokespersons from the SEC and GTS declined to comment to the news outlet.

* Financial institutions including Capital One Financial and JPMorgan may decrease the size of current and future loans to shale companies as they revise estimates on the value of some shale reserves held as collateral for loans to producers, The Wall Street Journal reports, citing people familiar with the matter. JPMorgan declined to comment, while Capital One did not respond to requests for comment to the publication.

* Société Générale and its U.S. unit, Societe Generale - New York Branch, entered into a written agreement with the Federal Reserve Bank of New York to submit a written plan within 60 days to strengthen oversight of the bank's compliance risk management program by its U.S. Risk Committee. Under the agreement, Societe Generale will provide for a sustainable governance framework.

* GreenSky has agreed in principle for a three-year $6 billion forward flow arrangement with an unnamed institutional asset manager. The decision comes in conjunction with the announcement that the firm's board would explore strategic alternatives, and months after it announced that one of its biggest partners, Regions Bank, would likely not renew its partnership.

* American Airlines has joined Citigroup in canceling reward points or seizing miles to crack down on customers who exploit the carrier's loyalty program by opening multiple accounts, Bloomberg News reports. In addition, card company American Express has upgraded its underwriting processes to ensure long-term loyalty from customers, who earlier used to abandon the cards after earning miles or points.

* Top global banks' fees from equity capital markets transactions are set to fall as much as 15% in 2019 and even more in 2020, Bloomberg News reports, citing research firm Coalition. This is a result of cancellation of listings on Wall Street and a lineup of companies including Airbnb that intend to raise capital through direct listings without raising funds, the report said.

* HSBC and JPMorgan accessed the audio feed of central bank press conferences, possibly gaining a trading advantage, and the Bank of England and the Financial Conduct Authority are investigating whether other big banks also accessed the feed, the Financial Times reports, citing a person briefed on the inquiries. While the central bank has not named the third-party audio distributor, news provider Statisma News is in focus, the source told the publication. The two banks declined to comment to FT.

* OMERS, the pension plan for Ontario's municipal employees, will acquire a 40% interest in Fairfax Financial Holdings's runoff group, RiverStone Insurance (UK). The cash purchase price of at least $560 million will result in Fairfax Financial recording a gain of approximately $280 million before tax, subject to certain book value adjustments at closing. The transaction is expected to close in the first quarter of 2020, subject to regulatory approval.

* Hartford Financial Services Group will no longer insure or invest in companies that generate more than a quarter of their revenues from thermal coal mining or more than 25% of their energy production from coal itself. The company will phase out existing underwriting relationships and divest publicly traded investments that exceed the threshold by 2023.

* The California Department of Insurance has revised the plan of operation for the state's fire insurer of last resort after it missed a deadline to file its own proposal.

The Daily Dose: Express Edition is updated as of 6:30 a.m. ET. Some external links may require a subscription. Links are current as of publication time, and we are not responsible if those links are unavailable later.