Money management mergers; Jay Powell mulls Fed trading fetters; Steve Cohen seeks his Deep Throat; and more!

Invesco in Talks to Merge With State Street’s Asset-Management Business [WSJ]
In a sign of potential investor enthusiasm for such a tie-up, Invesco shares rose more than 8% in after-hours trading Thursday after The Wall Street Journal reported on the talks. State Street shares rose more than 1%.... Consolidation in the industry has picked up precipitously in recent years, and both Invesco and State Street have been active deal makers. Invesco snapped up several other asset managers, including OppenheimerFund Inc. and Guggenheim Partners’s ETF business. State Street expanded its asset-servicing arm, adding financial-data firm Charles River Systems Inc. Earlier this month, the Boston-based bank agreed to acquire Brown Brothers Harriman & Co.’s investor-services unit for $3.5 billion in cash.

U.S. to Target Crypto Ransomware Payments With Sanctions [WSJ]
To effectively disrupt illicit crypto transactions, Treasury would need to target the digital wallets that receive ransom transactions, the crypto platforms that help exchange one set of blockchain coins for another to obscure the culprits and the people that own or manage those operations, according to analysts who specialize in such transactions…. Treasury and other regulating agencies also have been levying penalties and sanctions against individuals and companies facilitating illicit finance through the crypto markets as a warning to others.

Powell orders ethics review after Fed presidents disclosed multimillion-dollar investments [CNBC]
Powell ordered the review “because the trust of the American people is essential for the Federal Reserve to effectively carry out our important mission,” the spokesman said. “This review will assist in identifying ways to further tighten those rules and standards. The Board will make changes, as appropriate, and any changes will be added to the Reserve Bank Code of Conduct.”
Documents released last week revealed that Dallas Fed President Robert Kaplan made multiple trades worth $1 million or more last year in individual stocks including Apple, Amazon and Delta Air Lines.

Tech investor Chamath Palihapitiya: ‘I reserve the right to change my mind’ [FT]
How much of Palihapitiya’s success has to do with the favourable market in the past decade? “Probably a lot,” he says, before adding: “My real long-term track record won’t be known for another decade or two….”
Palihapitiya points out that his Spacs have generally done well since their mergers. The broader market is doing so poorly, he says, because interest rates are poised to rise, making a popular hedge fund strategy for Spac investing less attractive. Palihapitiya also blames banks for encouraging inexperienced financiers to start blank-cheque companies that went on to strike bad deals.
“What’s happened is you’ve had a lot of folks who are extremely talented, credentialed people do deals that were a bit of a headscratcher,” Palihapitiya says. “That’s caused that market to trade off in a very significant way.”

Jeff Bezos congratulates space rival Elon Musk on historic mission [Page Six]
Musk’s Space X company launched a historic all-civilian flight on Wednesday night, marking the first time that people have traveled to space without a professional astronaut on board.
But rather than brooding over his rival beating him to the milestone, Bezos, 57, tweeted, “Congratulations to @ElonMusk and the @SpaceX team on their successful Inspiration4 launch last night. Another step towards a future where space is accessible to all of us….” Musk, 50, continued the oddly gracious exchange, replying “Thank you.”

Mets owner Steve Cohen challenged Twitter followers to identify anonymous source [N.Y. Post]
The hedge fund billionaire, who offered three fans the chance to sit with him in his suite at Citi Field for guessing the source correctly, claimed to know that it was David Samson, the former Marlins president.
The Post does not identify its anonymous sources, but beat writer Mike Puma, who wrote the story, tweeted that it was not Samson…. “Cohen is out there tweeting about the organization and about stuff that he shouldn’t be tweeting about like he’s a fan,” the former executive said. “Why would somebody want to sign up for that? I think it’s a huge issue.”

Those hoping to learn more about Paul Singer’s lovelife will be disappointed.

Quibi, the short-lived short-form subscription video-streaming service, had many problems in its, again, very, very short life. The biggest, as co-founder Jeff Katzenberg obliquely acknowledges—in the not-entirely-self-aware way that only billionaires can—in an interview with The New York Times’ Kara Swisher, is that no one asked for movies broken up into eight-minute chunks, and consequently no one wanted them, certainly not if they cost money, which they did.

Even if Katzenberg and fellow mastermind Meg Whitman had been able to overcome that teensy issue—and Katzenberg is candid enough to admit that, given, you know, everything, that may well have been impossible—a successful Quibi would still have faced another existential issue. Specifically, as Paul Singer was only too happy to point out and pay for others to point out, the technology upon which the Quibi platform was built kinda sorta maybe didn’t belong to Quibi.

But successful Quibi was not, and so a protracted legal drama over that technology—fun and full of revelations of Singer’s personal peccadillos it might be—was, like Quibi itself, not meant to be.

Eko, an interactive video company, and Quibi's successor QBI Holdings announced today that they’d reached a settlement in the legal battle over Quibi’s perspective-shifting Turnstyle feature, which Eko alleged the streaming service had swiped from its own proprietary video technology. Both companies have agreed to dismiss their legal action against one another, and Quibi will hand over both the video technology and Turnstyle IP to Eko as part of their agreement…. Quibi finally shut down in December, and Roku swooped in to snap up the IP remains from its corpse for its own streaming service, The Roku Channel. But it left behind the Turnstyle tech and its legal woes, which remained unresolved prior to this week.

Finally, some good news for Quibi [The Verge]
Jeffrey Katzenberg Talks About His Billion-Dollar Flop [NYT]

For more of the latest in litigation, regulation, deals and financial services trends, sign up for Finance Docket, a partnership between Breaking Media publications Above the Law and Dealbreaker.

Elect take aim at ARK; p.e. secondaries buyer seeks one of its own; Elizabeth Warren’s sending letters again; and more!

Cathie Wood’s ARK Has a Challenger as Goldman Sachs Launches Tech ETF [Barron’s]
Thursday morning, Goldman Sachs Asset Management is unveiling the Goldman Sachs Future Tech Leaders Equity ETF, an actively managed fund that will invest in listed technology companies with market capitalizations of less than $100 billion, across both developed and emerging markets. The fund, which is launching Thursday, will trade on the NYSE under the ticker GTEK.

Investment Firm Lexington Partners Explores Sale [WSJ]
Closely held Lexington, which specializes in buying secondhand stakes in private-equity funds, has hired Goldman Sachs Group Inc. to advise on a potential sale, which could value the firm at a few billion dollars, some of the people said.
Among the interested bidders are large private-equity firms including KKR & Co., the people said…. The rise of the market for secondaries has made private equity a more liquid asset class, with firms such as Lexington, Paris-based Ardian and the Strategic Partners unit of Blackstone Inc. raising billions of dollars for the purpose of purchasing stakes in existing buyout funds from other investors.

Former Top Morgan Stanley FX Trader Leaves After Lengthy Probe [Bloomberg]
Thiago Melzer, who oversaw trading in currency derivatives known as FX options, was “discharged” in June because of allegations concerning the valuing of certain trades and using communication methods not approved by the firm…. The bank started an internal probe into suspected wrongdoing at the unit in late 2019….
Melzer is now starting a new investment fund in Sao Paulo called Upon Global Capital, where he will be chief investment officer….

Elizabeth Warren Calls on Fed Banks to Bar Leaders From Stock Trading [WSJ]
“The controversy over asset trading by high-level Fed personnel highlights why it is necessary to ban ownership and trading of individual stocks by senior officials who are supposed to serve the public interest,” Ms. Warren wrote in letters addressed to the leaders of the 12 regional Fed banks…. The Wall Street Journal last week reported that Dallas Fed President Robert Kaplan and Boston Fed President Eric Rosengren actively traded stocks and other investments over the course of 2020. The other 10 regional Fed leaders largely refrained from such financial activity.

Founder Of $90 Million Cryptocurrency Hedge Fund Sentenced To More Than Seven Years In Prison [DOJ]
“According to Stefan He Qin, founder of Virgil Sigma and VQR, a pair of cryptocurrency hedge funds in New York, Virgil had a stated market strategy of ‘market neutral,’ safe investments. Qin’s investors soon discovered that his strategies weren’t much more than a disguised means for him to embezzle and make unauthorized investments with client funds. When faced with redemption requests he couldn’t fulfill, Qin doubled down on his scheme by attempting to plunder funds from VQR to satisfy his victim investors’ demands. Qin’s brazen and wide-ranging scheme left his beleaguered investors in the lurch for over $54 million, and he has now been handed the appropriately lengthy sentence of over seven years in federal prison.”

Theater chain AMC to accept other cryptocurrencies along with bitcoin [Reuters via Yahoo! News]
AMC Entertainment Holdings Inc boss Adam Aron said the theater chain would accept ether, bitcoin cash and litecoin alongside bitcoin for ticket purchases…. "People are not buying Bitcoin to spend them. For me, it's still not a nicely established currency in the sense that it's more of an investment for the future or for something that we may want to have in the future," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

In fairness, Marcus Goldman got his start peddling household goods, so….

David Solomon’s quest to transform Goldman Sachs from the elite envy of all Wall Street into an aw-shucks community bank has, quite frankly, been a story of fits and starts. Marcus remains something of an unloved backwater, both externally and internally. And the investment bank stubbornly remains the source of most of Goldman’s profit.

Still, Solomon's at last getting into cryptos properly. He’s finally bought that plain-vanilla money manager he’s always wanted (although it wasn’t Wells Fargo’s), and he’s unloading the fancy part of Goldman Sachs Asset Management at the same time. But while he may have missed out on buying Robinhood, he’s not going to miss out on the latest acquisition craze.

Goldman Sachs is acquiring fintech lender GreenSky for $2.24 billion as the investment bank pushes further into consumer finance.

The all-stock deal for GreenSky, called the biggest fintech platform for home improvement loans in a release announcing the transaction, is expected to close by the first quarter of 2022…. Now, the bank that once catered only to heads of state, corporate leaders and the ultra wealthy will be extending installment loans to regular Americans seeking to renovate their kitchens…. GreenSky sidesteps credit cards for big ticket purchases with loans that are repaid over weeks or months. The buy now, pay later trend in fintech has gotten red hot as of late….

Unfortunately, it seems that at twice what he’s spent on his two biggest acquisitions combined, this bit of next-gen technology was a bit rich for D-Sol’s blood when there are SPACs out there willing to spend anything just to make a deal.

Pagaya operates an artificial-intelligence network to make financial transactions like lending more efficient and give more people the ability to borrow. Banks and other financial-services providers use its platform, which analyzes troves of data to help partners serve more customers.

Pagaya is combining with the SPAC EJF Acquisition Corp…. EJF is known for investing in the financial-services sector and was co-founded by Emanuel “Manny” Friedman, who is expected to join Pagaya’s board of directors.

For its part, JPMorgan—which already bought its piece of proletarian payments last week—is improbably turning to the pitiful Marcus to bolster its own online lending biz.

Paul Vienick will lead online investing, according to the memo. He was previously a top executive at Charles Schwab Corp.’s TD Ameritrade, and he also held top jobs at Morgan Stanley and Bank of America’s Merrill Lynch unit. Andrea Finan will run the bank’s self-directed investing business. She was previously at Goldman, where she helped launch Marcus Invest.

Goldman Sachs is acquiring buy now, pay later fintech GreenSky for $2.2 billion [CNBC]
Fintech Startup Pagaya Reaches $9 Billion SPAC Deal to Go Public [WSJ]
JPMorgan Chases the Online Investing Boom With Senior Hires [WSJ]

For more of the latest in litigation, regulation, deals and financial services trends, sign up for Finance Docket, a partnership between Breaking Media publications Above the Law and Dealbreaker.

Now that the meme-based cryptocurrency is not much of a joke anymore, it’s finally a funny one.

The cacographic Shiba Inu who emerged from the internet back in 2013 wasn’t particularly funny or imaginative, coming as it did six years after the original malaprop animal meme, the British shorthair with a taste for cheeseburgers. Nor, frankly, was the cryptocurrency created in the dog’s jesting honor later that year, Dogecoin. I mean, sure, it may have been funny to the handful of people who created it or were otherwise in on the gag. But it’s definitely not original in any meaningful way, and not just because there have been more than 100 successors created in its wake.

Dogecoin itself was originally created by copying and tweaking another open-source cryptocurrency project called luckycoin. Luckycoin was a tweaked version of litecoin, which was a tweaked version of bitcoin…. “It’s a copy of a copy of a copy,” Mr. Versetti said of dogecoin. “There is absolutely nothing valuable in the code itself. It exists purely due to its community, not for any technological reasons.”

What is funny is how deadly serious some people (idiots, mostly, and even its formerly puckish co-creator) now take this bad inside joke, how closely they follow every utterance about it from the likes of people who don’t take it seriously like Elon Musk and treat them like crucial fundamentals. But that sort of thing is funny in a “ha ha” kind of way, an arch meta-meta-joke on the meta-joke that is Doge in the first place, and the initial and unintentional joke that are cryptocurrencies writ large. This, on the other hand? This is genuinely, uproariously, laugh-out-loud funny.

The Dogecoin Foundation, a Colorado nonprofit formed in 2014 by dogecoin’s creators and supporters, didn’t file an official claim on the dogecoin brand name until late August. Its filing now sits beside half a dozen others before the U.S. Patent and Trademark Office, all vying for the exclusive use of the dogecoin brand, which, in addition to cryptocurrencies, has sprung up on applications to use it for baby blankets and men’s suits.

“Most believed it’s not worth registering those trademarks because who knows how long this would survive. Now we basically are ruing that a little bit,” said Jens Wiechers, a Dogecoin Foundation board member. The group, which became defunct for several years, relaunched in August….

Moon Rabbit AngoZaibatsu’s founder, Angel Versetti.... said he created another Cook Islands-based company called the Dogecoin Foundation this year. Last month, the Colorado-based Dogecoin Foundation said the Cook Islands dogecoin was “attempting to profit unfairly off of the goodwill Dogecoin has built.”

“We’re not doing it with any malicious intent,” Mr. Versetti said. “We thought it was abandoned, we thought it desperately needed guidance. We’re not going to make a U-turn just because the big kid came back to the playground.”

Dogecoin Copycats? Trademark Fight Erupts Over Joke Crypto Worth Billions [WSJ]

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Summer slowdown; don’t ask Annie; hedge funds bank on two volatile elements; and more!

Citigroup, JPMorgan Expect Lower Third-Quarter Markets Revenue [Reuters via U.S. News]
Citigroup Inc expects third-quarter markets revenue to decline by a "low-to-mid teens" percentage from a year earlier and JPMorgan Chase & Co expects a decrease of about 10%, according to executives of the two big banks…. Citigroup CFO Mark Mason and JPMorgan operating committee member Marianne Lake said their equities business had performed better than fixed income.

App Annie Settles SEC Fraud Investigation Over Mobile-Data Product [WSJ]
The Securities and Exchange Commission said Tuesday the enforcement action was the first against a provider of alternative data used by investors to make trading decisions…. “App Annie and Schmitt lied to companies about how their confidential data was being used and then not only sold the manipulated estimates to their trading firm customers, but also encouraged them to trade on those estimates—often touting how closely they correlated with the companies’ true performance and stock prices,” said SEC Enforcement Director Gurbir Grewal.

House Bill Raises Chance for Global Pact to Curb Corporate Tax Havens [NYT]
House Democrats, as part of their plan to raise as much as $2.9 trillion to finance President Biden’s social safety net package, proposed raising the tax rate on companies’ overseas earnings to 16.6 percent from 10.5 percent and calculating the tax on a country-by-country basis. The plan would meet the primary commitments of the global agreement that is being negotiated through the Organization for Economic Cooperation and Development.

Uranium Heats Up, and Hedge Funds Score [WSJ]
The price of uranium hit an eight-year high of $44 a pound this week…. That boost has benefited hedge funds including Segra Capital Management and Sachem Cove Partners, which have been betting that uranium would bounce back…. A much smaller uranium fund managed by Azarias Capital Management LP is up 97% for the year through Friday, including a 35% gain in September, said a person familiar with the firm.

Hedge funds riding crypto wave post bumper returns [FT]
The strong pace of gains means funds focused on bitcoin and other digital assets have returned 145 per cent this year, according to data from Eurekahedge…. June marked the only setback for crypto funds this year when they lost 10 per cent. They gained nearly 7 per cent in May even though the price of bitcoin halved from record highs.

Robinhood Is Going on a College Tour to Recruit New Customers [WSJ]
Robinhood will give students who sign up for brokerage accounts using their school email address $15 to trade, and enter them into a $20,000 giveaway. Robinhood executives will tour campuses of community colleges and historically black colleges and universities this fall…. Courting students is tricky for Robinhood. Critics say the app has turned trading into a game-like experience that encourages unsophisticated investors to take risks they don’t understand.

Well, it’s second-to-late. And if not that, let it be Jay Powell’s last.

To be honest, Wells Fargo probably didn’t think much of its latest regulatory run-in, a $250 million fine for failing to stop doing the mortgage things—overcharging customers, improperly kicking them out of their homes, etc.—it had been told three years earlier to stop doing. I mean, anything less than 10 figures isn’t going to make Charlie Scharf sweat, and the CEO more or less shrugged the whole thing off, simply saying, “progress will come alongside setbacks.”

Well, there’s one setback that progress will not come alongside, and one potentially very important collateral consequence of Wells’ most recent failure: It reminded Sen. Elizabeth Warren once again that Wells continues to exist, and, quite frankly, she doesn’t think it should.

In a letter to the Federal Reserve chair, Jerome H. Powell, on Monday, Ms. Warren asked the Fed to force the financial giant to break off its core banking activities, like offering checking and savings accounts and loans, from its other financial services…. The Fed could accomplish this, she explained, by revoking Wells Fargo’s financial holding company license — essentially making it impossible for the company to operate any nonbanking businesses.

“Continuing to allow this giant bank with a broken culture to conduct business in its current form poses substantial risks to consumers and the financial system,” she wrote.

Of course, Warren can’t be under any illusion that Powell will actually do any of that, but Wells’ unfortunate-as-ever timing gives her the opportunity to shout down the growing chorus calling for his reappointment as Fed chair, by demonstrating why he shouldn’t be.

Left-leaning activists and lawmakers are pushing President Joe Biden to dump Federal Reserve Chair Jerome Powell for Fed Governor Lael Brainard with a last-ditch message: Don’t miss a rare opportunity to install a known and tested Democrat atop the world’s most important economic institution…. Over the past four years, she built credibility with the progressive wing of the Democratic Party by dissenting more than 20 times on moves by Trump’s appointees, including on rollbacks of regulations placed on big banks after the 2008 financial crisis….

“The whole point of a four-year term is so that the political process and the public’s elected officials get to decide who is going to run the most important financial and economic policymaking body in the country,” [Better Markets head and Warren supporter Dennis Kelleher] said. “I find it hard to believe that in a country of 320 million people there isn’t one Democrat who is more or better qualified for the job than Jay Powell.”

Elizabeth Warren Asks the Fed to Break Up Wells Fargo [NYT]
Trump shattered tradition on Fed chair. Some Dems want Biden to do the same. [Politico]
Should Biden Reappoint Jerome Powell? It Depends on His Theory of Change. [NYT]
Dodd and Frank call on Biden to renominate Powell to chair the Fed [The Hill]

For more of the latest in litigation, regulation, deals and financial services trends, sign up for Finance Docket, a partnership between Breaking Media publications Above the Law and Dealbreaker.

Steve Scherr’s swan song; Elliott batters Blighty; old white men back other old white man; nothing to buy but buybacks; and more!

Goldman names Denis Coleman as new CFO starting next year for retiring Stephen Scherr [CNBC]
Coleman, the current co-head of the firm’s Global Financing Group, will take over for Stephen Scherr, who is stepping down as CFO at year-end and retiring in January 2022….
Scherr was part of a wave of investment bankers who rose to power after Solomon was anointed CEO…. Before being promoted to CFO, Scherr, 57, led the firm’s efforts to develop its retail banking business, Goldman’s first foray into the consumer realm.

Inflation Eased in August, Though Still High [WSJ]
Prices eased for autos, with used vehicle prices dropping sharply, and hotel rates and airline fares declined in August from July…. The so-called core price index, which excludes the often volatile categories of food and energy, climbed 4% from a year before, they estimate, compared with 4.3% in July….
“I think what we’re learning is that our supply chains were more vulnerable than previously thought and it’s difficult to make a quick turnaround,” said Andrew Schneider, U.S. economist at BNP Paribas.

Hedge fund Elliott takes stake in energy group SSE [FT]
Hedge fund Elliott Management has taken a stake in Scottish energy group SSE and is pushing for the company to separate or sell its renewables business, according to people with knowledge of the matter…. The SSE campaign marks the second major FTSE 100 company the hedge fund has targeted, after building a multibillion-pound stake in healthcare group GlaxoSmithKline and recommending a series of changes to improve its lagging performance.

Dodd and Frank call on Biden to renominate Powell to chair the Fed [The Hill]
Whatever one thinks of the rule that presidents should not tell the Fed what to do, it is clear that Mr. Powell is a believer — as Donald Trump discovered to his dismay. In fact, this is very much why Powell’s explicit refutation of the economic argument against the Biden plan carries so much weight…. We are convinced that facing a Biden-appointed vice chair for supervision, having only a one-vote majority on the board, and hedged in (pun intended) by Biden appointees to every other regulatory position, it is wholly implausible that Powell would initiate controversial deregulatory steps while he continues to focus on the economy.

Stock Buybacks Beat Capital Spending for Many Big Companies [WSJ]
Spending on share buybacks increased much faster than capital expenditures in the first half of the year, after pullbacks in both categories last year amid the pandemic…. “It wasn’t our intention to decrease our capex; it’s just been difficult to get tools,” [Hormel CFO Jim] Sheehan said, adding that the company plans to increase capital spending next year.

41% of Americans say it’s ‘going to take a miracle’ to be ready for retirement, report finds [CNBC]
Overall, 59% of Americans said they accept that they will have to keep working longer, while 36% now believe that they will never have enough money to be able to retire, according to the latest data from the Natixis Global Retirement Index…. The Covid pandemic has taken a heavy toll on Americans’ feelings about their own retirement security.

We’re sure all Gary Gensler needs to stop worry and love payment for order flow is time.

Last month, Gary Gensler said his Securities and Exchange Commission was taking a long, hard look at payment for order flow. He went so far as to call that system, by which the likes of Robinhood, E*Trade Securities and others get paid to direct customer trades to Citadel Securities and others, “an inherent conflict of interest.”

Given Gensler’s hyperactive regulatory imagination and appetite, that certainly sounds bad for the future of PFOF, and with it, four out of every five dollars say, Robinhood makes. Not so, says Dan Gallagher. According to Robinhood’s chief legal officer, once the terrifically uninformed Gensler learns about the amazing practice that incidentally happens to be crucial for the success of his business, he’s not only not going to ban PFOF—he’s going to put it in the Constitution.

The Securities and Exchange Commission is “going to arrive at the conclusion that payment for order flow is undoubtedly an amazingly good thing for retail investors and they’re not going to ban it,” Robinhood’s Dan Gallagher told CNBC’s “Squawk Box” on Monday…. “At Robinhood, [payment for order flow] is the life blood of a no commission, no minimum balance brokerage. This is what has brought in a whole new generation of investors,” added Gallagher. “I think that the overwhelming evidence is that the current market structure works well for retail investors.”

It's true: We’re sure Gensler completely missed that whole GameStop thing while he was putting together President Biden’s financial services regulation team and getting ready to nominate himself to lead the SEC.

“The notion that our customers are stupid, that they need protection, that they need the government and the nanny state to come out and save them for making bad decisions, I think they’re insulted,” said Gallagher.

Yea, it’s definitely their intelligence being insulted, and not that of the veteran regulator, MIT Sloan professor and one of the youngest Goldman Sachs partners ever.

Robinhood’s chief legal officer says the SEC won’t ban payment for order flow [CNBC]

For more of the latest in litigation, regulation, deals and financial services trends, sign up for Finance Docket, a partnership between Breaking Media publications Above the Law and Dealbreaker.

Two certainties: taxes and business opposition to taxes; pre-IPO market forgoes one; CFTC has more letters than members; and more!

House Democrats Outline Tax Increases for Wealthy Businesses and Individuals [NYT]
The preliminary proposal, which circulated on and off Capitol Hill on Sunday, would raise the corporate tax rate to 26.5 percent for the richest businesses and impose an additional surtax on individuals who make more than $5 million…. It also increases the top tax rate for capital gains — the proceeds from selling an asset like a boat or stocks — to 25 percent from 20 percent. Mr. Biden had proposed essentially doubling that tax rate.

In Social Policy Bill, Businesses See a Lot to Like. They Oppose It. [NYT]
Federal funding for family leave would ease the burden of businesses that currently pay for it while helping those that cannot afford it compete for workers. Child care tax credits would get women back in the work force. Income supports for young families could ease upward pressure on wages…. Yet the Chamber of Commerce, the Business Roundtable, the National Federation of Independent Business and the National Association of Manufacturers are implacably opposed. Many have made it clear: Taxes trump policy.

Pre-IPO Marketplace Forge Global to Go Public in $2 Billion SPAC Deal [WSJ]
San Francisco-based Forge said it has nearly 400,000 registered users, including more than 123,000 accredited investors. The rest of the users are mostly from the private companies selling shares and professional investment firms…. It has brokered trades in shares of companies such as Lyft Inc., Palantir Technologies Inc. and Robinhood Markets Inc. before they went public. Forge’s market is registered with the SEC as an alternative trading system….

CFTC Departure to Leave Five-Person Panel with One Republican, One Democrat [WSJ]
CFTC Commissioner Dan Berkovitz, a Democrat, said Thursday he plans to leave on Oct. 15. The commission now has just two members: Acting Chairman Rostin Behnam, a Democrat, and Republican Commissioner Dawn Stump…. People familiar with the matter say Mr. Biden is preparing to nominate Mr. Behnam for the role of permanent chair…. The CFTC has been evenly split between Republicans and Democrats for most of Mr. Biden’s time in office. As a result, its policy agenda has moved relatively slowly in comparison to its sister regulator, the Securities and Exchange Commission.

Kansas City Southern picks Canadian Pacific’s $31 billion bid for railroad [AP via CNBC]
It’s not yet clear whether Canadian National has any appetite to increase its bid because it is facing pressure from a major shareholder to abandon the deal. London-based investment firm TCI Fund — which owns about 5% of CN’s stock — maintains that CN should overhaul its board, get a new CEO and refocus its efforts on improving its own operations.

Lynn Parent Is Defendant In 1st 'Varsity Blues' Trial That Starts This Week [AP via WBUR]
Jury selection begins Wednesday in the case against the two parents —former Staples and Gap Inc. executive John Wilson, of Lynn, and former casino executive Gamal Abdelaziz — who are accused of paying hundreds of thousands of dollars to help get their kids into the University of Southern California by falsely presenting them as athletic recruits…. Wilson, who also heads a Massachusetts private equity firm, is charged with paying $220,000 to have his son designated as a USC water polo recruit and an additional $1 million to buy his twin daughters' ways into Harvard and Stanford.

Actually, he’s not saying anything. Just suing.

We are told that the powers that be in Washington, D.C., are worried about matters cryptocurrent. Most especially, there is concern over the purveyors of fake money’s evolution into a new brand of shadow bank, and all of the risks inherent in their adoption as such, both to their users and the financial system as a whole. Well, Gary Gensler—because of course it would be Gary Gensler—is doing something about it.

The cryptocurrency exchange and services firm received a Wells notice from the SEC last Wednesday saying the regulator intends to sue Coinbase over the product, called Coinbase Lend…. The product in question is billed as allowing users to earn a 4% annual percentage yield on a so-called stablecoin (USD Coin) by allowing Coinbase to lend those funds to verified borrowers.

At issue is not the fact that Coinbase seems very bad at everything it does other than raising money, nor the essentially criminal nature of stablecoins, but an old classic: the great semantic debate about what a cryptocurrency is. For Gensler, as usual, is not satisfied by the decisions made by his and his colleagues’ immediate predecessors.

[Coinbase CEO Brian] Armstrong said when the company initially reached out to the SEC for a briefing ahead of the launch, the regulator responded by saying the Lend feature is a security.

Armstrong, you may remember, is really not Gensler’s kind of guy in spite of their shared interest in blockchainery. And possibly as a result, Gensler is not particularly interested in Armstrong’s opinion on the matter.

The company’s chief legal officer, Paul Grewal, indicated in the post that the company was caught off guard by the threat considering its efforts to engage with the regulatory agency for the last six months. CEO Brian Armstrong said in a series of tweets that when he traveled to Washington, D.C. in May, the SEC “refused” to meet with him…. Armstrong said when the company initially reached out to the SEC for a briefing ahead of the launch, the regulator responded by saying the Lend feature is a security. When the company asked the SEC to help it understand their view, the agency responded with a number of demands, with which Coinbase complied, according to Armstrong.

Well, Gensler may not have much interest in an exchange of views with his fellow follicly-challenged financier, but—surprise, surprise—Armstrong’s gonna give his, anyway.

“We’re committed to following the law. Sometimes the law is unclear. So if the SEC wants to publish guidance, we are also happy to follow that,” Armstrong said in the tweets.

Be careful what you wish for, Brian. Anyway, Coinbase shares were off 3.6% on the news, and possibly not just that news.

The largest cryptocurrency by market value fell 1.3% to settle at $46,154.44 apiece, according to 5 p.m. ET data from CoinDesk. It briefly dropped 17% over the course of a few minutes Tuesday and ended the day down about 10%.... During the latest bout of volatility, bitcoin has lost more than $100 billion in market value since Sunday. Other cryptocurrencies have also taken a hit. Ether has lost roughly $56 billion, and Cardano’s ada has shed more than $16 billion.

Coinbase shares fall after it reveals SEC plans to sue over interest-earning product [CNBC]
Crypto’s Rapid Move Into Banking Elicits Alarm in Washington [NYT]
The New ‘Shadow’ Banks [DealBook]
Bitcoin Steadies After Flash Crash [WSJ]
Digital Currencies Pave Way for Deeply Negative Interest Rates [WSJ]

For more of the latest in litigation, regulation, deals and financial services trends, sign up for Finance Docket, a partnership between Breaking Media publications Above the Law and Dealbreaker.

The latest deal trend is exchanging money for companies that exchange money.

People (well, companies) are buying a lot of things these days. Specifically, they are buying other companies that actual people use to buy other things.

JPMorgan said Wednesday it plans to buy a majority stake of close to 75% in Volkswagen’s payments business…. Over time, the two companies plan to develop Volkswagen’s platform to cover markets outside the automotive sector, JPMorgan said.

European technology giant Prosus NV said it struck a $4.7 billion deal—its largest-ever acquisition—to buy Indian payments platform BillDesk, the latest investor bet that more and more consumers will conduct transactions online.

PayPal Holdings Inc. agreed to buy Japanese “buy now, pay later” startup Paidy Inc. for about $2.7 billion, in a move that will boost its business in the world’s third-largest e-commerce market.

JPMorgan is buying a majority stake in Volkswagen’s payments unit [CNBC]
Prosus Makes $4.7 Billion Bet on Online Payments in India [WSJ]
PayPal to Buy Japan’s Paidy for $2.7 Billion [WSJ]
Deals Spree Puts Banks on Track for Busiest-Ever Year [WSJ]

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GameStop earnings (as if they matter); Elliott has more helpful advice for Citrix; Credit Suisse steps in it again; and more!

GameStop Fans Face Off Against Earnings Day History of Defeat [Bloomberg]
Shares of the video-game retailer were up 1.2% in New York on Wednesday but they have tumbled 18% on average the day after earnings since June 2019 -- they gained on such reports only twice since the start of 2018. Add on that the options market implies the stock will swing 15% by the end of Thursday’s session and it suggests it could be a choppy few days ahead for the company that helped set off the meme-stock trend…. “The company remains enormously structurally challenged as the entire market moves rapidly to streaming/downloads,” said Vital Knowledge’s Adam Crisafulli. “The company’s stock price is completely divorced from fundamentals and has been for some time.”

Elliott Management Has a More Than $1 Billion Stake in Citrix Systems [WSJ]
Elliott recently informed Citrix it has a stake of more than 10% in the company and would like to work with it to improve its valuation, the people said…. Citrix, like many legacy software companies, has had a rocky transition to a subscription-based model for its core virtual-desktop services. But it has benefited as the pandemic stokes demand for remote-work services, a trend that appears poised to continue…. While Elliott’s exact demands couldn’t be learned, it previously called for Citrix to focus on its core offerings and better allocate capital when the investor built a stake of more than 7% in June 2015.

For Chobani, Allbirds, Other Coming IPOs, Greed Is Out. Do-Gooding Is In. [WSJ]
In regulatory filings, companies are referring to themselves as “mission-driven,” counting the environment among stakeholders, highlighting their commitments to charity and touting their sustainable methods. It is partly a shift in corporate—and employee—values, and partly virtue signaling…. The rush of do-gooder companies comes as the broader U.S. IPO market is on a tear, with major stock indexes near records and volatility historically low. Money raised by newly public companies in 2021, including special-purpose acquisition companies, is already the highest on record for any full year, according to Dealogic. Traditional IPOs alone have raised a whopping $105 billion through Monday, just shy of record full-year totals set during the tech boom.

Chinese dissident Ai Weiwei says Credit Suisse closing foundation’s bank account over ‘criminal record’ [SCMP]
“Credit Suisse initially informed me that they had a new policy to terminate all bank accounts which are related to people with criminal records,” Ai told Reuters in an emailed statement, adding the foundation had been asked at the time to move the funds before September…. Ai helped design the 2008 Beijing Olympics’ famed Bird’s Nest stadium before falling foul of the communist government, which detained him for 81 days in 2011. He said he has never been formally charged or convicted of a crime….
He said managers then referred to an interview he had done with a Swiss newspaper several days before, in which he criticised Swiss people for voting in favour of tighter “anti-immigrant policies” as a reason for the closure.

Hedge Fund Verition Opens to Cash for Patient Investors Only [Bloomberg]
The U.S. firm is to accept money in a new share class that will allow investors to redeem just 8.33% of their assets every quarter, down from a previous 25%, according to an investor document seen by Bloomberg. That means it will take clients three years to withdraw all their money instead of one…. Since starting in 2008, Verition has never had a down year. It made a record 30.4% in 2020 to beat the 9.5% average gain in hedge funds tracked by Bloomberg, and has gained about 5% so far this year.

Job Postings Level Off as Delta Variant Cools Demand for In-Person Workers [WSJ]
The August gain was largely driven by increased demand for jobs that can be done from home, such as software development. Postings for child care fell and openings in construction and at restaurants rose only slightly….
“There was a pretty clear reversal of fortune in pandemic-sensitive sectors,” said Indeed economist Nick Bunker…. “The Delta variant has thrown a wrench into things and the pace of postings has slowed down,” Mr. Bunker said.

Which is, in fairness, generally how it works at BaFin.

The Bundesanstalt für Finanzdienstleistungsaufsicht sounds terrifying. Generally speaking, it’s not, unless you are a short-seller or journalist with the temerity to uncover potential wrongdoing at a German company. If you’re one of those German companies, however, it’s usually a cuddly teddy bear. Much as it would like to, however—and certainly much as Allianz CEO Oliver Bäte would like it to—BaFin simply can’t ignore the growing number of U.S. regulatory probes in the same way it ignored the growing stack of client lawsuits over the company’s collapsed Structured Alpha hedge funds. And so, with regret, and belatedly as ever, the Germans are opening a probe of their own.

The investigation by Germany's financial regulator, BaFin, is across multiple departments of the institution, several sources said, speaking on condition of anonymity as the investigation is ongoing.

BaFin officials are examining the extent to which Allianz executives outside the fund division had knowledge of, or were involved in, events leading up to the funds racking up billions of dollars of losses, the people said….

The sources said the German investigation was currently in a fact-finding phase and involved multiple people, but had picked up pace since Allianz announced the DOJ probe on Aug. 1.

What an amusing coincidence.

Allianz under investigation in Germany over investment funds [Reuters]

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This is Goldman Sachs, though: No SPAC b******t.

Judging by the stock price of Blue Owl Capital, investors are pretty pleased with the concept of asset managers which buy minority stakes in other asset managers, no matter how unseemly the process by which that particular publicly-traded asset manager came to be. This has not failed to attract the notice of the O.G. asset manager investing in asset managers—the Cadillac of such asset managers, if you will—Goldman Sachs Asset Management’s Petershill fund. And wouldn’t you know if but GSAM is in a wheeling-and-dealing mood, as is Goldman itself, and, well….

Petershill will place minority stakes in 19 private equity, hedge funds, and other alternative managers into a structure that will then list in an initial public offering, according to a document filed with the London Stock Exchange on Monday. The new Petershill vehicle will issue shares worth around $750 million as well as sell existing shares…. Based on recent industry multiples, the unit’s valuation could exceed $5 billion….

The IPO will establish a pool of permanent capital and align Petershill with its investment targets for the long term, co-head Ali Raissi said….

Goldman’s Petershill to List $5 Billion Vehicle in London [Bloomberg]
Fund investor’s IPO depends on Goldman connections [Reuters]

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Busy bankers; Ben Mezrich churns out a GameStop book; killing newspapers apparently a good business; and more!

Deals Spree Puts Banks on Track for Busiest-Ever Year [WSJ]
In the first eight months of 2021, companies have announced mergers and acquisitions worth more than $1.8 trillion in the U.S. and more than $3.6 trillion globally, according to data provider Dealogic. Both figures are the highest at this point in a year since at least 1995, when Dealogic started keeping records…. Advisory revenue should continue to fuel banks through the rest of 2021. Bankers are paid when a deal closes, and many of the year’s biggest transactions are pending….
With summer vacations ending, bankers expect to get even busier. The deal pipeline at several banks ended the second quarter at record levels. Bankers cite a combination of factors, including a positive economic outlook, elevated corporate cash levels, flush private-equity firms and target-hunting SPACs.

Goldman Cuts U.S. Growth Forecast as Consumer Sees ‘Harder Path’ [Bloomberg]
“The hurdle for strong consumption growth going forward appears much higher: the Delta variant is already weighing on Q3 growth, and fading fiscal stimulus and a slower service- sector recovery will both be headwinds in the medium term,” said [economist Ronnie] Walker.

There’s a GameStop Book, Already [NYT]
Mezrich mans the conveyor belt at the factory that turns raw reality into its eventual slick cinematic depiction. He works fast. One does not have the sense that those gaps in knowledge ever haunt him as he goes…. Plotkin and Gill are pretty much the only two characters in this book who verifiably walk the earth. The other major voices — an anime-loving Duke senior who grew up on a boat, an Obama-then-Trump-voting nurse at a psychiatric hospital the author made up, a pregnant woman whose wedding and lifestyle upgrade were waylaid by the pandemic — appear to be either anonymized or composite characters, stand-ins for the WallStreetBets rabble, motivated alternately by vengeance, fun, desperation, boredom. All these characters can be ventriloquized whenever Mezrich needs to explain a concept in finance; they experience convenient revelations whenever the plot needs advancing.

Traders Return to London Metal Exchange’s 144-Year-Old Ring [WSJ]
The ring’s reopening came as the City awaited an influx of bankers, investors and lawyers who have mostly worked from home since March last year. Streets and stations in the historic financial district remain quiet. Companies such as JPMorgan Chase & Co. and Citigroup Inc. are encouraging staff to return after the summer vacation, though other big employers are delaying plans to bring back employees…. Traders must be fully vaccinated or take quick Covid-19 tests twice a week. The exchange said it would measure temperatures, provide hand sanitizer and install a one-way system to avoid unnecessary interactions….
Covid-19 almost brought about the ring’s demise. The LME backed down from a proposal to shut the arena for good after Sucden and its rivals said the ring enables dealers to execute complex trades on behalf of clients such as miners.

JPMorgan YouTube star reveals real reason for quitting [efinancialcareers]
[Ben] Chon, who worked for JPMorgan in the healthcare team in SF for nearly three years between 2015 and 2018, has a YouTube channel with nearly 40,000 subscribers and various hit videos. Many of Chon's videos are about crypto investing. But some of his most popular videos are about his time at JPMorgan….
Chon explained that on bad days at JPMorgan he woke up at 7am after finishing work at 4am the night before and had 50 emails in his inbox and a message he was supposed to have responded to 10 minutes previously…. On a more relaxed day at JPMorgan, Chon said he'd wake up at 8.30am, get into the office at 9.30am and leave the office at 11pm. Notably, the hours between 5pm and 7pm were spent doing very little while Chon waited for his 40-50 year-old MD to have dinner with his family and come back to him with suggested changes to the model or presentation.

Hedge fund ‘vampire’ sinks his teeth into $19M Miami home [N.Y. Post]
It is one of 18 homes in the Camp Biscayne gated community and boasts nearly 100 feet of private beach and a dock — as well as a pool, a movie theater with 12 seats and a garage for eight cars.
The gates may be helpful, as there have been protests outside his Hamptons property and Midtown offices.

Look, when Gary Gensler took his seat at the head of the SEC earlier this year, we were promised something a little different.

Look, when Gary Gensler took his seat at the head of the SEC earlier this year, we were promised something a little different. The guy taught courses at MIT call “blockchain technology” and “digital currencies” for crying out loud.

He, uh, had some stumbles out of the gate.

But now it looks like Gensler’s SEC is finally starting to deliver on the crypto protections it promised to keep retail investors from being talked into blowing grandma’s Social Security check on Garfield NFTs or whatever.

The Securities and Exchange Commission announced today that it has filed an action against BitConnect, an online crypto lending platform, its founder Satish Kumbhani, and its top U.S. promoter and his affiliated company, alleging that they defrauded retail investors out of $2 billion through a global fraudulent and unregistered offering of investments into a program involving digital assets.

Well, hey, the founder and a top promoter charged too instead of just underlings and entities. Maybe the Elizabeth Holmes effect is taking root even in her first week of trial. But it could just be that the allegations seem, let’s say, quite serious.

The SEC said investors in a BitConnect ‘lending program’ were told BitConnect would use a ‘volatility software trading bot’ that could generate returns of 40% per month, and were given fictitious returns showing gains of about 3,700% per year.

In reality, the SEC said BitConnect investors lost much of their money after the price of BitConnect Coin sank 92% on Jan. 16, 2018.

“Volatility trading bot” has got to be a new one. The SEC is not amused.

‘We allege that these defendants stole billions of dollars from retail investors around the world by exploiting their interest in digital assets,’ said Lara Shalov Mehraban, Associate Regional Director of SEC’s New York Regional Office. ‘We will aggressively pursue and hold accountable those who engage in misconduct in the digital asset space.’

Well, good luck to the defendants facing down…that. And kudos to the SEC for aggressively pursuing some executives this time.

SEC Charges Global Crypto Lending Platform and Top Executives in $2 Billion Fraud [U.S. Securities and Exchange Commission]

U.S. SEC sues BitConnect founder over alleged $2 billion cryptocurrency fraud [Reuters]

Unvaccinated people more likely to get the disease are also more likely to spread it.

As I write this, more than 5.02 billion doses of COVID-19 vaccine have been administered worldwide. In the United States, 364 million doses have been administered, enough to fully vaccinate 51.6 percent of the population (some of the vaccines, of course, require two doses). Although the pace of vaccination has slowed somewhat from highs earlier this year, the daily rate of doses administered in the U.S. is currently at 860,114 — not enough to go back to life as normal any time reasonably soon but not a paltry number either.

It is the biggest vaccination campaign in history (though smallpox vaccination efforts, the March of Dimes’ role in creating the polio vaccine, and a number of other historical vaccination drives have rich and robust histories themselves).

You don’t often get more certainty in life than 5.02 billion of your peers trying something first and having it all work out pretty well for them. Much like getting out of bed in the morning, COVID-19 vaccines are not fully without risk. But they have been found to be extremely safe in the BILLIONS of people they have been given to over the course of many months.

COVID-19, on the other hand, has already killed about one out of every 500 Americans in the last year-and-a-half. While a vaccine won’t necessarily prevent everyone from getting infected, it will typically reduce the severity of symptoms in those who have a breakthrough infection, and a vaccination makes the risk of dying from the disease almost negligible.

If you don’t want a COVID-19 vaccine, you are remarkably bad at risk assessment, and perhaps a career in the insurance industry is not for you. Other than a legitimate medical complication, there is no logical reason to refuse a COVID-19 vaccine.

But there are plenty of illogical ones, and it’s pretty easy to find them all over the internet, unfortunately. Maybe it’s the dumb fear that Bill Gates wants to waste time to microchip a secretary in Ohio, even though we’re all already carrying chip-laden smartphones around in our pockets every day and despite the fact that microchips cannot be injected through a tiny needle in liquid form. Maybe it’s just the supposedly principled stance that you don’t want to be forced to accept a medical intervention that will keep you from dying a horrible death while spreading your illness to others, even though the Supreme Court has stated that individual liberty is not absolute in upholding compulsory vaccination laws for over a century and even though George Washington himself ordered that his troops get inoculated against smallpox. Unless it came from their doctor, whatever someone’s reason for refusing a COVID-19 vaccine, it’s a bad one.

Humoring the conspiracy-minded about their COVID-19 vaccine fantasies might be fine if they were only hurting themselves by not getting the shot. But that is not how infectious disease works, and it’s pretty obvious that unvaccinated people more likely to get the disease are also more likely to spread it.

The human toll of needless deaths and hospitalizations is undoubtedly the worst part about vaccine hesitancy. But there are tremendous monetary costs as well, and those are being born by all of us, not just the unvaccinated. The Kaiser Family Foundation recently released an analysis which found that in June and July alone, more than 100,00 hospitalizations for COVID-19 could have been prevented had there been higher adult vaccination rates. These extra hospitalizations cost the U.S. health system at least $2.3 billion. Kaiser used very conservative figures for its analysis and said that the true cost is likely even higher.

Only “a small share of the cost” of that billion-plus dollars a month will be paid directly by the unvaccinated. All the rest of us are footing the bill for most of it, in the form of higher insurance premiums, more tax burdens, and prolonged pandemic-related economic stagnation.

I don’t know about you, but I’m ready to be done with pandemic restrictions, and I’m certainly ready to be done paying extra money so that conspiracy theorists can flout the rules of logic in the name of their supposed liberty. The rest of us enjoy liberty too, like, for instance, the liberty to not have to pay to hook you up to a ventilator because you caught what is now an easily preventable disease. If those who could get vaccinated would get vaccinated, we’d be done with this pandemic, at least in the United States. We’d be done paying for it too.

Jonathan Wolf is a civil litigator and author of Your Debt-Free JD (affiliate link). He has taught legal writing, written for a wide variety of publications, and made it both his business and his pleasure to be financially and scientifically literate. Any views he expresses are probably pure gold, but are nonetheless solely his own and should not be attributed to any organization with which he is affiliated. He wouldn’t want to share the credit anyway. He can be reached at jon_wolf@hotmail.com.

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And consider supporting automatic retirement account enrollment.

The pandemic has been very bad for a lot of people in terms of both bodily and financial health. Yet, a good number of other folks, and not just the billionaires and multimillionaires, have been doing quite well (perhaps not incidentally) while a number of outlets for blowing cash on useless nonsense have been shuttered.

Fidelity Investments, the largest provider of 401(k) plans in the U.S., recently released a report about the status of Americans’ investments accounts. At least for those actually saving for retirement, the numbers could hardly be better.

Average retirement account balances reached new records in the second quarter of 2021. The average 401(k) balance increased 24 percent from a year ago to $129,300. IRA balances fared even better, reaching $134,900 on average.

The amount retirement savers were contributing increased at well: The average contribution rate of 401(k) savers swelled to 9.3 percent. In general, younger savers were even more on board with the trend, with 54 percent of Generation Z workers who have retirement accounts increasing their retirement contributions over the last year, along with 43 percent of millennials. Only 7 percent of workers decreased their savings rates over the past 12 months.

The U.S. has also been minting retirement account millionaires in the wake of the pandemic. There are now 412,000 American workers with at least $1 million in their retirement accounts, an increase of 84 percent from a year ago. While this only represents about 2 percent of 401(k) plan participants, it is a new record, and one out of every 50 retirement savers reaching millionaire status is certainly nothing to sneeze at.

Unsurprisingly in a year when there have been repeated gangbusters stock market surges, 85 percent of the growth in account balances originated with stock market performance as opposed to individual savings behavior. Still, retirement plan participants get some credit beyond just riding market forces, with savings rates generally increasing across the board, and savings rates especially increasing amongst younger demographic groups.

Of course, no article about retirement accounts would be complete without at least noting that a lot of people don’t have them, or have them but aren’t robustly contributing to them. A quarter of American workers have less than $10,000 saved for retirement. 

One of the keys to increasing retirement savings appears to be automatic enrollment. When workers have to opt out rather than opt in to an employer-sponsored retirement account, 87 percent of them stick with the plan. On the other hand, when an employer-sponsored retirement plan is made available to workers but they actually have to proactively sign themselves up, only 52 percent enroll, proving that it’s not just economic hardship but also at least occasionally good old-fashioned stupidity and laziness that keep a lot of people from providing for themselves in old age. A number of states are now experimenting with automatically enrolling workers in IRA savings programs.

I’ve advocated growing wealth through passively managed index fund investments for some time now, and that appears to have been a particularly good retirement savings strategy during the pandemic. However your funds are managed though, increasing contributions during your working life can only stand to benefit you in retirement. Whether from lack of financial temptation in a partially shuttered economy, big savings on gas and vehicle maintenance costs while working remotely, salary increases, or a heightened sense of personal responsibility, something is causing a good number of Americans to contribute more to their retirement nest eggs. That is undoubtably paying off already, as evidenced by the new record number of retirement account millionaires.

And if you’re one of those Americans with little to nothing saved for retirement, well, you’re probably not reading a financial article about record-high retirement savings numbers. The rest of you though, keep up the good work. Also maybe consider supporting automatic retirement account enrollment policies to help out the less retirement attuned: You’re going to want company in doing expensive old people stuff when you retire.

Jonathan Wolf is a civil litigator and author of Your Debt-Free JD (affiliate link). He has taught legal writing, written for a wide variety of publications, and made it both his business and his pleasure to be financially and scientifically literate. Any views he expresses are probably pure gold, but are nonetheless solely his own and should not be attributed to any organization with which he is affiliated. He wouldn’t want to share the credit anyway. He can be reached at jon_wolf@hotmail.com.

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Many social media companies have yet to publish formal guidance on this issue and are choosing to arbitrarily censor CBD.

Companies selling hemp-derived products, including cannabidiol-infused products, have been faced with significant marketing challenges. For the past 18 months, the industry has been hit with a wave of suspensions, deletions, and warnings for advertising hemp-derived cannabidiol (CBD) products. Yet, depending on the platform, the reasons for such actions vary.

Facebook, for example, does not offer public terms and conditions or policies that expressly prohibit CBD advertisements on that platform. Instead, the company justifies its ban by stating on its website: “Ads must not promote the sale or use of illicit or recreational drugs, or other unsafe substances, products or supplements, as determined by Facebook’s in its sole discretion.” Interestingly, the list of problematic products and substances Facebook provides does not include CBD.

Other social media companies, such as Twitter, offer CBD-specific policies that are overly restrictive. In the U.S., Twitter permits “approved CBD topical advertisers” provided they meet the following requirements:

• Advertisers must be licensed by the appropriate authorities and pre-authorized by Twitter.
• Advertisers may only promote noningestible, legally derived CBD topical products.
• Advertisers may only target jurisdictions in which they are licensed to promote these products or services online.
• Advertisers may not target Georgia, Idaho, Iowa, Mississippi, Missouri, Nebraska, Oklahoma, South Dakota, or Virginia.
• Advertisers are responsible for complying with all laws and regulations.
• Advertisers may not target customers under the age of 21.

These are extremely restrictive and paternalistic regulations. Ironically, Twitter’s advertising policy places more constraints on CBD advertisers than many states do on CBD companies. These terms are so broad it is likely that most companies advertising CBD on Twitter are in clear violation of those requirements, and therefore, are at risk of seeing their accounts suspended or deleted.

This level of risk is hugely problematic, especially for small CBD companies. Any small business owner knows that getting social media followers takes time and money. With the risk of seeing an account shut down and losing all the good will associated with that account, social media advertising can be a serious gamble for CBD businesses. There is no clear right of appeal for these denials, and the idea of taking a social media giant to court (or forced arbitration) is just unfathomable for most CBD companies.

Regrettably, social media companies are not the only group creating marketing obstacles for the CBD industry. The Cellular Telecommunications and Internet Association (CTIA), a nonprofit that monitors SHAFT (Sex, Hate, Alcohol, Firearms, and Tobacco) content and reports violations to the FCC, recently added CBD to its list of illicit substances and prohibited content. CTIA deems that while a growing number of states have legalized medical or recreational cannabis, including CBD use, “Federal law still prohibits cannabis use”, and thus, companies “cannot send text messages with cannabis- or CBD-related content.” This means that carriers will suspect any short code that sends CBD-related content, despite the legal distinction between hemp-derived CBD, which is lawful, and marijuana-derived CBD, which remains a Schedule 1 controlled substance under the Federal Controlled Substances Act.

Notwithstanding the fact that the FDA has publicly acknowledged that there may be a regulatory pathway to marketing certain products containing hemp-derived CBD, such as cosmetics, many social media companies and organizations like CTIA have apparently taken it upon themselves to step into the shoes of regulators and ban all hemp-derived CBD products. To add insult to injury, many social media companies have yet to publish formal guidance on this issue and are choosing to arbitrarily censor CBD.

These overly restrictive and widely disparate regulations against hemp-derived CBD products reflect the confusing legal landscape of these products. As I have previously explained, the lack of federal regulations, combined with the patchwork of state-by-state regulations, has created a great deal of confusion regarding the legality of these products — but also contributed to the misinformation surrounding the legal status of hemp-derived CBD, resulting in more confusion in the consumers’ minds.

In response to these discriminatory marketing policies targeting CBD, a coalition of hemp-derived CBD brands, including Prima, a leading B-Corp, have organized a “Stop Censoring CBD #freeCBD” initiative to help bring awareness to this pervasive issue. The coalition’s main objectives are to encourage lawmakers to pass the Hemp Access and Consumer Safety Act (S. 1698), which proposes to establish legal and regulatory pathways for the sale of hemp-derived products; and to pressure the FDA to recognize the legal distinction between hemp-derived and marijuana-derived CBD and to develop a regulatory framework for the manufacture, sale, and marketing of those products.

This initiative shows, once again, that the industry is determined to legitimize its lawful commercial activities by advocating for federal standards and regulations that will provide consumers access to safer CBD products. For now, one thing is clear, social media companies and nonprofits like CTIA should step out of the shoes of the government and let CBD companies advertise products that are lawful or ban content of their choosing but provide clear and legitimate guidelines for such policies that align with existing CBD regulations.

Nathalie Bougenies chairs Harris Bricken‘s hemp CBD practice group and focuses her practice on health and wellness, in addition to corporate transactions and regulatory compliance. For the past three years, Nathalie has helped clients navigate the complex regulatory landscape of hemp products intended for human consumption and advises domestic and international clients on the sale, distribution, marketing, labeling, and importation of these products. Nathalie frequently speaks on these issues and has made national media appearances, including on NPR’s “Marketplace.” She also authors a weekly column for “Above the Law” that features content on cannabis policy and regulation and is a regular contributor to her firm’s “Canna Law Blog.” For three consecutive years, Nathalie has been named Rising Star by Super Lawyers.

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