Securities Industry Commentator by Bill Singer Esq

June 29, 2020

Telegram to Return $1.2 Billion to Investors and Pay $18.5 Million Penalty to Settle SEC Charges (SEC Release)
Supreme Court vacates 9Cir finding and remands based upon finding that the CFPB's independent, single-Director structure is unconstitutional, and the Director's five-year term and receipt of funds outside the appropriations process heighten the concern that the agency will "slip from the Executive's control, and thus from that of the people." READ FULL TEXT OPINION
As FoxBusiness's Manfredi reports in part, Chase posted this advisory on Sunday:

We know some customers reporting seeing incorrect balances in their checking account overnight. This was caused by a technical issue that delayed updates on what displayed on Chase Mobile & Chase Online. We resolved this issue as of 9AM ET and accounts now show current balances.
9:53 AM · Jun 28, 2020
As reported in part by Bloomberg, Chinese regulators are discussing:

plans to grant such licenses initially to some of the nation's biggest lenders, including Industrial & Commercial Bank of China Ltd. and China Construction Bank Corp., on a pilot basis, said people familiar with the deliberations who asked not to be identified since the matter is private. Policy makers are also mulling amending the commercial banking law to remove the legal hurdle that has prevented lenders from diversifying into securities and futures for decades, said the people.

The potential entry of Chinese banks, which have $43 trillion in assets, into deal making and trading would increase competition for global firms including Goldman Sachs Group Inc. and Morgan Stanley, which have been expanding their operations in China and can this year petition for full control of local securities firms. It will also pose a significant threat to local rivals such as brokerage Citic Securities Co., which saw its stock tumble on the news.

Chesapeake Energy, a pioneer in the U.S. shale revolution, files for bankruptcy protection (CNBC by Pippa Stevens and Brian Sullivan)
As reported by CNBC's Stevens and Sullivan, on Sunday, Chesapeake filed for Chapter 11 bankruptcy on Sunday:

Chesapeake said that $7 billion in debt will be wiped out through the restructuring. The company has secured $925 million in debtor-in-possession financing in order to continue operations during the bankruptcy process. In addition, Chesapeake has secured an agreement in principle from certain existing lenders for $2.5 billion in debt financing on emergence from bankruptcy, as well as a backstop commitment for $600 million in new equity.
In a Complaint filed in the United States District Court for the Southern District of New York ("SDNY"), the SEC alleged that Telegram Group Inc. raised capital via the sale of  2.9 billion Grams to 171 initial purchasers worldwide. SDNY issued a preliminary injunction barring the delivery of Grams and found that the SEC had shown a substantial likelihood of proving that Telegram's sales were part of a larger scheme to unlawfully distribute the Grams to the secondary public market. Without admitting or denying the allegations in the Complaint, Telegram Group Inc and its wholly owned subsidiary TON Issuer Inc. consented to entry of a final judgment enjoining them from violating the registration provisions of Sections 5(a) and 5(c) of the Securities Act; ordering them to disgorge $1,224,000 on a joint and several basis with credit for the amounts repaid to initial purchasers of Grams; ordering Telegram Group Inc. to pay a $18,500,000 civil penalty; and requiring Telegram for the next three years, to give notice to the SEC staff before participating in the issuance of any digital assets.
In an Indictment filed in the United States District Court for the Middle District of Florida, Phillip Roy Wasserman, 63, and Kenneth Murry Rossman, 62, were charged with conspiracy to commit wire fraud and mail fraud, wire fraud, and mail fraud. As alleged in part in the DOJ Release:

[W]asserman, a former lawyer and licensed insurance agent, and Rossman, a Florida certified public accountant and licensed insurance agent, made false and fraudulent misrepresentations and concealed material information in order to convince elderly victim-investors to put their money into Wasserman's new insurance venture, "FastLife." Some victims were persuaded to liquidate traditional investments, such as annuities, and/or to borrow funds against existing life insurance policies to generate cash to invest in the venture. These victims were not told about surrender fees and other costs associated with the liquidations and, Rossman prepared income tax returns for victim-investors in a manner designed to conceal negative personal tax consequences that resulted from the liquidations from both the victim-investors and the Internal Revenue Service. Wasserman paid Rossman a percentage of the victim-investors' money as compensation for his role in the conspiracy. Wasserman also used victim-investors' money to make payments to earlier victim-investors in the FastLife venture, as well to as victim-investors in his earlier hedge fund and real estate fund ventures. Wasserman spent a significant amount of the victim-investors' money to finance a lavish lifestyle that included luxury residences, high-end vehicles, jet skis, jewelry,  entertainment, gambling, retail shopping, home improvements, personal insurance, and many other expenses for his personal benefit and the benefit of family members.

Coronavirus rekindles global trade disputes (Reuters by Philip Blenkinsop)
As Reuters' Blenkinsop reports in part:

Countries across the world imposed 222 exports curbs on medical supplies and medicines and in some cases food, according to Global Trade Alert, a Swiss monitoring group. For medical products, it was more than 20 times the usual level.

Those curbs are now being lifted, but the pandemic has reinforced protectionist arguments by highlighting how global supply chains can deprive people of essential medical protection and disrupt food supplies, as well as threaten jobs.

Mapping America's Underwater Real Estate / What happens to home prices if flood maps start measuring climate change? Millions of Americans are about to find out. (Bloomberg by Leslie Kaufman, Mira Rojanasakul, Hayley Warren, Jason Kao, Brittany Harris and Prashant Gopal)
In this case, the Bloomberg headline sort of says it all. This is a very compelling article, which, in part warns that:

Recent academic papers have found banks are using flood information to "blue-line" neighborhoods, offering homeowners fewer or more expensive mortgage services due to more detailed understanding of risk. After big storms, research shows that banks sell off an increased percentage of mortgages in riskier areas to government-backed Fannie Mae and Freddie Mac. Banks are also increasingly asking for modified terms on mortgages in flood zones, such as demanding much more than 20% down at closing.
As CNBC's Ellyatt reports in part:

Diplomatic ties between Washington and Berlin have declined markedly in recent years and Germany's foreign minister has appeared to warn that relations between the two countries may never be the same again. 

In the biggest signal yet of how strained relations have become, Heiko Maas said this weekend that the alliance with the U.S. - which is important in terms of economics, defense and security - might not recover even if President Donald Trump's rival for the White House, Democrat Joe Biden, won the forthcoming election.

Bill Singer's Comment: With all due respect to my friends in Germany, are you serious?  You're warning us that our relationship may never be the same after Trump? Our relationship might not recover even if Biden wins? Wow . . . you all have a really flawed understanding of realpolitik, which, come to think of it, you folks coined that term. 
Not to make you uncomfortable or anything but when it comes to frayed ties and strained relations, what the hell did you think happened during and after World War I and World War II? As I recall, the concentration camps and the Blitzkrieg and the Battle of Britain prompted lousy diplomatic ties and strained relations with any number of countries and peoples. Have you forgotten about your former Fuhrer with the lousy haircut and the funny mustache? You don't think that relations improved with us after Konrad Adenauer was elected? To be as delicate here as I can, you sort of forfeited the right to lecture any country about diplomatic ties and strained relations. How about you just await the results of the November election? If the United States got over the Malmedy Massacre, you can get over Trump -- or, put another way, you owe us one for that. In the interim, while awaiting the results of the upcoming Trump and Biden election, maybe you could watch "Saving Private Ryan" or "Schindler's List."