Wall Street Firms Rise and Ride FAR To Fund Autism Research

wall street FAR autism research

Wall Street Firms and Broker-Dealers based across the NY tri-state area are preparing to get into gear in advance of the 2nd Annual Autism Science Foundation’s Wall Street Rides FAR Cycling Event for Autism Research. On Saturday, October 8, over 150 representatives from the Wall Street community will gather to cycle in support of innovative, life-changing autism research.

Per coverage courtesy of TradersMag John D’Antona, The Autism Science Foundation is a 501(c)(3) nonprofit organization that provides funding directly to scientists conducting cutting-edge autism research to discover the causes of autism and develop better treatments. The ride, which takes place at Saxon Woods County Park in White Plains, New York, gives participants a choice of four scenic routes through the beautiful fall foliage of the Lower Hudson Valley: 4 miles, 20 miles, 30 miles, and 62 miles.

Bryan Harkins

Bryan Harkins, Bats Global Markets

The event is being spearheaded by Bats Global Markets EVP Bryan Harkins, who, along with Alison Singer, president of the Autism Science Foundation are co-founders of Wall Street Rides FAR Cycling Event for Autism Research.

“I have seen the affects that autism can have on families,” Harkins told Traders Magazine. “Families affected by autism tend to shift the entire focus of their lives to providing a better quality of life for their loved one.”

This event, he added, is an extension of that inspiration.

“It’s our community’s responsibility to support those who need it,” Harkins said. “The vision for this event was to bring together my network of contacts (most of whom have shown amazing generosity) at a unique family friendly networking event all to benefit the Autism Science Foundation.  There’s no event like it really. We have family friendly shorter routers for the casual and beginner biker, and we have more advanced longer distance routes for the more avid cyclist.  It doesn’t matter what your level is.  It’s about coming out to have some fun, building a sense of community, growing awareness all to benefit a wonderful organization, the Autism Science Foundation.”

To donate or register go to, please go to www.wallstreetridesfar.org

And there I still time to ride, volunteer or cheer on the participants.

Harkins added that ASF is committed to the science of autism.

“The foundation’s mission is to provide grants to the country’s top scientists as they dedicate their research looking for the causes of autism, but also for better treatment methods to enhance the quality of life for those on the spectrum,” Harkins said.

Finra Fines Remoresless BrokerDealer

finra fines brokerdealer

Finra Fines Remorseless BrokerDealer; CEO has no remorse for fraudulent conduct..

Is BrokerDealer Fraud on the Rise?

(FTF News)-A Financial Industry Regulatory Authority (FINRA) hearing panel has fined New York-based brokerdealer Avenir Financial Group $229,000 for “misconduct including the fraudulent sales of equity interests in the firm and promissory notes,” and suspended it for two years from engaging in any self-offerings.

In addition, the FINRA panel has barred former CEO and Chief Compliance Officer Michael Todd Clements from the securities industry for fraud, and “suspended registered representative Karim Ahmed Ibrahim (aka Chris Allen) for two years for fraud, and ordered Ibrahim to disgorge his $25,000 commission.”

In its original cease-and-desist order, issued in April 2015, FINRA characterized the firm’s fraudulent sales as “often to elderly customers of the firm,” specifying that during its three years as a FINRA member, “Avenir and its branch offices have raised over $730,000 in 16 issuances of equity or promissory notes. Most of these sales of equity and promissory notes were to elderly customers of the firm.”

The more recent FINRA report offers the following examples of defrauded clients:

  • “In one instance, a 92-year-old customer was told his $250,000 investment would be used to grow the firm and fund its day-to-day operations, and that one day his investment would be returned ‘in a very large amount.’ Beyond the purchase agreement, Ibrahim did not provide the customer with any written materials, including any written information about the firm. Ibrahim admitted in testimony prior to the hearing that he was aware that Avenir faced a dire regulatory capital situation, yet he did not disclose this material fact to the customer.”
  • Cesar Rodriguez, a now-barred registered representative who was under Clements’ direct supervision, “sold a 2 percent equity interest in Avenir for $100,000 to a customer who had recently lost his daughter in a car accident, and was investing the life insurance proceeds to provide for his six-year-old grandchild’s future. Rodriguez and Clements assured the customer that Avenir was a growth company that was doing ‘exceptionally well’ and was ‘growing exponentially.’ ” Meanwhile, according to FINRA, “Clements did not provide the customer with any written documents except for the purchase agreement, and neglected to provide any information about the firm’s financial condition, including that Avenir had recently been prohibited for several weeks from conducting a securities business due to insufficient capital. Rodriguez later also sold him equity and promissory notes in the branch office holding company.”

FINRA noted also that “Avenir and Clements failed to accept responsibility for their misconduct and that Ibrahim failed to express remorse, all of which were aggravating factors considered when assessing sanctions.”

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IPO Watch

ipo watch brokerdealer

IPO Watch update courtesy of Renaissance Capital

Nutanix (NTNX): On file since December 2015, Nutanix plans to raise $168 million at a $2 billion market cap in its long-awaited IPO. Nutanix is a leader in the rapidly-growing market for “hyperconverged” networking, and it will be the year’s second VC-backed tech “unicorn” after Twilio (TWLO; +327%). Few IPOs can claim over $200 million in billings in the most recent quarter with 118% growth, though its accumulated deficit of $442 million is just as rare. Recently, IPO investors have been favorable toward high-loss, high-growth stories, and Nutanix has already posted three consecutive quarters of positive cash flow from operations.

MedEquities Realty Trust (MRT): The week’s largest IPO, MedEquities plans to raise $259 million at a market cap of nearly $400 million. While the REIT is concentrated both by geography (TX and CA are 86% of rent) and customers (top 5 are 97%), it boasts an experienced management team, a portfolio of long-term triple-net leases and a 6.5% annualized yield. Close peer Community Healthcare Trust (CHCT; 2015 IPO) is up 25% this year, while Global Medical REIT (GMRE) has traded up 4% from its June 2016 IPO.

Fulgent Genetics (FLGT): This small but fast-growing genetic test company is set to raise $60 million at a market cap of $235 million. Differentiated with its ability to more than 18,000 gene tests, Fulgent grew sales by 82% in the 2Q, reaching almost $4 million with a 24% operating margin. The seven diagnostics IPOs since 2015 average a return of -37%, though Fulgent’s closest peers have outperformed in recent months.

Tabula Rasa HealthCare (TRHC): Hoping to raise $60 million at a market cap of $251 million, Tabula Rasa helps long-term care facilities avoid adverse drug events from mismanaged prescriptions. The company grew 32% in the first half of 2016, giving it trailing annual sales of $80 million with an adjusted EBITDA margin of 13%.

Full Spectrum (FMAX): This micro-cap company, which sells products for private cellular networks, pushed back its $15 million IPO to the week ahead. AzurRx BioPharma (AZRX), a biotech that originally set terms in August, still hopes to raise $12 million

Medical device company Obalon Therapeutics sets terms for $75 million IPO

9/26/16 Obalon Therapeutics, which is developing an intragastric medical device to assist with weight loss, announced terms for its IPO on Monday.

The Carlsbad, CA-based company plans to raise $75 million by offering 5 million shares at a price range of $14 to $16. Insiders intend to purchase $20 million worth of shares in the offering. At the midpoint of the proposed range, Obalon Therapeutics would command a fully diluted market value of $267 million.

Obalon Therapeutics was founded in 2008 and booked $4 million in sales for the 12 months ended June 30, 2016. It plans to list on the Nasdaq under the symbol OBLN. UBS Investment Bank, Canaccord Genuity and Stifel are the joint bookrunners on the deal. It is expected to price during the week of October 3, 2016.


The Profit IPO: Camping World sets terms for $250 million IPO

9/26/16 Camping World Holdings, the largest RV retailer in the US offering new and used vehicles, parts, services and financing, announced terms for its IPO on Monday.

The Lincolnshire, IL-based company plans to raise $250 million by offering 11.4 million shares at a price range of $21 to $23. At the midpoint of the proposed range, Camping World Holdings would command a market value of $1.8 billion.CEO Marcus Lemonis stars in CNBC’s reality show The Profit.

Camping World Holdings was founded in 1966 and booked $3.5 billion in sales for the 12 months ended June 30, 2016. It plans to list on the n/a under the symbol CWH. Goldman Sachs, J.P. Morgan, BofA Merrill Lynch and Credit Suisse are the joint bookrunners on the deal. It is expected to price during the week of October 3, 2016.

Keywords / Tickers: CWH


Advanced Disposal, a waste removal company, sets terms for $375 million IPO

9/26/16 Advanced Disposal Services, a vertically integrated provider of solid waste collection, recycling and disposal services, announced terms for its IPO on Monday.

The Ponte Vedra, FL-based company plans to raise $375 million by offering 19.3 million shares at a price range of $18 to $21. At the midpoint of the proposed range, Advanced Disposal Services would command a fully diluted market value of $1.6 billion. Advanced Disposal had previously attempted to go public in February 2016 but ultimately postponed the deal. Advanced Disposal Services was founded in 2000 and booked $1.4 billion in sales for the 12 months ended June 30, 2016. It plans to list on the NYSE under the symbol ADSW. Deutsche Bank, Credit Suisse, Barclays, UBS Investment Bank, BofA Merrill Lynch, Macquarie Capital, Morgan Stanley and Stifel are the joint bookrunners on the deal. It is expected to price during the week of October 3, 2016.


Magnetic memory: Everspin Technologies, a memory chip provider, sets terms for $45 million IPO

9/26/16 Everspin Technologies, a provider of magnetic-based random access memory, announced terms for its IPO on Monday.

The Chandler, AZ-based company plans to raise $45 million by offering 3.8 million shares at a price range of $11 to $13. At the midpoint of the proposed range, Everspin Technologies would command a fully diluted market value of $133 million.

Everspin Technologies was founded in 2008 and booked $27 million in sales for the 12 months ended June 30, 2016. It plans to list on the Nasdaq under the symbol MRAM. Stifel and Needham & Co. are the joint bookrunners on the deal. It is expected to price during the week of October 3, 2016.

IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is up 2% year-to-date, while the S&P 500 is up 6%. Renaissance Capital’s IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Alibaba (BABA), Synchrony Financial (SYF) and Citizens Financial Group (CFG). The Renaissance International IPO Index is flat year-to-date, compared to +5% for ACWX. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include NN Group and Aena S.A. To find out if this is the best ETF for you, visit our IPO Investing page.

Keywords / Tickers: NTNX, MRT, FLGT, TRHC, FMAX
Attribution Policy: The information contained herein is proprietary and copyrighted. The media is welcome to use our information and ideas, provided that the following sourcing is included: Renaissance Capital – manager of IPO-focused ETFs.

Investment Disclosure: The information and opinions expressed herein were prepared by Renaissance Capital’s research analysts and do not constitute an offer to buy or sell any security. Renaissance Capital, the Renaissance IPO ETF (symbol: IPO), the Renaissance International IPO ETF (symbol: IPOS), or the Global IPO Fund (symbol: IPOSX), may have investments in securities of companies mentioned.

FINRA Election Mirrors Presidential Race?

Bob Much FINRA Board Member

Ex-Bear Stearns Partner Pledges To Make FINRA Great Again

FINRA, aka Financial Industry Regulatory Authority, the SRO that serves as overseer of the securities brokerage industry and broker-dealers at large has completed the election campaign and voting process for electing individuals to its Board and the election winners include a former Bear Stearns partner as well as a current senior exec of hedge fund complex Bridgewater Associates.

Per WSJ-The chief executive officer of a San Francisco investment bank prevailed in a hard-fought election to join the board of Finra, the front-line regulator of stockbrokers, knocking off an incumbent and a well-known challenger who campaigned on the message that rigid oversight is choking small firms.

Bob Muh, the CEO of Sutter Securities Inc. and a former Bear Stearns partner, narrowly defeated three other candidates to win a seat on the board of the Financial Industry Regulatory Authority. He beat the second-place candidate, Stephen Kohn of Lakewood, Colo., by just three votes, according to people familiar with the matter. Robert Keenan, a sitting board member who also upset an incumbent when he won his last election in 2013, placed third. Mark Howells, a broker based in Scottsdale, Ariz., also competed in the race.

Finra, one of the country’s most powerful financial regulators, allows the industry it oversees to elect some of its officers. While Finra isn’t a government agency and ultimately answers to the Securities and Exchange Commission, Congress has sanctioned its role as a standard-setter and rule-enforcer for the brokerage industry.

Finra’s bylaws require that a majority of its 24-member governing board have no industry ties. But Finra reserves three board seats to represent its 3,550 small-firm members. That board structure has fostered the unusual dynamic of candidates campaigning for office at the overseer by vowing to lighten its oversight.

Turnout in the election was about 43%, meaning about 1,500 of Finra’s small-firm members voted, people familiar with the matter said. (For the full WSJ article, click here)

A more colorful take on the above is courtesy of DealBreaker’s Jon Shazar:

t may surprise you (but probably shouldn’t) to learn that there are some people who think FINRA’s doing too good and too thorough a job regulating broker-dealers. That it’s really nobody’s business if a broker levies an unspoken lap dance fee. That its website is actually too up-to-date and too easy for clients to use to find out about the levying of unspoken lap dance fees. That the problem isn’t FINRA’s habit of whitewashing what broker records are available, but that there are just too many disciplinary actions being taken that require whitewashing. These people are called FINRA members, specifically its 3,550 small-firm members. And because self-regulation is a hilarious carnival of ineptitude and bad optics, these small firms get to elect a representative to FINRA’s board, to represent their interest in going unregulated to the greatest extent possible.

These triennial contests have all the hallmarks of a real political campaign: websites, mudslinging, throw-the-bums-out mentalities. Unsurprisingly, they also look an awful lot like a local Tea Party meeting, with candidate trying to one-up the other in making deregulatory promises they’ll never be able to keep in the face of the 23 other FINRA board members who don’t think it’s a great idea to provocatively antagonize customers, the press and the Securities and Exchange Commission at every turn.

This year, the bum getting thrown out was Robert Keenan, elected three years ago on the platform that the previous bum wasn’t doing enough to get these regulatory pencil pushers off their goddamned backs, and who was felled by the same sword. But the winner—who will get to serve alongside fellow new FINRA director and Bridgewater exec Eileen Murray—wasn’t the most fire-breathing of the candidate. Instead, by a margin of all of three votes out of 1,500 cast, the small folks of FINRA picked a 78-year-old former Bear Stearns, Bob Muh, partner to carry the doomed torch.

Mr. Muh, 78 years old, was seen as a moderate and experienced voice in a campaign in which Mr. Kohn accused Mr. Keenan of playing fast and loose with campaign rules and not pushing back hard enough against regulations that brokers oppose….

“I certainly can’t call it a landslide or a mandate, but I’m delighted I’ll have the chance to convince the independent directors on the board of some the changes that are need for the small firms,” Mr. Muh said in an interview Monday after Finra announced the results.


SEC Chair White Last Major Speech to BDs: Market Structure

mary jo white-sec-chair-brokerdealer

SEC Preparing to Finalize Transparency Rules for “Polluted” Dark Pools, Mary Jo White Says

Agency could alter 2015 proposal, which sought to pull back the curtain on opaque trading venues

In what might be her last major speech to members of the broker-dealer community as the Obama administration winds down and gets ready for the closing bell, SEC Chair Mary Joe White addressed a Washington DC gathering of the Securities Traders Association this week and talked about BDs favorite topic: equities market structure.  After taking a few accolades for approving Finra-recommended regulations that require software developers of algorithmic trading tools to be registered and licensed just as securities traders, Ms White  summarized her accomplishments  and forward looking perspectives regarding SEC efforts to address inequities in the equities market structure.

Courtesy of Mondo Visione, below are the opening extracts from Ms. White’s speech:

Thank you, Jim [Toes], for that kind introduction.  I am honored to join you again for your annual market structure conference.

The American equity markets are the strongest in the world, and one of the Commission’s most important responsibilities is to work every day to maintain their fairness, orderliness, and efficiency.  Optimizing market structure is a continuous process, one that requires the Commission to act with both care and intensity, strictly guided by what is best for investors and capital formation for public companies.

I emphasized this guiding principle when I last joined you in 2013,[1] and in 2014 when I laid out a program for enhancing equity market structure.[2]  Fulfilling our responsibility to investors and issuers, of course, demands that the Commission act quickly to address issues that are demonstrably undermining the interests of investors and issuers.  But it also requires the Commission to carefully consider changes to market structure where the impact on those interests is far less clear and the data to support competing perspectives is lacking or conflicting.

Where improvements to equity market structure are clearly called for, the Commission has acted.  The operational integrity of our markets – my top priority – has been significantly enhanced by a number of measures.  The staff is gathering and analyzing more market data than ever before to inform policymaking, and the consolidated audit trail is becoming reality.  And we have detailed proposals out for comment that will give investors more transparency into how the off-exchange markets operate and broker-dealers handle their orders.

At the same time, the Commission has undertaken a deliberate, data-driven process to assess – and, as appropriate, begun to implement – more fundamental changes to equity market structure.  This process requires great care.  The American equity markets today continue to serve well the interests of retail and institutional investors, delivering better executions at lower costs than ever before.  Broad changes to this market structure – especially those executed precipitously or without adequate data – can have serious unintended consequences for investors and issuers as their impact is fully realized, sometimes years down the road.

This two-pronged approach recognizes that market structure can never be perfect and, correspondingly, that the Commission’s work is never – and should never – be done.[3]  Market structure is continually evolving as technology and competition spur innovation.  That fluidity means that the Commission’s review must be both comprehensive and nimble, constantly testing existing assumptions, regulations, and market practices, while remaining poised to act quickly on issues that immediate attention can address.

Today, I want to report on some of our progress on both our targeted enhancements to tackle such issues, and our consideration of more fundamental market structure questions.  While the Commission has been active in a number of areas, I will focus today on operational integrity, market transparency, and algorithmic trading.

In assessing these areas and others, we have been fortunate to have the assistance of our relatively new Equity Market Structure Advisory Committee, or EMSAC.  Especially in addressing some of the more complex issues in market structure today, the EMSAC, which brings deep expertise and a wide range of perspectives, provides a public forum for valuable and timely discussions, both within the Committee itself and as a result of its efforts to reach out to a wide range of others with expertise on key issues.

Strengthening Operational Integrity and Market Stability

Let me begin where I always do, with operational integrity and market stability.  Since I arrived at the Commission, enhancing the reliability and resilience of our markets has been my top priority.  Weaknesses or disruptions in operations can destabilize markets and, in some cases, lead to extreme price volatility and the loss of investor confidence.  The Commission’s work here continues – we can never be complacent – but I am very pleased with the steps we have taken to strengthen the market systems on which investors depend every day.

Regulation SCI

Central to this effort has been Regulation SCI, which the Commission adopted at the end of 2014.[4]  While no measure can eliminate technology disruptions altogether, Regulation SCI is designed to reduce the occurrence of systems issues and to improve resilience and communication when systems problems do occur.  It imposes requirements on key market participants – the exchanges, high‑volume alternative trading systems (ATSs), clearing agencies, the securities information processors (SIPs), the Financial Industry Regulatory Authority (FINRA), and the Municipal Securities Rulemaking Board (MSRB).

These “SCI entities” were required to start complying with most of the requirements of Regulation SCI last November.[5]  In the first instance, this means maintaining comprehensive policies and procedures to ensure the capacity, integrity, resiliency, availability, and security of key automated systems.  It also means: taking appropriate corrective action when systems issues happen; reporting systems problems and changes directly to the Commission and market participants; and conducting periodic reviews and testing of automated systems.

Approaching the first full year of the regulation’s operation, our examiners have been reviewing compliance with Regulation SCI.  It is apparent from these examinations that many market participants have devoted significant resources to compliance, and there has been good progress in implementation.  But a few areas for additional attention have emerged.  For example, it is clear that processes for patching and updating systems deserve close attention – human errors in these routine tasks can create much more significant issues.  Another example is diversifying primary and backup systems – in seeking to fulfill their recovery obligations under Regulation SCI, market participants should focus on not just the geographic locations of those systems, but also consider their reliance on different electrical, telecommunications, and other infrastructure support.  Our staff is continuing to work with market participants in these areas and others to help ensure that the goals of Regulation SCI are achieved.

Improvements to Critical Market Infrastructure

Regulation SCI has been complemented by a number of initiatives by the exchanges and FINRA to enhance the operational integrity of critical market infrastructure like the SIPs and the open/close process.  At my direction, following the Nasdaq SIP outage in 2013 and NYSE’s trading outage in 2015, SEC staff worked with the exchanges and FINRA to correct the defects that caused these incidents, as well as to identify and address other potential single points of failure.  These cooperative efforts were expanded after the unusual volatility of August 24, 2015, and there has been significant progress.

  • First, the resilience of the SIPs is considerably improved.  There are now enhanced disaster recovery sites and systems to establish a “hot/warm” backup process, which provides for a failover from the primary site to the backup site in ten minutes or less.[6]
  • Second, as of June, the equity listing exchanges now have mutual backup arrangements for their closing auctions, which will address situations when a disruption might prevent the execution of a closing auction on the primary listing exchange.[7]
  • And third, the process for opening auctions, especially in volatile markets, has been and continues to be improved.[8] 

Enhancements to Volatility Moderators

Amidst these and other improvements,[9] reminders persist about the continued importance of the volatility moderators implemented after the “Flash Crash,” especially the “limit-up/limit-down” plan designed to reduce extraordinary volatility in individual securities.  The exchanges and FINRA have already implemented basic enhancements to limit-up/limit-down in the wake of the events of August 24, 2015,[10] and I have asked them to address additional issues that emerged during that event. 

Further Strengthening Market Operations

One such issue is the application of the mechanism to exchange-traded products (ETPs), where we have a broader program underway to help ensure that these increasingly popular products operate robustly in a variety of market conditions.  We saw during the Flash Crash and on August 24 that ETPs can be disproportionately affected when markets become disorderly.  Orderly trading in an ETP requires a smoothly functioning market for the ETP’s holdings so that market makers and authorized participants can reliably value the ETP’s portfolio.  If the underlying market becomes disorderly, or if market makers and authorized participants step away from trading, the arbitrage mechanism can be disrupted and an ETP can trade at prices substantially away from its implied value.

Commission staff, as well as the exchanges and FINRA, are assessing the special characteristics of ETP trading in determining whether particular changes should be made to the limit-up/limit-down mechanism to reflect the sensitivity of ETPs to disorderly market activity.[11]  In addition, I have directed the staff’s ETP Working Group to identify and analyze a broad range of issues relating to the structure, trading, and use of ETPs.  The Working Group is considering, among other things: what portfolio characteristics and market structures support effective arbitrage; the roles and practices of market makers and authorized participants; and the effects of the ongoing exchange pilot programs to incentivize trading in less‑liquid ETPs.

If you haven’t already fallen asleep and would like to read the entire transcript, please click here