Our FinTech roundup also covers the sale of Wells Fargo Asset Management, and people moves at BNP Paribas Asset Management, Marex Spectron, and Macrobond Financial.
Robinhood’s Role in the Gamestop Frenzy Under Scrutiny
Sen Elizabeth Warren
Wall Street critic and U.S. Senator Elizabeth Warren (D-Mass.) has called on self-regulatory organization FINRA to “respond to Robinhood’s role in recent market volatility, its decision to cut off customers’ trading, and the broader concerns about market fairness that these events represent.”
Warren is referring to discount brokerage Robinhood Markets, whose trading app and platform are at the heart of the Gamestop short-selling controversy because at the peak of the frenzy Robinhood halted trading in that stock by its clients. The firm’s customers have filed lawsuits, and the firm itself has gotten the attention of politicians such as Warren.
Warren, who is a member of the Senate Banking, Housing, and Urban Affairs Committee and the Senate Finance Committee, wants FINRA to investigate Robinhood to see if its “practices were in compliance with existing laws and regulations governing broker-dealers.”
The senator also wants FINRA to look into “misaligned incentives in the brokerage industry” such as firms paying for order flow, “and any gaps in market laws, regulations, and enforcement.”
Also, in the letter, Warren says that she wants to know “whether Robinhood improved its systems and compliance in response to the many complaints filed by regulators and lawmakers, and whether continued violations of market rules may have contributed to the company’s role in recent market swings.”
Warren also wants financial services watchdogs “to identify where there may be gaps in the current laws, rules, and guidance used to oversee market participants … [and] where regulators lack sufficient enforcement personnel, training, or resources.”
In her letter, Warren asked FINRA officials to provide a response no later than February 22, 2021. The senator also notified the SEC of her actions.
FTF News reached out to FINRA for an update. “Yes, we’ve responded to the Senator, but as the information was requested by and sent to her, you would have to contact the Senator’s office for it,” FINRA spokesperson says.
When contacted for comment, a spokesperson for Warren responded: “We will keep you posted when updates are available.”
FTF News also reached out to Robinhood for an update and a response to Warren’s letter. There was no response by deadline.
Vlad Tenev
However, Vlad Tenev, CEO and co-founder of Robinhood, in a blog posting dated Feb. 18, attempted to clarify the situation after appearing before Congress.
“There are two points I want to make clear about the temporary restrictions,” Tenev says. “First, Robinhood Securities put the restrictions in place in an effort to meet increased regulatory deposit requirements, not to help hedge funds. We don’t answer to hedge funds. We serve the millions of small investors who use our platform every day to invest,” he adds.
“Second, Robinhood immediately secured additional funds. Altogether, through capital raising and other measures, we have increased our liquidity by more than $3 billion to cushion ourselves against increased collateral requirements and related market stress,” Tenev says. “Despite the unprecedented market conditions in January, at the end of the day, what happened is unacceptable to us. To our customers, I apologize, and please know we are doing everything we can to make sure this won’t happen again.”
BNP Paribas Asset Management Names Deputy CEO
Sandro Pierri
BNP Paribas Asset Management reports the appointment of Sandro Pierri as deputy chief executive officer (CEO). The appointment went into effect on the first day of 2021.
Pierri adds this new appointment to his current position as head of BNP Paribas Asset Management’s global client group. He has headed the client group since 2017.
Pierri is based in London and reports to Frédéric Janbon, CEO of BNPP AM.
Pierri began his career in 1989 as a portfolio manager with San Paolo Fondi, moving to BNL Gestioni in 1992, before joining ING Investment Management in Italy in 1994, where he held several commercial roles, according to the statement.
“Between 2002 and 2003 he was Chief Executive of ING Group’s Italian retail business. Following the acquisition by UniCredit/Pioneer of ING’s Italian business, he joined Pioneer Investments, UniCredit’s asset management division, in 2004. He spent 10 years in various commercial and managerial positions, including being appointed CEO in 2012,” BNPP AM officials say.
Wells Fargo Asset Management Sold for $2.1 Billion
Wells Fargo & Co. announced Feb. 23 that it is selling Wells Fargo Asset Management (WFAM) to private equity firms GTCR LLC and Reverence Capital Partners L.P. for $2.1 billion.
Under the WFAM umbrella are Wells Fargo Funds Management, LLC, which serves as an investment advisor to funds; and Wells Capital Management Inc., and Wells Fargo Asset Management (International) Ltd., which are both registered investment advisors providing sub-advisory services to certain funds, officials say.
The closed-end funds that are part of the transaction are: the Wells Fargo Global Dividend Opportunity Fund; the Wells Fargo Income Opportunities Fund; the Wells Fargo Multi-Sector Income Fund; and the Wells Fargo Utilities and High Income Fund.
“As part of the transaction, Wells Fargo will own a 9.9 percent equity interest and will continue to serve as an important client and distribution partner,” officials say. “The transaction is expected to close in the second half of 2021, subject to customary closing conditions.”
Private equity firm GTCR focuses on the healthcare, financial services and technology, technology, media and telecommunications, and growth business services industries, officials say. GTCR has invested approximately $20 billion in more than 250 companies.
Reverence Capital Partners is a private investment firm investing in depositories and finance companies, the asset and wealth management sector, insurance, capital markets and financial technology/payments, officials say.
Marex Spectron Expands Franchise in North America
London-based commodities brokerage Marex Spectron reports the addition of a new energy-futures trading and clearing unit to its Marex North America operation.
The unit, which consists of seven exchange-traded energy market professionals and is headed by industry-veteran Martin Timmins, joined Marex from ED&F Man Capital Markets.
Timmins, the unit’s head, reports to Ram Vittal, CEO, Marex North America.
Other members of the new energy futures unit are Lauren Kane, Matthew Ventura, Christopher Timmins, Joseph Mancino, Joseph Posillico and Robert Hadley.
The ED&F Man acquisition follows the 2019 acquisition of the customer business of Rosenthal Collins Group, the addition of several execution and brokerage teams, and the November 2020 acquisition of X-Change Financial Access, an exchange-traded derivatives execution broker, according to Marex Spectron’s statement. The ED&F Man unit is based in New York.
In November 2020, Marex Spectron acquired X-Change Financial Access (XFA), an exchange-traded derivatives (ETD) execution broker, based in Chicago.
Macrobond Financial Names Chief Commercial Officer
Howard Rees
Macrobond Financial, a provider of economic and financial data, reports the appointment of Howard Rees as chief commercial officer (CCO). The appointment is effective immediately.
Rees will oversee “all global sales, customer activities; and strategic partnerships from the company’s London office,” according to Macrobond’s statement.
Macrobond characterizes itself as a “comprehensive source of economic intelligence for finance professionals, delivering instant access to clean macroeconomic and top-down financial time-series data from more than 2,000 sources from across 200 countries, combined with integrated analytics.”
Macrobond reports 500-plus current customers.
Rees most recently was head of international sales at Burgiss, “where he led the US private-equity data and analytics provider’s expansion across key markets,” according to Macrobond’s statement.
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