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Money Stuff: The Board Can’t Fire You If It Quits

by
Matt Levine
Money Stuff
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Ozy

  • Days after Ozy, a digital media company, said that it was ceasing operations amid growing concerns over the company's business practices, it said it wasn't going to shut down after all.
  • Ozy also halted legal investigations of its company's business activities because the board members who commissioned the law firm have left the company.
    • In a startup, the CEO is the largest shareholder and the public face of the company, so the board mostly serves to advise the CEO rather than make decisions.
    • In Ozy's case, the board realized they couldn't do anything, skipped past crisis management, and fled the company.

Crypto taxes

  • The wealth management industry is starting to make the case that crypto should have a place in investment portfolios and even retirement accounts.
    • Their idea is that crypto is a random-number generator: it goes down a lot, so you will have a big tax loss, but when it goes up a lot again the next day, you won’t have a _real _loss.

Anti-ESG

  • Wall Street's 3 biggest municipal-bond underwriters have seen business come to a halt in Texas after the state blocked governments from working with banks that have curtailed gun-industry ties.
    • Not only has TX not taken steps to limit oil and gas drilling, but it has also taken steps to make it illegal not to support oil and gas drilling.

PFOF

  • Kenneth Griffin, the founder of Citadel Securities, said he would be okay if PFOF was banned.
    • This doesn't make much sense because CItadel has a lucrative business of market-making for retail orders, which benefits from PFOF, so it would be really bad for Citadel if the SEC banned PFOF.
    • What Griffin probably meant was that he would be okay if PFOF was banned, so long as internalization is not.

Fake Trades

  • Keith Wakefield, a bond trader for broker-dealer IFS Securities, allegedly wanted to do rogue proprietary trades (specifically, selling Treasury Bonds short). To do this, he had to pretend to sell bonds for IFS's account and simultaneously pretend to buy them from a client's account.
    • IFS terminated Wakefield and eventually went bankrupt due to over $24 million of losses on Wakefield's trades.

Don't put it in email

  • Older members of the mafia say that the millennials—who grew up in the suburbs instead of city streets—are softer, dumber, and not as loyal as mobsters of the past.
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