Navesink International - July 2021
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And the largest FINRA penalty ever goes to... drum roll please... Robinhood!
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FINRA slapped its largest penalty eve, $70m, to Robinhood for numerous and shocking failings.
That fine will raise the firm's IPO price.
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The 2-and-20 model is broken. Hedge funds are great.
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The 2-and-20 are decried as enormous and one-sided fees. Investors are angry at the poor net performances. The press is pointing at large redemptions in a failing industry.
In other news, the weather is beautiful in hedge fund land.
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Defund the IRS? Done
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The Biden administration is planning a significant IRS budget increase so that the agency can effectively collect what it is owed. The investment will pay for itself multiple times. The "Tax Gap" now stands at an enormous $1 trillion per year. "Defund the IRS" has been the policy of the decade.
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Renaissance underperformance and redemptions - not for everyone
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Medallion is Renaissance’s flagship fund. It was up 75% in 2020. Unfortunately, it manages only the employees’ money.
All the other investors were down ~30% during the same period. Not as great.
Redemptions ensued. $11 bn of redemptions now.
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Should Central Banks issue digital currencies?
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Central Bank Digital Currencies are very different from cryptocurrencies. Cryptos will be used by unsavory countries. CBDCs will be used by democracies and bad actors alike.
Here are examples of both types, as well as the challenges the Federal Reserve faces in creating a digital dollar.
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The first NFT class action is out
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The Rosen Law Firm has filed the first NFT class action, which accuses Dapper Labs and the NBA of selling $500m of unregistered securities to US investors, as per the Howey test. The firm is also slow to pay back investors who sell their NFTs.
The case will be followed closely by the new digital litigation industry.
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The state of crypto hedge funds
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PwC released its annual Crypto Hedge Fund report; it contains many interesting statistics - fees, size, investor source, strategies, liquidity, performance...
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The end of corporate tax shenanigans? The global minimum tax
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Corporate taxes have been decreasing for the last decades, the result of tax competition between countries, tax havens, as well as corporate tax shenanigans. The finance ministers of the G-7 have now agreed to a global minimum rate of 15%. This is big news, with important consequences.
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Cum/Ex: the first jail sentence is frightening German finance
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The first jail sentence has been pronounced in the Cum/Ex tax fraud. The fine is a death knell for one of Germany's oldest private banks. The judgment is causing frights in board rooms and trading floors.
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Navesink International
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Navesink International offers expert witness services related to financial markets. We provide legal consulting, written expert reports, depositions and testimonies for lawsuits and arbitrations.
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