After Hours Summary: Quiet after hours session; SCHL -14.2%, OXM -6.7% lower on earnings; CURV +14.8%, HRTX +12.3% higher on earningsAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: CURV +14.8%, HRTX +12.3%, ADMA +6.1%, HROW +5.5%, MO +0.4% (reaffirms FY23 EPS guidance)
Companies trading higher in after hours in reaction to news: XAIR +2.5% (names new CMO), DHT +2% (files mixed shelf securities offering), HA +1.6% (reaches deal with Gevo to purchase 50 mln gallons of sustainable aviation fuel), SWX +1.4% (Carl Icahn increases stake), UBS +1% (UBS and CS among banks facing DOJ Russia-sanctions probe, according to Bloomberg), KKR +0.9% (announces intra-quarter monetization activity update for Q1), C +0.7% (tells staff not to poach clients from banks under stress, according to Financial Post), RTX +0.7% (awarded $320 mln U.S. Air Force contract), CS +0.6% (UBS and CS among banks facing DOJ Russia-sanctions probe, according to Bloomberg), PLTR +0.4% (AUSTRAC renews its partnership), JPM +0.4% (tells staff not to poach clients from banks under stress, according to Financial Post), JNJ +0.3% (Health Canada expands use of IMBRUVICA), SF +0.1% (reports February operating data)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: SCHL -14.2% (also authorizes new $50 mln share repurchase program), OXM -6.7% (also increases dividend)
Companies trading lower in after hours in reaction to news: TALO -4.6% (submits Zama Unit Development Plan), NNI -3.7% (announces reduction of staff due to contract changes impacting student loan servicing), YETI -1.9% (realigning its commercial and sales organizations), WW -0.7% (chairman resigns, names new chairman), MDXG -0.3% (CFO to step down), CSR -0.2% (names COO as new CEO), ABM -0.1% (to deliver housekeeping and event staffing for stadiums in Florida)
Closing Stock Market SummaryThe stock market started the session on a decidedly upbeat note, attempting to recover some of the sharp declines registered yesterday. The upside momentum started to dissipated, though, after the S&P 500 briefly tipped above the 4,000 level at its high for the day.
Still, the main indices remained in positive territory until an uptick in selling interest without an obvious catalyst dragged the market into negative territory in the late afternoon. Ultimately, the main indices closed in the green, but well off their highs for day, thanks to notable strength in some heavily-weighted components.
Investors were still digesting the Fed's latest rate hike and commentary from Fed Chair Powell today along with rate hikes from central banks overseas.
Briefly, the Bank of England announced a 25-bps rate hike and hinted at more increases in the future while central banks from Switzerland, Norway, Hong Kong, and Philippines also hiked their policy rates. The Swiss National Bank also said the country's bank crisis is over.
Initially, buying interest was broad in nature with mega cap stocks in a leadership position. By the close, most mega cap stocks maintained a leadership position while the broader market deteriorated. The Vanguard Mega Cap Growth ETF (MGK) was up 1.1% versus a 0.3% decline in the Invesco S&P 500 Equal Weight ETF (RSP).
Strikingly, consumer-oriented Tesla (TSLA 192.22, +1.07, +0.6%) and Amazon.com (AMZN 98.71, +0.01, +0.01%) were exceptions in regards to mega cap leadership, having fallen into negative territory around the same time that the main indices fell below their flat lines.
Bank stocks again fell under notable pressure as the market deteriorated. The SPDR Bank ETF (KBE) declined 2.5% and the SPDR Regional Bank ETF (KRE) fell 2.8%.
Only two of the S&P 500 sectors were able to close with a gain -- information technology (+1.7%) and communication services (+1.8%) -- while the energy (-1.4%), utilities (-1.0%), and financials (-0.7%) fell to the bottom of the pack.
The 2-yr note yield fell 11 basis points today to 3.78% and the 10-yr note yield fell nine basis points to 3.41%.
- Nasdaq Composite: +12.6% YTD
- S&P 500: +2.8% YTD
- S&P Midcap 400: -1.8% YTD
- Russell 2000: -2.3% YTD
- Dow Jones Industrial Average: -3.1% YTD
Reviewing today's economic data:
- Initial jobless claims for the week ending March 18 decreased by 1,000 to 191,000 (consensus 204,000) while continuing jobless claims for the week ending March 11 increased by 14,000 to 1.694 million from last week's revised level of 1.680 million (from 1.684 million).
- The key takeaway from the report is that initial claims remain at a low level, pointing to little recent change in the health of the labor market.
- Q4 current account balance rose to -$206.8 billion from a revised -$219 billion (from -$217.1 billion).
- New home sales increased 1.1% month-over-month in February to a seasonally adjusted annual rate of 640,000 units (consensus 650,000) from a downwardly revised 633,000 (from 670,000) in January. On a year-over-year basis, new home sales were down 19.0%.
- The key takeaway from the report is that sales activity edged up for the fourth time in the past five months, though the February increase was assisted by a downward revision to the sales total from January.
- Weekly EIA Natural Gas Inventories showed a draw of 72 bcf versus a draw of 58 bcf last week.
Market participants will receive the following economic data on Friday:
- 8:30 ET: February Durable Orders ( consensus 1.6%; prior -4.5%) and Durable Orders ex-transportation (Briefing.com consensus 0.3%; prior 0.7%)
- 9:45 ET: Preliminary March IHS Markit Manufacturing PMI (prior 47.3) and preliminary March IHS Markit Services PMI (prior 50.6)
Russian accused of evading sanctions escapes house arrest in Italy
Artem Uss goes missing a day after an Italian court approved his extradition request to the US
A Russian businessman wanted in the US for alleged money-laundering and sanctions evasion has escaped from house arrest in Italy, a day after an Italian court approved his extradition.
Artem Uss, 40, the son of the governor of the Russian province of Krasnoyarsk in Siberia, slipped out of his home in the small town of Basiglio near Milan on Wednesday afternoon despite the use of an electronic tag to monitor him.
“Intensive investigations are under way to find him,” Italy’s Carabinieri police said in a statement on Thursday.
Uss’ defence team said it did not know where he was, Russian state newswire Tass reported.
Uss, the subject of an international arrest warrant, was taken into custody at Milan’s international airport on October 17, weeks after US authorities charged him with criminal conspiracy, fraud and money laundering.
After about six weeks in jail, Uss was released to house arrest — with an electronic bracelet to monitor him — in early December, following an Italian court order.
The Carabinieri said officers rushed to the Russian’s home on Wednesday afternoon as the bracelet alarm began signalling his potential escape. They found he had already slipped away.
The police — whose station was just 2.3km from Uss’s home — said officers had checked on him at home an hour earlier and found nothing amiss.
The day before Uss’s escape, an appeals court in Milan had ruled he could be extradited to the US to stand trial on charges of bank fraud and violating an embargo against Venezuela.
According to US prosecutors, Uss was the co-owner of a Germany-based commodities trading and industrial equipment business called Nord-Deutsche Industrieanlagenbau.
US authorities claimed he used the German trading company to buy sensitive US military technology, then sent it to Russian entities, including sanctioned companies.
It said the company also smuggled hundreds of millions of barrels of Venezuelan oil to buyers, including to groups controlled by sanctioned oligarchs.
While the Italian court ruled the US could not try the Russian on the charges of smuggling military technology or money laundering, it said he could be held to answer the other two charges.
Shortly after Uss’ arrest in October, police in Moscow hurriedly put together a money-laundering case against him in Russia and secured a court order for his extradition. The hasty request probably indicated that Russia wanted to rescue him from US prosecution by remanding him there, the Kommersant newspaper reported.
Uss asked the court to extradite him to Russia instead of the US in January. Russian state media has suggested the US wants to use him as a pawn in a potential exchange for US nationals imprisoned in Russia, including ex-Marine Paul Whelan.
Russian deputy foreign minister Sergei Ryabkov, asked about the prospect of an exchange involving Uss on Wednesday ahead of his escape, said Washington had not expressed an interest in exchanging him for US citizens at “earlier stages of the discussion”. But Ryabkov added “everything is possible”, according to Tass.
“I don’t know what Mr Uss’ fate will be. I hope that he will return home one way or the other. But for now there is no basis to talk about anything to do with any kind of exchanges,” Ryabkov said.
The Russian businessman’s embarrassing escape comes after Italy’s prime minister Giorgia Meloni reiterated her commitment to Ukraine in its struggle against Russia’s invasion.
In parliament this week, Meloni, who visited Kyiv last month, pledged her government would support the Ukrainian cause even at the cost of her own popularity because “it is right to do so in terms of national values and interest”.
N. American fixed income group won't take legal action over Credit Suisse AT1 fiasco-source
TORONTO, March 23 (Reuters) - The Credit Roundtable, a lobby group of some of the biggest fixed income asset managers from the United States and Canada, has decided not to take legal action against Credit Suisse AG (CSGN.S) a person familiar with the matter told Reuters on Thursday.
Earlier this week, the Swiss regulator ordered 16 billion Swiss francs ($17.5 billion) of Additional Tier-1 (AT1) debt to be wiped out under its rescue takeover by UBS (UBSG.S).
The issue came up for discussion in a meeting earlier this week when some members wanted to sue the banks for the write-off, but the association decided not to take any action, the person added. The source was not authorized to speak about the matter publicly.
The source said it was always "black and white" that these bonds can be written down to zero in adverse events. "So if you bought it and didn't know about it, shame on you and if you bought it and knew about it, well..., " the source added.
The Credit Roundtable was not available for an immediate comment. Launched in 2007 for bondholders protection, Credit Roundtable consists of 43 members including PIMCO, Vanguard, MetLife (MET.N), Canadian pension fund Omers, Sun Life Financial Inc (SLF.TO) among others.
It was unclear if the individual members could pursue legal challenge.
The bond holders of Credit Suisse in Europe and UK have been seeking legal advice over the Swiss banking regulator's decision to write off AT1 bonds under the rescue take over by UBS. However on Thursday, the Swiss regulator once again re affirmed its position on creditor hierarchy.
Puig Sales Surpass 3 Billion-Euro Mark in 2022
All of the Spanish fragrance and fashion group’s product categories registered double-digit sales gains in the year.
PARIS — Beauty and fashion group Puig sped past its 3 billion-euro sales goal in 2022 and lassoed a 10 percent market share of prestige fragrances worldwide.
The family-owned Spanish company registered net sales of 3.62 billion euros in the 12 months, a 40 percent rise in reported terms and a 30 percent increase on a like-for-like basis on-year, driven by each of its product categories, which posted double-digit sales gains.
Business was spurred by a strong performance of Puig’s own brands amid a rise in consumer spending — especially for perfumes — and despite headwinds, such as the geopolitical environment, inflation and rising interest rates.
Marc Puig, chairman and chief executive officer of Puig, noted that the company’s showing “is a result of many of the choices that we have taken over the past 15 years.”
That included narrowing the group’s portfolio of categories, and focusing on storytelling and Puig-owned brands, which now make about 95 percent of its overall sales.
In 2022, Puig’s net profits were 400 million euros, up 71 percent. Its earnings before interest, taxes, depreciation and amortization reached 638 million euros, a 37 percent increase against 2021.
Puig had in March 2021 presented a three-year plan with an aim to reach sales of 3 billion euros in 2023 and 4.5 billion euros in 2025. However, due to strong growth during the past two years, the group already doubled its net revenue a year ahead of plan and is on track to triple its revenues by 2025.
The company was acquisitive in 2022, snapping up a majority share of Swedish prestige fragrance brand Byredo and incorporating wellness brands Kama Ayurveda and Loto del Sur, from India and Colombia respectively. The deals greatly increased the number of Puig’s own sales points and brought 1,000 new employees into the group.
Puig said the addition of the three companies had a limited impact on overall 2022 sales.
The group noted that in 2022, its fragrance and fashion business’ sales combined reached 2.67 billion euros, up 40 percent, beating the market average. The division’s sales growth was spurred by organic growth plus the addition of new brands, such as Byredo.
Puig attaining 10 percent market share last year in prestige fragrances was thanks to some of its own brands, including Paco Rabanne, ranking fifth, and Carolina Herrera, coming in sixth. Jean Paul Gaultier, meanwhile, placed 17th.
Puig remains the world’s fifth largest fragrance-maker.
“In the niche category, our intention is to reach 20 percent market share, because that’s a growing territory,” Marc Puig said.
Among the fragrance and fashion division’s highlights were, from the prestige category, the successful introduction of Fame from Paco Rabanne, the consolidation of Carolina Herrera’s Good Girl, which ranks third in the U.S., and the strong performance of Jean Paul Gaultier’s Scandal.
Notable in Puig’s niche fragrance portfolio was the opening of direct sales points for Penhaligon’s and L’Artisan Parfumeur in China, and Dries Van Noten’s first fragrance collection’s launch.
Puig’s fashion business, which includes the Paco Rabanne, Carolina Herrera, Jean Paul Gaultier and Nina Ricci brands, grew apace with the rest of the company.
Marc Puig highlighted Jean Paul Gaultier’s successful collaborations. The executive commended Wes Gordon’s evolution of the Carolina Herrera brand.
When asked about the renewal of Julien Dossena’s contract as Paco Rabanne’s creative director, after 10 years, or whether the fashion brand might change designers, Puig said: “We are very happy with the collaboration with Julien.”
Regarding Nina Ricci, he said: “We are very excited about what’s going on with that brand right now.”
Makeup was the product category that grew fastest for Puig in 2022, notching up a 52 percent rise to 626 million euros, spurred by the Charlotte Tilbury and Carolina Herrera brands. Charlotte Tilbury was the first-ranking color cosmetics brand in the U.K., and its position was bolstered by products such as the Pillow Talk makeup line and technological innovations combining consumer’s physical and virtual experience of the brand’s products.
Last year, Carolina Herrera registered its best results since launching its makeup collection in 2020. The Byredo makeup business saw the launches of numerous new products, while Dries Van Noten rolled out 30 shades of lipstick.
Puig’s dermocosmetics activity posted sales up 20 percent to 328 million euros. Investment in innovation and tech were stepped up for Uriage and Apivita, so as to keep developing science-based dermatology products with eco-friendly formulas, particularly in the sun care and antiaging lines. The leading skin care product for Charlotte Tilbury was Magic Cream.
By region, Puig’s growth was fastest in the Americas, where sales increased 56 percent to 1.31 billion euros, or 36 percent of overall group sales. That turnout was primarily reinforced by business in the U.S., its largest market by sales, and the dollar’s appreciation against the euro.
In the U.S., the prestige fragrance category and Charlotte Tilbury, which ranked first in Sephora, registered significant growth.
Puig’s sales in Asia, where the group reinforced its presence, rose 41 percent to 349 million euros. China remained a top-10 market for the group and posted 36 percent growth, despite the country’s zero-COVID-19 measures.
“It’s not in the top three yet, but we expect it to come soon,” Marc Puig said.
Sales in the Europe, Middle East and Africa zone came in at 1.96 billion euros, representing a 31 percent gain. Europe has five of Puig’s 10 major countries: the U.K., Spain, France, Germany and Italy.
Spain, the birthplace of the group, generates 7 percent of the company’s overall sales.
Puig’s digital business remained robust, rising by 23 percent and representing 25 percent of total company revenues.
The company’s sales in travel retail gained 72 percent versus 2021, thanks to travelers coming from the Americas and Europe. Against 2019, prior to the coronavirus pandemic, sales in the channel rose 28 percent.
Related to the environment, society and governance, Puig has committed to limiting global warming by 1.5 degree centigrade by 2030, in keeping with the Paris Agreement, and to becoming net-zero in emissions by 2050. With that in mind, each brand in the company defined its ESG goals.
At Puig, today 50 percent of power used comes from renewable sources, and all of its factories manufacturing perfumes send zero waste to landfill. In 2022, Puig was granted EcoVadis’ Gold Medal certificate and the Carbon Disclosure Project gave it an A- in Climate.
Puig’s ongoing Invisible Beauty Makers social action program supports the mentoring and financing of high-impact initiatives.
When asked if the company might make more acquisitions, Marc Puig said: “We have leveraged our balance sheet already, so we need to digest some of the acquisitions. We need to keep nurturing these brands.
“They are placed in growth territories, so that will help us continue growing faster than the industry for awhile,” he continued. “We have momentum with the different brands, clearly, to outgrow the industry for the next 12 months for sure — if not more.”
‘Gabrielle Chanel. Fashion Manifesto’ at London’s V&A Will Span Coco Chanel’s Life and Career
The exhibition will feature more than 200 looks, opening to the public on Sept. 16.
LONDON — The work and life of Gabrielle “Coco” Chanel will be on display at the Victoria & Albert museum on Sept. 16, at the museum’s Sainsbury Gallery.
“Gabrielle Chanel. Fashion Manifesto” will be the first U.K. exhibition dedicated to the French fashion designer, charting six decades of her career, from the opening of her first millinery boutique in Paris in 1910 to her final show in 1971.
The showcase will be divided into 10 sections, starting with “Towards A New Elegance,” which will trace Chanel’s beginning in millinery and quick expansion into clothing.
“The Emergence of a Style” will focus on her minimal design aesthetic, which transcended onto theater stage and silver screen; “The Invisible Accessory” looks at the debut of the house’s famous perfume No5 and the launch of makeup in 1924 and skin care in 1927; “Luxury and Line” introduces the house’s eveningwear and Bijoux de Diamants, Chanel’s first and only collection of fine jewelry commissioned by the International Diamond Corporation of London in 1932; “Closing House” details how the war affected her business and personal life, as well as her return to the fashion scene in 1954 and the relaunch of her couture line; “The Suit” highlights how the Chanel suit became synonymous with uniform dressing; “Chanel Codes” examines how the 2.55 handbag and two-tone slingback shoes have endured; “Into the Evening” spotlights Chanel’s couture garments and cocktail suits; “Costume Jewellery” touches on Chanel’s playfulness with jewelry and rejecting conventions of fine jewelry; and “A Timeless Allure” will visit Chanel’s final collection of spring 1971.
Based upon an exhibition of the same name organized by the Palais Galliera in Paris in 2020, the exhibition will be reimagined for the V&A. It will feature rarely seen pieces from the London museum’s collection alongside looks from Palais Galliera and the Patrimoine de Chanel, the heritage collections of the fashion house in Paris.
“This is just really the precursor to the king’s state visits to Paris this weekend,” joked Tristram Hunt, director of the V&A at the exhibition’s further unveiling.
“This exhibition will analyze her contribution to fashion and her radical vision of a style that created modernity and reflected the aspirations of women and the evolution of their place in society,” said Bruno Pavlovsky, president of Chanel SAS and president of Chanel Fashion.
The exhibition features more than 200 looks — some seen for the first time, including costumes designed for the Ballets Russes production of “Le Train Bleu” in 1924; outfits created for Hollywood stars Lauren Bacall and Marlene Dietrich, and early examples of Chanel’s seminal take on evening trousers.
For the V&A, the Chanel exhibit follows major success of the “Christian Dior: Designer of Dreams” exhibition.
Tickets to “Christian Dior: Designer of Dreams,” which took place in 2019, sold out less than three weeks after opening, and welcomed nearly 600,000 visitors. The show’s run was extended from July until September of that year and was one of the most successful in the museum’s history.
“We knew that ‘Christian Dior: Designer of Dreams’ would be popular, but we have been overwhelmed by the phenomenal visitor response to date,” Hunt said in 2019.
The largest and most comprehensive British show on the House of Dior, it was a grand sweep of sparkle, rippling wool, sculpted jackets and floral prints and motifs. It threw light on the designer’s fascination with Britain, his “lines” and defining looks, and his international outlook and inspirations from history.
Exclusive-ECB pressures Austria's Raiffeisen bank to quit Russia -sources
VIENNA (Reuters) - The European Central Bank is pressing Austria's Raiffeisen Bank International to unwind its highly profitable business in Russia, five people with knowledge of the matter told Reuters.
The pressure comes after a top U.S. sanctions official raised concerns about Raiffeisen's business in Russia on a visit to Vienna last month, said another person familiar with the matter, asking not to be named due to its sensitivity.
The push from Washington and the ECB is upping the stakes for Austria and its second-biggest bank, which plays a key role in the Russian economy but also an increasingly contested one as Moscow's year-long war in Ukraine drags on. Many Western companies, including French bank Societe Generale, have already left Russia.
While the ECB is not asking Raiffeisen to leave the country immediately, it wants a plan of action for unwinding the business, two of the people said. One person said such a plan could include the sale or closure of its Russian bank.
"We have been asking banks to keep closely monitoring the business in Russia, and ideally, reduce it and wind it down as much as possible," a spokesperson for the ECB said, adding it had been doing the same with all institutions concerned since Moscow launched its invasion of Ukraine.
Raiffeisen, however, does not intend to present such a plan yet, the people said, and some Austrian government officials see the moves as unwarranted foreign meddling.
A Raiffeisen spokesperson said that it was examining options for its Russia business "including a carefully managed exit" and that it was "expediting" its assessment, adding that it had also reduced lending in the country.
The Austrian lender is now the most important Western bank in Russia, offering a payments lifeline and accounting for roughly one quarter of euro transfers to the country, although other banks, such as Italy's UniCredit, are still present.
ECB officials are reluctant to pressure Raiffeisen into an immediate sale, fearing the financial hit it could trigger, one person said, after a week of global banking turmoil.
A spokesperson for Austria's finance ministry said that while there could be no return to the status quo in relations with Russia, "most" international companies, including banks remained there.
"There is substantial trade going on between Russia and the rest of the world in commodities like grain, fertilisers, oil, gas, nickel and other metals, which...require payments," said the spokesperson.
HIGH STAKES
In January, the U.S. sanctions authority launched an inquiry into Raiffeisen over its business related to Russia.
Two people with direct knowledge of the matter told Reuters that the probe concerned potential breaches of Western sanctions. Raiffeisen said the inquiry was of a general nature.
The inquiry, which has strained relations between Vienna and Washington, could prove perilous for Austria, which had modelled itself as a bridge between east and west, turning Vienna into a magnet for Russian money.
James O'Brien, a senior sanctions official with the U.S. Department of State, spelt out American concerns over Raiffeisen and its business with Russia during discussions in Vienna in February, one of the people said.
"Ambassador O'Brien and Austrians discussed our close cooperation on sanctions in response to Russia's illegal further invasion of Ukraine," a State Department spokesperson said when asked about the visit.
The Raiffeisen spokesperson said that the bank was in the "early stages" of collecting information to respond to the inquiry letter from the U.S. Treasury Department's Office of Foreign Assets Control (OFAC).
During Austrian President Alexander Van der Bellen's visit to Kyiv last month, Ukrainian President Volodymyr Zelenskiy criticised Austrian businesses still operating in Russia, singling out Raiffeisen, for supporting Moscow.
The bank has also been sharply criticised by investors after participating in a Russian scheme to grant loan payment holidays to troops fighting in Ukraine.
Although the stakes are high, some Austrian officials hope they can hold out long enough for a negotiated resolution to the war, allowing for a resumption of normal business with Russia, three of the people familiar with the matter said.
Austria's foreign minister Alexander Schallenberg has said that while it is "legitimate" for U.S. authorities to approach Raiffeisen, Austria had primary responsibility for enforcing sanctions.
U.S. authorities can go as far as preventing a bank from processing dollar transactions, a step that would deal a serious blow to Raiffeisen and that euro zone regulators fear could destabilise the bank.
Latvia's ABLV Bank quickly unravelled after being placed under U.S. sanctions in 2018 due to concerns about illicit activity connected in large part to Russia.
Some Austrian lawmakers are also critical of the government's stance.
"Supervisory authorities must examine the risks from Raiffeisen's activity and that from day one of the war," Stephanie Krisper, a lawmaker from the liberal Neos opposition party told Reuters last week.
"For many years, connections to Moscow permeated our political system - now, the economic and political dependence on Russia has finally become visible."
Suspected Crypto Fugitive Arrested in Montenegro
Person believed to be Do Kwon, creator of failed TerraUSD stablecoin, is detained
A person who officials believe to be Do Kwon, creator of the failed TerraUSD stablecoin, has been arrested in Montenegro after months in hiding, the interior minister of the Balkan country said Thursday.
Montenegro Interior Minister Filip Adzic said on Twitter that the suspect was detained in the airport of the country’s capital of Podgorica with false documents, and that the local authorities were awaiting official confirmation of his identity.
Mr. Adzic and representatives of Mr. Kwon’s company, Terraform Labs Pte. Ltd., didn’t immediately respond to requests for comment. An official from the National Police Agency in South Korea—where Mr. Kwon is from—said the agency believed the detained person was Mr. Kwon but was waiting on fingerprint information to confirm, the country’s semiofficial Yonhap News Agency reported.
TerraUSD, a so-called algorithmic stablecoin that sought to maintain a price of $1, lost its dollar peg in May of last year, setting off a chain reaction that wiped out some $40 billion in value from the digital-currency markets. The crash hurt thousands of investors worldwide, including some who lost their life savings.
Authorities in the U.S. and beyond have stepped up the pressure on the crypto industry after a series of recent blowups that hurt investors in the digital currency markets. Federal prosecutors in New York have charged Sam Bankman-Fried, the founder of the failed FTX crypto exchange, with fraud in connection with FTX’s implosion. Mr. Bankman-Fried has pleaded not guilty and the case is set to go to trial in October. International law-enforcement agencies have also repeatedly busted operations connected to crypto crime.
If detained man is confirmed to be Mr. Kwon, the arrest would mark the end of a monthslong manhunt that spanned Asia and Europe. During that time, the once-outspoken booster of TerraUSD occasionally surfaced on social media to promote a new cryptocurrency project and to defend himself against accusations of fraud.
Just one year ago, Mr. Kwon was a high-profile crypto entrepreneur backed by some of the industry’s biggest investors and trading firms. The Stanford University graduate spoke at digital-currency conferences and had numerous fans dubbed “Lunatics,” after TerraUSD’s sister cryptocurrency, Luna.
Before the collapse, he often boasted online about TerraUSD’s stability and derided critics who questioned the underlying financial mechanism that kept it pegged to the dollar. Investors both large and small flocked to TerraUSD because of a project called Anchor Protocol that allowed them to earn up to 20% annual yields by parking it in the stablecoin.
The collapse of TerraUSD shredded his reputation and triggered a number of investigations and lawsuits around the world.
South Korean authorities issued a warrant for Mr. Kwon’s arrest in September and obtained a so-called red notice for him from global policing body Interpol, effectively putting law-enforcement agencies worldwide on the lookout for him. The Wall Street Journal reported last week that the U.S. Justice Department was investigating the collapse of TerraUSD and had questioned former Terraform Labs team members.
The Securities and Exchange Commission sued Mr. Kwon and the company for alleged securities fraud last month in connection with the TerraUSD collapse. A lawyer for Mr. Kwon and Terraform has said in court that they would seek to dismiss the SEC’s lawsuit. Mr. Kwon has previously denied committing fraud. In an interview with the Journal last year, he said that he believed in TerraUSD and personally lost money when it collapsed. “There is a difference between failing and running a fraud,” he said then.
Police in Singapore have also said they are investigating Terraform Labs, where the company is based. Mr. Kwon was living in Singapore until he disappeared from public view six months ago. According to South Korean prosecutors, he left Singapore in September, traveling to Dubai and then to Serbia. Montenegro neighbors Serbia.
Mr. Kwon has denied being on the run but declined to disclose his whereabouts, saying he was worried about his security amid threats from disgruntled investors. Officials from South Korean law enforcement visited Serbia earlier this year to seek the Balkan country’s cooperation.
The SEC’s lawsuit accused Mr. Kwon and his company of misleading investors about the risks of TerraUSD and wrongly claiming that Terraform Labs’ blockchain technology was used to process transactions on Chai, a South Korean payment app, when in fact Chai used more traditional payment technology. The SEC also said Mr. Kwon and Terraform Labs had transferred a huge amount of bitcoin to an unnamed Swiss bank and converted it to cash. Over $100 million in fiat currency was withdrawn from that Swiss bank since June 2022, the SEC said.
Mr. Kwon has yet to respond to the SEC’s lawsuit in detail. In a Feb. 1 tweet, before the SEC lawsuit, he wrote: “I’ve stolen no money and never had ‘secret cashouts.’”
Financial regulators, which have the power to impose monetary penalties, have sought to curb the activities of crypto companies, with the U.S. moving more aggressively than many other countries. On Wednesday, the biggest U.S. crypto exchange, Coinbase Global Inc., said it had received a notice from the SEC that the agency is planning to bring an enforcement action against it. Coinbase expressed disappointment that it failed to reach an agreement with the SEC over legally registering its business.
Also on Wednesday, the SEC agreed to a settlement with actress Lindsay Lohan and boxer Jake Paul over accusations that they had promoted cryptocurrencies without disclosing that they were paid to do so. Ms. Lohan and Mr. Paul didn’t admit or deny wrongdoing.
Antisemitic Incidents Rise to New High, Report Says
The ADL says bomb threats, physical attacks on Jews and white supremacist propaganda increased
There were 3,697 antisemitic incidents in the U.S. last year, the most since the Anti-Defamation League started keeping records in 1979.
Antisemitic incidents rose 36% in 2022 from the previous year, according to data from the ADL, a Jewish advocacy group that examines antisemitism in the U.S. On average, there were 10 incidents a day in 2022, according to the data.
Antisemitic incidents have been increasing, according to the ADL. In 2021, there were 2,717 occurrences, then the highest figure on record, the group said.
“We’re deeply disturbed by this dramatic and completely unacceptable surge in antisemitic incidents,” said Jonathan Greenblatt, chief executive of the ADL. “This data confirms what Jewish communities across the country have felt and seen firsthand and corresponds with the rise in antisemitic attitudes.”
The ADL said it counts both criminal and noncriminal events of harassment, vandalism and assault where victims are targeted due to their Jewish identity as antisemitic incidents. The majority of the incidents are reported to the ADL directly by Jewish victims, the group said. ADL researchers also monitor media reports and other online sites for credible reports of antisemitic incidents, the group said.
There were 2,298 incidents of harassment in 2022, an increase of 29% from the previous year, according to the ADL. There were 1,288 incidents of vandalism, a 51% jump, and 111 incidents of assault, a 26% increase.
White supremacist groups were more active last year, according to the ADL. Instances of antisemitic propaganda distributed by white supremacist groups doubled last year, the organization found.
The ADL didn’t identify a single factor or ideology fueling the increase in antisemitic incidents, the group said. But more bomb threats toward Jewish institutions, white supremacist propaganda activity and attacks on Orthodox Jews were all contributing factors, the group said.
Hate crimes have been on the rise. The FBI reported there were 9,065 hate crimes in 2021, a 12% increase from the previous year. There were 817 incidents of anti-Jewish hate crimes in 2021, up 20% from the previous year, according to the FBI.
There were 1,107 anti-Black hate crimes in 2021, an increase of 27% from the previous year, according to the FBI data. Anti-Asian hate crimes more than doubled, to 746. Hate crimes targeting gay men rose 41% to 984.
The FBI defines hate crimes as those motivated by prejudice based on race, gender and gender identity, religion, disability, sexual orientation or ethnicity.
The Biden administration has denounced the rise in antisemitic attacks and threats across the U.S.
“I just want to make a few things clear: The Holocaust happened. Hitler was a demonic figure,” the president said in a tweet in December. “And instead of giving it a platform, our political leaders should be calling out and rejecting antisemitism wherever it hides. Silence is complicity.”