Tuesday 30 April 2019
BUSINESS DAY
45
FINANCIAL TIMES
COMPANIES & MARKETS
@ FINANCIAL TIMES LIMITED
Bart Chilton, former CFTC commissioner, 1960-2019 Flamboyant, folksy image signalled his identification with the ‘little man’ PHILIP STAFFORD
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art Chilton, one of the most distinctive and controversial figures in financial-market regulation, has died at the age of 58. Easily recognised with his shoulder-length white-blond hair, loud enthusiasm, folksy comments and cowboy boots, Chilton was a singular character as a commissioner at the US Commodity Futures Trading Commission. The television channel RT America, for which he hosted its main financial show Boom Bust, announced Chilton’s death on Saturday evening, saying it followed a sudden illness. Walt Lukken, chief executive of the Futures Industry Association and also a former CFTC commissioner, compared him to a big-haired 1980s rock star, “always colourful, always funny and always passionate . . . the David Lee Roth of the CFTC”. A Democrat, Chilton regularly appeared on TV and at industry conferences as a critic of highfrequency traders, calling them “cheetahs”. Although he privately said his flamboyant image in the largely grey world of regulation was partly for show, it also signalled his identification with what he saw as his key constituents: America’s farmers and ranchers. They, he said, were disadvantaged in Washington’s policymaking machinations. Powerful and rich interests would try to roll policies
back over time, he argued. Chilton said being the “little man” was a key part of his life, firstly as a worker in a steel mill in Indiana after college and then as a long-serving government official in the agriculture industry. He was also chief of staff at the US National Farmers Union, which represents family farmers and rural communities, from 2006-07. He was appointed as a commissioner in 2007 by President George W Bush, as technology was beginning to revolutionise trading and the global financialmarket meltdown was beginning to simmer. From 2010, the CFTC, which had previously been a sleepy backwater agency, took on new powers to oversee the US derivatives market, which had been blamed for exacerbating the crisis. The era of rapid change was further underscored by the flash crash of May 2010, in which US stocks abruptly dived. Although an official government report blamed the poor execution of a trade from Kansas, many of America’s retail investors pointed the finger at high-frequency traders, which dart in and out of bets and execute deals in milliseconds. From his position, Chilton vividly spoke out against such activity, labelling those market participants as “cyber cowboys” and “high rollers”, and calling out a rampant “Ponzimonium” in financial markets.
Wall Street stocks tick up to new record peak S&P 500 climbs above previous intraday high set last September MICHAEL HUNTER AND ADAM SAMSON
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all Street’s benchmark stock index rose on Monday to a new record peak, exceeding the intraday high that was set last autumn. The S&P 500 climbed 0.05 per cent to reach a high of 2,942, ticking above the previous historic intraday high that was set in September 2018. The index had reached a record closing high last week after stronger-than-expected US growth data for the first three months of 2019. The tech-heavy Nasdaq Composite also struck a new high, rising 0.1 per cent to 8,154. The gains in the US bucked a more muted performance in Europe, where the continent-wide Stoxx 600 index was flat. Frankfurt’s Xetra Dax 30 fell 0.3 per cent, while London’s FTSE 100 inched up by 0.2 per cent. Property and utility stocks led the declines, while banks offset losses after S&P left Italy’s credit rating on hold. Spain’s Ibex 35 was 0.4 per cent lower after the result of the country’s general election. The Federal Reserve’s preferred
inflation indicator was published in the run-up to the New York open. The core personal consumption expenditures price index for March read 1.6 per cent, slightly softer than forecasts of 1.7 per cent, and still under the central bank’s 2 per cent target, playing into the existing dovish outlook for US monetary policy. The dollar held around some of its strongest levels in two years after the data, with the index tracking the world’s reserve currency anchored just over 98 points. Meanwhile, in Asia, China’s CSI 300 was up 1.2 per cent after posting its biggest weekly decline in six months last week, falling 5.6 per cent. Figures released over the weekend showed Chinese industrial profits returned to growth in March, rising 13.9 per cent year on year, following four consecutive months of falls. Further clues on the impact of Chinese stimulus programmes will come on Tuesday with the official manufacturing purchasing managers’ index. Brent crude fell 0.1 per cent to $71.98 a barrel after Donald Trump urged Opec to bring down prices. www.businessday.ng
Bart Chilton spoke out against rampant ‘Ponzimonium’ in financial markets © Bloomberg
Shareholder adviser attacks Metro Bank over pay and governance Investors urged to vote against re-election of Vernon Hill as chairman NICHOLAS MEGAW
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nvestors in Metro Bank have been urged to block the re-election of chairman Vernon Hill at its annual meeting later this month, with advisory group Glass Lewis arguing that Mr Hill risked further damaging he bank’s reputation after a string of recent issues. The proxy adviser also accused Metro of undermining basic pay principles by awarding its new chief financial officer tens of thousands of pounds in bonus payments for a period before he joined the bank. Glass Lewis said “the introduction of an independent chair should be a priority”, thanks in part to Mr Hill’s pattern of paying large sums to a firm owned by his wife. It also said he “clearly does not meet” recommendations under the UK Corporate Governance Code for independent chairs, given his role in
co-founding the bank and long tenure on the board. The complaints, outlined in a note for shareholders published on Monday, are not the first time Glass Lewis has criticised Mr Hill’s leadership, having unsuccessfully raised similar concerns about the payments to related parties last year. However, it also stepped up its criticism of the bank’s broader approach to governance. More than half of Metro’s nonexecutive directors at the end of 2018 had been on the board since shortly after it was founded, a policy that Glass Lewis warned “creates the risk of ‘group-think’” and potentially inhibits the non-executives from presenting an appropriate challenge to management. It acknowledged that the bank had taken some steps to improve the situation in recent months, but suggested the decision to appoint a nonindependent director to the newly created position of deputy chair was
a missed opportunity. Mr Hill has long been a controversial figure in the banking world, with UK regulators twice trying to block him from becoming chair. However, the board has come under particular scrutiny since the revelation of a reporting error in January prompted a massive drop in the bank’s stock and forced it into a new fundraising. The pressure on Mr Hill in particular has been amplified by recent legal action in the US accusing him of unfairly dismissing a pair of exbusiness partners and having a history of making sexist remarks. Metro Bank declined to comment on Monday, but in its annual report published last week the bank said: “As the founder of the Bank, Vernon has a unique role. The Board firmly believes Vernon to be the best qualified individual to take the Bank forward and implement the Bank’s unique business model as Chairman.”
Iliad chairman fined €600,000 for insider dealing
Maxime Lombardini punished for share sale before failed 2014 move for T-Mobile USA HARRIET AGNEW
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he chairman of French telecoms company Iliad has been fined €600,000 for insider dealing over his sale of shares in the telecoms company weeks before they dropped during the failed 2014 takeover approach for T-Mobile USA. The Financial Markets Regulator’s enforcement committee said on Monday it had fined Maxime Lombardini, then chief executive, for “breaching insider dealing regulations”. Iliad must pay €100,000 “for breach of its disclosure requirements”. The breaches relate to Iliad’s attempt to acquire the much larger US mobile network in July 2014. When Iliad surprised the market with its initial approach, its share price slipped 7 per cent, the French group’s sharpest drop in almost eight years. Weeks earlier, Mr Lombardini had sold Iliad shares for him-
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self and his partner, which the regulator said constituted insider dealing. Iliad was fined for delaying by seven days its communication to the market of its interest in TMobile USA. The AMF statement said Iliad waited until “31 July 2014 to disclose that information, even though the company could not ignore that, on 24 July 2014 at the latest, it was no longer able to ensure its confidentiality, following which Iliad had failed in its obligation to communicate any inside information as soon as possible.” The offer for T-Mobile USA, an attempt by Iliad’s largest shareholder Xavier Niel to establish an American foothold, was rebuffed by the US company’s majority shareholder Deutsche Telekom. An improved bid was also rejected before Iliad withdrew its offer in October 2014. The fines are lower than the regulator was seeking — it recommended last month that the @Businessdayng
enforcement committee fine Mr Lombardini €1m and Iliad €500,000. Mr Lombardini and Iliad, who have previously said the regulator’s grievances were “unfounded”, declined to comment on Monday. The fines come at a difficult time for the company and its management. Its shares have dropped by more than a fifth this year, reflecting investor concerns about the highly competitive commercial environment in France and over the company’s ability to generate cash. Iliad acknowledged last month that it would take longer than expected to hit its cash flow targets and said it might try to raise cash by selling part of its mobile network. A foray into Italy, where Iliad is building a mobile network from scratch, has put further pressure on cash at the same time it has to invest in faster fibre broadband in France.