Weekly Roundup

Reddit Forum Investors Beat Hedge Funds – A group of Reddit forum of individual investors trading Gamestop, AMC, and other stocks, was reported as raising the price of the stocks and planning to “beat WallStreet at its own game.” Several hedge funds reported large losses as stocks surged as much as 400% in a week, with individual investors in Reddit forums reporting gains and dramatic price moves. Notably, the trading pause, implemented by Robinhood, sparked a great deal of controversy. It is likely that the SEC will scrutinize the unusual trading and Chair Maxine Waters (D-CA) has announced the House Financial Services Committee will hold a hearing on “Short Selling and Online Trading Platforms,” and questions have been raised as to whether this might be a catalyst for further hearings or discussions about equity market structure, more generally.

Microsoft CEO Satya Nadella noted that there is a big crisis now for cybersecurity, as the company reported a 40% over the year jump in the security business to $10 billion over the past year. The need for cybersecurity was highlighted with recent nation state cyber-attack on SolarWinds posing a risk to the US government agencies and private firms.

Source Code & Trade Secret Unlawful Access
Industry discussion continued over the need for safeguarding source code from both outside threats and accidental leakage. Author Dor Atias noted, “For organizations developing software, source code is their most valuable asset – it’s what drives user growth and adoption. Far more than plans or trade secrets, source code is, quite literally, a software company’s intellectual property.”

ETFs: Data on Market Stability and Resiliency During Covid-19 Volatility—The ETF market is predicted to grow to $50 trillion by 2030, with investors continued to utilize ETFs as an investment strategy. An analysis by Blackrock of ETF performance during covid volatility concluded that bid-ask spreads remained narrow for ETFs, and that ETFs were a source of resiliency and market stability for investors during Covid-19 volatility

Future of Workforce and Digital Equity
With the technology industry supporting an estimated 18 million jobs in America, and further growth in coding professions expected, discussions continued over digital equity as part of fiscus stimulus and social justice. It was reported that technology companies have asked the BidenAdministration to focus on workforce and social justice activities, including STEM education and supporting education beyond four-year college degrees to apprenticeships, technical training, and community college.

Savings Tax Study Released – A study was released noting 50 percent reduced trading costs over a decade as a result of fintech disruptions of automated trading, as well as the negative impact of a FTT in turning back progress on cost savings to investors. A FTT would aim squarely at the savings of Americans including 529 plans, 401(k) plans, and more.

In the Mix: This Week’s Top FinTech Thought Leader

  • Professor Charlton McIlwain– Amid discussions of digital equity and future of workforce, Professor Charlton McIlwain, NYU, authored a book “Black Software” and has organized a program for middle school students interested in STEM careers through his Center for Critical Race & DigitalStudies.
  • TBD: Head of SEC Division of Trading and Markets – A new head has yet to be publicly named,to assume the role of Brett Redfearn, with speculation that the next head will come from within theDivision of Trading and Market’s team, rather than an outside
  • Hank Kim, Executive Director of National Conference on Public Employee Retirement Systems(NCPERS), released results of a survey this week that investment earnings drive 71% of publicpension revenue, underscoring traditional pensions’ safety and reliability.
  • Chair Richie Neal (D-MA), Chair, House Ways and Means Committee, released his plans for equity in retirement security including broadening access to retirement plans for As experts look at waysto broaden access to retirement saving vehicles, resources are available here on fintech disruption inthe retirement savings space.