Back when I was a schoolboy, we discovered that one of the vending machines in the yard would give you an item and then also refund your money. A teacher eventually noticed our abnormal interest in the vending machine and put a stop to the exploit. Fintech Revolut has identified a similar flaw in its payment system and while I confess that we got away with around 10 chocolate milks (see statute of limitations and minimum age of criminal responsibility), the Revolut thieves got away with more than $20 million in cash – that’s a lot of chocolate milk!

The lowdown

• 💰 Flaws in Revolut’s payment system allows thieves to steal more than $20 million.

• 🦅 Twitter is threatening to sue Meta over the launch of its new social media app Threads, alleging theft of trade secrets.

• 💸 Payrolls rose by 209,000 in June, below the consensus estimate of 240,000.

Flex your finance muscle

Quant hedge funds

A quantitative (quant) hedge fund relies heavily on mathematical computations to identify investment opportunities. These funds use complex algorithms and models to make investment decisions and can (but don’t always) involve automated trading strategies. This supposedly contrasts with more traditional hedge funds that are thought to rely more on human judgment, fundamental analysis of companies, or macroeconomic trends.

Aurum have published an incredible primer on the strategies used by these firms and one of the key takeaways is that, while automation is part of it, human judgment is still needed to pick from the universe of strategies.

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Twitter holding company sues Twitter’s former lawyers

As always, a few things are going on at Twitter. In addition to the legal action Twitter is threatening against Meta mentioned above, Musk’s holding company for Twitter, X Corp, has sued the law firm Wachtell, Lipton, Rosen & Katz, alleging that the $90 million legal fee they charged for their services in relation to the Twitter takeover was unwarranted and excessive.

Wachtell was representing Twitter during Musk's attempt to privatize the company in 2022 and secured their substantial fee for compelling Musk to complete the takeover. X Corp is represented by Reid Collins & Tsai.

Musk is getting a reputation as a bit of a bad payer – Twitter has been sued at least 26 times for vendor non-payment, including rent for its San Francisco headquarters and for Google's cloud infrastructure.

The content we're consuming today

• Unhedged podcast: Harry Markowitz found a free lunch in finance.

• Bloomberg: Equity Analysts Have Only One Way to Get Paid ($).

• Methods to the Madness: Trading the Night Effect.

Off-balance sheet items

• With all the sport on at the moment, I almost missed that the Tour De France had started. If you’re like me and a little behind, check out the official website for extended stage highlights and get ready for stage 10.

The bottom line