Levine on Wall Street: Tax Evaders Were Just Doing Their Jobs

One could almost say that they, and also the foreign exchange traders who may or may not have manipulated fixing rates, were doing God's work.

Leave the FX manipulators alone.

My working assumption of the foreign exchange manipulation scandal has always been that it's too easy to confuse legitimate hedging of a client order with evil front-running and manipulation, and that a lot of what I've read about the scandal sounds more like the former than the latter. Here Joy Rajiv, a former FX trader at Morgan Stanley and Deutsche Bank, defends that position clearly and at some length at FT Alphaville.

A decade of gold manipulation .

You decide whether the above logic applies to the London gold fix, which "may have been manipulated for a decade by the banks setting it."

I like this Bankpersonalverband .

I can understand why Brady Dougan would tell the Senate that Credit Suisse's piles of tax evasion were committed by some (large) number of bad apples. But the Schweizerischer Bankpersonalverband can't:

The body representing staff at Credit Suisse and other Swiss banks reacted with astonishment to Dougan's comments, saying it was "hardly credible" that the bank's bosses knew nothing of the practices.

"It was common knowledge that tax evasion was the strategy, a business model pursued by many banks for a long time," the Schweizerischer Bankpersonalverband said in a statement.

It said Dougan's comments "vilify lots of employees that had nothing to do with offshore U.S. banking", and demanded he apologize to the bank's 46,000 staff.

You just can't win: U.S. lawmakers will be offended if you say that your whole business strategy was tax evasion, and Swiss employees will be offended if you don't.

The suit wars march on.

The latest is that Jos. A. Bank will meet with Men's Wearhouse and give it "a limited amount of time to come forward with your best offer," after which it will stick its tongue out and go with Eddie Bauer. This seems about right: Jos. A. Bank's board has a lot of law on its side in rejecting Men's Wearhouse's latest offer, but on the other hand the expedited trial in Delaware suggests that its case for ignoring Men's isn't airtight. Some good-faith, or good-faith-looking, meetings might be just what they need to defend their position.

Are poison pills preempted by the Williams Act ?

I would have guessed the answer was no, but Lucian Bebchuk and Rob Jackson guess yes, and they are smart guys. The issue is that there is a weird tension between federal securities laws -- which regulate various kinds of securities-market conduct, like tender offers -- and state corporate laws, which regulate mergers and acquisitions. Poison pills are allowed by some states' laws, especially Delaware's, as an M&A thing, but Bebchuk and Jackson think that because they "enable incumbents to block shareholder consideration of outside tender offers for lengthy periods of time, they may well impose tighter restrictions on unsolicited offers than the state antitakeover regulations that federal courts invalidated on grounds of preemption during the 1970s and 1980s." Someone should litigate that, maybe Men's Wearhouse.

This lawsuit doesn't seem to have worked as intended.

A former broker, whom I will not name here, though he is named in the linked Reuters article, sued Finra for invasion of privacy because its website still shows a 1997 disciplinary action against this broker. So all of his Google results, etc., mention the disciplinary violation, which makes it hard for him to get a job. He seems to have a case -- Finra sort of told him that it would go away after two years, then changed its mind -- but can you spot the problem with filing a lawsuit to fix it?

Trade stocks for free !

This zero-commission stock trading app looks sort of neat, if you're into trading stocks, and I am not. On the other hand, "if you're not paying for it, you're the product." The product here seems to be order flow, or possibly margin lending.

The weather is doing God's work .

A downside of being the chief executive officer of a global investment bank is that you can't make jokes any more, people take you too seriously. (Related?)

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    (Matt Levine writes about Wall Street and the financial world for Bloomberg View.)

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