Too big to jail come on.

DealBook has a long article about the dumb discussions that regulators and prosecutors are having about making big banks -- big non-U.S. banks like BNP Paribas and Credit Suisse, though maybe later some U.S. ones -- plead guilty to criminal charges. The problem is that criminal charges carry a range of really disastrous consequences that can effectively put a bank out of business. The regulators don't want the disastrous consequences. They want the banks to pay them a lot of money, which they could do with civil settlements, but they want the criminal convictions so they can go around swaggering about how tough they are. But they don't actually want to put anyone out of business, because deep down they don't really think that what the banks did deserves the consequences that would come from a criminal conviction.1 They want to say the words "criminal conviction" without having the effect of a criminal conviction. This stupid charade will no doubt get prosecutors lots of praise for finally overcoming the "too big to jail" problem, even though of course you actually can't jail a bank. But ignore the praise! Ask prosecutors instead how often they try to mitigate the collateral consequences of charging poor people with crimes.

Apple sold some bonds.

Only $12 billion worth, at spreads of 18/37.5/60/77/100 basis points to Treasuries for the 3/5/7/10/30-year fixed-rate notes. Compare last year's 20, 40, 75 and 100 basis-point spreads for 3s, 5s, 10s and 30s (no 7s last year), and it looks like no one held Apple's previous perfect timing against it.

See ya, Skip.

Hugh "Skip" McGee announced yesterday that he's leaving his job as head of Barclays Plc's Americas division:"My focus has always been on clients, but given the need for Barclays leadership to focus on regulatory issues for the foreseeable future, I have decided that it is time for me to move on to new challenges." It used to be about the banking, man. I don't know, I have some sympathy for deal guys who are promoted to run banks and find themselves Peter-principled into spending all of their time on regulation and none of it golfing with clients. That's not what they signed up for! Though apparently "McGee had sought the job that's going to" Tom King, who will be the sole head of Barclays's corporate and investment bank, which presumably would have involved even more regulation.

What the heck, BofA.

"Bank of America Corp. paid $111.4 million to mortgage-bond trusts after cutting the balances on home loans more than allowed under the terms of an $8.5 billion settlement, according to a trustee notice to investors." If you're keeping track, that's a nine-digit settlement for violating the terms of a previous, ten-digit settlement. Our children's children will still be talking about Bank of America mortgage settlements.

Parliament beheaded the people responsible for the Royal Mail IPO.

I've said before that the English are better at holding meetings than Americans are, and it sounds like the parliamentary committee meeting about the initial public offering of Royal Mail -- whose shares soared on the first day and have never looked back -- was no exception.

In a fairly typical exchange from the meeting, Mr. Fallon said: “I haven’t seen any evidence that the shares were undervalued at the time of the flotation.” That comment made the chairman of the committee, Adrian Bailey, apoplectic.

“That’s Alice in Wonderland,” said Mr. Bailey, a Labour member of Parliament, noting that the share price soared on the day of the sale.

Don't you wish every deal got a postmortem like this? Meanwhile, some lucky person at Breakingviews got to write the headline "WH Group's pulled pork IPO is least bad outcome."

Would you like to read about Allergan's governing documents?

This is hostile-M&A-junkie stuff, but Steven Davidoff takes a long look at Allergan's documents to analyze Valeant's (and Pershing Square's) chances of winning a hostile takeover battle. Those chances are ... confusing. Valeant and Pershing can act by written consent, but probably not to appoint directors. And they can call their own shareholder meeting, but Allergan may be able to delay it.

The basis step-up as punishment.

My tax professor's two fundamental rules of tax law were that it is always better to have more money than less money, and that it is always better to die later than to die sooner. Anyway the most interesting financial aspect of the Donald Sterling imbroglio is that, while Sterling will make many many hundreds of millions of dollars in profits from his forced sale of the Clippers, he'll have to pay taxes on it -- whereas if he had just left the team to his heirs, they'd have a basis step-up to the fair value at his death, and avoid probably hundreds of millions of dollars of taxes. It almost looks like a violation of the second law of taxes.

Things happen.

Please Stop Ideating. Harvard business school has too much money. Oh, OrgyMan (via). "Warren Buffett offers investors autographed diamonds." Billion-story building. "Pilots warned about loose Budweiser beer blimp floating over Canada."


1 Cf. the SEC's belief that basically no one deserves the WKSI consequences of a criminal conviction.

To contact the writer of this article: Matt Levine at mlevine51@bloomberg.net.

To contact the editor responsible for this article: Tobin Harshaw at tharshaw@bloomberg.net.