Benghazi!

This is perhaps the most comical story you'll read today featuring both an al-Qaeda terrorist attack and a massive mortgage fraud. The Justice Department had decided to bring a huge mortgage fraud lawsuit against Citigroup last month. But then:

News had leaked that afternoon, June 17, that the U.S. had captured Ahmed Abu Khatallah, a key suspect in the attacks on the American consulate in Benghazi in 2012. Justice Department officials didn't want the announcement of the suit against Citigroup -- and its accompanying litany of alleged misdeeds related to mortgage-backed securities -- to be overshadowed by questions about the Benghazi suspect and U.S. policy on detainees.

So they delayed the lawsuit and ended up negotiating a settlement that is supposed to be announced today. Keep that in mind next time someone tells you that the Justice Department is interested only in pursuing justice, whatever the consequences. (DealBook has a similar account, quoting Associate Attorney General Tony West saying "We’ve got a lot going on right now, so we’re putting the lawsuit temporarily on hold.") Perhaps the real motivation was to distract from existing Benghazi conspiracy theories by creating a new, and apparently correct, Benghazi conspiracy theory about terrorists and banksters and the Justice Department.

Elsewhere in Libya.

I hope you will not be surprised to learn that American and European companies tried to win business in Muammar Qaddafi's Libya by ummm let's say expensively befriending members of Qaddafi's regime. For one thing, we've talked about a lawsuit by new Libya against Goldman Sachs alleging corruption in old Libya, accusing the Goldman guy of courting Libyan officials by "frequently bringing them small gifts, such as aftershaves and chocolates." If you like that sort of thing you will love this Wall Street Journal story, which catalogs both touchingly strange bribes (Robert Bailey of Swiss broker Tradition Financial Services allegedly "gave Seif Gadhafi a gift of a $1,900 Apple laptop in New York in November 2008") and amazingly over-the-top financial-services stereotypes:

In an April 2009 email to Mr. Bailey, according to the transcripts, [Libyan Investment Authority board member Mahmoud] Zewam referred to a coming Marrakesh trip as "a week [of] joy in the NSL zone." That stood for "no sperm left," according to people familiar with the expression.

Oh hey super that's charming, that's a great way to present your financial credentials.

The Wylys didn't insider trade.

We talked a while back about the Securities and Exchange Commission's lawsuit against the Wyly brothers, Texas billionaires who were accused of insider trading and some not-great disclosure around their secret stock positions. A jury agreed with the SEC on the not-great disclosure points, but on Friday U.S. District Judge Shira Scheindlin found that the Wylys hadn't insider traded. The question is a nice pure what-is-insider-trading one: They controlled a company called Sterling Software. They bought a bunch of stock in Sterling via a swap. Then they sold the company at a premium. There is evidence that they were thinking about selling the company before entering the swap. The question is: Does their intention to sell a company that they control constitute material nonpublic information? If so, it'd be hard for anyone controlling any company to do any trading, since their subjective intentions would always be a possible source of illegality. Judge Scheindlin decided not to go that far, writing: "While it is difficult to draw the line between inchoate desire and something more material, that line must be drawn somewhere."

But what did Renaissance get up to?

"A U.S. Senate investigative panel will hold a hearing July 22 to probe tax maneuvers by Renaissance Technologies LLC," and that will probably be unenlightening, but those tax maneuvers are very cute and if you're not aware of them you should be. Here's the original Bloomberg News article about the strategy from last July. Here's what I wrote about it at the time; I called it "an example of how synthetic prime brokerage can transform the very nature of time itself." Renaissance basically traded stocks in a margin account, but characterized its position as an option on a basket of stocks owned by its prime brokers, and claimed long-term capital gains on the option position rather than short-term gains on the frequent trading of stocks in the basket. It is undeniably aggressive but also quite endearingly slick.

The clocks are all wrong.

Speaking of the nature of time itself, here's a story about how regulators and exchanges and dark pools and high frequency traders and so forth all have clocks that are slightly out of sync, making it impossible to know if people are trading at the wrong price. Trading at the wrong price is a feature of high-frequency trading scandals, and clock syncing is a good way to check on those scandals. When Goldman got in trouble for trading at the wrong price in its dark pool -- roughly speaking because the clock was too slow -- I said that the SEC should really do an audit of how often venues printed trades that were legal (at the best "official" price) but nonetheless not at the best price, because direct-feed prices were better. But of course this audit doesn't work if the clocks aren't all synced (and might not even then: Einstein, Heisenberg, blah blah blah). Apparently they're not.

Have a sweet Merger Monday.

Or something, I don't know, "Swiss chocolate maker Chocoladefabriken Lindt & Sprüngli said on Monday that it had reached an agreement to acquire Russell Stover Candies" and that's my chocolate-merger joke, hope you liked it. Elsewhere, big law firms are leading the mergers and acquisitions league table, which is sort of the raison d'être of big law firms no? Silver Lake settled its share of the big private-equity-antitrust lawsuit for $29.5 million, as that lawsuit continues to fizzle disappointingly into just another plaintiffs'-lawyer paycheck. And Vince Cable wants stricter British takeover rules, particularly on the commitments that bidders must make to win takeover approvals; "I want such commitments to be clear, unambiguous and with no wriggle room."

Things happen.

If you're a junior trader in London who manipulated foreign exchange, you might have a get-out-of-jail free card, but if you're a junior trader planning to manipulate something else don't assume that that generalizes, junior traders go to jail too. Izzy Kaminska on short squeezes and the problems of the no debt society, and on hierarchy "which was earned through generations of precious object accumulation." There's some bank fraud in Bulgaria. Las Vegas Sands is being sued for $5 billion for allegedly stealing trade secrets, and how can a casino have $5 billion of trade secrets? "The sophistic outpourings of a confirmed agent of Satan sent to Earth to separate you and your orphaned, widowed Mother-in-law from any semblance of financial wherewithal and pin money," but check out footnote 22 here. If you live in Ancient Rome, now you can plan your next vacation online.

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.