How bad is insider trading?

One good test is: If the FBI knows you are planning to commit Crime X, and Crime X is really bad, they'll probably stop you. If Crime X isn't so bad, they'll let you go ahead and just arrest you afterwards, when they have lots of proof. This is sort of how the War on Drugs works, but it's also exactly how insider trading works; here is Peter Henning at DealBook on one recent case:

That may explain why the government was willing to let Mr. Lucarelli continue trading on inside information so it could catch him red-handed. Investigators would not be expected to allow a defendant to commit an armed robbery, but insider trading does not have a comparable threat to individuals -- at least as long as the profits can be seized before the trader spends them.

Oh sure but will the profits then be returned to the schmoes who sold stock to Lucarelli when he had inside information -- the diffuse and anonymous victims of his crime? Obviously not. The government had no problem with them being victimized; its goal was not to prevent crime but to put a person in prison. Elsewhere, insider trading sentences are going up: "In the five-year period ending December 2013, insider trading defendants received an average sentence of 17.3 months, up from 13.1 months during the previous five years, or a 31.8 percent increase."

Allergan says more mean things about Valeant.

The Allergan/Valeant lawsuits in brief: Allergan and Valeant are fighting in Delaware court about when and how Allergan should hold a special meeting to vote on, roughly speaking, Valeant's proposed merger. Separately, Allergan sued Valeant and Pershing Square in a California federal court, claiming that they violated securities laws in accumulating their Allergan stake. Valeant and Pershing Square, not ones to pass up the opportunity for a lawsuit, countersued in the California court, claiming that Allergan violated securities laws by basically saying false mean things about Valeant's business model. This, in turn, gave Allergan an opening to file a 54-page answer explaining in detail its concerns "about Valeant’s unsustainable business model, its misleading financial disclosures, and its massive debt burden" -- and then publicize that answer. It would be funny if Allergan convinced the court that Valeant's business model is unsustainable as a matter of law, and the judge ordered Valeant disbanded and sold for parts. Also excellent is Allergan's claim that the countersuit is an effort by Valeant and Pershing to "misdirect the public from their languishing efforts to pillage Allergan," though of course Allergan's lawsuit is itself an effort to misdirect the public from management's flailing efforts to avoid being pillaged.

Watch out what you say in a chat room.

Not that I need to tell you that at this point, but here's more stuff:

Credit Suisse's months-long review of chat transcripts and interviews with employees also have turned up allegations of traders on the same London desk using profane, sexist and racist language and watching sex videos on the trading floor, the people said.

How many "sex videos" do you think are watched on an average day on Wall Street and City trading floors? Like ... more than one, right? Still, as a reason for being fired from a bank, that is not a great one. Not that any of the porn-watchers have been fired yet. Trouble has instead come for one saleswoman who apparently shared client blasts -- which "described Credit Suisse clients' interest in buying or selling stocks, price ranges of upcoming public offerings, or updates on corporate mergers or other deals" -- with her husband at another firm. Which probably violates a policy, sure, but which also probably happens all the time and isn't particularly bad; public offering price ranges aren't exactly the secret sauce that makes Credit Suisse tick. But she got caught and suspended, she "complained about what she described as improper and lewd behavior by her colleagues on the pan-European equities sales trading desk," her boss got suspended, and now everyone's workplace porn habits are being scrutinized.

NYSE floor traders miss the good old days.

I'm a bit late to this, but here is a story about the "atmosphere of common cause and collegiality" in the old days at the New York Stock Exchange, before the computers came and ruined all the fun. It sounds a little like Credit Suisse actually:

Socially, the floor had regressive tendencies, derived from a long-held patriarchy that didn't admit its first female member until 1967 and its first African-American member until 1970. Mr. Kenny says he once "saw a man drop from a heart attack" and "others step over his body to make their trade."

Also the commissions were pretty high though.

Angelo Mozilo is not sorry.

Sorry for what? What are you even talking about?

Things happen.

Regulators will vote on liquidity rules today. The CoCo market might reach $80 billion this year. JPMorgan's operational risk-weighted assets keep going up. Why a Breakup of Citigroup Is Still a Good Idea. Ivy League kids go into banking and consulting, but so do marginal tennis pros. It’s Never Been More Lucrative to Be a Math-Loving People Person. IEX is finding it pretty easy to raise money. "Support for a hip Brooklyn ranges from 49 - 32 percent in The Bronx to 85 - 12 percent in Brooklyn." Rudy Giuliani wants to make golf "simpler" by reducing it to twelve holes. Scary, secretive things that are round-ish.

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.