published Apr 15th 2015, 7:14 am, by Matt Levine

(Bloomberg View) —

Bank earnings.

Bank of America beat on adjusted earnings, though the news was mixed; trading was disappointing (outside of foreign exchange, which did great) but legal costs were down significantly from last year. “The firm said it’s keeping its quarterly dividend unchanged, disappointing analysts who had expected an increase to 8 cents a share from 5 cents,” though from its presentation it seems pretty stoked about starting its stock buyback program after passing last month’s stress test. Here are the earnings release and supplement. Elsewhere, John Carney argues that JPMorgan is a fox and Wells Fargo is a hedgehog.

An SEC settlement.

I never understand why people get so mad when the Securities and Exchange Commission settles cases for hundreds of millions of dollars in fines but the defendant “neither admits nor denies” its guilt; the hundreds of millions of dollars seem sufficient to me for deterrence purposes. But yesterday a judge approved an SEC settlement with former Freddie Mac executives in which the parties agreed “that no party is the prevailing party” and “that it is not in the interest of justice to continue to litigate this matter,” which is very different from the usual neither-admit-nor-deny-but-come-on. Basically they got bored and decided to stop having a lawsuit. Lawsuits being what they are, it’s hard to stop having one without someone paying some money, but they kept it to a minimum. Here’s one of the executives:

I am not making any payment to the S.E.C. or to anyone in connection with this case; rather, the insurance carriers for Freddie Mac are making a nominal donation to an unrelated fund to benefit investors on my behalf.

That sounds like he prevailed? The SEC had accused the executives of lying about how much subprime exposure Freddie had; the executives pointed out that Freddie clearly disclosed its exposures but didn’t call all of them “subprime,” and that “there was no one universally accepted definition of subprime that was used by market participants.” This case always seemed pretty terrible to me, and eventually everyone agreed.

An FCA fine.

The U.K. Financial Conduct Authority fined Bank of New York Mellon 126 million pounds for “failing to comply with the FCA Client Assets Sourcebook (Custody Rules, or CASS), which applies to safe custody assets and to client money.” It is a big fine for what seem to be mostly very dull failures to carefully segregate client assets; Bank of New York Mellon would sometimes put different clients’ money in the same account, though it always knew whose money was whose and no clients ever lost money. But they could have lost money, is the point. As sins go, these don’t seem mortal, and if we were talking about a mid-size futures broker or hedge fund firm or whatever you’d be able to laugh this off. But Bank of New York Mellon is a custody bank. It’s a you-had-one-job sort of bank, and the one job is keeping careful track of customer assets. It’s alarming that it would mess that up. Izabella Kaminska has more.

Bad, bad obvious joke headline.

Here is a securities fraud case against a man named Leroy Brown, who in the words of the Securities and Exchange Commission stands “accused of telling false tales about his stockbroking experience to lure current and former U.S. military personnel into investing with him.” I feel like I would enjoy reading SEC fraud lawsuits more than I already do, which is very much, if securities fraud was usually described as “telling false tales” rather than, like, making misrepresentations of material fact with the requisite degree of scienter. Anyway Brown’s stockbroking business was allegedly all hat and no cattle:

Brown and LB Stocks make other specious claims on LB Stocks’ websites and other media that reflect a basic misunderstanding of the financial markets. For example, Brown states on LB Stocks’ Facebook page that, “[a]s of 06/20/2014 LB Stock&Trades Advice is not accepting any new clients. Also I will be getting a IPO meaning entering my company into the stock market ticket symbol LBJ. Thank you God. BOOM POW BAM[.]” (errors in original). In fact, there has never been an initial public offering of stock in LB Stocks, nor is it a publicly traded company. Moreover, the stock ticker symbol “LBJ” is already in use.

Moreover “BOOM POW BAM” doesn’t have, like, an accepted meaning in the financial advising community. Brown also allegedly made bold yet somehow familiar claims about his other companies named LB Securities and LB Capital:

These representations about LB Securities and LB Capital are patently false. Neither company is registered with FINRA or the SEC in any capacity. In fact, there is no evidence that these companies even exist, as Brown and LB Stocks simply copied these statements directly from the FAQ page of E*TRADE’s website – changing E*TRADE Securities and E*TRADE Capital Management to LB Securities and LB Capital Management, respectively.

If you are running a stocks scam, one question that you might have to answer early on is “how do I stocks?” Fortunately that is a question that has been answered before by legitimate stocks businesses and there’s (almost) no harm in copying their work.

Elsewhere in securities fraud news Sheldon Silver’s son-in-law was arrested for allegedly running a Ponzi scheme, though at a rather higher level of sophistication than Brown.

Some Reg FD.

What do you think went on here? J.C. Penney says that “a senior official of the Company inadvertently sent an e-mail communication to a securities analyst that contained non-public information regarding the Company’s comparable store sales results for the fiscal first quarter of 2015 to date,” so yesterday it disclosed that information to everyone because Regulation FD forbids selective disclosure of material financial information. But is that, like, the analyst called the guy and was like “hey how late are your stores open this weekend?” and the guy was like “hang on let me forward you an e-mail” and he forwarded an e-mail with current sales results? Or is it like, the guy was trying to send some financial planning documents to his deputy, Matthew X. Levine, but inadvertently sent it to analyst Matthew Q. Levine? (Happens more often than you’d think, to Matthew Levines.)

Or — and this is just a wild guess — was the inadvertence more along the lines of, the senior official forgot that you’re not supposed to give analysts specific numeric information about undisclosed financial results? Because he was intentionally e-mailing the analyst to help the analyst model J.C. Penney’s results? Because that’s what securities analysts do, talk with corporate executives about how the company is doing, in ways that carefully but imperfectly navigate between the analysts’ duty not to insider trade and the executives’ duty not to make selective disclosure?

Google is in trouble.

I guess I am just not very sophisticated at antitrust but I don’t really get this objection to Google’s search dominance:

The European Commission sent a “statement of objections” to Google that alleges the company unfairly favors its own comparison shopping service above rivals.

I mean, I do, in a way. I mean if I want to use Priceline or whatever to buy a thing I’ll go to Priceline; if I want to use Google I’ll use Google. But that is perhaps the wrong way to look at it; lots of people who want to use Priceline will use Google, because Google is pretty much the Internet. If you think that, then I suppose Google should just be a neutral arbiter of the Internet and not use its dominance in search to sell its own services. But isn’t the point of providing a useful free service to leverage it into exposure for your other profitable services?

Sarah Nassauer on food trends.

Is basically all I ever want to read:

Three years ago, Campbell was tracking two big trends: younger shoppers who want more adventurous ethnic flavors and the need for easy weeknight dinners. To respond, Campbell introduced dinner sauces, which can be heated in a skillet, oven or slow-cooker with a meat and come in a variety of flavors from Thai curry to pot roast. The best-selling flavors are “different from what they [consumers] would normally have, but not so different that it’s foreign and scary,” says Mr. Goodman, the company innovation director.

The company plans to stop selling a cheddar bacon beef sauce. “We thought the consumer was really hungering for those familiar flavors,” but it likely wasn’t exciting enough, says Mr. Goodman.

Things happen.

Nokia-Alcatel-Lucent. Morgan Stanley might sell its physical oil trading business to Castleton Commodities International. Solar companies vs. utilities. Investors are buying European bonds. A former Citi banker “defied company orders 40 years ago to covertly smuggle more than 100 Vietnamese out of Saigon during the last days of the Vietnam War.” Tears on My Zillow. Would you rather hire someone who agrees or disagrees with the statement “I have never understood why some people find abstract art appealing”? How Capitalism Created ‘Cool.’ Jia Tolentino went to a Shark Tank casting. A Field Guide to the American Sandwich.

This column does not necessarily reflect the opinion of Bloomberg View’s editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story: Matt Levine at mlevine51@bloomberg.net To contact the editor on this story: Zara Kessler at zkessler@bloomberg.net