Felix Salmon put up a great note from a reader about investment banking conflicts; it's fantastic so go read it. But this is a tiny bit unfair: You and many other commentators seem to have some misconceptions about what exactly large, sophisticated clients such as El Paso’s board hire investment bankers to do. Its always funny how, in the minds of pundits everywhere, those conniving and all-powerful one-percenters who sit on corporate boards become impotent and completely incapable of independent decision-making once an investment banker walks into the room. The basic argument is that repeat-player investment bankers provide value not by telling brainless executives whether to accept or reject a merger, but by providing intelligent decisionmakers with access and relationships, and relationships come with conflicts. As he says: When sophisticated clients (management teams, company boards, PE funds, etc) hire M&A bankers, they typically hire them for two main reasons (in addition to the legally required shams referred to as “fairness opinions”): Execution and Connections. Of those things, connections are higher-value and inextricable from conflicts. If you're hiring someone to sell you to Company X, a bank who has done work for Company X - heck, who owns 20% of Company X - is the bank you want. And sure maybe their "conflict" will cause them to advise you to sell for a lowball price so that Company X appreciates them more but, hey, nobody's forcing you to take their advice. So, yes, this is all true. But he's maybe a little too harsh on the commentators and their misconceptions.

But...

If you had asked us two years or two months or two days ago if we thought that there would be a time in the near future when Securities and Exchange employees would not be getting reprimanded for watching porn on their work-issued computers, we would have said absolutely not. No judgment, but in our professional opinion, people do not go from, among other things: * Receiving "over 16,000 access denials for Internet websites classified by the Commission's Internet filter as either "Sex" or "Pornography" in a one-month period" * Accessing "Internet pornography and downloading pornographic images to his SEC computer during work hours so frequently that, on some days, he spent eight hours accessing Internet pornography...downloading so much pornography to his government computer that he exhausted the available space on the computer hard drive and downloaded pornography to CDs or DVDs that he accumulated in boxes in his office." * www.ladyboyx.com, www.ladyboyjuice.com, www.trannytit.com, and www.anal-sins.com ...to living a porn-free existence at l'office. Did we think they'd take baby steps toward that goal sure? But when you've tried to log on to your websites of choice, on average, 533 times a day, assuming weekends were worked, baby steps means getting yourself to a place where you can do a solid two hours of work each week without hitting up anal-sins.com. So you can imagine (and probably share in) our surprise to hear that, according to a probe by Interim Inspector General Jon Rymer re: "misuses of government resources," the worst offenses one office was charged with claiming they needed iPads to do their jobs when really they just wanted to watch movies on them at home and going to hacker conferences without encrypting the data on their computers. Granted, it doesn't look so great that the group that was running around with computers that didn't even have anti-virus programs on their computers was the one that "is responsible for ensuring exchanges are following a series of voluntary guidelines...concerning computer audits, security, and capacity" but still, no ladyboyjuice while on the job-- that's huge. In a 43-page investigative report that probed the misuse of government resources, SEC Interim Inspector General Jon Rymer discovered that an office within the SEC's Trading and Markets division spent over $1 million on unnecessary technology. The report also found that the staffers failed to protect their computers and devices from hackers, even as they were urging exchanges and clearing agencies to do just that. Although no breaches occurred, the staffers left sensitive stock exchange data exposed to potential cyber attacks because they failed to encrypt the devices or even install basic virus protection programs...On Friday Reuters reviewed a copy of the full report, which details an even broader array of problems, from misleading the SEC about the office's need to buy Apple Inc products, to cases in which staffers took iPads and laptops home and used them primarily for pursuits such as personal banking, surfing the Web and downloading music and movies. The report says the staff may have brought the unprotected laptops to a Black Hat convention where hacking experts discuss the latest trends. They also used them to tap into public wireless networks and brought the devices along with them during exchange inspections...The report also found that some people who worked in the office had little or no experience with exchange technical matters. SEC staffers used govn't computers for personal use - report [Reuters] Earlier: SEC Supervisor Surfed Tranny Porn To Cope With Stress Of The Job; SEC Official Who Surfed Tranny Porn To Deal With Stress Of The Job– Not Alone!;

The whiners have won at the Chicago Mercantile Exchange. You won't be able to buy grain or soy futures in the Windy City from 2:15 in the afternoon to 8 at night.*