Judge Jed Rakoff – American Hero – Is America awakening ?

A judge on Monday used unusually harsh language to strike down a $285 million settlement between Citigroup and the Securities and Exchange Commission over toxic mortgage securities, saying he couldn’t tell whether the deal was fair and criticizing regulators for shielding the public from details of the firm’s wrongdoing.

U.S. District Judge Jed Rakoff said the public has a right to know what happens in cases that touch on “the transparency of financial markets whose gyrations have so depressed our economy and debilitated our lives.” In such cases, the SEC has a responsibility to ensure that the truth emerges, he wrote.

Rakoff said he had spent hours trying to assess the settlement but concluded that he had not been given “any proven or admitted facts upon which to exercise even a modest degree of independent judgment.” He called the settlement “neither fair, nor reasonable, nor adequate, nor in the public interest.”

The SEC shot back in a statement issued by Enforcement Director Robert Khuzami, saying the deal was all four of those things and “reasonably reflects the scope of relief that would be obtained after a successful trial.”

The SEC had accused the bank of betting against a complex mortgage investment in 2007 — making $160 million in the process — while investors lost millions. The settlement would have imposed penalties on Citigroup but allowed it to deny allegations that it misled investors.

Khuzami is the problem. Allowing cash settlements with no admission of guilt sets the stage for more abuse of investors. Yes, it a lot of money but it will never be enough to make investors whole on the funds they lost due to misleading and negligent practices of Wall Street.

It is a rigged game and Judge Rakoff has had enough. Clearly someone forgot to pay him off but then again, maybe he does not want to work on Wall Street or be the SEC chairman.


About theworldawakens

Have you ever just sat back and said "why is that". I do it all the time but now I am just going to write about it.
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3 Responses to Judge Jed Rakoff – American Hero – Is America awakening ?

  1. Pingback: Federal Judge, Jed S. Rakoff, Tells the SEC to do its Job - Pilant's Business Ethics | Pilant's Business Ethics

  2. Pingback: NY Judge Rejects $285M SEC-Citigroup Agreement « News Worldwide

  3. Pingback: Signs of (US) Justice against Misery Makers « French News Online Blog

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