Last go around, the SEC proposed that Bank of America pay a $33 million fine for failing to disclose that it had authorized as much as $5.8 billion of bonuses for Merrill Lynch & Co. employees before shareholders voted in December 2008 to approve its purchase of Merrill. Now the commission wants Bank of America to pay a $150 million fine for the same purported violations, plus some additional... [more]
Last go around, the SEC proposed that Bank of America pay a $33 million fine for failing to disclose that it had authorized as much as $5.8 billion of bonuses for Merrill Lynch & Co. employees before shareholders voted in December 2008 to approve its purchase of Merrill. Now the commission wants Bank of America to pay a $150 million fine for the same purported violations, plus some additional allegations the agency has thrown into the mix. Rakoff should tell the SEC to get lost.
http://www.bloomberg.com/apps/news?pid=20601039&sid=aL7s61oeOu1I
Once again, the agency is saying it can’t find a single person who should be held liable for these alleged misdeeds. It’s as if the corporate person broke the rules, while the living, breathing people in charge of running Bank of America and Merrill had nothing to do with it. That shouldn’t fly today anymore than it did last September when Rakoff issued his first ruling, in which he said the initial settlement proposal was “neither fair, nor reasonable, nor adequate.”
It’s when you dig through the weeds of the allegations that the absurdity of the commission’s case comes through.
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Response by Riversider
over 14 years ago
Posts: 13573
Member since: Apr 2009
Rakoff again!
WASHINGTON — Taking a broad swipe at the Securities and Exchange Commission’s practice of allowing companies to settle cases without admitting that they had done anything wrong, a federal judge on Monday rejected a $285 million settlement between Citigroup and the agency.
The judge, Jed S. Rakoff of United States District Court in Manhattan, said that he could not determine whether the agency’s settlement with Citigroup was “fair, reasonable, adequate and in the public interest,” as required by law, because the agency had claimed, but had not proved, that Citigroup committed fraud.
The guy's a federal judge. Why can't you give him the respect of spelling his name correctly? You come here and post your supposedly thoughtful articles, then you disrespect your subjects and your readers.
A judge does not have to %u201Cautomatically approve whatever consent decree the S.E.C. brings him and assume that it is in the public%u2019s interest,%u201D said John R. Wing, the lawyer for Judge Rakoff
Brad S. Karp, a lawyer for Citigroup, highlighted this concern, emphasizing the potential repercussions of judges%u2019 overriding government agencies and forcing them to require defendants to acknowledge wrongdoing.
%u201CMany corporations will decide to not settle matters if a requirement is to admit liability,%u201D Mr. Karp said. %u201CThe federal regulatory enforcement regime would screech to a grinding halt.%u201D
In court papers, Judge Rakoff%u2019s lawyers dismissed such a claim as %u201Cneedlessly alarmist.%u201D
The S.E.C.%u2019s civil fraud action against Citigroup related to the sale of a complex $1 billion mortgage bond deal during the waning days of the housing boom. Citigroup was accused of deceiving its customers by selling them pools of risky mortgages that the bank knew would decline in value. Clients suffered more than $600 million in losses.
Citigroup agreed to play $285 million to settle the complaint, but Judge Rakoff rejected the settlement. He derided the amount of money that Citigroup had agreed to pay, calling it %u201Cpocket change%u201D for the bank. And in settling the case without proving that Citigroup committed fraud, the parties deprived the public %u201Cof ever knowing the truth in a matter of obvious public importance,%u201D Judge Rakoff wrote.
He ordered the parties to prepare for trial, but that was postponed after the commission and Citigroup appealed Judge Rakoff%u2019s rejection of their deal.
Historically, judges have rubber-stamped S.E.C. settlements with banks and other defendants accused of civil fraud. Such settlements require court approval, and the judge is charged with finding that the settlement is %u201Cfair, reasonable, adequate and in the public interest.%u201D
The rulings became a cause c�l�bre in the wake of the financial crisis, a time when the commission and other federal authorities were being criticized for failing to hold large banks accountable
You don’t want to live in a town where the police and the mob work together.
In a completely unrelated note, today the Second Circuit heard arguments from the SEC — the federal agency statutorily charged to enforce the nation’s securities laws — and Citigroup — a company targeted for securities laws violations that it refuses to admit or deny committing — on the SAME SIDE.
This should be a red flag.
They wanted the Second Circuit to spank Judge Jed Rakoff for having the audacity to ask the SEC to kindly do its job. The nerve of some people.
Ignored comment.
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Response by generalogoun
over 13 years ago
Posts: 329
Member since: Jan 2009
I rarely agree with you, but I'm with you on this one.
It's just like the FAA, which is nestled deeply inside the vest pocket of the airline industry. Our federal courts should rethink the doctrine of automatic deference to administrative agencies. These days, the agencies represent and work for the industries they're supposed to be regulating.
Ignored comment.
Unhide
Response by truthskr10
over 13 years ago
Posts: 4088
Member since: Jul 2009
>You don’t want to live in a town where the police and the mob work together.
You think there isnt a federal WASP "mob?"
My friend's dad used to own a diner back when Guiliani was "kicking out the mob" from waste management.
The national contractor was coming in at 50% below "soprano" rates and their muscle was ex and/or retired federal law enforcement.
One who claimed to be as such offered "protection" for any blow back.
After all the "sopranos" were cleaned out, rates went right back up and then some.
Rakoff again!
WASHINGTON — Taking a broad swipe at the Securities and Exchange Commission’s practice of allowing companies to settle cases without admitting that they had done anything wrong, a federal judge on Monday rejected a $285 million settlement between Citigroup and the agency.
The judge, Jed S. Rakoff of United States District Court in Manhattan, said that he could not determine whether the agency’s settlement with Citigroup was “fair, reasonable, adequate and in the public interest,” as required by law, because the agency had claimed, but had not proved, that Citigroup committed fraud.
http://www.nytimes.com/2011/11/29/business/judge-rejects-sec-accord-with-citi.html?_r=1
The guy's a federal judge. Why can't you give him the respect of spelling his name correctly? You come here and post your supposedly thoughtful articles, then you disrespect your subjects and your readers.
http://dealbook.nytimes.com/2013/02/08/appeals-court-hears-arguments-over-judge-rakoffs-rejection-of-citigroup-settlement/
A judge does not have to %u201Cautomatically approve whatever consent decree the S.E.C. brings him and assume that it is in the public%u2019s interest,%u201D said John R. Wing, the lawyer for Judge Rakoff
Brad S. Karp, a lawyer for Citigroup, highlighted this concern, emphasizing the potential repercussions of judges%u2019 overriding government agencies and forcing them to require defendants to acknowledge wrongdoing.
%u201CMany corporations will decide to not settle matters if a requirement is to admit liability,%u201D Mr. Karp said. %u201CThe federal regulatory enforcement regime would screech to a grinding halt.%u201D
In court papers, Judge Rakoff%u2019s lawyers dismissed such a claim as %u201Cneedlessly alarmist.%u201D
The S.E.C.%u2019s civil fraud action against Citigroup related to the sale of a complex $1 billion mortgage bond deal during the waning days of the housing boom. Citigroup was accused of deceiving its customers by selling them pools of risky mortgages that the bank knew would decline in value. Clients suffered more than $600 million in losses.
Citigroup agreed to play $285 million to settle the complaint, but Judge Rakoff rejected the settlement. He derided the amount of money that Citigroup had agreed to pay, calling it %u201Cpocket change%u201D for the bank. And in settling the case without proving that Citigroup committed fraud, the parties deprived the public %u201Cof ever knowing the truth in a matter of obvious public importance,%u201D Judge Rakoff wrote.
He ordered the parties to prepare for trial, but that was postponed after the commission and Citigroup appealed Judge Rakoff%u2019s rejection of their deal.
Historically, judges have rubber-stamped S.E.C. settlements with banks and other defendants accused of civil fraud. Such settlements require court approval, and the judge is charged with finding that the settlement is %u201Cfair, reasonable, adequate and in the public interest.%u201D
The rulings became a cause c�l�bre in the wake of the financial crisis, a time when the commission and other federal authorities were being criticized for failing to hold large banks accountable
http://abovethelaw.com/2013/02/sec-to-second-circuit-please-dont-make-us-do-our-jobs/
You don’t want to live in a town where the police and the mob work together.
In a completely unrelated note, today the Second Circuit heard arguments from the SEC — the federal agency statutorily charged to enforce the nation’s securities laws — and Citigroup — a company targeted for securities laws violations that it refuses to admit or deny committing — on the SAME SIDE.
This should be a red flag.
They wanted the Second Circuit to spank Judge Jed Rakoff for having the audacity to ask the SEC to kindly do its job. The nerve of some people.
I rarely agree with you, but I'm with you on this one.
It's just like the FAA, which is nestled deeply inside the vest pocket of the airline industry. Our federal courts should rethink the doctrine of automatic deference to administrative agencies. These days, the agencies represent and work for the industries they're supposed to be regulating.
>You don’t want to live in a town where the police and the mob work together.
You think there isnt a federal WASP "mob?"
My friend's dad used to own a diner back when Guiliani was "kicking out the mob" from waste management.
The national contractor was coming in at 50% below "soprano" rates and their muscle was ex and/or retired federal law enforcement.
One who claimed to be as such offered "protection" for any blow back.
After all the "sopranos" were cleaned out, rates went right back up and then some.
A la Walmart....