Nov 28, 2011

Judge Blocks Citi Settlement

Federal Judge Blocks Citigroup’s Mortgage Settlement With S.E.C.

A federal judge in New York on Monday threw out a settlement between the Securities and Exchange Commission and Citigroup over a 2007 mortgage derivatives deal, saying that the S.E.C.’s policy of settling cases by allowing a company to neither admit nor deny the agency’s allegations did not satisfy the law.

The judge, Judge Jed S. Rakoff of the Federal District Court in Manhattan, ruled that the S.E.C.’s $285 million settlement, announced last month, is “neither fair, nor adequate, nor in the public interest” because it does not provide the court with evidence on which to judge the settlement.

The ruling could throw the S.E.C.’s enforcement efforts into chaos, because a majority of the fraud and other cases that the agency brings against Wall Street firms are settled out of court, most often with a condition that the defendant does not admit that it violated the law while also promising not to deny it.


On the bright side, there's now accountability for the lack of accountability -- but remember, it was the SEC that wasn't just asleep at the wheel, they were watching porn when Citi helped cause the great recession.

While it's great that they're not getting a back door slap on the wrist (this time)... but they're also not arresting the Board of Directors and taking them to their prison cells either (which I assume was something everyone at Zuccoitti Park were waiting for, right?)

No comments: