Federal Judge Pimp-Slaps the SEC Over Citigroup Settlement Matt Taibbi Rolling Stone
Rakoff’s 15-page final ruling read like a political document, serving not
just as a rejection of this one deal but as a broad and unequivocal indictment
of the regulatory system as a whole. He particularly targeted the SEC’s
longstanding practice of greenlighting relatively minor fines and financial
settlements alongside de facto waivers of civil liability for the
guilty – banks commit fraud and pay small fines, but in the end the SEC allows
them to walk away without admitting to criminal wrongdoing.
This practice is a legal absurdity for several reasons. By accepting
hundred-million-dollar fines without a full public venting of the facts, the SEC
is leveling seemingly significant punishments without telling the public what
the defendant is being punished for. This has essentially created a parallel or
secret criminal justice system, in which both crime and punishment are
adjudicated behind closed doors.
This system allows for ugly consequences in both directions. Imagine if
normal criminal defendants were treated this way. Say a prosecutor and street
criminal combe into a judge’s chamber and explain they’ve cooked up a deal, that
the criminal doesn’t have to admit to anything or plead to any crime, but has to
spend 18 months in house arrest nonetheless.
What sane judge would sign off on a deal like that without knowing exactly
what the facts are? Did the criminal shoot up a nightclub and paralyze someone,
or did he just sell a dimebag on the street? Is 18 months a tough sentence or a
slap on the wrist? And how is it legally possible for someone to deserve an
18-month sentence without being guilty of anything?
Such deals are logical and legal absurdities, but judges have been signing
off on settlements like this with Wall Street defendants for
years.Read more: http://www.rollingstone.com/politics/blogs/taibblog/federal-judge-pimp-slaps-the-sec-over-citigroup-settlement-20111129#ixzz1hLv7XgIG
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