Judge rejects settlement between SEC and CitiBank .. Movie Margin Call and Inside Job

[Thomas Beyer]

After watching the movie "The Inside Job" and "Margin Call" I find this court order interesting in that it highlights a common practice on Wallstreet: make money first, then settle later and do not admit guilt.



Perhaps, just perhaps, some of the perpetrators of the financial crisis will be brought to justice .. or is this unlikely ?




NEW YORK (AP) ` 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."




...





"In much of the world, propaganda reigns, and truth is confined to
secretive, fearful whispers," Rakoff said. "Even in our nation,
apologists for suppressing or obscuring the truth may always be found.
But the SEC, of all agencies, has a duty, inherent in its statutory
mission, to see that the truth emerges; and if it fails to do so, this
court must not, in the name of deference or convenience, grant judicial
enforcement to the agency's contrivances."



Full article here: http://news.yahoo.com/ny-judge-rejects-285m-sec-citigroup-agreement-210325625.html



Your thoughts ?

 

[gwasser]

I agree with this judge. If you settle to make a possible charge of inappropriate behavior go away then was the accusar only after the settlement money and you didn't do anything wrong or were you guilty?



The SEC's mandate is to protect the investor against unfair investment trading practices and if the SEC thinks it is justified in filing a claim of inappropriate dealings then it ought to be fair to warn or show the public what the issue was and not hide it behind a backroom settlement. Afterall it was not the SEC who was harmed, it was the public and it deserves to know. and to be compensated.

 

[kir]

I like your connection you made from the 2 movies to the Judge Rakoff's ruling.



I also think all these events (including unemployment and low income, poor economy,etc...) are stirring up people to examine the modern day realities. I think it's only the beginning of movements like the Occupy movement (the 99%).



Haven't seen Margin Call yet....looks like a good one.



Kir.