Federal Judge Roasts SEC for Supine Citigroup Settlement

[The Straight Story]

Federal Judge Roasts SEC for Supine Citigroup Settlement

MANHATTAN (CN) - With obvious relish, a federal judge held an SEC attorney's feet to the fire for proposing a settlement with Citigroup that represents a fraction of an alleged $600 million mortgage fraud and does not require the bank to admit wrongdoing. Citigroup sold $1 billion in mortgage-backed CDOs, which a Citigroup trader called "a collection of dogsh!t," while secretly shorting the securities.

SEC attorney Matthew Martens urged U.S. District Judge Jed Rakoff not to factor the public interest into his decision on whether to approve the deal.
"That's an interesting position," Rakoff replied with acid understatement. "I'm supposed to exercise my power, but not my judgment."

The SEC on Oct. 19 accused Citigroup Global Markets of hyping and selling roughly $1 billion in residential mortgage-backed collateralized debt obligations, while secretly selling the CDOs short.

http://www.courthousenews.com/2011/11/10/41354.htm

[jayfish]

1. "urged Judge not to factor the public interest into his decision on whether to approve the deal."

And this comes from the Obama administration. How grand.

[Aerows]

3. The judge openly slammed the SEC prosecutor

As well he should have. I like this part:

" Paraphrasing the complaint to omit the profanity, Rakoff asked Martens whether the SEC complaint had quoted Citigroup executives as calling the CDOs "real dogs," then summarized several allegations."

Martens rephrased Rakoff's summary with more technical and euphemistic language.

"So it's what I just said?" Rakoff said.

"Yes," Martens acknowledged."

Busted.

[PoliticAverse]

4. If this were fiction it would be hard to believe... n/t

[Aerows]

2. That judge laid it on the line

and didn't back up an inch. If we had a hundred of him, or nine of him on the Supreme Court, we might actually have a justice system that works again.

[jayfish]

5. But will his decision follow his rhetoric?

Or will it be a "hold your nose" moment.

[PoliticAverse]

6. In a previous case Rakoff rejected a $33 million settlement eventually approving a $150 million one.

See: http://www.readersupportednews.org/opinion2/279-82/8344-finally-a-judge-stands-up-to-wall-street

[jayfish]

8. Good to read! -NT-

[DURHAM D]

7. Memo to Judge Rakoff:

Don't get on a private plane.