Judge Blocks Citigroup Settlement With S.E.C.

[MerryBlooms]

WASHINGTON — 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, Jed S. Rakoff of United States District Court in Manhattan, ruled that the S.E.C.’s $285 million settlement, announced last month, is “neither fair, nor reasonable, 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 cases and other actions 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.

That condition gives a company or individual an advantage in subsequent civil litigation for damages, because cases in which no facts are established cannot be used in evidence in other cases, like shareholder lawsuits seeking recovery of losses or damages.

Full article-
http://www.nytimes.com/2011/11/29/business/judge-rejects-sec-accord-with-citi.html?src=tp&smid=fb-share

[Lint Head]

1. I hope this judgement is not appealed.

[MerryBlooms]

2. I know, me too, but I'm sure it will be-

I hope the judge is well protected because I get a feeling big money is gearing up for a major character assault.