A Judge Fights Wall Street When SEC Doesn’t
The Securities and Exchange Commission (SEC) is notoriously underfunded. The firms it regulates, Wall Street’s finest and less than finest, are overfunded. This leads to an enforcement challenge from SEC. SEC has responded by often offering settlements to firms accused of breaking the law. These settlements are often cushy and involve no admission of guilt. Matt Taibbi has the story of one judge who wouldn’t stand for it.
Judge [Jed] Rakoff balked at the settlement and particularly balked at the SEC’s decision to allow Citi off without any admission of wrongdoing. He also mocked the SEC’s decision to describe the crime as “negligence” instead of intentional fraud, taking the entirely rational position that there’s no way a bank making $160 million ripping off its customers can conceivably be described as an accident.
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