CalendarAdvertiseDistributionArchiveAboutContact
Close
News & Politics
Events
Music
Arts & Culture
Opinion
Food & Drink
Web Only
More
Business
Community
Environment
Erie at Large
Erie Faces Erie
Features
Film
From the Editors
Harrisburg Happenings
Jen Sorensen Cartoons
Just a Thought
Just Toyin' Witcha
Music Reviews
News of the Weird
Sports
Theater
Events Calendar
Advertise
Distribution Locations
Issues Archive
Shop
About Us
Contact Us
Share:
BloggERy

SEC Chided for Sweetheart Settlement Deal with Citigroup

A New York federal judge deals a blow for the 99% and for a fair and free market.

by Jay Stevens
View ProfileFacebookTwitterGoogle+RSS Feed
November 29, 2011 at 7:30 PM
Josh Townsend

Maybe you saw, maybe you didn't, but New York federal judge Jed Rakoff threw out a settlement between the SEC and Citigroup in a ruling that makes a 99-percenter's heart trill. Here's why.

For starters, the way the SEC and Wall Street has done business for years is when a financial company was involved in fraud or other illegal activities, the SEC levies a fine against the company in return for not detailing the infractions and allowing the company not to admit to wrongdoing.

In short, such a deal essentially shields the Wall Street firm from civil litigation. That is, the poor suckers the firm swindled are left holding the bag. Matt Taibbi:

The Rakoff ruling shines a light on the way these crappy settlements have evolved into a kind of cheap payoff system, in which crimes may be committed over and over again, and the SEC's only role is to take a bribe each time the offenders slip up and get caught.

If you never have to worry about serious punishments, or court findings of criminal guilt (which would leave you exposed to crippling lawsuits), then there's simply no incentive to stop committing fraud. These SEC settlements simply become part of the cost of doing business...

But you've got to read the ruling itself. It's awesome. It's an indictment of Wall Street and the government agency that protects it. Rakoff calls Citigroup a "recidivist," calls the fine levied against them "pocket change," and notes that the settlement leaves the "defrauded investors substantially short-changed." But the judge's harshest words were saved for the settlement's suppressing of the facts of the case from the public -- and the SEC's argument that the "public interest" should have no bearing on the settlement:

Finally, in any case like this that touches on the transparency of financial markets whose gyrations have so depressed our economy and debilitated our lives, there is an overriding public interest in knowing the truth. In much of the world, propaganda reigns, and truth is confined to secretive, fearful whispers. Even in our nation, apologists for suppressing or obscuring the truth may always be found. But the S.E.C., 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.

These kinds of settlements have allowed Wall Street to cheat, steal, and lie to enrich itself at the expense of the rest of us -- and, recently, at the cost of the economy -- without any real repercussion. Hopefully, the Rakoff decision will force the SEC to bring to light the depradations of the industry, and open the industry to civil litigation for its wrongdoing.

Still, these kinds of settlements are just one of Wall Street's innumerable sweetheart deals with the government. And who are we kidding? Do you think the government and their Wall Street masters will let this ruling ruin the good thing they have together?

Featured Events

Today Tomorrow This Weekend

Wine & Cheese Weekend

Food & Drink
Apr. 20th, 5 PM

Light It Up

Music
Apr. 20th, 6 PM to 11 PM

Small Town Revolution

Music
Apr. 20th, 6 PM to 10 PM

A Comedy of Tenors

Theater
Apr. 20th, 7:30 PM to 10 PM

Jim Avett

Music
Apr. 20th, 8 PM to 9:30 PM

Submit Your Event   View Calendar

The Erie Art Museum Spring Show
Erie Reader: Vol. 8, No. 8
View Past Issues
In This Issue

Popular This Week

Millcreek Teachers' Baseball Bats Make Global Headlines

The Human Experience

Three Dems Debate for Erie's New Congressional District

Aqueous Expects More Highs for the Rook on 4/20

Activism In Me: Erie's Students Walkout: Morgan Williams

Related Articles

Tiger Maple String Band is spending St. Patrick's at Sprague's

by Ryan Smith3/17/2017, 5:04 AM
DD ... check. Go get some of your Patty's on at Sprague Farm and Brew Works!

Looking for a scary good time?

by Ryan Smith10/31/2016, 12:42 PM
Get your Halloween Night fright on at Ghost Lake.

Shining on the last night of Night Lights

by Ryan Smith8/27/2016, 12:00 PM
A quick Q-and-A with one of the festival's mainstay favorites: Aqueous

Shining (even more) on Night Lights Music Festival

by Ryan Smith8/26/2016, 3:04 PM
A quick Q-and-A with one of the festival's amazing performers: Tyler Smilo of Daybreak Radio

Shining (some more) on Night Lights Music Festival

by Ryan Smith8/25/2016, 5:06 PM
A quick Q-and-A with one of the festival's amazing bands: GNOSiS

Shining on Night Lights Music Festival

by Ryan Smith8/24/2016, 5:44 AM
A quick Q-and-A with one of the festival's chief founders, organizers, and musicians: Scott Molloy
© 2018 Great Lakes Online Media
1001 State Street  //  Erie, PA 16501
Terms of Use Privacy Policy