Wow! Guess this is what it takes to make me blog again. From the WaPo:
If the judge’s ruling became the new standard, it could fundamentally alter the way the SEC does business and make it harder for Wall Street firms to make cases go away.
The standard language used in settlements — neither admits nor denies wrongdoing — is one of the carrots that induces defendants to settle."
The SEC has said that without settlements it would be forced to battle cases in court, tying up limited resources. As a result, the SEC said, it would be able to pursue fewer cases.
Simple and naturally unavoidable solution is to raise taxes. Keeping that simple is as easy as raising them 1% on the upper brackets for every .5% levied on the lower brackets. Simple and both extremely effective as well as completely equitable.
The next spurious and ill-conceived defense of the SEC's actions is also legally and scientifically simple to alleviate. Onward in the story:
The SEC has argued that defendants would refuse to settle many cases if they were forced to admit wrongdoing. Such an admission could be used against them in private lawsuits.
Rakoff said that was part of the problem: Investors defrauded by Citigroup would not only recoup less than than their total losses; they would have to establish their own proof in any private lawsuits against the firm without any help from the SEC.
Are they really serious with that argument? Can the people who run the Securities and Exchange Commision honestly NOT want the Public, the peops being duped by otherwise (supposedly) respectable corporations, to be able to put pressure on those corps to do Honest business?? Really, SEC?!
First they argue that the caseload of lawsuits is too much for it to handle and then they go and argue against the most obvious solution to that problem; letting the folks who got duped pursuit lawsuits at their own expense.
None of that sounds as if the SEC is at all concerned with its raison d'etre of keeping businesses from circumventing the Law and abusing their privileges. Prosecutors in a murder case will surely take a plea which still garners a Manslaughter conviction but they're hardly, rarely at any rate, likely to accept plea of disorderly conduct in its place. That is precisely, and often every bit as destructively what the SEC's "standard language" does. Repeated and as an enormous incentive to companies to plan their business activities with paying that "disorderly conduct" penalty rather than serving the rest their lives in prison.
Rakoff has said that he is required to show some deference to the SEC’s judgment. But in Monday’s ruling, he said that the agency was asking too much of the court. Rakoff said that imposing settlements such as Citigroup’s $285 million deal can be unfair to the defendant and be susceptible to “abuse” by the SEC.
“An application of judicial power that does not rest on facts is worse than mindless, it is inherently dangerous,” he wrote. It “serves no lawful or moral purpose and is simply an engine of oppression.”
I couldn't agree any more with either the sentiment or the language, Justice Rakoff. I couldn't agree not a bit more.