“Federal judge Jed Rakoff made waves in November 2011 when he rejected a proposed neither admit nor deny consent decree between the Securities and Exchange Commission (SEC) and Citigroup, ruling that the settlement was “neither reasonable, nor fair, nor adequate, nor in the public interest.”
“Now, the Second Circuit has overturned Judge Rakoff and let the SEC Citigroup settlement stand.
“But it didn’t give the SEC a blank check to settle corporate wrongdoing cases as they wish.
“The Second Circuit decision pivoted on the question of “what deference the district court owes an agency seeking a consent decree.”
“’The appeals court today rejected the SEC’s extreme position that courts merely rubber stamp whatever settlement the SEC files,’ said Dennis Kelleher of Better Markets, an independent nonprofit organization that promotes the public interest in the financial markets. ‘The appeals court correctly ruled that to do what the SEC was really asking for here would be a ‘dereliction of the court’s duty.’ That is a victory for investors, our markets and the public interest.'”
Read full Corporate Crime Reporter article here