I was not shocked at the U.S. Federal Appeals Court decision overturning Judge Jed S. Rakoff’s rejection of the settlement deal with Citigroup, claiming that the bank had got off with a mere slap on the wrist. The three-judge panel yesterday said Rakoff got it wrong by applying an “ incorrect legal standard.” Citigroup now pays a fine and its business as usual.
The decision becomes even more frightening, at least to the layperson, when you peel back the details of the ruling! It seems to me that the three judges were searching for a rationale to support a foregone conclusion, much like Elmer Gantry could always find a passage in the Bible to support a point of view!
Judges Rosemary S. Pooler, Raymond J. Lohier Jr. and Susan L. Carney — concluded that it “is not within the district court’s purview to demand ‘cold, hard, solid facts. ”
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The appellate court instead outlined a checklist for judges to follow when weighing enforcement cases, saying they must “determine whether the proposed consent decree is fair and reasonable, with the additional requirement that the public interest would not be disserved.”
What a stretch! That the public interest would not be disserved! How is that for a parsing of words to avoid saying that the greater public interest should be served! Your honors, please!
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The final affront comes in this quote from the appellate decision. “ Trials are primarily about truth. Consent decrees are primarily about pragmatism.”
The bottom line is that three federal judges ruling deemed Judge Rakoff the
“ skunk” at the Citigroup, S.E.C. party.
A final irony in this sordid affair is that the appellate court, in closing, questioned its own judgment!
“On remand, if the district court ( Rakoff) finds it necessary, it may ask the S.E.C. and Citigroup to provide additional information ( the truth) sufficient to allay any concerns the district court may have regarding improper collusion” between Citigroup and the S.E.C.” I think that Judge Rakoff made it quite clear that he had MANY CONCERNS!
This disingenuous decision may require an additional 50 pages in Tom Piketty’s already voluminous Capital in the Twenty-First Century.
