This time it is the Wall Street bankers and not the Occupiers who are getting hit with pepper spray.
The spray comes straight from the laser printer in the chambers of a federal judge, Jed Rakoff, in New York. The victory that Rakoff gave to the Occupy Wall Street movement Monday came from the federal courthouse — not far from Zucotti Park, the lower Manhattan headquarters of OWS.
Rakoff is the leader of a new wave of judges who take the view that the litigation dance played by the SEC and Wall Street actually affects other people — like investors and home buyers and even the economy as a whole.
He refused to allow the usual chummy settlement between a government agency – the Securities and Exchange Commission — and a major bank – Citigroup. He instead created a new legal paradigm — in which the big banks and their purported government watchdogs must give the rest of us a look at the backroom machinations that have ruined the U.S. economy.
The SEC sued Citigroup earlier this year for fraud — alleging that the bank sold investors mortgage-bank securities that the bank knew would default, while claiming that the securities were safe and had been “rigorously selected by an independent investment adviser.” Investors lost $700 million. The bank made a profit of $160 million by taking a short position in the very assets it foisted on clients, according to the SEC’s complaint.
The SEC and Citi agreed to a business-as-usual settlement. The lawyers for the SEC and the bank, all old pros, agreed that Citi would pay a $285-million fine. As is typical, in the settlement agreement Citi agreed to go forth and do no more wrong. But, also following standard operating procedure, the SEC settled with Citi without the bank have to admit that it did anything wrong in the first place.
. . . .
“In any case like this,” Rakoff wrote, “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.”
Way to go, Judge Rakoff!