Wednesday, June 4, 2014

Second Circuit Overturns Rakoff Rejection of S.E.C. - Citigroup Settlement

As a firm supporter of Judge Jed Rakoff's refusal to rubber stamp the S.E.C.'s request for judicial imprimatur of its settlement, I am disappointed.  As we have argued before - as did former S.E.C. Commissioner Harvey Pitt - Judge Rakoff's refusal to embrace the S.E.C. v. Citigroup settlement was within the bounds of his discretion.  The S.E.C. has since changed its policy, now requiring admissions of wrongdoing.  As Prof. Jill Fisch said - the "genie cannot be put back in the bottle". - gwc
Appeals Court Overturns Decision to Reject S.E.C.-Citigroup Settlement -
by Ben Protess and Matthew Goldstein
A federal appeals court on Wednesday overturned District Judge Jed Rakoff's decision to reject a federal settlement deal with Citigroup, undercutting the judge’s concerns that the bank got off with little more than a slap on the wrist.
In a long-awaited 28-page opinion, a three-judge panel of the United States Court of Appeals for the Second Circuit  concluded that the trial judge “abused its discretion by applying an incorrect legal standard in its review” of the case. The harsh rebuke of the judge, Jed S. Rakoff, now sets in motion a process that will most likely lead to the deal being approved.

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