Friday, June 13, 2014

Rethinking Court’s Reversal of S.E.C. Challenger -James B. Stewart -

James B. Stewart, the Times business writer has a good piece on the Second Circuit's reversal of Judge Jed Rakoff's refusal to approve the S.E.C.'s settlement with Citigroup Global Markets.  Taking  a separation of powers approach he actually offers his own dissent to the majority opinion. - GWC
Rethinking Court’s Reversal of S.E.C. Challenger -

Video - James B. Stewart on CNBC
STEWART, Circuit Judge:
The issue before this court isn’t whether Citigroup engaged in fraud in marketing complex mortgage-backed securities in the run-up to the financial crisis, as the S.E.C. said in its complaint. Maybe it did and maybe it didn’t.
Nor is it our function to determine the appropriate fines or penalties. As part of the proposed settlement, Citigroup has agreed to pay $285 million and to refrain from future such conduct. Whether that’s a slap on the wrist or excessive punishment or just right isn’t for the courts to decide. Rather, the standard is whether the settlement is “fair and reasonable.”
Thus, the question before this court is simply whether a district court judge can declare a settlement to be fair and reasonable if that judge knows nothing about the facts of the case.

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