Judge Jed S. Rakoff Stands Firm: No Conspiracies in his Courtroom
September 14, 2009
Last week Bank of America and the SEC conspired to trick Judge Jed S. Rakoff into approving a bogus settlement agreement. Today Judge Rakoff sent a message to the SEC: Stop lying to me; stop cheating the American public; stop cheating Bank of America shareholders. The Wall Street Journal is reporting:
Federal District Judge Jed S. Rakoff rejected a proposed $33 million settlement of allegations by the Securities and Exchange Commission that Bank of America Corp. "materially lied" in shareholder communications about bonuses to employees of Merrill Lynch & Co.
Instead, Judge Rakoff set a Feb. 1 trial date on the allegations in his New York courtroom.
In an order issued Monday, Judge Rakoff acknowledged the public interest in settling disputes rather than having them go to trial. Nonetheless, he wrote, "even upon applying the most deferential standard of review," he was "forced to conclude that the proposed consent judgment is neither fair, nor reasonable, nor adequate" to protect the public interest.
"It does not comport with the most elementary notions of justice and morality, in that it proposes that the shareholders who were the victims of the bank's alleged misconduct now pay the penalty for that misconduct," the judge wrote.