Well how about this.... http://www.nytimes.com/2011/11/29/business/judge-rejects-sec-accord-with-citi.html?exprod=myyahoo I hope this becomes the rule and not the exception. Judge Rakoff is an American hero
I read this thread headline and thought "That must be the first time a bank has been sued by an athletic organization" and then realized I'm an idiot.
I like the fact that he is calling bullshit on this particular settlement, but the way he is going about it is odd. Virtually all settlements everywhere include this language where the defendant neither admits nor denies fault. Without it, you would have a lot less settlements and in the grand scheme, settlements between parties is much better than full blown litigation. I'm not arguing that the SEC shouldn't do more or demand more in settlement but I'm not sure this is a good place for the judge to stick his nose. The point about future civil suits is a bit skewed in the piece. Of course, an admission of fault would help civil plaintiffs, but a non-admission doesn't really hurt them. They just have to prove their case against Citi without having it handed to them.
The problem in a nutshell (law school joke....get it?.....) is that these lawsuits somewhat straddle the (statutorily drawn) line between being civil versus criminal matters. The S.E.C. and the targets/perps want to settle the cases like any normal civil matter between private litigants, but Judge Rakoff is wanting more of an allocution like one would see in a plea bargain. I can understand both sides of the argument.
Ive often remembered this over the last few years. My born-on-the-farm Grandfather proudly retired from Continental Illinois Bank and Trust ("The big bank with the little bank inside") in 1967. CIBT has since been absorbed by First Chicago then by Bank One and then by Chase. This process started sometime in the mid eighties and my Grandfather, following along closely during the Reagan S&L deregulation fiasco was livid. We were at a concert at Ravinia Park sometime in the late eighties when he discovered that First Chicago had a champagne hospitality tent. Almost 90 years old he damn near ran into that tent, scanned the crowd and walked right into a group having a quiet cocktail party conversation, stuck his finger into a 5000$ suit and loudly exclaimed "YOURE GOING TO JAIL!!!" I dont know if the suit ever turned stripey but Ive never been prouder. We need more of that.
This can't be right - the banks own the system, we all know that. I think you've all been had by an Onion piece. On a serious note, I'm not entirely sure how I feel about Rakoff's view on this, but I can understand it. Citi has been a consistent violator of these rules.
"According to the Securities and Exchange Commission, Citigroup stuffed a $1 billion mortgage fund that it sold to investors in 2007 with securities that it believed would fail so that it could bet against its customers and profit when values declined. The fraud, the agency said, was in Citigroup’s falsely telling investors that an independent party was choosing the portfolio’s investments. Citigroup made $160 million from the deal and investors lost $700 million." You can call it fraud if it makes you feel better.
It speaks volumes that it is the fact one judge actually said something that makes this "news". It should be way more common. It always chafes my hide to read every couple years that the same company (Citi, GE, Raytheon, etc) get written up and "fined" for defrauding the taxpayer (assuming I catch the page 24 story at all), then the next month are awarded yet another gov't contract; rinse, repeat. (similar, not exact, situation) theft, fraud, bullshit deceptive business practices ... semantics
I want high ranking decision makers jailed for forging mortgage documents. Forgery, fraud, Perjury, Contempt of Court. How many charges do we need to indict the top guy who signed off on signing-circle deliberate forgeries of legal documents? Somebody defend them.
How about this one. Can a financial expert explain the Banks righteousness here? http://www.courthousenews.com/2011/12/07/42015.htm Bank of America found a new way to illegally extract money from customers, according to a federal class action: deduct taxes and insurance from mortgage payments, even though the homebuyers make those payments themselves, then call the mortgage in default for the unauthorized deductions, and charge late fees and penalties.