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Judge Rakoff Conditionally Approves Revised SEC-BofA Settlement
Developing story. Following the money - taxpayers give money to BofA to keep it alive, BofA pays SEC/shareholders in revised wrist slap. Sure seems like one way to keep keep the velocity of money above 1. One hopes that Cuomo won't follow next and throw in the towel in his civil suit against Ken Lewis. A seemingly unhappy with this outcome Rakoff had this to say: "So should the court approve the proposed settlement as being fair, reasonable, adequate and in the public interest? If the court were deciding that question sole on the merits - de novo, as the lawyers say - the court would reject the settlement as inadequate and misguided. But as both parties never hesitate to remind the court, the law requires the court to give substantial deference to the SEC as a regulatory body having primary responsibility for policing the securities markets, especially with respect to matter of transparency." We have gotten to the point where the SEC's cronyism is even impairing the judicial system.
From Dow Jones:
A federal judge approved a $150 million settlement between Bank of America Corp. (BAC) and the U.S. Securities and Exchange Commission over the bank's disclosures before its acquisition of Merrill Lynch
& Co. last year.In an order Monday, U.S. District Judge Jed S. Rakoff in Manhattan approved the pact, which resolves two separate lawsuits by the SEC over the Charlotte, N.C., bank's disclosures before the $50 billion merger closed on Jan. 1, 2009.
The first of two lawsuits brought by the SEC was set for trial on March 1.
In his order, the judge asked the parties to include several minor revisions to the pact that the parties had previously agreed to, including giving the SEC a say in the hiring of an independent auditor to assess over the next three years whether the bank's accounting controls and procedures are adequate.
The revised pact must be given to the judge by Thursday.
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So charging the equity holders $30 million for getting deceived in the first place was absurd, but now charging them $150 million is ok? Seems like this settlement is, once again, a slap on the wrist and a bigger insult to BaC shareholders.
So when do we appoint Rakoff Lord Protector of the Commonwealth, or does he self appoint?
So now they ban the media from the courtroom and the backroom dealing begins....see a pattern yet
"In an order Monday, U.S. District Judge Jed S. Rakoff in Manhattan approved the pact, which resolves two separate lawsuits by the SEC over the Charlotte, N.C., bank's disclosures before the $50 billion merger closed on Jan. 1, 2009."
You don't become a federal judge without having kissed some butt. And while Rakoff can be see as an "activist" judge, and even tolerated by the powers-that-be because that perpetuates the idea that the system is self policing and self correcting, ultimately Rakoff had to either go along or just go. Permanently. I'm sure Rakoff was visited in his chambers by men in suits informing him of the consequences of holding this up any longer. He must have been under tremendous pressure, including threats.
The system simply can not be fixed from within. This is the last denial that must fall before any serious work is done. There are too many people involved with too much money at stake with too many political and economic careers on the line for Rakoff to not have fallen off the roof of his "home" or have committed suicide by his own hand if he did not go along. Period.
As a lawyer practicing before federal courts, I agree almost completely: this system, including even good Article III judges, is incorrigible.
For me, however, Rakoff's decision is the penultimate denial. The Bloomberg-Fed FOIA case is still pending before the 2nd Circuit Court of Appeals.
If the 2nd Circuit affirms C.J. Preska's ruling to make the Fed cough up the info, SCOTUS will reverse in Fed's favor. If 2nd Circuit reverses, SCOTUS will deny cert. Fed wins either way.
That'll be the last denial for me.
CD and 240235....very well said from both of you.
I have been in denial and perhaps I'm just a naive moron....I thought perhaps there were some remnants of leadership and values left in American society.
Wall st and the banks, who currently and obviously own the Presidency and the US Congress, may very well own the Judiciary at this point.
The slow climb down the abyss continues and the U.S.A. will end up in the trash heap of busted civilizations. What a piece of shit the USA has become, I am very sad to say.
Phuck it, maybe the revolution has started.
"maybe the revolution has started"
Perhaps not in a formal sense, but incidents late last week in Austin, TX (Joe Stack's plane) and Cincinnati (Terry Hoskin's house) were, if not opening shots, dark omens. Both men felt deprived of justice--and by the I.R.S. no less. Isn't that Turbo Tim's outfit? You know, the one that unilaterally gave Citigroup some $38B in tax breaks the day after Citi's surprise announcement that it would pay back $20B in TARP?
Let the sociopathic PTB think they can continue pissing on justice. See what happens.
There are no honest men because there are no honest masters
See my post below. I am a "former" attorney. Article III judges, because they are appointed for life, are supposed to be free from coercion and political influence ... and to an extent they are. But mighty pressure can still be brought to bear and the amount of courage it takes to go against another branch of government requires almost a "sacrificial lamb" mentality.
It "sounds" like Judge Rakoff didn't want to approve this agreement but he caved. It is a sad day and I am even more convinced that the scales of justice are no longer blind.
As an attorney I have seen firsthand the amount of pressure than can be brought to bear on a judge, Federal District Judge or not. They still have to go out to the club for dinner, attend Judicial Conferences and take phone calls from important people who weigh in on issues before the court. They (including Rakoff) seek guidance from other Judges and sometimes lawyers not involved in the case.
Technically, such things are not misconduct or a conflict of interest, and even if his arm was twisted most Judges will not blow the whistle. The truth is, he would have been shunned, scolded in silence and cast into the "outer darkness" if he had not gone along with the SEC this time. He was probably told, "look, you made your point but let it go through this time otherwise your career is over and you will be relegated to minor cases for the rest of your career - or pressured to resign.
I had hoped that this Judge had the "right stuff" so to speak and would stand up to the powers that be, but for whatever reason he didn't or couldn't. The system is broken beyond repair - even the judiciary. It is a sad day.
The system is broken beyond repair - even the judiciary. It is a sad day.
Sure is beginning to look that way. Thank you for the excellent insights Psquared...it is appreciated.
We've always stated that "settlement" was a done deal (despite the mental masturbation and theatrics), as was Brian Moynihan becoming CEO. Always focus on what is, and will happen in this business, rather than the screaming, whining, and yelling of the audience in the mezzanine seats.
AR...you consistently stuck with that call and you are correct.
DH / It's good to have contacts (smile). Guys our age have accumulated many, many close friends. Smile... You're a good soul.
Thank you!
Ken Lewis put his house for sale in Charlotte....probably a short sale soon to a BAC customer with 3% down and credit score of 350 dumped on the FHA. But it's cool, BAC Mortgage will charge over $10,000 in fees to close the loan. Sucker taxpayers.
Pelican Brief.
Always appreciate your thoughts, CD.
150 million? With that huge penalty they are sure to never do that again.
We will never be able to follow the $..too many variables
How much does this story translate into other areas like finance/banking?
February 19, 2010
Bill Moyers Journal takes a hard look at how campaign cash in judicial races may sway America's courts.
The power of money drives cynicism into the heart of all levels of government.
http://www.pbs.org/moyers/journal/02192010/watch.html
What was that saying in All The Presidents Men?
"If you've got them by the balls, their hearts and minds will follow"
probably applies here, too!
There is no justice for rich and connected wrongdoers, fraud wins the day all the time.
I never understood how suing BAC for messing with shareholders, only for the very same shareholders to have to pay the SEC?... and what have they ever done for us in the first place?
The rule of law in the United States submits to state sponsored corruption with a whimper. "Judge" Rakoff demonstrates why placing any faith in the structures of American governance, most especially the shield that is the law is a waste of time and effort. It now rests upon the ranks of the professions outside of law, journalism, finance, education, economics or civilian government as these have become too corrupted to do anything but pretend to care while collecting their checks for selling out their selves, families, communities and nation. Judicial exclusion is now more deeply ingrained that ever as the National Security State rolls effortlessly along with the willing acquiescence of most of the the core professions. One thing is certain, my choice of career and placing value upon my oath of office and the sacrifices that were made have been completely cheapened by the very society I defended.
MK / We agree. Today, we consistently find ourselves fighting all those around us who insist on lower standards, and compromised ethics. It indeed is hard to continue to remain true to one's values as all else pressures us to concede and follow their insane leadership into the abyss. Stay both focused and committed to your values. In the end, not much else matters, outside of family.
AR - if I gave the impression that I, or those that comprise the ranks of our armed forces are going to reduce or compromise my/our standards then I gave a false impression. The ranks of the armed forces have known this condition for a long time as the recent examples provided by the Abu - G situation clearly demonstrate. What is abundantly clear to the ranks is that the profession of the law has clearly joined the profession of journalism in wallowing in its own Vietnam experience. Judge Rakoff in the case of BAC at district level, along with the GE case at district level in Connecticut a few months ago, combined with the expected ruling from the 2d circuit on Bloomberg v Federal Reserve is that the profession of the law is having its very own self inflicted My Lai moment.
The profession of the law that supposedly serves as the shield of our society deserves every bit of spittle hurled at it from the ranks as the law states once again that the indignity of Lewis having to resign his command is sufficient recompense for the harm his leadership caused American society and its investors. Especially since it is the ranks of society that will have to shoulder the costs in their totality of Lewis's and now the law's horrendous actions. Remembering the illustration provided to us all by John Thain I believe that requiring Ken Lewis, or those that aided and abetted his command decisions to resign his or their commissions will never be considered as too harsh a sentence. In this I suggest we find a local judge, lawyer, fed, regulator or bank employee and take a dump on their doorstep rather than spitting on them on the local streets, markets or airports. Regardless, the time for these professions to self enforce "standards' of professional conduct is rapidly evaporating.
More Alice in Wonderland b.s. I really had hopes that Rakoff would hold his ground and at least peel back the opaque layer covering up this regulatory crap. Carry on.
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