The anatomy of a proposed settlement by Citigroup

| November 10, 2011 | 1 Reply

Matt Taibbi dissects a proposed deal between the SEC and Citigoup, after Judge Jed Rakoff harpoons it:

In the deal, Citi made a $160 million profit, while its customers lost $700 million. . . . So to recap: a unit of Citigroup, having repeatedly violated the same laws and having repeatedly violated the SEC’s own cease-and-desist orders and injunctions, is dragged into court one more time for committing a massive fraud.

And what does the SEC do? It doesn’t even bring up Citi’s history of ignoring the SEC’s own order, slaps the bank with a fractional fine, refuses to target any individuals, allows the bank to walk away without an admission of wrongdoing, and puts a cherry on the top by describing the $160 million heist not as a crime, but as unintentional negligence.

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Category: Corporatocracy, Fraud

About the Author ()

Erich Vieth is an attorney focusing on consumer law litigation and appellate practice. He is also a working musician and a writer, having founded Dangerous Intersection in 2006. Erich and his wife, Anne Jay, live in the Shaw Neighborhood of St. Louis, Missouri, where they are raising their two extraordinary daughters.

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  1. Erich Vieth says:

    The SEC is much more concerned about befriending banks than aggressively representing the People of the United States, as reported by Matt Taibbi:

    “[Federal Judge Ned Rakoff] targeted the SEC’s longstanding practice of greenlighting relatively minor fines and financial settlements alongside de facto waivers of civil liability for the guilty – banks commit fraud and pay small fines, but in the end the SEC allows them to walk away without admitting to criminal wrongdoing.

    This practice is a legal absurdity for several reasons. By accepting hundred-million-dollar fines without a full public venting of the facts, the SEC is leveling seemingly significant punishments without telling the public what the defendant is being punished for. This has essentially created a parallel or secret criminal justice system, in which both crime and punishment are adjudicated behind closed doors.”

    Read more: http://www.rollingstone.com/politics/blogs/taibblog/federal-judge-pimp-slaps-the-sec-over-citigroup-settlement-20111129#ixzz1hL8qlAny

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