As mad as he.ll! Fury as judges nix ‘no-fault’ Wall Street deals
New York Post...By KAJA WHITEHOUSE
They’re like stealth bombers.
A growing number of federal judges have had about as much as they can take with Wall Street firms paying hefty fines to settle probes into serious wrongdoing — without admitting any guilt or any executive taking the fall.
So at least four judges, in New York and Washington, are not going to take it any more.
The mostly quiet attack by these judges on a long-standing business practice could mushroom into one of the most serious threats to bad corporate culture in many years.
The pushback against the “neither admit nor deny guilt” settlements comes as many Americans grow frustrated that few executives have been held personally accountable for toxic mortgages, betting against the client and insider-trading practices.
The latest example of judicial frustration came this week when Manhattan federal judge Sidney Stein raised concerns about a $590 million settlement agreed to by Citigroup to settle charges it deceived shareholders about its toxic mortgage holdings.
The shareholder suit named former CEO Chuck Prince and senior adviser Robert Rubin — but only the bank and not the executives paid out to settle the case.
“Does the absence of any payments from the individual defendants render the settlement unfair to class members who still hold the Citigroup stock they purchased during the class period?” the judge asked in a memo announcing a hearing to discuss the terms of the controversial deal.
“In the cases where there’s really egregious behavior, I think to let these people off scot-free is just wrong,” said Lynn Turner, with the $37 billion Colorado Public Employees’ Retirement Association.
Just last month, Manhattan federal judge Victor Marrero questioned a record $602 million settlement the Securities and Exchange Commission hashed out with hedge-fund giant SAC Capital over allegations of insider trading.
Finally, a JJ post grounded in reality. Let's see if all them lobbying dollars pay off and bring down political pressure on the judges. Most likely outcome, they sweeten the pot with another 50 million and give the judges an out to save face with a pyrrhic victory. Sad.
Let's see if all them lobbying dollars pay off and bring down political pressure on the judges. Most likely outcome, they sweeten the pot with another 50 million and give the judges an out to save face with a pyrrhic victory. Sad.
You assume, nothing changes. The too big to fails will get broken up. There isn't enough confidence left in them. New York City's derivatives bookies, have twisted everything up and it will take a generation to get over the fact, most have been had. They'll turn on each other.