In a 2011 case involving Vitesse Semiconductor Corp. (VTSS), Rakoff approved a settlement after criticizing the SEC’s practice of letting defendants settle allegations without saying whether they’re true. Vitesse, based in Camarillo, California, was accused by the SEC of fraudulently inflating revenue and backdating stock options.
“Here an agency of the U.S. is saying, in effect, ‘Although we claim that these defendants have done terrible things, they refuse to admit it and we do not propose to prove it, but will simply resort to gagging their right to deny it,’” Rakoff wrote in his decision approving the settlement.
The SEC has defended the practice, saying it encourages settlements and allows defendants to avoid public admissions that would then be used against them in private litigation. In a policy change last year, the SEC limited the “neither admit nor deny” language to settlements with defendants who have not already been convicted of the conduct in related criminal cases.
let me repeat from above....."and allows defendants to avoid public admissions that would then be used against them in private litigation." Excuse me SEC, so when these culprits have ruined the finances of mom and pop households, are not entitled to be sued, dam@ right they should get sued. A slap on the wrist will do SEC?
The market is one big con organization protecting each other.