Town Hall Meeting

The settlement was for $285 million. Which is nothing compared to the billions they made on toxic mortgages they sold as AAA rated loans. This is fraud, and should be treated as a criminal lawsuit. Other than basic justice, trying this case and similar ones with other banks will help clean out the system of rot. This is from the AP article…

A judge on Monday used unusually harsh language to strike down a $285 million settlement between Citigroup and the Securities and Exchange Commission over toxic mortgage securities, saying he couldn’t tell whether the deal was fair and criticizing regulators for shielding the public from details of the firm’s wrongdoing.

U.S. District Judge Jed Rakoff said the public has a right to know what happens in cases that touch on “the transparency of financial markets whose gyrations have so depressed our economy and debilitated our lives.” In such cases, the SEC has a responsibility to ensure that the truth emerges, he wrote.

The settlement would have imposed penalties on Citigroup but allowed it to deny allegations that it misled investors.

Citigroup said in a statement that it disagreed with Rakoff because the proposed settlement was “a fair and reasonable resolution to the SEC’s allegation of negligence” and was consistent with long-established legal standards.

Adam Pritchard, a professor of securities law at the University of Michigan Law School, said courts could become clogged with cases that would normally be settled if other judges adopt Rakoff’s reasoning and deprive companies of their incentive to avoid trial.

The defense of Citigroup is preposterous – they are saying we love the deal we got to pay out $285 million! Now that you reject it, then we’ll say we are innocent! Some mental gymnastics are required to understand that one. And the UM law professor saying this is bad because it clogs up the courts. Wow, interesting legal point of view. We shouldn’t prosecute criminals because it’s too time consuming. How is this person an expert?

Read the full article here.

PS: Sorry I haven’t written in a while, my wife and I had a healthy baby boy and that has taken up about 99% of my time the past several weeks.