The Crooks And The Cops Lock Arms: The SEC Plans To Appeal Judge Krakoff's Ruling In The Citigroup Case

Time was, when the crooks, in this case Citigroup (who ripped off everyone in sight, including every taxpayer in the US for generations), got caught and lost their case in court, they appealed their conviction/loss, proclaiming that they were the real victims, etc. etc., and that theft isn't theft because it was done with computers by white people in suits, not black people holding up liquor stores with guns--you know, real criminals, the kind you put in jail, to keep white folk like us safe on the way to the country club...

Them daze iz over, ya'll. Merry Christmas!

OS's readers may remember a couple of earlier posts, here and here, in which he recounts how one federal Judge Rakoff had decided he had had enough, and that he would not rubber-stamp one more sweetheart deal between the SEC Enforcement Division and the banks they were supposed to be, well, enforcing the rules on. His intent, obviously, was for the SEC to go back, and extract real penalties from Citigroup for having blatantly ripped the world off for some 700 million dollars, and come back to him.

To quote John Belushi: 'But NOOOOOOOOOOOOOOoooooo......'


The SE frigging C plan to lock arms with the crooks, and appeal the judge's ruling!!!

They have no intention of (a) ceasing to make sweetheart deals with crooks, and (b) exposing the inner workings of the machine that makes these sweetheart deals by actually litigating them, because that would open them up to adversarial process, which includes (drumroll please) Discovery!

So, instead of spending their energies enforcing the law, they'll spend their energies arguing that they shouldn't have to enforce the law, even though that's what they were instituted to do, and are paid to do, and (by innocent souls like OS) expected to do.

This is Alice Through The Looking Glass, pure and simple.

It is maddening, but no longer surprising to read of it. We're at the point where the cops don't even need to pretend to uphold the law.

By the way, if anyone thinks those MF Global clients, including all those farmers who didn't even know they were MR Global clients, have a prayer of getting their money back, this should disabuse them.

The cops now protect the crooks--it's the Chicago Way--the world of Al Capone, Eric Holder, Tim Geithner...

Judge Rakoff Tells The SEC and Citigroup He's Had Enough, Refuses To Approve One More Slap On the Wrist

As OS noted last month, the judge seems to have located his huevos.

Today's new's comes as confirmation that, indeed, he has.


From the New York Times, this evening:

Taking a broad swipe at the Securities and Exchange Commission’s practice of allowing companies to settle cases without admitting that they had done anything wrong, a federal judge on Monday rejected a $285 million settlement between Citigroup and the agency. 

The judge, Jed S. Rakoff of United States District Court in Manhattan, said that he could not determine whether the agency’s settlement with Citigroup was “fair, reasonable, adequate and in the public interest,” as required by law, because the agency had claimed, but had not proved, that Citigroup committed fraud. 

As it has in recent cases involving Bank of America, JPMorgan Chase, UBS and others, the agency proposed to settle the case by levying a fine on Citigroup and allowing it to neither admit nor deny the agency’s findings. Such settlements require approval by a federal judge. 

While other judges are not obligated to follow Judge Rakoff’s opinion, the 15-page ruling could severely undermine the agency’s enforcement efforts if it eventually blocks the agency from settling cases in which the defendant does not admit the charges. 

The agency contends that it must settle most of the cases it brings because it does not have the money or the staff to battle deep-pocketed Wall Street firms in court. Wall Street firms will rarely admit wrongdoing, the agency says, because that can be used against them in investor lawsuits.

'Well, Duh!' to quote Snookie.  Beside, the lawyers at the SEC, who sheltered Bernie Madoff all those years, were too busy with their online porn to actually check to see if Citigroup were engaging in massive fraud. That would resemble...well...work! Besides, if you want a job at Citigroup or J.P. Morgan after your exhausting five years at the SEC, you best not piss those bankers off by actually doing your job.

In his decision, Judge Rakoff called Citigroup “a recidivist,” or repeat offender, for having previously settled other fraud cases with the agency where it neither admitted nor denied the allegations but agreed never to violate the law in the future.


Citigroup and other repeat offenders can agree to those terms, the judge said, because they know that the commission has not monitored compliance, failing to bring contempt charges for repeat violations in at least 10 years.

Ten years, at least ten years. No attempt to monitor compliance of known fraud artists. Billions lost, businesses and neighborhoods in ruins. Words fail.

It's time for the lawsuits and indictments, ya'll. Somebody needs to go to jail, or we need to apologize to Bernie Madoff and let him go home to Ruth and get back into business. Why the hell not? Either we prosecute massive frauds or we don't. At least, let's be honest and admit that we don't, if we don't intend to.

Here's hoping his ruling stands, and that he doesn't waken one morning with the decapitated head of a horse on the foot of his bed, left as a friendly warning about what happens to uppity judges.