With the Citizens United v. Federal Election Commission ruling in 2010 ushering in a new era of money in politics, it’s becoming more common to see elected officials turn a blind eye to malfeasance by well-connected crooks. But some recent court cases, where a few fastidious judges have attempted to knock unrepentant Wall Street snakes down a few pegs, offer hope that maybe our judiciary is still interested in truth and justice.
In many Wall Street settlements, the truth is buried in deals by white-collar criminals who avoid charges and admit no wrongdoing in exchange for a settlement with the federal Securities and Exchange Commission. It’s basically a “Get Out Of Learning A Lesson Free” card. The difference is that in Monopoly, the card only works once, then you have to throw it away; on Wall Street, Citigroup, for example, has reached fraud settlements with the SEC five times since April 2000, according to The New York Times.
That’s why it was refreshing two weeks ago to see U.S. District Judge Victor Marrero frown on the $602 million settlement proposed by the SEC and SAC Capital Advisors LP. The firm is accused of making $276 million off illegal stock tips from ex-employee Mathew Martoma. Martoma was charged with securities fraud last November by U.S. Attorney Preet Bharara, who dubbed it the largest insider-trading case in history.
Judge Marrero, whose approval is needed to seal the deal, was miffed by SAC’s refusal to admit wrongdoing, given that Martoma might still be convicted of criminal charges.
“How would it look if, in the settlement before (Martoma’s case), the parties were allowed to say ‘We did nothing wrong’?” Marrero asked, adding that “there is something counterintuitive and incongruous about settling for $600 million if it truly did nothing wrong.”