In November 2011, Rakoff rejected a $285 million admit-no-wrongdoing settlement with Citigroup, accused of misleading clients about mortgage securities. Rakoff noted the deal includes only a $95 million penalty, while the SEC estimated Citigroup ripped investors off to the tune of $700 million.
“So the net effect of this is that you’re only returning a small fraction of what the investors lost, yes?” Rakoff asked the SEC lawyer. “I won’t be cute and ask what percentage of Citigroup’s net worth is $95 million, because I do not have a microscope with me.”
At least someone’s interested in the truth. The SEC, staffed by White House political appointees, clearly isn’t. And don’t expect it to get better under new boss Mary Jo White, who was confirmed Monday by the Senate in a move reminiscent of a fox being appointed hen-house guardian. As a defense attorney, White represented JPMorgan Chase and Bank of America executives in the aftermath of the 2008 financial meltdown.
Given her coziness with Wall Street, it’s no surprise White breezed through her confirmation hearing. As George Carlin said, “‘Bipartisan’ means some larger-than-usual deception is being carried out.”
JUSTIN VERNOLD is a copy editor at The Daily Star. Contact him at firstname.lastname@example.org.