Tuesday, September 22, 2009
Judge Rakoff Rejects Bank of America and SEC’s Arguments - WSJ.com
I think this judge has it exactly right.
Hopefully, he has seniority and job security...
Hopefully, he has seniority and job security...
This is from a Wall Street Journal opinion column
"Judge Rakoff was having none of it. In a 12-page opinion, he tore into the SEC for ignoring its own guidelines and penalizing shareholders rather than the individuals who supposedly acted improperly. The settlement 'does not comport with the most elementary notions of justice and morality, in that it proposes that the shareholders who were the victims of the Bank's alleged misconduct now pay the penalty for that misconduct.' As for the SEC's argument that this shareholder punishment will result in better management, the judge called it 'absurd.'
The judge also had little sympathy for the SEC's argument that it would be too difficult to pursue executives, since they had been guided by lawyers. 'If that is the case, why are the penalties not then sought from the lawyers? And why, in any event, does that justify imposing penalties on the victims of the lie, shareholders?' he asked.
He also had harsh words for BofA, which has recently filed court papers claiming its proxy statement was neither false nor misleading. 'If the Bank is innocent of lying to its shareholders, why is it prepared to pay $33 million of its shareholders' money as a penalty for lying to them?'"
