Sitting on the Bench, Swinging for the Fences
Judge Rakoff noted in his ruling that there is an “overriding public interest in knowing the truth.”
Yes, there is.
And as Judge Rakoff put it, the SEC’s core duty is to “see that the truth emerges.” In the event that it doesn’t, as part of the settlement process, “courts must not, in the name of deference of convenience, grant judicial enforcement, to the agency’s contrivances.”
I did some checking, and I learned that this is not the first time Rakoff has stuck it to the SEC.
Apparently, he’s the one who made headlines when he initially rejected the BofA settlement related to that bank’s shotgun takeover of Merrill Lynch & Co., a fact I’d forgotten. At the time, Rakoff rejected the SEC’s $33 million BofA settlement on the grounds that it punished shareholders. The SEC then came back with a much more realistic $150 million agreement.
Some think Rakoff has gone too far. They worry that judges have no business interfering in agreements ostensibly reached by private parties.
But I disagree. I believe the SEC is the public.
And the public has the right to know about any case where the transparency of the financial markets (or lack thereof) has so impacted the markets as to destroy the wealth of millions of hard-working people and bring the global markets to the edge of oblivion.
Frankly, I’d love to shake Judge Rakoff’s hand.
I hope what he’s done encourages judges to finally stand up for the body of law they supposedly represent and the public that it’s intended to protect.
This article originally appeared on Money Morning.