Judge Refuses to Sign off on Citigroup Settlement
If you’ve been following the stories of Wall Street corruption over the past few years, then you know about consent agreements. These are the settlements that regulators like the SEC reach with financial firms accused of wrongdoing. These settlements usually include some type of cash disgorgement and they also force the firm to promise that they’ll never do it again. The other clause that nearly all these consent agreements include is one that allows the bank to “neither admit nor deny any wrongdoing.” This clause essentially allows them to avoid criminal charges because the courts have signed a document saying they didn’t do anything wrong in the first place.
Lots of people have found fault with these types of agreements, and for good reason. How can we ever have justice against financial firms that commit fraud if they don’t ever have to admit they did anything wrong? Cash settlements are fine, but they generally are low enough to allow the firm to still make a nice profit from their fraud. Well some federal judges are now standing up and refusing to sign these agreements. First there was Judge Jed Rakoff, who refused to accept a consent agreement with Citigroup, and now we have Judge Sidney Stein, who wouldn’t “rubber stamp” an agreement with — you guessed it — Citigroup again! We need more judges like this, who want to ensure justice is being served, and that the investors who were wronged by these firms get some kind of restitution. Read more about Judge Stein’s story at First Senior Financial Group.