Friday, December 2, 2011

Judge Rakoff Rejects the SEC Deal with Citigroup

Truthdig named Judge Jed Rakoff "Truthdigger of the Week," and rightly so.  Judge Rakoff performed a public service in rejecting the SEC's deal with Citigroup this week.  These no-fault settlements are nothing but corporate power over government and regulation in its purest form.  We hear the same excuses all the time: regulation will hurt US corporate competiveness... or, the agency doesn't have enough manpower to enforce regulation. We've come to accept these excuses as true but it's The Great Bamboozle.  And, I applaud Judge Rakoff for seeing through it.

Judge Rakoff has performed a vast public service.  In the American order of things with the separation of powers between legislative executive, judicial and the various agencies, it is never clear where salvation is going to come from, if at all, and God bless the judicial branch and Judge Rakoff.

What’s happened is a reflection of the transcending corporate power, and particularly, the ability of the financial sector to bamboozle legislators and regulators by saying if you require us to obey the law it will make us uncompetitive, we’ll lose business to London, we’ll extend our liability to all of those dreadful private litigants, so therefore, we have to have a formula that preserves the system.  So, that’s why we have what Judge Rakoff complains of, and complains of appropriately. 

Then the next line is, well there aren’t enough staff in the SEC and these are very difficult cases to bring and what have you and what have you.  It is very insightful to remember the several occasions, and I’ve seen several clips of Eliot Spitzer who just simply says that this is baloney.  I remember Spitzer talking the Senate Banking Committee when he was attorney general of New York, I’ve seen him in more recent times on CNN tapes simply saying, look, they have better resources than I do and they simply didn’t have the will to bring the case.

And so we have to get beyond the bamboozle, as the bamboozle basically is, look, this is such an important national asset that must be preserved in the benefit of the country and we can’t do anything to disturb it because that would disturb it.  And you have to say wrong.  This is a crime, and people who commit crimes should be prosecuted.  And there is no reason why they can’t be prosecuted.

A number of the elements of crime are difficult.  People will tell you that if you need to prove intent, how do you prove intent for a corporation, how does a corporation have intent?  Well, you begin to get into flights of fancy.  You have to say, well, if this and this and this happened, they must have intent or this and this and this wouldn’t have happened.  And somebody else so no, no, that isn’t proving intent.  It just depends what the judge says.  Sloppy, miserable area.

On the other hand, look, that’s how we make a country is by facing up to real issues and slogging through miserable difficult questions.  So the general response is simply part of a large, large tendency in this country to try to organize reality as if the ultimate virtue was the preservation of the financial system in its present form.


December 2, 2011 in Capture , Corporate Power , SEC  |  0 comments  | 

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