A judges rejection of a US Securities and Exchange
Commission (SEC) settlement is not the beginning of a hard-line
policy of the courts. But the SEC is expected to look at
different settlement options in future.
The grounds on which district court Judge Rakoff
refused a SEC and Citigroup consent judgment last month
created controversy for two reasons. Firstly, and most notably,
his denial of a neither admit nor deny clause goes
against a forty year-old SEC policy designed to maximise the
agencys ability to meet its often conflicting
Secondly, Rakoffs labeling of the $285 million
settlement figure as inadequate prompted chairman
letter to the securities Senate subcommittee requesting new
formulae to calculate fines.
Rakoffs stance on neither admit nor deny
clauses has created disbelief and outrage within sectors...