Indeed, Marrero is waiting for Rakoff’s ruling; Rakoff is rejecting a $285 million settlement against Citigroup in a fraud cause initiated by the Securities and Exchange Commission.
Marrero is unhappy about the deals the S.E.C. has been striking, especially regarding the “neither admit nor deny” that give too much leeway to places like SAC. It seems such legislation could act like a “get out of jail free card” letting them commit crimes or engage in spurious activity, but never have to admit it.
“Perhaps we live in a different era,” Judge Marrero wrote, as Dealbook reported. “In this age when the notion labeled ‘too big to fail’ (or jail, as the case may be) has gained currency throughout commercial markets, some cynics read the concept as code words meant as encouragement by an accommodating public — a free pass to evade or ignore the rules, a wink and a nod as cover for grand fraud, a license to deceive unsuspecting customers.”
“Perhaps, too, in these modern times,” he also said, “new financial, industrial and legal patterns have merged that call for enhanced regulatory and, as appropriate, judicial oversight to counter these sinister attitudes.”
His mixed feelings and uncertainty can be read through his statements on the case, such as when he said:
“The court must avoid undue meddling and second-guessing, and must accord government agency law enforcement and financial determinations such as those now before it the proper level of deference they are due. At the same time, the court cannot conceive that Congress intended the judiciary’s function in passing upon these settlements as illusory, as a predetermined rubber stamp for any settlement put before it.”
His concern shows a conviction that the SAC Capitol Advisors and others are using such “neither admit nor deny” language in cases to avoid real guilt and responsibility.