This week, Judge Jed S. Rakoff’s stand against Wall Street and the S.E.C.’s leniency was overruled. Judge Rakoff took squared up against the Securities and Exchange Commission when he rejected their settlement deal with Citigroup in 2011, believing that the agency was not being tough enough. This week a federal panel as part of the United State Court of Appeals overturned Judge Rakoff’s 2011 decision. However, even though the judge may have lost the battle, he is winning the war against Wall Street.
Since his 2011 ruling many have rallied behind Judge Rakoff. He has influenced other judges in their rulings and many have questioned various securities cases. Also, others who are critics of Wall Street have come to see Judge Rakoff as a leader trying to crack down on their wrongdoings. Rolling Stone magazine even called him “a sort of legal hero of our time.” The S.E.C. has also taken notice of Judge Rakoff’s critique of their policies via his ruling and the chairwoman, Mary Jo White has been working on changing some policies to come down harder on companies. Last year they ditched their policy that allows companies to neither “admit nor deny wrongdoing.” Now they have to own up to their actions.
There were others that agreed with Judge Rakoff on the Citigroup case. After his ruling, in 2012 a federal jury rejected an S.E.C. case against a midlevel Citigroup employee. The jury’s main concern echoed that of Judge Rakoff, prompting them to ask the questions, “Why didn’t they go after the higher-ups rather than a fall guy?” This was not Judge Rakoff’s first attempt at trying to get the S.E.C. to stand up against Wall Street. He also rejected another S.E.C. deal with Bank of America. After several attempts to get the deal passed, he finally allowed it, but publically pronounced it was “half-baked justice at best.”
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