Tag Archives: litigation articles

Second Circuit Mixes Clarity with Opacity in Ruling on Trial Courts’ Review of SEC Settlement,

It is curious how an appellate court can resolve cases before it in a manner and spirit that are vastly at odds with the driving philosophy behind the lower court’s decision. The U.S. Court of Appeals for the Second Circuit’s decision in United States Securities and Exchange Commission v. CitiGroup Global Markets, Inc.is such a case. Judge Jed Rakoff’s decision below, S.E.C. v. CitiGroup Global Markets, Inc., 827 F. Supp. 2d 328 (S.D.N.Y. 2011), in which he declined to enter a consent decree that resulted from settlement negotiations, was driven by the judge’s intense displeasure that the settlement presented to him failed to include an admission of guilty. The decision emboldened advocates who believed that the SEC should require admissions, and likely played a role in the agency announcing that it would so require them in certain matters.

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SEC "Gag Orders": Does Settling in Silence Advance the Public Interest?

A simmering anger against “too big to fail” banks and judicial criticism of Securities and Exchange Commission (SEC) settlement practices involving Wall Street have fueled a fierce debate over those practices. To date, the controversy has centered on the propriety and wisdom of permitting defendants in SEC proceedings to settle claims “without admitting or denying” the SEC’s allegations. While that issue may be worth discussing, any re-assessment of SEC settlement practices would be incomplete without considering the wisdom and impact of the post-judgment restraint on speech that the SEC imposes in every settlement. 

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