A federal judge in New York on Monday threw out a settlement between the Securities and Exchange Commission and Citigroup over a 2007 mortgage derivatives deal, saying that the S.E.C.’s policy of settling cases by allowing a company to neither admit nor deny the agency’s allegations did not satisfy the law.
The judge, Jed S. Rakoff of United States District Court in Manhattan, ruled that the S.E.C.’s $285 million settlement, announced last month, is “neither fair, nor reasonable, nor adequate, nor in the public interest” because it does not provide the court with evidence on which to judge the settlement.
The ruling could throw the S.E.C.’s enforcement efforts into chaos, because a majority of the fraud cases and other actions that the agency brings against Wall Street firms are settled out of court, most often with a condition that the defendant does not admit that it violated the law while also promising not to deny it.
That condition gives a company or individual an advantage in subsequent civil litigation for damages, because cases in which no facts are established cannot be used in evidence in other cases, like shareholder lawsuits seeking recovery of losses or damages.
The S.E.C.’s policy — “hallowed by history, but not by reason,” Judge Rakoff wrote — creates substantial potential for abuse, the judge said, because “it asks the court to employ its power and assert its authority when it does not know the facts.”
The S.E.C. did not respond immediately to a request for comment on the judge’s decision, which was released Monday morning. A Citigroup spokesman said the company was studying the decision and had no immediate comment.
The NYPD has discredited itself — Tough tactics and intolerance favor the rich and flout the rule of law
As Occupy Wall Street grew, the New York Police Department’s “crowd control” tactics became increasingly bizarre and aggressive: historic mass arrests, motor scooter attacks, destruction of books, ramming horses into demonstrators, putting New York Post reporters in choke holds – to name only a few. And following Tuesday’s brazen raid of Zuccotti Park, carried out in the dead of night, the NYPD indicated that de-escalation is not on the horizon. Quite the opposite, in fact. Police officials at the highest ranks, under the direction of Mayor Mike Bloomberg and Police Commissioner Ray Kelly, have taken to simply making up the rules as they go along.
In case you were wondering about the effects of an LRAD, read this report from the ACLU from last month:
The American Civil Liberties Union of Pennsylvania filed a federal lawsuit today on behalf of Karen Piper, a bystander who suffered permanent hearing loss after Pittsburgh police deployed a Long Range Acoustic Device (LRAD) against protestors during the 2009 G-20 Summit. An LRAD emits harmful, pain-inducing sounds over long distances. Developed for use by the military, LRAD technology had never before been used against US civilians.
"Police departments should not be using weapons built for the military on civilian protesters," said Witold Walczak, legal director of the ACLU of Pennsylvania "As this case shows, the LRAD cannot be controlled to prevent serious harm to innocent bystanders. Collateral harm to innocents may be justifiable in wartime, but not to quell protesters who overturned a couple of trash dumpsters."
On September 24, 2009, Piper, then a visiting professor at Carnegie Mellon University, decided to observe G-20 protests in Pittsburgh’s Lawrenceville neighborhood as research for her book on globalization issues and the responses of bodies like the G-20 to protest activity. She arrived at Arsenal Park around 10 a.m. and saw protestors calmly and peacefully milling around the area. After the protest began, Piper walked on the sidewalk a short distance from the marching protesters, in the company of other curiosity seekers and journalists. When Piper became concerned about rapidly increasing police activity, she tried to leave the area. As she was walking away, police officers activated, suddenly and without warning, an LRAD a short distance away from her. It emitted a continuous piercing sound lasting several minutes.[…]
The LRAD, a distance hailing and crowd control device, was originally developed in response to the terrorist attack on the USS Cole in October 2000 and was intended to be used by American warships to warn incoming vessels approaching without permission. Among other things, it emits harmful, pain-inducing sounds over long distances.
According to Walczak, local ear doctors reported that they treated a fair number of people, including Pittsburgh police officers, for hearing and other ear problems in the wake of the LRAD deployment. The ACLU-PA will use the discovery process to learn more about the extent of the harms caused by the LRAD, to police and others. […]
Yet another pain compliance device in use against American citizens. The good news is that the intense pain it causes anyone in the vicinity is “harmless.” Except when it causes permanent damage. […]
But still, as a spokesman for the company said:If you stand right next to it for several minutes, you could have hearing damage,” he said. “But it’s your choice.”
See? You have a choice. You can just not protest. If you do, expect torture and possible permanent damage. That’s what being free is all about.
A funny thing happened to the First Amendment on its way to the public forum. According to the Supreme Court, money is now speech and corporations are now people. But when real people without money assemble to express their dissatisfaction with the political consequences of this, they’re treated as public nuisances and evicted.
First things first. The Supreme Court’s rulings that money is speech and corporations are people have now opened the floodgates to unlimited (and often secret) political contributions from millionaires and billionaires. Consider the Koch brothers (worth $25 billion each), who are bankrolling the Tea Party and already running millions of dollars worth of ads against Democrats.
Such millionaires and billionaires aren’t contributing their money out of sheer love of country. They have a more self-interested motive. Their political spending is analogous to their other investments. Mostly they want low tax rates and friendly regulations.
Wall Street is punishing Democrats for enacting the Dodd-Frank financial reform legislation (weak as it is) by shifting its money to Republicans. The Koch brothers’ petrochemical empire has financed, among many other things, candidates who will vote against environmental protection.
This tsunami of big money into politics is the real public nuisance. It’s making it almost impossible for the voices of average Americans to be heard because most of us don’t have the dough to break through. By granting First Amendment rights to money and corporations, the First Amendment rights of the rest of us are being trampled on.
This is where the Occupiers come in. If there’s a core message to the Occupier movement it’s that the increasing concentration of income and wealth poses a grave danger to our democracy.
Yet when Occupiers seek to make their voices heard — in one of the few ways average people can still be heard — they’re told their First Amendment rights are limited.
The New York State Court of Appeals along with many mayors and other officials say Occupiers can picket — but they can’t encamp. Yet it’s the encampments themselves that have drawn media attention (along with the police efforts to remove them).
A bunch of people carrying pickets isn’t news. When it comes to making views known, picketing is no competition for big money .
Yet if Occupiers now shift tactics from passive resistance to violence, it would spell the end of the movement. The vast American middle class that now empathizes with the Occupiers would promptly desert them.
But there’s another alternative. If Occupiers are expelled from specific geographic locations the Occupier movement can shift to broad-based organizing around the simple idea at the core of the movement: It’s time to occupy our democracy.
#OWS This May Not Be What A Police State Looks Like, But It’s Certainly How One Begins
Police State Tactics On Display Nationwide
In the last couple of days, police at Occupy protests:
- Bludgeoned peaceful protesters at Berkeley … and then said that the protesters’ locking of arms was “violent”
- Beat and reportedly broke the ribs of a peaceful protesting, 70-year old, Pulitzer prize winning literature professor at Berkeley (and see this).
- Punched a woman in the face for showing a court order to the police stating that the protesters can be in the park
The Guardian’s Laura Pennie notes:
Law enforcement is there to protect a wealthy elite from the rest of the population
A teenage girl holds a hastily written sign saying: “NYPD, we trusted you – you were supposed to protect us!”
The sentiment is a familiar one. Across Europe, over a year of demonstrations, occupations and civil disobedience, anti-austerity protesters have largely shifted from declaring solidarity with the police – as fellow workers whose jobs and pensions are also under threat – to outrage and anger at state violence against unarmed protesters. Following last month’s police brutality in Oakland, and today’s summary eviction of the Occupy Wall Street camp, American activists too are reaching the conclusion that “police protect the 1%”.
“Who do you guys work for?” Shouts one Manhattan protester, as police load arrestees into a van. “You work for JP Morgan Bank!”
And the Washington Post’s James Downie writes:
As hard as the NYPD and New York City’s government might try to obscure the truth though, one truth remains: At 1 a.m. this morning, in the heart of New York City, protesters exercising their constitutional rights to free speech and assembly were swept away by the state, while that state also did all it could to prevent media coverage. No matter what one may think of the occupiers or their cause, nothing they’ve done justifies blockading the press or ignoring court orders. Mayor Bloomberg, Police Commissioner Ray Kelly and other New York leaders who ordered the eviction should take a long, hard look at their handling of the occupation. This morning’s action may not be what a police state looks like, but it’s certainly how one begins.