The SEC continues to play softball with financial institutions that repeatedly break the same fraud laws, settling for chump change agreements that don't require an admission of lawbreaking and for pious promises Never To Do It Again. If they were a parent, all the neighbors would be clucking their tongues and predicting the kids would end up in juvie.
On Wednesday, Judge Jed S. Rakoff of the Federal District Court in Manhattan, an S.E.C. critic, is scheduled to review the Citigroup settlement. Judge Rakoff has asked the agency what it does to ensure companies do not repeat the same offense, and whether it has ever brought contempt charges for chronic violators. The S.E.C. said in a court filing Monday that it had not brought any contempt charges against large financial firms in the last 10 years.
If you don't enforce the law, and create significant consequences for failing to do so … then the law is meaningless, and will be violated. QED. #ddtb
Embedded Link
In S.E.C. Fraud Cases, Banks Make and Break Promises
An analysis of enforcement actions found at least 51 cases in which 19 Wall Street firms had broken antifraud laws they had agreed never to breach.
I used to play Space Taxi on my Commodore 64. Once when I accidentally hit a fare with my taxi and lost $10 from my score, my friend said, “The penalty for murder is $10.”
I imagine that’s about as effective a deterrent as what the SEC tries with the banks.
“I neither admit nor deny that I actually hit a pedestrian, but will simply pay this token fine and promise never to do so, perhaps again. Though if I do, and it’s on a different street or in a different vehicle, then clearly there is no connection to the present hypothetical circumstance, and so the promise will not really apply, though I’ll be happy to promise not to do that again, either.”