Believe it or not, one public official has actually stood up to the finagling banksters of Wall Street.
Three years ago, Jed Rakoff, the U.S. District Judge in Manhattan, stunned Citigroup by just saying no to a sweetheart deal it had cut with the Securities and Exchange Commission. The bank had been caught in an egregious case of ripping off customers by selling a mess of investments to them that the bankers knew would go bad. Sure enough, the customers lost $700 million, while Citigroup reaped $160 million from a side bet it made that the investments would indeed be worthless.
Yet, even though the SEC had a solid case against the crooks, rather than taking them to court for proper punishment, the agency slapped them on the wrist with a $285 million fine — pocket change for the $14 billion a year bank.
As is common in these sweetheart settlements, called "consent decrees," the SEC didn't even make Citigroup admit that it was guilty of fraud. Such decrees, however, have to be signed by a judge, and Rakoff was asked to rubber stamp this one. He refused! Like most Americans, he's appalled by Washington's coddling of Wall Street's too-big-to-fail/too-big-to-jail banks, so he demanded that the two cozy parties submit proof that this deal had any relationship to justice.
Way to go, Jed! But rather than bother with such niceties as truth, Citigroup appealed Rakoff's ruling, and now he is the one being punished. The appeals court reprimanded Rakoff for demanding truth from a Wall Street bank, declaring that it was not in his judicial purview "to demand cold, hard, solid facts."
By getting the one guy who stood up slapped down, Citigroup and the SEC are claiming victory. But they actually lost any shred of public respectability they had left, while lifting the public's esteem for Judge Rakoff higher than ever.
Jim Hightower is the best-selling author of Swim Against the Current: Even a Dead Fish Can Go With the Flow, on sale now from Wiley Publishing. For more information, visit jimhightower.com.