Unsettling Wall Street; A Financial Regulator Under Fire  

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Jenis: Article from Bulletin/Magazine
Dalam koleksi: The Economist (http://search.proquest.com/) vol. 401 no. 8762 (Dec. 2011), page 82.
Topik: Court Decisions; Plea Bargaining; Settlements & Damages; Banking Industry; Economic Crisis

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Perpustakaan Pusat (Semanggi) Nomor Panggil: EE29.69 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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As America looks back on the financial crisis, the Securities and Exchange Commission (SEC), Wall Street's main regulator, is under particular scrutiny. On November 28th a judge took aim at one of its pet habits: agreeing to "plea bargains" with financial institutions. It works like this. A bank is accused of wrongdoing. It agrees to pay a huge fine to make the charges go away. Instead of going to court, the SEC agrees. The bank avoids admitting guilt, or being found guilty of anything. It also disarms aggrieved investors of a weapon (a conviction) which they might have used in future lawsuits. From the public's point of view, the advantage of such deals is that they are cheap and easy. A full trial against a big bank can cost a fortune. The bank, obviously, can mount a vigorous defence. By settling, the SEC guarantees a good-enough result. It collects money. The bank is shamed by the airing of (unproven) charges. The regulators can claim victory in press releases and self-congratulatory reports to Congress. It is hard to imagine a more thorough rebuke of these arguments than that delivered by Jed Rakoff, a New York district judge, in rejecting a $285m settlement between Citigroup and the SEC.

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