End the Collusion between Wall Street Banks and the Securities and Exchange Commission

Petitions, Politics — By Gabriel Cantu on December 2, 2011 8:26 am

Target: Judge Jed Rakoff, Southern District of New York

Goal: To express support and solidarity with Judge Rakoff’s bold move to dissolve the corrupt relationship between the SEC and fraudulent Wall Street Banks.

Since 1972 the US financial regulator, the Securities and Exchange Commission (SEC), has followed a rather peculiar policy when confronting the questionable activities of banks that come under its scrutiny. Preferring to strike deals and issue fines without declarations of guilt or innocence from the banks and hoping that the whole dirty business goes unnoticed, the SEC has long relied on the acquiescence of the judiciary in financially important jurisdictions like New York City to sign off on these settlements, oftentimes without even a modicum of evidence or legal reasoning to support such a ‘no contest’ agreement. This cozy relationship, which major banks and financial institutions have been all too happy to maintain, is now coming under attack from Judge Jed Rakoff of the Southern District of New York.

Columnist John Gapper of The Financial Times reports that, according to Judge Rakoff, the long-standing practice of judicially approving such deals “serves no legal or moral purpose” and is simply “an engine of oppression.” His comments relate specifically to the role which the judge is so flippantly expected to play in the SEC’s proposed $285m settlement with Citigroup in a case of alleged fraud, a case in which the bank is desperate neither to admit nor deny the allegations for fear of inviting a flood of civil and possibly criminal lawsuits. Although this is a reasonable consideration for any business, Judge Rakoff contends that public interest in exposing the kind of fraudulent business activity which is the underlying cause of our depressed economy is paramount, and should take second place to the protection of shareholders’ assets.

Unfortunately, Judge Rakoff is facing an uphill battle. According to Stanford University Professor and former SEC Commissioner Joseph Grundfest, “the SEC is so underfunded that it lacks the capacity to be a credible litigation force in a large number of cases.” However, current SEC Chairman Luis Aguilar has recently expressed an intention to revisit the Commission’s “neither confirm nor deny” policy.

The common aphorism that “justice must also be seen to be done” is, in this case, of the utmost importance in upholding the rule of law and the protection of consumers, pension-holders and myriad other stakeholders in our economy. As Judge Rakoff warns, “in much of the world, propaganda reigns, and truth is confined to secretive, fearful whispers.”

PETITION LETTER

Dear Judge Jed Rakoff, Southern District of New York,

Your recent attempts to expose and overturn the shameful collusion between America’s financial regulator, the SEC, and the Wall Street banks that rely on its complacence in covering up their crimes, should be loudly applauded.

All who believe in reasoned and substantive legal probity in matters of commercial and corporate fraud, especially those instances which arguably led to the current economic depression, now look to your leadership and influence in helping to overturn a decades-old policy which has reduced the law to the status of handmaiden to the oligarchy.

We support and admire your efforts to realign the law, democracy and the proper functioning of the market to a position which truly reflects America’s status as a free and civilized nation.

Sincerely,

[Your Name Here]