There’s a remarkable new trend in federal courts: Judges are refusing to rubber stamp deals federal agencies have worked out with financial industry defendants. Is this a sign of things to come?
The New York Times recently wrote about several judges who looked at proposed settlements and questioned whether they were in the public interest. One judge wanted to know why prosecutors weren’t getting tough with banks. Another questioned whether a settlement with Citigroup was fair and reasonable. And a third accused the Securities & Exchange Commission of going easy on Bank of America. Finally – someone is watching the watchdog.
But why is the SEC so timid? Is there pressure to get quick settlements? Are they reluctant to litigate? Or is it the result of years of entrenched complacency?
One thing is certain: Some judges are looking at settlements that they do not believe serve the public interest and demanding more accountability from regulators. Hopefully we can expect more from the SEC now that the courts are demanding more.