CITI settlement rejected

[sactoking]

http://money.cnn.com/2011/11/28/news/companies/citigroup_settlement_rejected/index.htm

NEW YORK (CNNMoney) -- A judge rejected a proposed $285 million mortgage securities fraud settlement between Citigroup and the Securities and Exchange Commission on Monday, saying the deal was "neither fair, nor reasonable, nor adequate, nor in the public interest."

Judge Jed Rakoff said that the settlement announced last month, under which Citi neither admitted nor denied the SEC's allegations, deprived the public "of ever knowing the truth in a matter of obvious public importance." He instead ordered Citi to face trial over the allegations in July 2012.

61PrintCommentA spokeswoman for Citi said the bank was "declining to comment, pending a review of the decision." The SEC did not immediately return a request for comment.

The SEC has alleged that in 2007, Citi created and sold a mortgage-related collatarized debt obligation, or CDO, called Class V Funding III.

According to the SEC complaint, one CDO trader characterized the asset group in internal communications as "a collection of dogshit" and "possibly the best short EVER!" In marketing materials, however, the assets were described as "attractive investments rigorously selected by an independent investment adviser," Rakoff's decision said.

After marketing the CDO, Citi (C, Fortune 500) then took a short position -- or bet against -- the security as the housing market deteriorated, bringing in a net profit of $160 million for the bank. Investors, meanwhile, were cleaned out.

Litigation is also pending against Brian Stoker, the Citi employee alleged to be primarily responsible for structuring the CDO.

The SEC has settled a string of similar complaints in recent months, including agreements with Goldman Sachs (GS, Fortune 500) and JPMorgan Chase (JPM, Fortune 500).

Shares of Citi were up 6%, although the gains came before the judge's ruling.

Good to see that judicial oversight will ensure that CITI can't buy their way out of this mess with a paltry sum and no acknowledgment of the alleged crimes involved.

 

[Texashiker]

An person steals from walmart, and that person could go to jail.

A company steals from people, and the company gets fined?

How exactly is that supposed to be fair?

 

[thraashman]

An person steals from walmart, and that person could go to jail.

A company steals from people, and the company gets fined?

How exactly is that supposed to be fair?

According to most current Republicans, corporations are people and money is free speech ... right up until they do something wrong, then they're protected by the virtue of being incorporated. I don't get it either.

 

[airdata]

An person steals from walmart, and that person could go to jail.

A company steals from people, and the company gets fined?

How exactly is that supposed to be fair?

^

Some places like the young turks and alex jones were talking last week about some guy who got caught siphoning hundreds of thousands of dollars from customer accounts at the bank he worked at.

I think he got 3-4 years. And then we see other examples of people stealing negligible amounts of money and they get far more harsh sentences.

Or Madhoff getting life for ripping off rich people. If Madhoff stole from some childrens non profit or something he'd probably be doing 5-6 years.

 

[DesiPower]

I wished some of these occupy people would have dragged some of the swines out of their offices and lynched them, figuratively speaking of-course... But it turned out to be a modern day hippie movement...

 

[Genx87]

^

Some places like the young turks and alex jones were talking last week about some guy who got caught siphoning hundreds of thousands of dollars from customer accounts at the bank he worked at.

I think he got 3-4 years. And then we see other examples of people stealing negligible amounts of money and they get far more harsh sentences.

Or Madhoff getting life for ripping off rich people. If Madhoff stole from some childrens non profit or something he'd probably be doing 5-6 years.

Petition your govt to increase sentencing guidelines for fraud.

 

[Texashiker]

Petition your govt to increase sentencing guidelines for fraud.

The people have to be brought to trial first.

When the government refuses to bring the accused to trial, tougher penalties do not make difference.

The justice department, the states attorney general and the local DA all refuse to do anything. What are the people supposed to do?

 

[Genx87]

An person steals from walmart, and that person could go to jail.

A company steals from people, and the company gets fined?

How exactly is that supposed to be fair?

If an individual commits fraud they go to jail. Even if they are doing it while working for a corporation. If a company breaks the law. They are fined. Breaking the law in this regard typically is not a criminal matter but a civil matter. Like a company dumps toxins into a river beyond regulation. They are fined for their act.

 

[Genx87]

The people have to be brought to trial first.

When the government refuses to bring the accused to trial, tougher penalties do not make difference.

People are brought to trial. Even his example talks about people being brought to trial. He is complaining about the sentencing once they are found guilty.

 

[Texashiker]

If a company breaks the law. They are fined. Like a company dumps toxins into a river beyond regulation. They are fined for their act.

The people responsible should go to prison, and the company should be fined.

If I dumped oil into a local river, I would probably go to jail and have to pay a clean up fee.

 

[dmcowen674]

Originally Posted by Texashiker
An person steals from walmart, and that person could go to jail.

A company steals from people, and the company gets fined?

How exactly is that supposed to be fair?

According to most current Republicans, corporations are people and money is free speech ... right up until they do something wrong, then they're protected by the virtue of being incorporated.

and those Republicans are certainly on here.

 

[Genx87]

The people responsible should go to prison, and the company should be fined.

If I dumped oil into a local river, I would probably go to jail and have to pay a clean up fee.

People do go to jail and the company fined. Why do you believe otherwise?

 

[Macamus Prime]

A company steals from people, and the company gets fined?

Correction; a company hires people who work hard. There is no such thing as stealing in capitalism - it's all hard work.

Just ask this forum's swine fingermen.

 

[Thump553]

Citi peddled some of these to my elderly dad as a safe, income generating asset. The government forced Citi to buy them back at full value a couple of years ago. I'm not sure what they are fighting about now as we already got paid back in full.

 

[Texashiker]

People do go to jail and the company fined. Why do you believe otherwise?

When are British Petroleum employees going to prison for dumping oil on the US coast line?

 

[Genx87]

When are British Petroleum employees going to prison for dumping oil on the US coast line?

The investigation is ongoing.

http://www.huffingtonpost.com/2010/06/01/bp-criminal-investigation_n_596626.html

And a civil suit is going to trial in Feb 2012 against Transocean. The owners\operators of the rig.

 

[Craig234]

Great to see a judge protect the public interest.

Suspecting odds were this is a Democratic appointment, I checked, and he was appointed by Clinton.

I often say people don't appreciate how crucial it is who we have appointing judges - we've had a DISASTER from the Republican judges since Reagan.

Citizens United - 5-4 ruling - is a leading example as our democracy is corrupted.

 

[SagaLore]

An person steals from walmart, and that person could go to jail.

A company steals from people, and the company gets fined?

How exactly is that supposed to be fair?

Take a freshman level class in management and learn what a "corporation" is and how it works, then answer your own question.

 

[Darwin333]

This is definitely a step in the right direction but it is an absurdly small step.

Wake me up when they start breaking out handcuffs by the hundreds.

 

[Darwin333]

Take a freshman level class in management and learn what a "corporation" is and how it works, then answer your own question.

A corporation does not protect you from criminal prosecution if you personally commit a crime such as, oh I dunno, fraud.

See the prosecutions from the S&L debacle to see how it works

 

[Darwin333]

Citi peddled some of these to my elderly dad as a safe, income generating asset. The government forced Citi to buy them back at full value a couple of years ago. I'm not sure what they are fighting about now as we already got paid back in full.

First of all, not everyone has gotten their money back by a long shot.

Secondly, go rob one of their banks and see if "giving them their money back" is adequate.

 

[Darwin333]

People do go to jail and the company fined. Why do you believe otherwise?

Because thousands upon thousands of crimes were committed by "elites", largely responsible for the worst economic downturn since the great depression, and almost all of them have gotten to keep their ill-gotten gains and none of them have gone to jail? Just a guess.

 

[Genx87]

Because thousands upon thousands of crimes were committed by "elites", largely responsible for the worst economic downturn since the great depression, and almost all of them have gotten to keep their ill-gotten gains and none of them have gone to jail? Just a guess.

If they committed a fraud or broke another law then they should be prosecuted. But I suspect you are conflating an emotional issue with a legal one.

There are plenty of examples of individuals who engaged in illegal activity and were prosecuted and served jail time. Being within a corporation did not absolve them of responsibility.

 

[cybrsage]

According to most current Republicans, corporations are people and money is free speech ... right up until they do something wrong, then they're protected by the virtue of being incorporated. I don't get it either.

They are not people, they are US Persons. Some people are US Persons, but most people are not. Some companies are US Persons, but most are not.

The reason a company is listed as a US Person is so that the company is protected by the Constitution. For example, if a company is not a US Person, the government has no restrictions against search and seizure..it can force companies to house troops.

However, it is impossible to put a company into jail.

Those who broke laws should be punished according to the law, though.

 

[cybrsage]

When are British Petroleum employees going to prison for dumping oil on the US coast line?

Is prison time listed as one of the possible punishments for the crimes committed?