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Judge Jed Rakoff taps into nation's outrage over economic crisis

The outspoken federal jurist has condemned not only big banks for their financial misdeeds but also their regulators.

April 10, 2010|By Nathaniel Popper

But because Rakoff works in Manhattan, he gets a steady stream of cases dealing with high finance.

On Monday, saying he needed more information, Rakoff refused to approve an SEC settlement with a securities trading firm tied to a high-profile case of alleged hedge fund insider trading.

Late last month, he rejected Citigroup Inc.'s bid to have a lawsuit against it thrown out. Last week, he dismissed a case brought by pension funds against rating firms Moody's and Standard & Poor's.

For now, Rakoff's greatest long-term effect is likely to come from the Bank of America case. Last year the judge rejected the company's first settlement with the SEC, saying the $33-million payment that had been negotiated was insufficient. He ultimately approved a revised accord that called for a $150-million payment.

The case has sent a clear message to the SEC, securities lawyers say.

"What he was trying to do in part is to shake up the agency and prod them to work harder -- to do better investigations," University of Cincinnati law professor Barbara Black said.

SEC enforcement chief Robert Khuzami told the Washington Post last week that the agency, as part of an effort to be more aggressive, might detail its findings of wrongdoing in cases that the agency settles.

Rakoff says he gave up any hope of moving to a higher court when he ruled against the death penalty -- and says he has no desire to be anywhere else.

"To have the thrill of seeing actual people testifying in hotly disputed matters -- to see a jury at work -- I cannot tell you how enticing it is," he said. "I love my job. That's the bottom line."


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