Sunday, September 27, 2009
Jed Rakoff may be our new hero - and what of Gordon Brown ?
In August, the SEC and Bank of America came to their proposed settlement -- the one that so greatly troubled Judge Rakoff. Rakoff confronted the SEC lawyers with his concerns that same month, asking why they weren't going after any of the individual officers responsible for the alleged disclosures. The SEC responded with a circular argument that seemed to stoke Rakoff's fury all the more. The back-and-forth essentially was this:
SEC: We can't prove the individual executives did anything wrong because they tell us they simply delegated to their lawyers the task of handling the disclosure obligations.
Rakoff: Then go after the lawyers.
SEC: We don't know what the lawyers said, since the executives invoked their attorney-client privileges.
Rakoff: If the officers are saying they relied on counsel, they're automatically waiving the privilege. Plus, there's a crime-fraud exception to the privilege, so you could have asked me to order them to answer.
SEC: Not really. We haven't charged anybody with fraud.
Rakoff: Why didn't you charge anyone with fraud?
SEC: We couldn't prove fraudulent intent.
Rakoff: Why not?
SEC: They said they relied on advice of counsel.
IMO: Seems clear to me, anyway, SEC really are still not doing their alleged job, as petitioners frequently have found over the years. If Gordon Brown seriously intends to win the next election, surely he could ensure that the large sum spent on SFO - effectively by the UK taxpayers who employ him - is more wisely used. (SFO used the 'legal advice' quirk, now being strongly tested such cases even in USA, to avoid condemning the Phoenix fraudsters). We can perhaps fairly assume the Tories wouldn't act usefully. Once again Gordon Brown has a chance to act for the voters. Will he ?
SEC: We can't prove the individual executives did anything wrong because they tell us they simply delegated to their lawyers the task of handling the disclosure obligations.
Rakoff: Then go after the lawyers.
SEC: We don't know what the lawyers said, since the executives invoked their attorney-client privileges.
Rakoff: If the officers are saying they relied on counsel, they're automatically waiving the privilege. Plus, there's a crime-fraud exception to the privilege, so you could have asked me to order them to answer.
SEC: Not really. We haven't charged anybody with fraud.
Rakoff: Why didn't you charge anyone with fraud?
SEC: We couldn't prove fraudulent intent.
Rakoff: Why not?
SEC: They said they relied on advice of counsel.
IMO: Seems clear to me, anyway, SEC really are still not doing their alleged job, as petitioners frequently have found over the years. If Gordon Brown seriously intends to win the next election, surely he could ensure that the large sum spent on SFO - effectively by the UK taxpayers who employ him - is more wisely used. (SFO used the 'legal advice' quirk, now being strongly tested such cases even in USA, to avoid condemning the Phoenix fraudsters). We can perhaps fairly assume the Tories wouldn't act usefully. Once again Gordon Brown has a chance to act for the voters. Will he ?
# posted by uv : 6:32 PM
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