Judge Rakoff once again stands for restoring trust by insisting that the SEC provide facts concerning wrong doing rather than settling out of court and allowing Citibank to claim no wrong doing. He rejected a 285 million dollar settlement because there was not real agreement concerning the truth about what Citibank did wrong. The alleged betrayal of trust was in concealing the fact that they had deliberately designed an instrument to fail, like Goldman's Abacus deal. It was alleged that they knew they had to conceal this fact to sell the instrument so they marketed the instrument as being put together by an "independent" party. Citibank made 160 million on the deal and investors lost 700 million. Rakoff stands for trust, truth and transparency when he says in his judicial opinion: "But when a public agency ask a courttobe
come itspartnerinenforcementby imposingwide -
ranginginjunctiveremediesonadefendant ,enforcedby the formidablejudicialpowerofcontempt ,thecourt , andthepublic , needsomeknowledgeofwhattheunder lyingfactsare :forotherwise ,thecourtbe comesamerehandmaidentoasettlementprivatelynegotiatedonthebasis of unknown facts, while the
public is deprived of ever knowingthe
truth in a matter of obvious public importance."