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CEOs Push Back Against Judge Rakoff Decision

Back in November, Judge Jed Rakoff made headlines for throwing out a settlement between the SEC and Citibank.  The settlement provide far too little information to the court, Rakoff argued, for him to be able to assess the settlement's fairness.  It was our interpretation that, should this ruling stand, it would be a boon to private securities class action litigation, since it would force companies to disclose far more informations.

Looks like over 200 CEOs agree.  A group of executives have urged the federal appeals court to reverse Judge Rakoff's decision.  They fear "protracted and expensive litigation" should the ruling stand.

Of course, time will tell if the appeals court sides with Rakoff or with the 200 plus CEOs, but one thing is certain-- the days of gentlemanly settlements between governmental agencies and corporations are over.

Earlier this month, the SEC changed it's long-standing policy to let defendants "neither confirm nor deny" fraud or insider trading charges when they have also admit to or are convicted of criminal violations.  So even if this gaggle of CEOs convince the appeals court to reverse Judge Rakoff's move, times have definitely changed:  future SEC settlements will be more robust, in language at the least, and that change could still be a boon to plaintiffs in subsequent private litagations.