This inspired my own paraphrase of his explanation, based on the script for the movie Hester Street:
Despite the public importance of this case, the proposed consent judgment would leave uncertain the truth of the very serious allegations made in the complaint.
The proposed consent judgement in no way specifies the basis for the $33m figure or whether any of this money is derived directly or indirectly from the $20bn in public funds previously advanced to Bank of America as part of its 'bailout.'
You can't piss up my back and tell me its rain!
Rakoff followed up his decision with an order for both sides to present arguments to refute his position and justify the acceptability of their proposed settlement. He has now reviewed those arguments and is hanging tough. Here is the Reuters account from Jonathan Stempel and Joe Rauch:
A federal judge ordered Bank of America to explain why it agreed to pay $33 illion to settle a U.S. Securities and Exchange Commission lawsuit if it believed it properly disclosed bonuses it authorized for Merrill Lynch & Co employees.
A day after receiving arguments from both sides about the proposed settlement, U.S. District Judge Jed Rakoff questioned the bank's willingness to settle, saying that if it was "to curry favor with the SEC or to avoid retaliation by the SEC, the court needs to know the specifics."
The judge, however, also questioned the SEC effort to end its civil case, suggesting it might be unreasonable to let off company executives and their lawyers without penalty.
By questioning motivations behind the August 3 settlement, the judge threw a spotlight on regulators' willingness to settle with companies that do not admit wrongdoing.
"The deal is the complete opposite of transparency," said David Lewin, a corporate governance professor at the University of California at Los Angeles' Anderson School of Management. "There are a lot of decisions on these kinds of disclosure issues right now, and some you can argue the merits of. But I don't think this one is even close."
The judge directed both the SEC and the largest U.S. bank to make further submissions by September 9. It remains unclear whether he will approve the settlement. Bank of America bought Merrill on January 1.
The bottom line is that Rakoff is less interested in settlement and more interested in establishing the usual issues that occupy a judge:
- Has any wrongdoing taken place?
- If so, who is responsible for that wrongdoing?
- If the guilty parties can be identified, how may they best be punished to the satisfaction of the victims of their wrongdoing?
The judge has his priorities, and he is holding to them tenaciously. Let those of us on Main Street who have grown sick and tired of the legerdemain of Wall Street hope that his grip persists!