August 18, 2010
The New Scrutiny of Settlements?
This week - and for at least the third time this year - a federal judge has refused to rubber stamp a monetary settlement between a bank and a U.S. regulator. Specifically, a Washington court will later today scrutinize a proposed $298 million deal between authorities and Barclays bank concerning alleged violations between 1995 and 2006 of U.S. sanctions prohibiting trade with certain nations.
The higher bar for settlements appears to have been set by Judge Rakoff of the SDNY, who, earlier this year rejected a settlement between the SEC and Bank of America on a host of grounds. Commentators note that judges appear to be disgruntled with what appears to be the acceptance of a check for very serious misconduct; in the BOA case, Rakoff ultimately and "reluctantly" accepted a deal with a higher monetary penalty, the establishment of a FAIR fund for investors, and attendant policy changes at the bank.
For details on the Barclays case, see "Barclays Follows Citigroup With Court Rejection of U.S. Accord" at Bloomberg.com.
August 18, 2010 | Permalink