Rakoff Seeking Truth of Wall Street Wrongdoing Labeled Rogue
U.S. District Judge Jed Rakoff doesn’t shy away from high-profile fights.
In 2005, he challenged the Department of Defense for holding suspected terrorists at Guantanamo Bay in Cuba without identifying them. The Pentagon protested his order to release their names, saying it would undermine their privacy rights and in a few cases threaten national security. The judge rejected most of the arguments from the military and forced it to reveal the names, Bloomberg Markets magazine reports in its May issue.
“I’m not by nature reticent,” Rakoff, 68, says from behind his glass-topped desk in his chambers in lower Manhattan. “I wonder if Rush Limbaugh is ever going to come after me.”
Rakoff sits on the court for the Southern District of New York, which covers Wall Street. He has presided over a number of heavyweight financial lawsuits and currently is overseeing the case of former McKinsey & Co. head Rajat Gupta, who’s charged with insider trading. The judge is also embroiled in a battle with the Securities and Exchange Commission over what he considers its tepid enforcement of the law.
On Nov. 28, Rakoff threw out the SEC’s $285 million settlement of a lawsuit with Citigroup (C) Inc. for selling $1 billion of toxic mortgage securities in a collateralized debt obligation that defaulted in 2007. As part of the agreement, New York-based Citigroup neither admitted nor denied the agency’s allegations, a clause that has been standard in such settlements for at least four decades. Rakoff said he wanted the SEC to reveal more facts about Citigroup’s wrongdoing so he could judge whether the settlement is fair.