考研阅读精选：金融监管下的华尔街躁动不安

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A financial regulator under fire Unsettling Wall Street
金融监管下的华尔街躁动不安
A judge rules against the SEC’s favorite way of penalizing financial institutions

  AS AMERICA looks back on the financial crisis, the Securities and  Exchange Commission (SEC), Wall Street’s main regulator, is under  particular scrutiny. On November 28th a judge took aim at one of its pet  habits: agreeing to “plea bargains” with financial institutions.
  It works like this. A bank is accused of wrongdoing. It agrees to pay a  huge fine to make the charges go away. Instead of going to court, the  SEC agrees. The bank avoids admitting guilt, or being found guilty of  anything. It also disarms aggrieved investors of a weapon (a conviction)  which they might have used in future lawsuits.
From the public’s  point of view, the advantage of such deals is that they are cheap and  easy. A full trial against a big bank can cost a fortune. The bank,  obviously, can mount a vigorous defense. By settling, the SEC guarantees  a good-enough result. It collects money. The bank is shamed by the  airing of (unproven) charges. The regulators can claim victory in press  releases and self-congratulatory reports to Congress.
It is hard to  imagine a more thorough rebuke of these arguments than that delivered by  Jed Rakoff, a New York district judge, in rejecting a $285m settlement  between Citigroup and the SEC.
The case involved a fund that, it  is alleged, the bank had designed to fail. The subsequent implosion cost  investors $700m while earning Citi $160m. Mr. Rakoff called the  settlement not just a betrayal of the public interest, but the product  of an approach “hallowed by history but not by reason” that provided the  SEC with little beyond a “quick headline”. Settling without  establishing the facts “is worse than mindless, it is inherently  dangerous,” Mr. Rakoff wrote.
If the unproven allegations were  correct, they constituted a violation of core principles of securities  laws. Citi, said the SEC in its complaint, created a billion-dollar fund  half-full of wretched mortgages. It then bet against it, earning fees  on both ends of the transaction. Investors were not told of Citi’s role  in choosing securities, nor how it stood to benefit if defaults ensued.
  Those contentions alone would put Citi in violation of the disclosure  provisions at the heart of the 1933 Securities Act, the foundation of  market regulation. But in a curious twist, Mr. Rakoff noted that in a  parallel complaint against the Citi employee who structured the fund,  the SEC went a critical step further, suggesting deliberate deception  and thus fraud, which would have put the bank at odds with another core  provision of the act, and opened it up to civil litigation. The absence  of the charge in the Citi complaint makes some wonder if the scope of  charges is inversely proportional to the size of the defendant.
  Beyond the issues in the immediate case, Mr. Rakoff noted that although  the settlement called for Citi to operate under an injunction  prohibiting further illegal conduct, such conditions had been imposed on  it, and others, in the past, with no consequences. Merely establishing  the authority of the court without firm cause, “serves no lawful or  moral purpose and is simply an engine of oppression”, he wrote.
A  settlement also carries other large costs for society, Mr. Rakoff  added. “In any case like this that touches on the transparency of the  public markets whose gyrations have so depressed our economy and  debilitated our lives, there is an over-riding public interest in  knowing the truth.” He ordered a retrial to begin in July 2012.
  Unsurprisingly, Citigroup and the SEC both expressed their objections.  Citi said it stood ready with “substantial factual and legal defenses”.  The SEC noted decades of precedent, and asserted that the settlement  “reflects the scope of relief that would be obtained after a successful  trial”.
The SEC then released a letter from its chairman, Mary  Schapiro, asking Congress for the right to inflict heavier penalties on  recidivists, a barely veiled reference to Citi and its like. That may  placate some of the SEC’s critics, but it does nothing to address Mr.  Rakoff’s most important concern: that before a suitable punishment can  be set, there must be a determination as to what occurred, and why it  was wrong. Of such sentiments are revolutions born.