U.S. District Judge Jed Rakoff has come out guns-a-blazing in an appellate brief filed on his behalf with the U.S. Court of Appeals for the Second Circuit. The brief, submitted Monday by court-appointed counsel John “Rusty” Wing of Lankler Siffert & Wohl in support of Rakoff’s position, accuses Citigroup Global Markets and the Securities and Exchange Commission of twisting the Manhattan judge’s words and mischaracterizing his decision to scuttle the SEC’s $285 million settlement with Citi for allegedly misleading investors in a $1 billion collateralized debt obligation.
You can read the hefty 90-page brief here; the court allowed the outsized filing given the voluminous briefs filed by the SEC, Citi, and various amici.
From the start, Wing asserts that–contrary to what the SEC and Citi have contended–Rakoff didn’t refuse to approve the settlement because Citi wouldn’t admit to any wrongdoing. Instead, he argues, Rakoff simply needed more information to determine if the settlement was fair, reasonable, and in the public interest.
Rakoff’s position will be tested at oral arguments in September. In the meantime, here are some highlights from the brief:
“The gravamen of the parties’ appeal–that the district court imposed a new bright-line rule of law that no consent judgment could be approved ‘unless liability has been conceded or proved’ and ‘conclusively determined’ [citing to Citi's brief]–is based on a flat mischaracterization and distortion of the district court’s ruling. Even a microscopic review of the district court’s opinion will not find any such statement.”
