"A federal judge [Jed Rakoff] threw out the Securities and Exchange Commission's proposed settlement with Bank of America over its disclosure of controversial bonuses paid to Merrill Lynch employees...
"In a rare scuttling of an SEC settlement, Judge Rakoff said the $33 million fine levied on Bank of America "does not comport with the most elementary notions of justice and morality" because the company's shareholders -- the victims of the alleged misconduct -- are the same people being asked to pay the fine. He set a trial date for Feb. 1.
The judge was absolutely right when he noted executives would get to complain about the settlement -- but shareholders would pay for it and the executives would suffer no personal penalty. The SEC would say they "got tough", but they would "get tough" when it was too late to do anything. It was all just a dance designed to create the illusion of governing.
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