The Face of Justice

With all the corruption, political gamesmanship, and greed in our country today, it’s easy to believe there’s no longer such a thing as justice within the ranks of our government. I often find myself thinking this way, but recently learned of a judge that offers some hope. His name is Jed Rakoff and he’s a U.S. District Judge in the Southern District of New York.

Rakoff was nominated to the bench in 1995 by President Clinton and soon started making a name for himself as an outspoken judge that wasn’t afraid to take an unpopular stand when he felt it was right. Presiding over several large cases, a few of note include:

In 2004 he weighed in favor of the Associated Press in their suit against the U.S. Department of Defense for access to the names of and charges against the inmates at Guantanamo Bay under the Freedom of Information Act. The U.S. tried to argue that it was in the prisoners’ best interests if their identities remained a secret.

In 2009, Rakoff rejected a $33M settlement between Bank of America and the Security and Exchange Commission concerning BOA’s non-disclosed hand-out of billions of dollars in bonuses to Merrill Lynch bankers in the midst of their merger just before claiming the $27.6B annual loss that wound up leading BOA to accepting their share of the TARP bailout that I wrote about in my past posts The Bonus Culture and Wall Street Fraud. Rakoff forced them to a new trial in 2010 where he ultimately approved a $150M settlement for the case but did so only reluctantly, calling it "half-baked justice at best."

Just last month, Rakoff was the judge that handed down a $92.2M penalty to Raj Rajaratnam for insider trading. You might remember this hedge fund thief from my past post, Who is the “1%”?

And finally, Rakoff just rejected a $285M settlement between Citigroup and the SEC last week concerning betting against mortgage investments while at the same time, selling them to their investors, profiting $160M while their investors lost millions. He’s set a new trial date for July 2012 for that one. He said a settlement might undermine investors’ efforts to reclaim their losses since it allowed Citigroup to avoid admitting any liability.

As part of that decision, Rakoff stated "In much of the world, propaganda reigns, and truth is confined to secretive, fearful whispers. Even in our nation, apologists for suppressing or obscuring the truth may always be found. But the SEC, of all agencies, has a duty, inherent in its statutory mission, to see that the truth emerges; and if it fails to do so, this court must not, in the name of deference or convenience, grant judicial enforcement to the agency's contrivances."

That is the sort of opinion we need more of from our justice department.

After discovering Judge Rakoff, it didn’t take me long to wonder if he might not be a strong candidate for our next opening on the Supreme Court. Alas, Rakoff has taken at least one unpopular stand that I cannot agree with and that at least for me, would preclude his consideration for a spot on our highest court. In 2002, he declared the death penalty to be unconstitutional. His decision was reversed shortly thereafter by the Court of Appeals but it suggests perhaps his current spot in NY is in fact, the best one for him. I can only hope he continues in that position for years to come, doing his part to bring some measure of justice to those on Wall Street that would rob others in order to line their own pockets.