In the case before Marrero, SAC Capital Advisors, a hedge fund run by the billionaire investor Steven A. Cohen, had agreed to settle insider-trading allegations by writing the Securities and Exchange Commission a check for $602 million. As usual, the deal included the "neither admit nor deny" language that has become standard for settlements with the SEC and other federal regulator
Marrero found that odd. "There is something counterintuitive and incongruous about settling for $600 million if it truly did nothing wrong," he said at a Federal District Court hearing last week in Manhattan.
Judges have been increasingly willing to question the "neither admit nor deny" deals since Judge Jed S. Rakoff refused to approve a $285 million settlement in 2011 between the SEC and Citigroup over allegations of mortgage fraud.
Two months later, Judge Renee Marie Bumb blocked an $11.5 million settlement between the Federal Trade Commission and a New Jersey marketing company that also used "neither admit nor deny" language.
More than a year after Rakoff's decision, the Court of Appeals for the Second Circuit in New York is still weighing whether his ruling was the right one. When the case is decided, Donald Langevoort, a Georgetown University law professor who specializes in securities law, told ProPublica, "it will basically give marching orders to Judge Rakoff and the others."
Success Argument I
Success Argument I (No. 2)
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