Rakoff Round-up: Slamming JP Morgan And Telling The SEC And Galleon Defendants To Sit And Wait

WSJ Screen Grab Rakoff

Being a federal judge in the Southern District of New York means you see all sorts of high profile cases. But by any calculation, Judge Jed Rakoff has been in the news a lot in the past six months.

This morning, his name leads the headlines of two of the main stories on the WSJ’s legal page. Here’s the round-up of what Rakoff’s recent news-making:

JP Morgan: Rakoff issued a strongly-worded ruling against JP Morgan at the end of January, but it just came to light last week. In a memorandum order, Rakoff said JP Morgan had attempted a “disguised but unconsented” assignment that breached a credit agreement connected to a more than $220 million loan made by the bank to Mexican telecommunications company Cablevisión. The bank agreed to assign the loan to Banco Inbrusa. Inbrusa is controlled by Mexican magnate Carlos Slim, who also controls one of Cablevisión’s biggest competitors. (He also owns a huge stake in the New York Times, which is taking flak for not covering this story.)

Cablevisión had asked for a preliminary injunction blocking the assignment, which Rakoff granted. That litigation continues.

Galleon: Despite all sides (the SEC, the defendants and the Manhattan US Attorney’s office) asking him to delay the civil trial in the Galleon insider trader case until the criminal trial is complete, Rakoff said he needed additional time to confirm the start date. It is not uncommon for defendants to face both criminal charges and civil charges, though traditionally the criminal trial goes first. Rakoff has not seen the need for such tradition, and has thus far indicated his trial would proceed on an expedited plan. 

“I find it a little strange, not completely, that the SEC, which brought charges with so much fanfare, could say not yet, not now, not for a very long time,” Judge Rakoff said at the hearing late last week, according to Chad Bray of the WSJ. His decision is pending.

Bank of America: JP Morgan and Galleon provided plenty of news-making, but let’s not forget Bank of America. Rakoff said last week that he would decide today whether he’ll approve the settlement between the SEC and Bank of America relating to the Merrill bonuses and loss disclosures. Rakoff asked to see deposition transcripts from testimony taken by the the office of New York Attorney General Andrew Cuomo, as his interpretations over internal discussions at BofA differ from what the SEC and BofA are saying. So Rakoff’s approval of the BofA agreement could depend on if he thinks Cuomo has a point or is just blowing smoke.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.