Judge Jed Approves Schottenfeld Settlement

Federal District Court Judge Jed Rakoff has approved the SEC’s settlement with Schottenfeld Group, a trading firm that once employed three traders charged in the Galleon insider trading case.

The settlement seemed shaky after Judge Jed requested more information from the SEC about how regulators came up with the $460,475.28 they say Schottenfeld needs to pay in disgorgement fees.

He also wanted details on how and when Schottenfeld planned to implement new compliance recommendations including the hiring of an outside consultant to watch over them. The SEC’s response seems to have satisfied Rakoff. In his order, issued yesterday, Rakoff said the disgorgement and penalty calculations were “reasonable” even though the “prophylactic measures appear somewhat superficial.”