These days, Judge Jed Rakoff’s name creates about as much agita inside the SEC as as Bernie Madoff. If Wall Street’s cops on the beat didn’t have enough to deal with already, now Judge Jed is up their ass about a seemingly meaningless legal settlement in the Galleon insider trading case.
Before approving the pact between the SEC and the Schottenfeld Group, where three traders worked before they were arrested in connection with the Galleon case, Judge Jed wants more info about how the regulators came up with the $460,475.28 they say Schottenfeld needs to pay in disgorgement fees. (We’ll now get to see the math skills of some SEC employees when they’re not looking at porn.) He's given them until next week to come up with the answers.
Judge Jed also wants details on how and when the trading firm plans to implement new compliance recommendations and hire an outside consultant to watch over them. He pulled a similar maneuver last year when he refused to approve a settlement between the SEC and Bank of America over the shotgun wedding to Merrill Lynch.
He reluctantly approved the settlement after the SEC nearly tripled the penalties.