rakoff was also critical since citigroup did not acknowledge fault. the judge wrote that he could not approve it because "the court has not been provided with any proven or admitted facts upon which to exercise a modest degree of independent judgement." the s.e.c. disagreed strongly with his ruling, an order that may have significant implications. we get more on all this with edward wyatt of the "new york times." and jacob frankel, a former federal prosecutor at the s.e.c. who's now in private practice at shulman rogers. edward, let's start with you. explain the machinery here. why did judge rakoff have to sign off on this deal in the first place once it was negotiated between thering bank and a regulator? >> well, the s.e.c. brought the case in federal district court. it was asking for an injunction which would prevent citi group from violating the securities laws again. because of that and because it's a federal agency it had to get a judge's approval for the decision. now judge rakoff has been a frequent critic of the s.e.c. in these types of settlements. he

what you know they will do if there's no one looking over their shoulder and the third lesson of judge rakoff is if you pick a government that has insufficient people doing the work insufficient budgets because everybody's cutting the government budget you're going to leave a government supervisor with much less money and resources than the people they're supposed to supervise which is what the governor judge rakoff so angry because he was being required to make decisions that were patently unfair that favored the very businesses that were supposed to be supervised this is a system that's very seriously out of whack and he at least was a judge with the ability to say so just very quickly just a few seconds might this mean that bet those banks could end up going to jail and might this might there be contagion my other banks be dragged into this well it certainly opens the can of worms in that direction whether they don't have enough power to make sure all this goes away only time will tell but he was at least courageous enough to say this is a serious problem and he won't be part of the usual

book called plunder the crime of our time everything you discuss that's coming through recently judge rakoff are examples of the f.t.c. settlement and bank of america and citigroup were abomination but that is a federal judge had no authority to do anything about it your thought well this is the whole problem we still haven't had an infected investigation on any level of fraud on wall street has been a couple of prosecutions mostly of minor players another made all for trader has now been basically convicted and being sentenced to forty years but basically the people in the big banks who engaged in the subprime lending scandals and the leveraging and all of this have been able to create said newman it's. their companies pay off the government in lieu of trials that would send c.e.o.'s to jail and this is one of the blatant problems that inspired movements like occupy wall street and anger americans across the spectrum who are just theories of sickness an abomination of justice they use the judge's word now is the whole question of m.f. global company that fell apart under the leadership of f

to come up with settlements that are big enough so that judges like rakoff will not question them as much and that allows sort of the same gravy train to keep rolling where nobody admits wrongdoing they pay basically a pittance maybe it's a little larger now and they don't have to get exposed to all of the investors coming out with lawsuits because of if citigroup for example in its to actually defrauding investors then obviously there's a host of lawsuits and punitive damages they would be liable for so i think this is a way for the f.c.c. to try to minimize the damage to these banks by. having big enough fines so that they can get it past the judicial process in the settlements yeah and at the end of the day with them to find them right it definitely seems to me david thanks so much for joining us tonight thank you. i saw comes after the f.b.i. launched an internal review of the anti muslim rhetoric and its counterterrorism causes the white house has decided to conduct its own revealed details straight ahead out of mayor of los angeles says occupying fatman the city needs to be eva

have to forfeit only $285 million-- including a penalty of $95 million for negligence, which judge jed rakoffcket change. the judge's harsh words reflect h worer concern that wall street's top executives have never answered for a 2008 st eltdown. only 39 senior corporate officers have been charged by the s.e.c. and not one key official from the largest firm has gone to prison. in a crisis measured in the trillions, the s.e.c. has obtained only $2 billion in penalties. in a statement today, robert khuzami, the s.e.c.'s director of enforcement called the thetlement fair, adequate, reasonable, in the public settlement fai interest. and in a recent interview with cbs news he defended the s.e.c.'s overall response to the financial meltdown. >> it's a record, frankly, unmatched by any other federal law enforcement agency and one we are rightly proud of. >> reporter: you've got to wonder whether this institution is protecting investors or protecting wall street. >> reporter: lynn turner, former head accountant at the s.e.c.-- now a critic-- says the aitigroup settlement reflects a agenre of the agen