Tariffs-Free Regulatory Importing? Jul. 2016 | Seite 32

Tariffs-Free Regulatory Importing? Asad Akhtar commenced through trial. For a respondent, no-contest settlements omit the possibility of private litigants utilizing a company’s admission of guilt as the basis for a private civil litigation.101 2. Criticism Despite its advantages and extensive use, this tool has received heightened scrutiny in the wake of the 2008 financial crisis. Some critics, and even the judiciary, have begun to view these agreements as “deals” for large corporations that are expensed to the public.102 SEC v Citigroup Global Markets,103 provided a particularly striking commentary on this tool and questions what role the Court plays in upholding the public interest. Citigroup In this case, the SEC concluded a four-year investigation by filing a complaint/statement of allegations against Citigroup. The SEC alleged Citigroup negligently misrepresented its role, and its $500 million short position, to investors when it created a billion-dollar fund consisting of mortgage-backed securities.104 On the same day the complaint was filed, the SEC provided its consent decree to a no-contest settlement. The terms of that settlement would have required Citigroup to disgorge $285 million in profits and civil liability penalties. Judge Rakoff, of the District Court of New York, initially refused to approve the settlement on the basis that without any proven or admitted facts, the court could not determine whether the agreement was “fair, adequate, reasonable and in the public’s interest”.105 Judge 101 Ibid. Alexander Cobb & Raphael Eghan, “The Debate Surrounding No Contest Settlement Continues”, Osler Hoskin & Harcourt LLP (June 27, 2014) online: Risk and Crisis Management . 103 752 F.3D 285 (2d Cir. 2014) [Citigroup]; Settlement agreement: File No. 3-16757 (August 17, 2015), online: SEC . 104 Ibid at 3-4 (of settlement agreement). 105 Harvard Law Review, “Second Circuit Clarifies that Court’s Review Should Focus on Procedural Propriety” (2015) 128:4 Harv L Rev. 1288 at 1289. 102 31