Democrats on the House Financial Services Committee were critical yesterday of the Securities and Exchange Commission at a hearing to examine settlements for corporate wrongdoers, the Washington Post reported today. Democrats said that they were worried that such settlements could send the wrong message, allowing corporations to treat SEC enforcement actions as just another cost of doing business. U.S. District Judge Jed S. Rakoff last year challenged what has long been official policy at the SEC by refusing to approve Citigroup’s $285 million, "no-admit" settlement with the agency over charges that it misled investors during the mortgage meltdown. The SEC and Citigroup have appealed, and in a preliminary ruling, appellate judges have expressed sympathy for their position. Rep. Spencer Bachus (R-Ala.), chairman of the House Financial Services Committee, bristled at the criticism, saying thats, when it comes to resolving enforcement cases, the SEC knows best and judges should not micromanage.
