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    Former SEC Chief Walter Named FINRA Public Governor

    The Financial Industry Regulatory Authority announced Thursday that former Securities and Exchange Commission Chairwoman Elisse Walter has been elected to FINRA’s board as public governor, along with Susan Wolburgh Jenah, president and CEO of the Investment Industry Regulatory Organization of Canada (IIROC). Also elected at FINRA’s 2014 annual meeting in Washington, which was closed to the public, were a small-firm governor, Mark Cresap, president and owner of Cresap Inc., and a large-firm governor, Gregory J. Fleming, president of Morgan Stanley Wealth Management and Morgan Stanley Investment Management. More on ThinkAdvisor here.

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    Once Powerful, Mary Jo White’s S.E.C. Is Seen as Sluggish and Ineffective

    Mary Jo White took the helm of the Securities and Exchange Commission facing high hopes that she could turn around the once-proud agency. More than a year into her tenure, she has disappointed a wide swath of would-be allies. Over the last several weeks, I’ve been talking to fellow regulators, administration officials, current and former S.E.C. staff members, financial reform advocates and people on Capitol Hill whose opinions of Ms. White’s performance range from dissatisfied to infuriated. More in the New York Times here.

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    Law and the Truth: A Judge’s Whine

    SOMETIMES it is not easy for a judge to both fulfil the requirements of his job and splash enough ink in the process to launch a debate. Jed Rakoff, a district judge in New York (pictured), managed just that after he was forced by a federal appeals court to rubber-stamp a $285m settlement between Citigroup and the Securities and Exchange Commission (SEC). “The court has now fixed the menu, leaving this court with nothing but sour grapes,” writes Mr Rakoff in a ruling published on August 5th. But the mischievous judge then uses the rest of his three-page opinion to attack the higher court’s command for being superficial, unworkable, and irresponsible. It forces, he argues, the judiciary to extend its enforcement powers while at the same time gutting its ability to oversee how they are used. More on The Economist here.

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    Judge Rakoff of Southern District of New York Continues to Question Adequacy of Judicial Oversight of SEC

    On remand of his rejection of the proposed Consent Judgment between the SEC and Citigroup Global Markets, Judge Jed Rakoff of the United States District Court for the Southern District of New York expressed additional misgivings about effective judicial oversight of the SEC. In his opinion issued August 5, 2014, Judge Rakoff noted that the Court of Appeals “who must be obeyed have spoken, and this Court’s duty is to faithfully fulfill that mandate.” In faithfully fulfilling that mandate and approving the Consent Judgment, however, Judge Rakoff expressed his “fears that, as a result of the Court of Appeal’s decision, the settlements reached by governmental regulatory bodies and enforced by the judiciary’s contempt powers will in practice be subject to no meaningful oversight whatsoever.” He further questioned the Court of Appeal’s direction that the SEC could avoid judicial review entirely by proceeding solely on an administrative basis. “One might wonder: from where does the constitutional warrant for such unchecked and unbalanced administrative power derive?” His question is particularly pertinent in light of the SEC’s statements that it intends to pursue more actions administratively than it has in the past and echoes Judge Rakoff’s July 11, 2011, denial of the SEC’s motion to dismiss in Gupta v. Securities and Exchange Comm’n on the grounds that proceeding administratively against one defendant while trying all others in federal court could violate the Equal Protection Clause of the Constitution. More in the National Law Review here.

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    Judge approves $285M Citigroup-SEC settlement

    A federal judge reluctantly approved a $285 million settlement between Citigroup and the Securities and Exchange Commission Tuesday over allegations that the global bank misled investors on a $1 billion package of mortgage bonds. U.S. District Court Judge Jed Rakoff acted two months after a federal appeals court ruled that he had shown an “abuse of discretion” by blocking the 2011 settlement in an earlier ruling. Rakoff initially refused to sign off on legal grounds that the two sides hadn’t given him enough information to determine whether the settlement was fair and “in the public interest.” He also criticized the SEC’s failure to require Citigroup to acknowledge wrongdoing as a condition of the deal. More on USA Today here.

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