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Judge Jed Rakoff’s Ruling on Unsealing FINRA Documents…

Posted by Larry Doyle on January 20, 2010 10:09 AM |

…will be delivered by February 15th.

Will America ever learn if current SEC Chair and former FINRA head Mary Schapiro and fellow FINRA executives lied verbally and in a proxy statement regarding the merger of NYSE Regulation and the NASD to form FINRA?

Having attended hearings on this case (Standard Investment Chartered v FINRA) in Judge Jed Rakoff’s chambers in October and been informed of further deliberations in December, I was hopeful last Thursday that Rakoff would order the details of pertinent FINRA documents to be made public. Recall that The New York Times, Dow Jones, Bloomberg, and Sense on Cents have all requested the release of these documents.

I was back in Judge Rakoff’s chambers last Thursday.

I heard impassioned pleas by lawyers for the news organizations (The New York Times lawyer spoke on behalf of all the news organizations) and for FINRA making spirited cases for their positions.

While America is screaming for transparency, Americans should be aware that FINRA’s defense in this case is trying to totally stifle it. The gist of FINRA’s defense is that Judge Kram (since deceased), the initial presiding judge in this case, had ordered the documents sealed. That ruling was upheld on appeal. Would Rakoff overturn these rulings? Would America finally receive a degree of transparency into our failed financial regulatory system?

How would Rakoff rule? He had a full month to prepare for this hearing, knowing full well what each side would likely present. At one point, Rakoff even offered that he would have ruled differently than Judge Kram’s initial ruling to seal the documents.

Anticipation ran high in the courtroom. Unfortunately, that anticipation was met with disappointment when Judge Rakoff indicated that he would not issue his ruling until February 15.

The incestuous intersection of Wall Street and Washington is reviling to the American public.

We will have to wait another month to see if the allegations of Mary Schapiro’s lying are confirmed. These allegations (see details here) were made in the complaint and verbally highlighted in December by plaintiff’s attorney Jonathan Cuneo.


P.S. Want to learn more about the Wall Street self-regulator, FINRA? I have written extensively on FINRA, including reviews of Annual Reports, pending lawsuits, investment activities, and more.  Please utilize the search window here at Sense on Cents to access numerous articles on FINRA.

  • TML

    Might Jed Rakoff hear what America is saying? Does Rakoff care for transparency? Is he weighing America’s right and desire to know against the impact of revealing this seemingly career-ending info for Ms. Schapiro on the administration and the markets?

    Why if the Times, Bloomberg, and Dow Jones are requesting the release don’t those organizations highlight this story?

    Thanks for keeping us informed.

  • Bill

    Judge Rakoff may not have a great deal of
    latitude in his ruling. I don’t know about
    NY procedure, but ordinarily if a ruling has
    been affirmed on appeal, it becomes what
    is known as the law of the case and not
    subject to reversal, whereas a judge may at
    any time usually reverse a ruling that has
    not been appealed.

    • Larry Doyle


      Interesting you should raise that point. In the course of a discussion with an esteemed attorney he made a very similar point.

      For that very reason I am sure the plaintiff would like public pressure in order to elevate the issue in the public domain.

      I found it very interesting that Rakoff shared that he would have ruled differently from the outset.

      Wow. America could be one ruling away from learning amazing material about our SEC Chair only to denied by a previous appeal.

      Thanks for your insightful perspective.

      • Bill

        Larry, as in most things legal, this doctrine is
        not set in stone. There are exceptions that
        permit such a ruling to be reversed, such
        as the introduction of new evidence or where
        adherrence to the prior ruling would cause
        a manifest injustice, or if the controlling
        authority upon which affirmance of the
        ruling on appeal was based has been overruled.
        But there is a hurdel to clear. That’s
        obviously why Judge Rakoff did not rule
        from the bench. In any event, even if
        he allows an unsealing, we won’t see them
        any time soon because you can rest assured
        there will be an appeal.

        • Mike

          It would be a shame if the information doesn’t get released.

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