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Judge Rakoff Dismisses Suit Against Mary Schapiro and FINRA Under Absolute Immunity

Posted by Larry Doyle on March 1, 2010 5:49 PM |

America should be reviled when those charged with upholding the law overseeing our markets are not held to that standard themselves.

Today is a very dark day for those in our country who cherish the virtues of truth, transparency, and integrity.

Why am I despondent? This afternoon, Judge Jed Rakoff issued a ruling dismissing the lawsuit brought on behalf of Standard Investment Chartered against Mary Schapiro and other FINRA executives. What is the basis for Judge Rakoff’s dismissal? He allowed the defense the cover of absolute immunity in the merger of the NASD with NYSE Regulation to form FINRA.

Recall that the plaintiffs alleged that Ms. Schapiro and her fellow defendants lied verbally and in the proxy statement used for this merger. The alleged lie had a dollar value of $175-$350 million.

In conjunction with the ruling by Judge Lifland earlier today against Madoff investors, this ruling by Judge Rakoff is further evidence of just how stacked the Wall Street regulatory powers are against American investors. Additionally, with this dismissal I would imagine the allegations embedded in the Amerivet Securities v FINRA case will also face an uphill climb. Those allegations include claims of FINRA front running the auction-rate securities market, FINRA investing in Bernie Madoff, and more.

I love my country, but this system is not serving the interests of the American public.

Wall Street. What a racket.

The ruling is subject to appeal.

I submit Judge Rakoff’s ruling. Click on image to access pdf document:


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