Jed Rakoff is a federal judge who, guaranteed his job for life by the Constitution, more or less does what he wants.
This afternoon, he scuttled a proposed settlement between Bank of America and the S.E.C., objecting to the fact that the bank planned to pay its fines out of shareholder money, when Bank of America was essentially being fined for hiding Merrill bonuses from those same shareholders when the two companies merged.
The judge, who maintains an impressive white beard, was once a federal prosecutor of business and securities fraud, and he’s often shown a populist streak in cases like this. He vetoed a $500 million settlement by WorldCom in 2003, and upped the ante to $750 million–to be paid, Rakoff insisted, to the shareholders, not the S.E.C.
For all his toughness on corporations, he’s hardly a hanging judge. Rakoff once declared the death penalty unconsitutional–quickly overturned, as he must have expected–and he’s been a frequent critic of stiff sentences for white-collar criminals. He gave Marc Dreier 20 years, even though prosecutors asked for 145 years and fellow Ponzi schemer Bernie Madoff had just been sentenced to 150 years.
Rakoff, who has a B.A. in English from Swarthmore and went on to read philosophy at Oxford, quoted briefly in his Bank of America ruling from Oscar Wilde’s 1892 play Lady Windermere’s Fan. He cited only one line, that a cynic is someone “who knows the price of everything and the value of nothing.” But it was a fitting selection: in the first act, Lady Windermere breaks into her husband’s locked bank book to discover that he is making payments to another woman behind the good lady’s back.