Jed S. Rakoff
|Jed S. Rakoff|
|U.S. District Judge for
the Southern District of New York
March 1, 1996 – December 31, 2010
|Preceded by||David N. Edelstein|
|Succeeded by||Katherine B. Forrest|
|Nominated by||William Clinton|
August 1, 1943 |
|Alma mater||Swarthmore College
Harvard Law School
- 1 Biography
- 2 Expertise on securities law
- 3 Notable cases
- 4 References
- 5 External links
Rakoff graduated with honors in English literature from Swarthmore College (B.A. 1964), earned his M. Phil. from Balliol College at Oxford University (1966), and received a J.D., cum laude, from Harvard Law School (1969), where he was a member of the Harvard Legal Aid Bureau. He has received honorary degrees from Saint Francis University and from Swarthmore. After serving as law clerk to the late Honorable Abraham Freedman of the U.S. Court of Appeals for the Third Circuit, Rakoff spent two years in private practice at Debevoise & Plimpton before spending seven years as a federal prosecutor with the United States Attorney for the Southern District of New York. For the last two of those years, he was Chief of the Business and Securities Fraud Prosecutions Unit. He then returned to private practice where he was a partner first with Mudge, Rose, Guthrie, Alexander & Ferdon, and then with Fried, Frank, Harris, Shriver & Jacobson. He headed both firms' criminal defense and civil Racketeer Influenced and Corrupt Organizations Act (RICO) sections.
On October 11, 1995, Rakoff was nominated by President Bill Clinton to fill a seat on the United States District Court for the Southern District of New York vacated by David N. Edelstein. He was confirmed by the Senate on December 29, 1995, appointed on January 4, 1996, and entered on duty on March 1, 1996. On December 31, 2010, he assumed senior status.
Rakoff is Adjunct Professor of Law at Columbia Law School. He has taught at the law school since 1988, teaching seminars on White Collar Crime, the Interplay of Civil and Criminal Law, and Science and the Courts. Judge Rakoff also served on the Board of Managers of Swarthmore College and serves on the Governing Board of the MacArthur Foundation's Law & Neuroscience Project.
On April 13, 2013, Rakoff was on a list released by the Russian Ministry of Foreign Affairs (MID) of Americans banned from entering the Russian Federation over their alleged human rights violations. The list was a direct response to the so-called Magnitsky list revealed by the United States the day before.
Judge Rakoff's younger brother, Todd, is a professor at Harvard Law School.
Expertise on securities law
Judge Rakoff is a leading authority on the securities laws and the law of white collar crime, and has authored many articles on the topic, as well as leading treatises on RICO and corporate sentencing. Speaking about the federal mail fraud statute, Rakoff wrote, "To federal prosecutors of white-collar crime, the mail fraud statute is our Stradivarius, our Colt .45, our Louisville Slugger, our Cuisinart -- and our true love. We may flirt with other laws and call the conspiracy law 'darling,' but we always come home to the virtues of [mail fraud], with its simplicity, adaptability, and comfortable familiarity. It understands us and, like many a foolish spouse, we like to think we understand it." Judge Rakoff is also co-editor, with Judge Leonard B. Sand and others, of Modern Federal Jury Instructions.
Rolling Stone magazine Matt Taibbi wrote in 2011, "Federal judge Jed Rakoff, a former prosecutor with the U.S. Attorney’s office here in New York, is fast becoming a sort of legal hero of our time."  In 15 years on the federal bench, Judge Rakoff has written funny, blunt and occasionally reversed opinions. In addition to pushing back against what he has described as superficial punishment by the SEC for companies accused of fraud, Judge Rakoff has held the federal death penalty unconstitutional, sharply criticized the U.S. sentencing guideline, inserted himself into corporate governance reform at WorldCom, and pushed for the public release of documents.
Swarthmore, in conferring his honorary degree, noted that Rakoff is "broadly recognized as a legal thinker, scholar and judge who not only elucidates and enforces the law, but interprets, defends and challenges it in light of the principles of ethics and social justice that it is designed to serve" and that his opinions "are cited as models of intellectual clarity and judicial vision by lawyers and judges throughout this nation."
He is well-known among lawyers for showing little patience with delays and moving cases along rapidly. The judge says he feels bad taking lawyers and others to task, but he saw in private practice how delays and gamesmanship made the American legal system too slow and expensive for the average person. "The price of being a nice guy is too high—much too high—in terms of the system of justice," Judge Rakoff says.
United States v. Quinones
In 2002, Rakoff declared the federal death penalty unconstitutional, writing that
The best available evidence indicates that, on the one hand, innocent people are sentenced to death with materially greater frequency than was previously supposed and that, on the other hand, convincing proof of their innocence often does not emerge until long after their convictions. It is therefore fully foreseeable that in enforcing the death penalty a meaningful number of innocent people will be executed who otherwise would eventually be able to prove their innocence. It follows that implementation of the Federal Death Penalty Act not only deprives innocent people of a significant opportunity to prove their innocence, and thereby violates procedural due process, but also creates an undue risk of executing innocent people, and thereby violates substantive due process.—Jed S. Rakoff, United States v. Quinones, 205 F. Supp. 2d 256 (S.D.N.Y. 2002)
Although his opinion was heralded by the New York Times as "a cogent, powerful argument that all members of Congress - indeed, all Americans - should contemplate," the decision was subsequently reversed by the United States Court of Appeals for the Second Circuit, United States v. Quinones, 313 F.3d 49 (2d Cir. 2002).
Before he found the death penalty unconstitutional in 2002, Rakoff says he suspected his ruling would be reversed because he knew a majority of judges on the U.S. Second Circuit Court of Appeals would interpret a Supreme Court decision on the issue, Herrera v. Collins, differently than he did. (He thought he might get lucky if he drew a 2nd Circuit panel that included the few judges who would agree with him.) The judge, who still believes he “had it exactly right on the law,” also told his wife before the controversial ruling that it would likely prevent him from being promoted to a higher court. “You’re having more fun in the district court anyway,” he recalls her saying.
Securities and Exchange Commission v. Bank of America
On August 3, 2009, Bank of America agreed to pay a $33 million fine, without admission or denial of charges, to the U.S. Securities and Exchange Commission (SEC) over the non-disclosure of an agreement to pay up to $5.8 billion of bonuses at Merrill. Judge Rakoff, in an unusual action, refused to approve the settlement on August 5 and then, on September 14, after at least one hearing, rejected the settlement outright and told the parties to prepare for trial to begin no later than February 1, 2010:
Overall, indeed, the parties’ submissions, when carefully read, leave the distinct impression that the proposed Consent Judgment was a contrivance designed to provide the S.E.C. with the facade of enforcement and the management of the Bank with a quick resolution of an embarrassing inquiry – all at the expense of the sole alleged victims, the shareholders. Even under the most deferential review, this proposed Consent Judgment cannot remotely be called fair . . . .
The fine, if looked at from the standpoint of the violation, is also inadequate, in that $33 million is a trivial penalty for a false statement that materially infected a multi-billion-dollar merger. But since the fine is imposed, not on the individuals putatively responsible, but on the shareholders, it is worse than pointless: it further victimizes the victims.Oscar Wilde once famously said that a cynic is someone “who knows the price of everything and the value of nothing.” Oscar Wilde, Lady Windermere’s Fan (1892). The proposed Consent Judgment in this case suggests a rather cynical relationship between the parties: the S.E.C. gets to claim that it is exposing wrongdoing on the part of the Bank of America in a high-profile merger; the Bank’s management gets to claim that they have been coerced into an onerous settlement by overzealous regulators. And all this is done at the expense, not only of the shareholders, but also of the truth.—Jed S. Rakoff, SEC v. Bank of America, 09 Civ. 6829 (JSR)
Judge Rakoff forced Bank of America and the SEC to come back with a 50-page statement about what happened—and a higher penalty. He reluctantly approved the revised deal, calling the revised settlement "half-baked justice at best" and quoting "the great American philosopher Yogi Berra" in a ruling. Washington Post columnist Steven Pearlstein commented approvingly, "maybe Rakoff is exactly the kind of activist judge we need more of."
Securities and Exchange Commission v. Citigroup
The New York Times reported that "Taking a broad swipe at the Securities and Exchange Commission’s practice of allowing companies to settle cases without admitting that they had done anything wrong, a federal judge on Monday rejected a $285 million settlement between Citigroup and the agency. The judge, Jed S. Rakoff of United States District Court in Manhattan, said that he could not determine whether the agency’s settlement with Citigroup was “fair, reasonable, adequate and in the public interest,” as required by law, because the agency had claimed, but had not proved, that Citigroup committed fraud." 
In his opinion Rakoff wrote, "The SEC’s long-standing policy—hallowed by history, but not by reason—of allowing defendants to enter into consent judgments without admitting or denying the underlying allegations, deprives the court of even the most minimal assurance that the substantial injunctive relief it is being asked to impose has any basis in fact." Judge Rakoff said the agency settlement policy creates substantial potential for abuse because “it asks the court to employ its power and assert its authority when it does not know the facts.” That undermines the constitutional separation of powers, he said, by asking the judiciary to rubber-stamp the executive branch’s interpretation of the law."
In conclusion, Judge Rakoff wrote, "In any case like this that touches on the transparency of financial markets whose gyrations have so depressed our economy and debilitated our lives, there is an overriding public interest in knowing the truth. In much of the world, propaganda reigns, and truth is confined to secretive, fearful whispers. Even in our nation, apologists for suppressing or obscuring the truth may always be found. But the SEC, of all agencies, has a duty, inherent in its statutory mission, to see that the truth emerges; and if fails to do so, this Court must not, in the name of deference or convenience, grant judicial enforcement to the agency’s contrivances."
The SEC has appealed Judge Rakoff's decision to the U.S. Court of Appeals for the Second Circuit.
Judge Rakoff also articulated his objections to the SEC's practice in another case, SEC v. Vitesse Semiconductor Corp., 771 F. Supp. 2d 304 (S.D.N.Y. 2011):
Long before 1972, the S.E.C. had already begun entering into consent decrees in which the defendants neither admitted nor denied the allegations. This was strongly desired by the defendants because it meant that their agreement to the S.E.C.‘s settlements would not have collateral estoppel consequences for parallel private civil actions, in which the defendants frequently faced potential monetary judgments far greater than anything the S.E.C. was likely to impose. But there were benefits for the S.E.C. as well. First, the practice made it much easier for the S.E.C. to obtain settlements. And second, at a time (prior to 1972) when the S.E.C.‘s enforcement powers were largely limited to obtaining injunctive relief, the S.E.C.‘s focus was somewhat more centered on helping to curb future misconduct by obtaining access to the Court’s contempt powers than on obtaining admissions to prior misconduct.
But, by 1972, it had become obvious that as soon as courts had signed off on such settlements, the defendants would start public campaigns denying that they had ever done what the S.E.C. had accused them of doing and claiming, instead, that they had simply entered into the settlements to avoid protracted litigation with a powerful administrative agency. Thus, the real change effected by the S.E.C. in 1972 was the requirement that a defendant who agreed to a consent judgment “without admitting or denying the allegations of the Complaint” nevertheless agree that the defendant would not thereafter publicly deny the allegations. To this end, each of the proposed Consent Judgments now presented to this Court is accompanied by a formal written “Consent” of the defendant agreeing, pursuant to 17 C.F.R § 205.5, “not to take any action or to make or permit to be made any public statement denying, directly or indirectly, any allegation in the complaint or creating the impression that the complaint is without factual basis.”
The result is a stew of confusion and hypocrisy unworthy of such a proud agency as the S.E.C. The defendant is free to proclaim that he has never remotely admitted the terrible wrongs alleged by the S.E.C.; but, by gosh, he had better be careful not to deny them either (though, as one would expect, his supporters feel no such compunction). Only one thing is left certain: the public will never know whether the S.E.C.‘s charges are true, at least not in a way that they can take as established by these proceedings.
This might be defensible if all that were involved was a private dispute between private parties. But here an agency of the United States is saying, in effect, “Although we claim that these defendants have done terrible things, they refuse to admit it and we do not propose to prove it, but will simply resort to gagging their right to deny it.”
The disservice to the public inherent in such a practice is palpable. Confronted with the same choice, the United States Department of Justice has long since rejected allowing defendants, except in the very most unusual circumstances, to enter into pleas of nolo contendere, by which a defendant accepts a guilty plea to a criminal charge without admitting or denying the allegations.Moreover, as a practical matter, it appears that defendants who enter into consent judgments where they formally state, with the S.E.C.‘s full consent, that they neither admit nor deny the allegations of the complaint, thereafter have no difficulty getting the word out that they are still denying the allegations, notwithstanding their agreement not to “make any public statement” denying the allegations....
Associated Press v. Dept. of Defense
In November 2004, the Associated Press submitted a request under the Freedom of Information Act seeking unredacted transcripts of the Department of Defense's Combatant Status Review Tribunals' proceedings and related documentation. In response, the Government invoked FOIA's Exemption 6, claiming that they redacted identifying information in order to protect the detainees' personal privacy. Rakoff's rulings highlighted what he viewed as the hypocrisy of the Government's position—as he wrote, "one might well wonder whether the detainees share the view that keeping their identities secret is in their own best interests"—and held that, in any case, the detainees had no reasonable expectation of privacy in the information at issue. He therefore ordered the Department of Defense to release the unredacted transcripts (including the detainees' names) and related documentation. AP v. United States DOD, 2006 U.S. Dist. LEXIS 211, 410 F. Supp. 2d 147 (S.D.N.Y. Jan. 4, 2006).
The Department of Defense complied with the order, releasing the unredacted transcripts and related documents relating to those 317 detainees (of the approximately 500 at Guantanamo) who participated in Combatant Status Review Tribunals: "Forced by a federal court to lift the cloak of secrecy that had long shrouded the U.S. prison at Guantanamo Bay, Cuba, the Pentagon released thousands of pages of documents Friday containing names and other details for hundreds of detainees scooped up after the Sept. 11 attacks. The records provide the most comprehensive view to date of the Guantanamo prison population, as well as an exhaustive catalog of the U.S. government's charges against detainees who — in page after page of tribunal proceeding transcripts — protest their treatment and proclaim their innocence."        
The Bush administration appealed Rakoff's decision on May 5, 2008.
Aguinda v. Texaco
Judge Rakoff presided over a class action lawsuit against Texaco, brought under the Alien Tort Claims Act, by a class of Ecuadoreans, including several indigenous tribes, claiming that Texaco caused extensive destruction to the Oriente rainforest. Judge Rakoff dismissed the case on forum non conveniens grounds, writing "While reserving final decision on this motion, the Court is tentatively of the view that, if Ecuador provides an adequate alternative forum, it is the proper place to try these cases, with the Peruvian plaintiffs afforded the alternative of a Peruvian forum if they so prefer. Indeed, the voluminous record before the Court demonstrates that these cases... have everything to do with Ecuador and very little to do with the United States. Moreover, the notion that a New York jury (which plaintiffs have demanded) applying Ecuadorian law (which likely governs the claims here made) could meaningfully assess what occurred in the Amazonian rainforests of Ecuador in the late 1960s and early 1970s is problematic on its face..."
SEC v. WorldCom
Rakoff presided over the Securities and Exchange Commission's accounting fraud suit against WorldCom, and, on July 7, 2003, approved a settlement between the SEC and Worldcom. Rakoff appointed Richard C. Breeden, former Chair of the Securities and Exchange Commission, to serve as Corporate Monitor. Breeden actively involved himself in the management of the company, and prepared a report for Judge Rakoff, titled Restoring Trust, in which he proposed extensive corporate governance reforms, as part of an effort to "cast the new MCI into what he hoped would become a model of how shareholders should be protected and how companies should be run." The reforms were implemented, and Rakoff later credited Breeden with "helping to transform a fraud-ridden company into an honest, well-governed, economically viable entity, MCI, Inc." WorldCom was purchased by Verizon in January 2006.
Motorola Credit Corp. v. Uzan
Motorola Credit Corporation and Nokia brought suit against the Uzan family of Turkey. Judge Rakoff found that the Uzans perpetrated a multi-billion-dollar fraud in connivance with various corporate defendants, involving the making of numerous false statements designed to induce Motorola and Nokia to extend the loans in issue, diluting the collateral pledged to secure the loans, and filing false criminal charges in Turkey against plaintiffs' senior executives, claiming that the executives engaged in "explicit and armed threat[s] to kill," blackmail, and kidnap members of the Uzan family. Rakoff awarded over $2.1 billion in compensatory damages and an equal amount in punitive damages. Motorola Credit Corp. v. Uzan, 274 F. Supp. 2d 481 (S.D.N.Y. 2003).
United States v. Adelson
A jury convicted Richard Adelson, as Chief Operating Officer and, (eventually) President of Impath, Inc.—a public company specializing in cancer diagnosis testing—of conspiracy, securities fraud, and three false filing counts that related to filings made in the latter half of 2002, but acquitted him of all seven counts that related to earlier filings. The gist of the indictment was that Adelson, joined a conspiracy, initially concocted by others, to materially overstate Impath’s financial results, thereby artificially inflating the price of its stock.
At sentencing, Judge Rakoff noted that "as a practical matter, a sentence of life imprisonment was effectively available here, for the statutory maximum sentence for the combined five counts of which Adelson had been convicted was 85 years, which, given his current age of 40, would have led to his imprisonment until the age of 125. Even the Government [prosecutors] blinked at this barbarity." Adelson was actually sentenced by the court to three and a half years in prison and restitution of $50 million, $12 million of which would be paid by the immediate forfeiture of most of Adelson's assets and the rest by payments of 15% of his monthly gross income.
To put this matter in broad perspective, it is obvious that sentencing is the most sensitive, and difficult, task that any judge is called upon to undertake. Where the Sentencing Guidelines provide reasonable guidance, they are of considerable help to any judge in fashioning a sentence that is fair, just, and reasonable. But where, as here, the calculations under the guidelines have run so amok that they are patently absurd on their face, a Court is forced to place greater reliance on the more general considerations set forth in section 3553(a), as carefully applied to the particular circumstances of the case and of the human being who will bear the consequences.—Jed S. Rakoff, United States v. Adelson Sentencing Memorandum
- Federal Judicial Center Bio of Jed Saul Rakoff, US Department of Justice
- Jed Rakoff '64: Honorary Degree Citation, Swarthmore College, June 1, 2003
- Jed S. Rakoff '64: Commencement Address, Swarthmore College, June 1, 2003
- Sandomir, Richard. The New York Times http://topics.nytimes.com/topics/reference/timestopics/people/r/jed_rakoff/index.html
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- "MacArthur Foundation's Law & Neuroscience Project, Governance". Retrieved 2009-09-11.
- PDF, retrieved 19 Sep 2012. Opinion by Rakoff.
- PDF, retrieved 19 Sep 2012. Rakoff scheduled to hear 23 cases.
- PDF, retrieved 19 Sep 2012. Rakoff scheduled to hear 16 cases.
- "Russia strikes back with Magnitsky list response". rt.com. Retrieved 13 April 2013.
- "HLS : Faculty Directory". Harvard Law School. Retrieved 2007-12-29. "Todd D. Rakoff, Byrne Professor of Administrative Law"
- Jed S. Rakoff, The Federal Mail Fraud Statute (Part 1), 18 Duq. L. Rev. 771 (1980)
- Matt Taibbi, Finally, a Judge Stands up to Wall Street, The Rolling Stone, November 7, 2011
- Michael Rothfeld, No Mr. Nice Guy—Just Ask Wall Street, The Wall Street Journal, November 9, 2011
- Louise Story, Plain Talk From Judge Weighing Merrill Case, New York Times, August 23, 2009
- Michael Rothfeld, No Mr. Nice Guy—Just Ask Wall Street, Wall Street Journal, November 9, 2011
- Benjamin Weiser, A Legal Quest Against the Death Penalty; Chance of Error Is Too Great, Even for a Murder Victim's Brother, New York Times, January 2, 2005
- Michael Rothfield, Judge Jed Rakoff: The Outtakes, Wall Street Journal Law Blog, November 9, 2011
- "BofA Settles S.E.C. Suit Over Merrill Deal" by Zachery Kouwe, DealBook blog, The New York Times, Aug. 3, 2009. Retrieved 8/3/09.
- "Judge blocks Bank of America-SEC bonus settlement" by Jonathan Stempel, Reuters, 8/6/09. Retrieved 8/7/09.
- "Judge Rejects Settlement Over Merrill Bonuses" by Louise Story, The New York Times, September 14, 2009. Retrieved 9/14/09.
- Steven Pearlstein (16 September 2009). "What Kind of Judge Stands Up For Truth and Justice?". Washington Post. Retrieved 16 September 2009.
- Judge Blocks Citigroup Settlement with SEC
- Judge Orders Release of Gitmo Detainee IDs, Boston Globe, January 23, 2006
- Thom Shanker, Pentagon Plans to Tell Names of Detainees, New York Times, February 26, 2006
- AP v. United States DOD, 2006 U.S. Dist. LEXIS 2456 S.D.N.Y. January 23, 2006 (download)
- US to release partial list of Guantanamo detainees, Reuters, March 3, 2006
- Reprocessed Combatant Status Review Tribunal (CSRT) and Administrative Review Board (ARB) Documents Released March 3, 2006: Testimony of Detainees Before the Combatant Status Review Tribunal, US Department of Defense, March 3, 2006
- Details of Some Guantanamo Hearings, Washington Post, March 5, 2006
- Varied Tales Emerge From Guantanamo Files, "Global Security, March 5, 2006
- Timeline of AP's Guantanamo-Related Suit, Washington Post, March 4, 2006
- Guantanamo Inmates Despair of Ever Leaving, The Associated Press March 5, 2006
- In Guantanamo Bay Documents, Prisoners Plead for Release: US Makes First Public Accounting of Detainees, Washington Post, March 5, 2006]
- Documents Reveal the Stories of Prisoners at Guantanamo Bay, L.A. Times, March 4, 2006
- Larry Neumeister (May 5, 2008). "NY appeals court weighs IDs of abused Guantanamo detainees". Associated Press. Retrieved 2008-05-05. "Assistant U.S. Attorney Elizabeth Wolstein told the 2nd U.S. Circuit Court of Appeals that Judge Jed S. Rakoff in Manhattan erred in 2006 when he ordered the names released, finding in favor of a Freedom of Information Act request by The Associated Press."
- The Honorable Jed Rakoff Approves Settlement of SEC'S Claim for a Civil Penalty Against Worldcom, US Department of Justice, July 7, 2003
- Restoring Trust: Corporate Governance for the future of MCI
- United States District Court for the Southern District
- Jed S. Rakoff at the Biographical Directory of Federal Judges, a public domain publication of the Federal Judicial Center.
- Podcast of Oxford Debate: Are Courts Representative Bodies?