Citibank’s decision to settle a huge lawsuit over misrepresentations it made to investors is yet another moment to consider how people who contributed to the financial crisis just skate free and clear. Such is the good fortune of Robert Rubin — unscathed, rich and, hard to believe, still listened to.
The news of yet another settlement over greed and/or incompetence:
Citigroup.said on Monday that it had agreed to pay $730 million to settle a class-action lawsuit on behalf of investors who said they were misled by the company’s disclosures.
Investors who bought the bank’s debt and preferred stock from 2006 to 2008 contended in their suit that there were misstatements and omissions in the bank’s disclosures, Citigroup said in a statement announcing the proposed settlement.
The investors accused the bank of understating loss reserves for its high-risk residential mortgage loans and falsely stating that risky assets were of high credit quality, according to Bernstein Litowitz Berger & Grossmann, a law firm that represented pension funds and other investors in the case.
Of course, this settlement does two things. First, as is typical with this horseshit, the bank’s leaders can continue to deny any wrongdoing and claim its just settling the case to avoid litigation costs. This is the equivalent to “I’m leaving the race to spend more time with my family…not because I was found in bed with a 15-year-old boy/the $90,000 in cash stashed in my freezer (better known as the “Dollar Bill” Jefferson problem/or fill in the blank. We all know you are guilty — but this sham just covers up the ugly details.
Second, it means no one goes to jail. This is yet another link in the long chain of Goldman Sachs-Bank of America-JPMorgan Chase-UBS etc etc pathetic cases where the people who did the deed don’t serve a day in jail. And, better yet, they keep their jobs and continue to make a huge amount of money and, actually, the shareholders and bank customers end up paying the cost of the settlement via higher fees or hits to the stock.
Which brings me to Robert Rubin. Two years ago, I wrote that one could make a very convincing case that Rubin had lied about his role in the financial crisis — what he knew and when he knew it. Certainly, he is, in my opinion, a great threat to any change –however slim — that the Democratic Party will ever escape the grasp of Wall Street and corporate influence. Because Rubin is the oil that makes all those relationships hum along with nary a hiccup.
But, it is really astonishing that anyone listens to a guy who was at the helm of a major financial institution — where he was paid tens of millions of dollars in pay and stock options — when that institution almost went belly up.
