Judge Jed Rakoff: A bank's nightmare?
Since Judge Denny Chin is moving on up to the Second Circuit, the S.D.N.Y. cases pending before him have to be redistributed. Lawyers for Bank of America, which has 15 civil shareholder lawsuits on Chin’s docket, sent the chief judge a letter requesting that the cases be reassigned using a lottery system. As we mentioned in Morning Docket, Cleary Gottlieb, Davis Polk, and Wachtell Lipton all signed the letter.
Why did they need to send this special letter? Because they were scared of B of A landing again in the lap of Judge Jed Rakoff, says the Wall Street Journal:
Judge Rakoff disappointed bank executives last year when he rejected a $30 million settlement with the Securities and Exchange Commission, which had charged the bank with misleading shareholders about bonuses paid prior to the Merrill merger. The New York judge reluctantly approved a new $150 million agreement in February but called it “half-baked justice at best.”
One of the pending shareholder cases accuses the bank of failing to “disclose billions in Merrill losses before shareholders approved the deal in December 2008.”
Apparently, the lawyers debated whether or not to name Judge Rakoff in their letter, thus making it clear that he was the particular judge they hoped to avoid. They ultimately decided to name names.
They were successful in steering their cases clear of Rakoff, though the chief judge claims the letter wasn’t a factor in her decision to assign the cases to Judge Kevin Castel (aka the John Gotti judge). How did she decide?
