Frank, Juengel & Radefeld, Attorneys at Law Frank, Juengel & Radefeld, Attorneys at Law DEFENDING THE RIGHTS OF THE ACCUSED 314-282-8657 Menu View Our Practice Areas

Debate focuses on 'neither admit nor deny' in settlement pacts

A federal judge's tentative ruling and comments issued in a securities fraud insider trading case in New York underscore a festering judicial debate surrounding a defendant's ability in some instances to settle cases while declining to admit guilt. They also reveal a sharp dichotomy that exists between the size and power of most corporate defendants and a few entities that command far greater wealth and resources.

The matter at issue involves what the Securities and Exchange Commission (SEC) says is the biggest insider trading settlement ever reached in the Unites States, a $600 million-plus agreement recently reached between the government and giant hedge fund operator SAC Capital Advisors. Judge Victor Mattero says he is disturbed by a defendant's ability to make such a huge payment -- an outlay that far eclipses what it would cost the defendant to litigate the matter -- "while simultaneously declining to admit the allegations asserted against it."

Another federal judge, Jed Rakoff, firmly endorses a requirement for the SEC to secure an admission of liability in a corporate fraud matter prior to accepting a settlement. Mattero is currently waiting on the outcome of a federal appeals court ruling that is reviewing Rakoff's rejection of a $285 million settlement that Citicorp has agreed to pay absent an admission of liability before he makes his approval final in the SAC Capital case.

Some commentators agree with Rakoff and Mattero, especially in cases like the one now before Mattero, in which a defendant is willing to pay $600 million in fines, while declining to admit allegations against it, in lieu of spending an estimated $1 million to litigate the charges against it. Mattero calls that outcome "counterintuitive and incongruous."

It should be noted, though, that many defendants do in good faith stress innocence in a matter, yet agree to pay a penalty to settle it, given the downside related to the costs they would expend taking the matter to trial.

In other words: Not every defendant can readily afford to make large outlays to settle a case, and, for many defendants, settling a matter despite being innocent of wrongdoing is sometimes a logical business decision. In such a case, it seems both logical and fair that the settlement should also provide for an opportunity to abstain from admitting guilt.

An experienced St. Louis fraud defense attorney can answer questions and provide diligent representation to any person or business facing fraud charges.

Source: Fort Wayne Journal Gazette, "Judge OKs record insider trading settlement," April 22, 2013

No Comments

Leave a comment
Comment Information

Contact Our Firm

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Frank, Juengel & Radefeld,
Attorneys at Law

7710 Carondelet Avenue
Suite 350
St. Louis, MO 63105

Phone: 314-282-8657
Fax: 314-721-4377

View Map and Directions

FindLaw Network
Super Lawyers AV Lexis Nexis Martindale Hubbell PeerReviewRated The National Trial Lawyers Top 100 Trial Lawyers The Bar Association of MetroPolitan St. Louis Illinois State Bar Association St. Louis Business Journal
National Association of Criminal Defense Lawyers The Missouri Bar St. Louis County Bar Association MACDL UP COMING 2011 Avvo Rating 10.0 Superb | Top Attorney Criminal Defense
Back to Top