On Thursday, January 12, 2012, Business Roundtable ("BRT"), the association of chief executive officers of leading U.S. companies, requested leave to file an Amicus Brief in the SEC v. Citigroup Global Markets, Inc. appeal, requesting that the Second Circuit reject the "potentially dangerous, approach to reviewing settlement agreements" in Judge Jed Rakoff’s November 28, 2011 decision in the lower court.
Judge Rakoff’s decision to reject the proposed settlement with Citigroup Global Markets criticized the policy of accepting settlements without an admission of liability. Both the SEC and Citigroup Global Markets appealed the decision, which the SEC filing an emergency motion to stay the lower court proceedings (which resulted in a temporary stay until that motion can be heard by the Second Circuit’s Motions Panel on January 17, 2012). This week, Citigroup filed a brief in support of the Motion to Stay as well.
In submitting their proposed amicus brief (available here), Business Roundtable argued that "the district court’s rejection of the parties’ consent decree could potentially affect most of the BRT’s members, as virtually every large company faces enforcement actions by federal regulators. Such companies have a significant interest in resolving enforcement actions through consent decrees, and in many cases would be unwilling or unable to settle them if required to admit or deny each of the agency’s allegations."
Business Roundtable argued that, from the corporate defendant’s viewpoint, the "ability to resolve enforcement actions without admitting misconduct is important to defending claims in related litigation, obtaining insurance coverage, prudently managing its defense costs, the ability to attract and retain qualified directors and officers, access to the capital markets, and other ongoing business decisions … ." According to Business Roundtable, Judge Rakoff’s decision "could harm all parties involved and increase the burdens on the already overburdened federal judiciary," and should be overturned.