Lai See

In the public interest

PUBLISHED : Friday, 06 June, 2014, 12:36am
UPDATED : Friday, 06 June, 2014, 12:36am

US District Judge Jed Rakoff attracted attention in December last year with a piece in the New York Review of Books in which he fulminated over why it is that none of the senior executives in the financial institutions that helped precipitate the financial crisis have been prosecuted.

He noted that the US government's Financial Crisis Inquiry Commission, in its final report, used variants of the word "fraud" no fewer than 157 times.

There was a systemic breakdown, he wrote, "not just in accountability, but also in ethical behaviour". The signs of fraud, particularly mortgage fraud, were everywhere to be seen, yet he says the Department of Justice was notably cautious, a position articulated by Attorney General Eric Holder, who said prosecution could "have a negative impact on the national economy, perhaps even the world economy". All of this led to an emphasis on non-prosecution agreements where firms rather than individuals were fined.

But Rakoff felt that "the fear of prison resonates far more than the writing of a cheque", and flouted the notion of treating everyone equally under the criminal law.

This is why he blocked a US$285 million settlement between Citi and regulators over alleged mortgage securities fraud in November 2011. He sharply criticised the Securities and Exchange Commission for accepting a small fine and was particularly critical of the agreement for not requiring Citi to admit or deny the allegations.

However, a federal appeals court recently overturned that decision, saying that Rakoff had abused his position and that he should have allowed SEC "significant deference" in determining whether a deal serves the public interest.

Unsurprisingly, the decision was applauded by Andrew Ceresney, the SEC's enforcement director, who said the ability to settle allowed "regulatory agencies to serve the public interest by returning money to harmed investors more quickly". Ho hum.


Harsh words inflict pain in a funny old world

Being a sensitive soul, Lai See was somewhat pained by some of the harshly worded comments on yesterday's online version of the piece - a report on Dr Daniel Botkin's testimony to a US congressional committee that was examining the 2014 report published by the United Nations Intergovernmental Panel on Climate Change.

Comments ranged from "excellent", "keep up the good work", "stick to your core competence" to "utterly moronic". We're not claiming to be an expert in this, unlike some of our critics, but have simply drawn attention to what we believe to be an interesting report by an academic which falls outside consensus views.

The vitriol this subject always seems to attracts, if the consensus is not adhered to, seems way over the top. It's not as if Lai See was questioning anybody's parentage or the basis of their religious beliefs.

Whatever our critics care to say, the one thing that can be said with any certainty is that the science is "never certain". A degree of scepticism is explicit in the scientific method. But we are curious as to why people feel so passionately that human activity is contributing to global warming that they become abusive. Yet despite these deeply held views, they still maintain the lifestyles that supposedly contribute to a condition they deplore. They quite happily fly off on business trips and holidays, enjoy modern gizmos, all of which have huge carbon footprints through their production or operation. It's a funny old world.


Thrilling star attraction

Turning to lighter matters, Lai See has been invited to today's launch ceremony to celebrate American Airlines inaugural flight from Hong Kong to Dallas.

The attraction is not so much the in-flight tour of the Boeing aircraft that will serve this route. Nor is it the presence of Stanley Hui, the chief executive of Airport Authority Hong Kong, or Clifford Hart, the US consul general, and other luminaries. We have been told to expect a "thrilling performance" from no less than the Dallas Cowboys Cheerleaders, who have been flown over for the occasion.

AA says the new flight underlines "the company's commitment to strengthen its global network and meet customer demand for travel between the US and Asia". We'll have to wait for the next downturn in airline travel to assess the extent of that commitment.


Have you got any stories that Lai See should know about? E-mail them to