Citi and other large banks should be very grateful for the Twiqbal rule that keeps knocking out cases on pleading motions. Indeed, imagine the punitive damages verdict if Citi's senior execs were put on trial for its actions for CDOs. The point is made plain as more comments and explanations emerge from the federal jury that heard the Stoker/Citi trial before Judge Rakoff. Susan Beck has a great post about an interview of the jury foreperson (Mr. Brendler), and it all should be read. Here, however, are two quotes from Mr. Brendler, and Ms. Beck's editorial comment:
"We were all concerned that the verdict would prompt the SEC to back away from this kind of investigation," said Brendler. "We didn't want the verdict to be interpreted as some sort of signal that organizations like Citi are not somehow responsible for the financial crisis. We know they are. . .We realized that this trial was a window into what those people do, creating these bizarre CDOs. We found their behavior outrageous and appalling."
So what's the answer? The SEC is surely stinging from this defeat. But I hope it takes the Stoker jury's message to heart. And Brendler offers another suggestion: Aim higher.
"I would like to see the CEOs of some of these banks in jail or given enormous fines," he said, "not a lower level employee."