SEC Says Rakoff Erred on ‘Public Interest’ Test for Accords

U.S. Securities and Exchange Commission lawyers said U.S. District Judge Jed Rakoff erred in determining that courts must find its proposed settlements with companies to be “in the public interest” to win approval. Courts must only find the accords to be “fair, adequate and reasonable,” SEC attorney Andrea Wood told a federal judge in Wisconsin in a filing defending the agency’s proposed settlement with Milwaukee-based Koss Corp., a manufacturer of stereo headphones sued for allegedly making materially inaccurate financial statements for fiscal years 2005 through 2009.
Read more in Bloomberg Businessweek here.