Judge Rakoff

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In an opinion today, Judge Rakoff rejected motions to set aside a jury verdict in the so-called “Hustle” case, in which the government accused Countrywide (later acquired by Bank of America) and an officer named Rebecca Mairone of a scheme to defraud Fannie Mae and Freddie Mac into buying faulty mortgages.  The jury had ruled against the defendants and Judge Rakoff then ordered damages of $1.3 billion (see our prior posts on the case here). The defendants sought to set aside the verdict by arguing “that the Government’s evidence did not establish that the HSSL loans were of lower quality than Fannie and Freddie could have reasonably expected, and therefore that they made no misrepresentations that were material,” but Judge Rakoff rejected the argument as “border[ing] on the frivolous”:
Continue Reading Judge Rakoff: Challenge to Countrywide “Hustle” Jury Verdict “Borders on the Frivolous”

Attorneys at Skadden Arps and Post & Schell, on behalf of a client named Joseph Stilwell and his firm, today filed a complaint arguing that SEC administrative proceedings are unconstitutional:

SEC administrative proceedings violate Article II of the U.S. Constitution, which states that the “executive Power shall be vested in a President of the United States of America.”
Continue Reading New Suit Challenges Constitutionality of SEC Administrative Proceedings Based on ALJs’ Insulation From Executive Oversight

In an opinion today, Judge Rakoff ordered Bank of America to pay $1.3 billion in the so-called “Hustle” case, in which a jury found that Countrywide (later acquired by Bank of America) and an officer named Rebecca Mairone engaged in a scheme to defraud Fannie Mae and Freddie Mac into buying faulty mortgages. Judge Rakoff rejected Bank of America’s argument that the statute at issue, FIRREA, required the penalties to be calculated by reference to the “net” gains or loss resulting from the alleged conduct:
Continue Reading Judge Rakoff Orders Bank of America to Pay $1.3 Billion in “Hustle” Case

In an opinion dated Sunday, July 6, Judge Rakoff ruled that the trustee administering Bernie Madoff’s defunct investment firm could not invoke the Bankruptcy Code to recover funds transferred between two foreign entities. Citing Morrison v. Nat’l Austria Bank Ltd., Judge Rakoff held that Section 550 of the Bankruptcy Code, like other federal statutes,…

In an opinion Friday, Judge Rakoff ruled that the German state of Bavaria was entitled to sovereign immunity in a suit seeking return of a Picasso painting called Madame Soler that was allegedly the subject of a forced transfer from Paul von Mendelssohn-Bartholdy to Justin Thannhauser under the then-Nazi regime in Germany  in 1934. Mr. Thannhauser later relocated to New York and then transferred the painting to Bavaria to be displayed in a museum. The plaintiffs sought to invoke an exception to sovereign immunity for commercial activity having a substantial connection to the United States, but Judge Rakoff ruled that the case, at bottom, concerned the events in Germany, not New York:
Continue Reading Judge Rakoff Rules Bavaria Has Sovereign Immunity From Suit Seeking Return of Picasso Painting