An SEC ‘Smackdown’

BY Paul Solman  December 1, 2011 at 3:41 PM EST

Making Sense

Peter Steiner is the New Yorker cartoonist best known for his 1993 cartoon of two dogs looking at a computer monitor as one says to the other: “On the Internet, nobody knows you’re a dog.”

He sent us an economics cartoon the other day and said we could share it, which we do herewith:

Cartoon of CITI Bank by Peter Steiner

The cartoon illustrates a recent legal settlement between Citibank and the Securities and Exchange Commission that a federal judge overturned earlier this week. As Time Magazine’s Adam Sorenson explains:

“Federal District judge Jed Rakoff followed through with a smackdown of the Securities Exchange Commission on Monday, rejecting a settlement between the agency and Citibank that would have imposed a $285 million penalty on the bank without forcing it to admit wrongdoing for betting against mortgage securities that eventually cost investors hundreds of millions of dollars. Rakoff, whose approval was needed to finalize the deal, was not prepared to let Citi quietly slink away from what Wall Street critics allege to be the central crime of the financial crisis-mortgage securitization fraud-without airing the particulars of the case in a public forum. “In any case like this that touches on the transparency of financial markets whose gyrations have so depressed our economy and debilitated our lives,” he wrote, “there is an overriding public interest in knowing the truth.”

And here’s an approving Wall Street Journal editorial on Judge Rakoff’s decision.

Finally, a link to Peter Steiner’s website, where this and other recent cartoons are posted.

This entry is cross-posted on the Making Sen$e page, where correspondent Paul Solman answers your economic and business questions _Follow Paul on Twitter._