And yet, I have also seen situations where accusers have been willing to lie in order to manipulate the system to extract a settlement.
If anything, the S.E.C. might be criticized for being too aggressive, using its considerable power to extract a settlement in a case whose weaknesses, if it finally goes to trial, will probably become readily apparent.
Citing the Invictus memo, Judge Lewis Kaplan of the Southern District of New York argued that the plaintiffs were seeking to use a "worldwide, full-court press" to extract a settlement against a company of considerable importance in providing energy supplies to the United States economy.
The securities raid follows a strategy developed by attorneys general over the past decade: Target an unpopular industry like tobacco or a company like Microsoft, team up to file lawsuits, and extract a settlement.
Despite this pseudo-plaintiff having never sought representation, the law firm can now proceed with seeking to extract a settlement from the opposing side.
The S.E.C. also extracted a $550 million settlement from Goldman Sachs for a mortgage security the bank built, though the S.E.C. did not name executives in that case.
As noted above, the SEC already extracted a $550m settlement from Goldman back in 2010, with one of those wishy-washy "neither admit nor deny" agreements that let the bank avoid actual responsibility.
The case was closed after the Securities and Exchange Commission extracted a civil settlement and levied a fine of $67.5 million on Mr. Mozilo, two-thirds of which was paid by the company and its new owner, Bank of America.
Its lawyers, Kreindler & Kreindler, the law firm that helped extract a $2.7 billion settlement from Libya in the Pan Am-Lockerbie bombing, tried negotiating a settlement through the Russian embassy but got nowhere.
Authorities announced the first Libor case in June, extracting a $450 million settlement with the British bank Barclays.
