Citigroup $285M Settlement of SEC Charges Rejected by Judge

Washington, DC: Judge Jed Rakoff of New York's Southern District, has rejected a proposed $285M settlement offered by Citigroup to end an civil complaint brought by the Securities & Exchange Commission (SEC) over allegations that they defrauded investors through highly risky mortgage-backed investments. The specific transaction referred by the SEC involved a $1 billion portfolio of mortgage-related investments.

Rakoff is a critic of the custom that allows firms to use their pocketbook to settle charges rather than admitting guilt, and said there is a public interest in finding out the truth.

Rakoff scheduled a trial, for July 16, 2012, though it is possible Citi and the SEC could bring forth a new settlement for the judge' approval in the interest of keeping the case out of court. (Forbes.com)

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Published on Oct-21-11