Citi Settlement With SEC Rejected by Judge

Citigroup Inc. (C)’s $285 million settlement with the U.S. Securities and Exchange Commission over mortgage-backed securities was rejected by a Manhattan federal judge.

U.S. District Judge Jed Rakoff rejected the settlement in an opinion released today. The judge has criticized the agreement for permitting New York-based Citigroup to settle without admitting or denying liability in the matter.

Citigroup, the third-biggest U.S. lender, agreed last month to settle a claim by the SEC that it misled investors in a $1 billion CDO linked to subprime residential mortgage securities. Investors lost about $700 million, according to the agency.

“In any case like this that touches on the transparency of financial markets whose gyrations have so depressed our economy and debilitated our lives, there is an overriding public interest in knowing the truth,” Rakoff wrote in the opinion.

Rest from Bloomberg here…

Copy of the ruling below…

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4closureFraud.org

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SEC v CITI