SEC-Citigroup Deal Rejected

U.S. District Judge Jed Rakoff in New York has rejected the proposed $285M settlement between the SEC and Citigroup over allegations related to the sale of mortgage securities that contributed to the financial crisis. As noted in the WSJ report, Rakoff has been critical of the SEC’s handling of these cases, specifically that the agency allows “defendants to enter into consent judgments without admitting or denying the underlying allegations,” thus hindering his ability to assess the adequacy of the proposed relief. The highly respected judge did not mince his words: “It is harder to discern from the limited information before the Court what the SEC is getting from this settlement other than a quick headline.”

Rakoff is also mentioned in our article on Unraveled, a new documentary about Marc Dreier by attorney-filmmaker Marc Simon. Rakoff sentenced Dreier to 20 years in federal prison, despite calls from prosecutors to give him 145 years. The WSJ also ran a profile of Rakoff earlier this month, noting he has “a reputation as a populist.”