Democracy Now: Judge Says SEC Misleading, Obstructing on Citibank Settlement Ruling


A federal judge has accused the U.S. Securities and Exchange Commission of misleading an appeals court and withholding important information. On Thursday, U.S. District Court Judge Jed Rakoff of New York said the SEC had misled a federal appeals court in seeking to overturn his recent decision rejecting a proposed $285 million settlement between Citigroup and the Securities and Exchange Commission over Citigroup’s sale of toxic mortgage debt. In a major decision last month, Rakoff had said the proposed settlement was “neither reasonable, nor fair, nor adequate, nor in the public interest” and “pocket change to any entity as large as Citigroup.” The SEC had accused Citigroup of selling $1 billion of deceptive mortgage-backed securities in 2007 just as the nation’s housing bubble was about to burst. Citigroup made $160 million in profits on the transaction, while investors lost $700 million.

~ by wheresthemic on December 31, 2011.

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