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Released: November 10, 2011
Judge chafes over Citigroup fraud settlement
Source: David Hilzenrath, Washington Post & Bloomberg (Free Registration)
A federal judge Wednesday challenged the SEC’s plan to settle a fraud case against Citigroup for $285 million, saying that the deal would recoup only a fraction of investors’ losses and would leave the firm free to proclaim its innocence in private lawsuits over the remaining damages.
The judge used the Citigroup case to mock the SEC’s traditional way of doing business — allowing defendants to settle without admitting or denying wrongdoing. The unproven allegations, U.S. District Court Judge Jed S. Rakoff said, “are no better than rumor or gossip.”
It was the third case since the financial meltdown of 2008 in which Rakoff sharply questioned the value of enforcement actions brought by the Securities and Exchange Commission, which is responsible for policing Wall Street and protecting investors.
Read Full Article: Judge chafes over Citigroup fraud settlement
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