Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

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Monday, August 16, 2010

Judge Refuses to Approve SEC's Settlement with Citigroup

Courts have typically approved SEC settlements under a lenient "fair and reasonable" standard, but Judge Jed Rakoff may have started a trend when he initially refused to approve the agency's settlement with Bank of America involving misstatements about the Merrill Lynch merger.  Today Judge Ellen Segal Huvelle, also of the S.D.N.Y., refused to approve the SEC's proposed settlement with Citigroup involving allegations that the bank failed to disclose the extent of its exposure to subprime assets in 2007.  The judge stated she did not have sufficient information and requested further briefing from the parties.  In the hearing, she specifically questioned why the SEC singled out two individuals -- the former CFO and the head of investor relations -- as well as the corporation and questioned how the amount of the penalty had been calculated.  WSJ, Judge Won't Approve Citi-SEC Pact

http://lawprofessors.typepad.com/securities/2010/08/judge-refuses-to-approve-secs-settlement-with-citigroup.html

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