SEC says judge committed legal error in Citigroup ruling

Robert Khuzami asks 2nd Circuit to review Judge Jed Rakoff’s rejection of the proposed $285 million settlement

The Securities and Exchange Commission (SEC) is on a mission. Robert Khuzami, director of the SEC’s enforcement division, yesterday announced that he’s petitioning the 2nd Circuit to review U.S. District Judge Jed Rakoff’s rejection of the SEC’s proposed $285 million settlement with Citigroup.

Rakoff, who is known to be a regular critic of the agency, issued a 15-page ruling on Nov. 28 stating that the SEC’s settlement with Citigroup did not reflect whether it was “fair, reasonable, adequate and in the public interest.” He went on to say that the agency “has a duty, inherent in its statutory mission, to see that the truth emerges,” and that the $285 million settlement “is pocket change to any entity as large as Citigroup.”

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