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NYC Judge Rejects SEC-Citigroup Settlement

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Citigroup Center - New York, NY (file / credit: Chris Hondros/Getty Images)

Citigroup Center – New York, NY (file / credit: Chris Hondros/Getty Images)

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NEW YORK (AP / WCBS 880) - A federal judge in New York has struck down a $285 million settlement that Citigroup reached with the Securities and Exchange Commission, citing a need for truth about the financial markets.

WCBS 880’s Irene Cornell On The Story

Judge Jed Rakoff rejected the settlement Monday. The deal would have imposed penalties on Citigroup even as it allowed the company to deny allegations that it misled investors on a complex mortgage investment. The SEC has accused the bank of betting against the investment in 2007 and making $160 million, while investors lost millions.

The judge wrote that there is an overriding public interest in knowing the truth about the financial markets. He set a July 16 trial date for the case.

Citi says it is reviewing the decision and declined to comment.

(TM and Copyright 2011 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2011 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

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