Editorial Board
Citigroup’s Deal With SEC Got the Treatment It Deserved: View
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U.S. District Judge Jed Rakoff intimated last month that he wasn’t happy with the Securities and Exchange Commission’s proposed settlement with Citigroup Inc. over the creation and sale of a security that cost investors $700 million.
Yesterday, Rakoff made it official: The proposed $285 million penalty seemed disproportionately small when compared with the losses, Rakoff ruled, and would keep secret crucial details of the risky instrument Citigroup was selling. What’s more, he said, the proposed settlement didn’t serve the public interest because it didn’t do anything to restore faith in the financial markets. The judge ordered Citigroup and the SEC to prepare for a trial in July.