A New York federal judge ruled Monday against the proposed $285 million settlement agreed to by Citigroup and the Securities and Exchange Commission (SEC) in October.

“[T]he Court concludes, regretfully, that the proposed Consent Judgment is neither fair, nor reasonable, nor adequate, nor in the public interest,” Judge Jed S. Rakoff stated in his ruling.

Rakoff’s opposition is rooted in the lack of evidence needed to determine whether the settlement is justified and sufficient.

While the SEC stated that taking into account the public’s interest is not necessary, Rakoff argues assessing public

interest is part of the court’s duty in considering injunctive relief.

In addition, Rakoff takes issue with the lack of admission of fault from Citigroup.

The SEC is charging Citigroup with negligence after it composed a collateralized debt obligation (CDO) and then took a proprietary short position against it. The CDO defaulted less than a year later, costing investors millions.

While Citigroup agreed to a $285 million settlement, it neither admitted nor denied fault.

“There is little real doubt that Citigroup contests the factual allegations of the complaint,” Rakoff stated, adding that Citigroup’s counsel “strongly hinted” that it would “fully contest the facts in any parallel litigation.”

“If the allegations of the Complaint are true, this is a very good deal for Citigroup; and, even if they are untrue, it is a mild and modest cost of doing business,” Rakoff said.

Following Rakoff’s ruling, SEC Enforcement Director Robert Khuzami released a statement claiming that the amount agreed to in the settlement is about the same amount a trial would likely obtain from the bank, according to the Associated Press.

A trial is set for July 16.