Home | News | Government | Federal Judge Rejects Citi’s $75M Settlement with SEC
Print This Post Print This Post

Federal Judge Rejects Citi’s $75M Settlement with SEC

A federal judge is refusing to sanction an agreement between ""Citigroup"": and the ""Securities and Exchange Commission"": (SEC) to settle charges brought against the New York bank that it misled investors about its exposure to subprime home loans.


The SEC alleged that after repeated investor inquiries, Citi continued to make false statements in earnings calls and public filings about the extent of its holdings of assets backed by risky subprime mortgages, even as the


subprime market began to unravel in 2007. Citi ""agreed late last month"": to pay a $75 million penalty to settle the charges.

But at a hearing on the settlement this week, Judge Ellen S. Huvelle of the U.S. District Court for the District of Columbia would not give her stamp of approval to the terms of the agreement.

Judge Huvelle reportedly asked why the company's shareholders â€" some of whom were the ones misled by the financial giant â€" must pay for the institution's transgressions.

She raised questions about the SEC's investigation and asked why only two Citi executives had been charged, when the SEC said in its complaint that ""senior management"" had knowledge of the deception.

""Why would I find this fair and reasonable?"" Judge Huvelle said. ""You expect the court to rubber-stamp, but we can't.""

She has ordered both the SEC and Citigroup to provide additional records and information. A new hearing has been set for mid-September.

About Author: Carrie Bay

Profile photo of Carrie Bay
Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.

Leave a Reply

Scroll To Top