March 15 A federal appeals court on
Thursday said there is a "strong likelihood" that a lower court
judge erred in rejecting the U.S. Securities and Exchange
Commission's proposed $285 million settlement with Citigroup Inc
in a fraud case.
The 2nd U.S. Circuit Court of Appeals said it was premature
to decide whether U.S. District Judge Jed Rakoff in Manhattan
correctly rejected the settlement in November. It nonetheless
put proceedings in that case on hold while it considers an
appeal by both the SEC and Citigroup.
The accord was intended to resolve charges that Citigroup
sold risky mortgage-linked securities in 2007 without telling
investors that it was betting against the debt, and causing more
than $700 million of losses.