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.