Judge Rejects Citigroup/SEC Settlement

In cases involving Bank of America, JP Morgan Chase, UBS and other big corporations, the Securities and Exchange Commission has allowed fraud charges to be settled. Companies pay fines without admitting they've done anything wrong, even promising not to do again what they haven't admitted to in the past. Today, District Judge Jed Rakoff essentially said, "not in my courtroom." The SEC had accused Citigroup of selling a $1 billion mortgage fund to investors without telling them it was betting the deal would fail. When it did, Citi made $160 million while investors lost $700 million. Rakoff's refusal to approve a $285 million fine without admission of wrongdoing could make a difference on Wall Street says Matt Taibbi, a contributing editor to Rolling Stone magazine.