X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

After keeping the parties’ lawyers on pins and needles for over a month, Washington, D.C., federal district court Judge Ellen Segal Huvelle said Friday afternoon that she will accept — with a few preconditions — Citigroup’s $75 million settlement with the Securities and Exchange Commission over the bank’s inadequate reporting of its exposure to subprime mortgage debt. As we’ve previously reported, Huvelle channeled her inner Rakoff in August, refusing to “rubber stamp” the settlement without more information. Specifically, she wanted to know how the SEC had come up with the $75 million figure and why the agency had singled out only two Citigroup executives, Gary Crittenden, the bank’s then-chief financial officer, and Arthur Tildesley Jr., then-director of investor relations. Out of all the Citi execs involved in shielding the bank’s $40 billion in subprime exposure from shareholders, “You’ve focused on two individuals and I can’t for the life of me figure out why,” Huvelle complained to the SEC. The Wall Street Journal reports that Huvelle told lawyers for Citi and the SEC at a hearing on Friday that she would “ultimately approve” the deal, provided that the SEC certifies Citigroup’s revamped disclosure procedures and that the $75 million is used for compensating shareholders who suffered losses as a result of Citigroup’s misstatements. At the SEC’s request, the judge gave the parties two weeks to return to court with a settlement proposal that addresses those two issues. Brad Karp of Paul, Weiss, Rifkind, Wharton & Garrison, longtime outside counsel to Citi, declined to comment on the record when we asked him about Huvelle’s decision on Friday. Shannon Bell, a spokeswoman for Citigroup, said in a statement that the bank was “pleased with today’s hearing and will comply with the judge’s request.” In an e-mail, an SEC spokesman told us the agency would submit revised settlement documents as requested by the judge. Despite giving her near-consent, Huvelle still didn’t hide her skepticism about the settlement, according to the The Wall Street Journal. She said that “$75 million is not going to deter anyone” unless Citi takes the remedial steps she outlined. And the judge still questioned why other Citigroup executives seemed to be getting off easy, saying, “This is where the SEC is doing a disservice to the public.”

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at customercare@alm.com

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.