Before an overflow audience on Feb. 8, the U.S. Court of Appeals for the Second Circuit considered whether Southern District Judge Jed Rakoff (See Profile) acted properly when he condemned a securities fraud settlement that the Securities and Exchange Commission reached with Citigroup Inc. in late 2011.
Lawyers for the SEC and Citi contended during the oral argument that Rakoff misinterpreted his role when he refused to let the bank pay $285 million to settle charges that it misled investors about the health of an investment portfolio tied to the housing market. The case is Securities and Exchange Commission v. Citigroup Global Markets, 11-5375 cv, 11-5242 cv.
