“Judge Jed S. Rakoff has been an outspoken critic of the Securities and Exchange Commission, chiding the agency’s practice of allowing companies to settle fraud cases without having to admit that they had done anything wrong.
“On Friday, it was the S.E.C.’s turn to criticize him.
In an unusual hearing before the federal appeals court in Manhattan, lawyers for the S.E.C. — along with lawyers for Citigroup — tried to convince a three-judge panel that Judge Rakoff, a trial court judge, exceeded his authority in rejecting the settlement that let Citigroup avoid an admission of wrongdoing.
“The court failed to give the S.E.C. any deference in this case,” said Michael A. Conley, the commission’s deputy general counsel.
“Judge Rakoff, who was represented by a court-appointed lawyer, did not attend the argument, which took place before a packed courtroom at the United States Court of Appeals for the Second Circuit in Manhattan.”
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