“A judge overstepped his authority when he blocked a $285 million settlement between Citigroup Inc. and government regulators over toxic mortgage securities, a federal appeals court panel said Wednesday.
“The 2nd U.S. Circuit Court of Appeals in Manhattan reversed a decision by Judge Jed S. Rakoff to set a trial date for the case brought by the Securities and Exchange Commission in October 2011.
“A three-judge panel said the SEC had demonstrated it would face irreparable harm because the judge refused to reconsider his rejection of the settlement as he set a 2012 trial date.
“The settlement between the SEC and Citigroup came after the commission accused the bank of betting against a complex mortgage investment in 2007. It said the company made $160 million while investors lost millions.”
“Dennis Kelleher, president of Better Markets, a Washington-based group that advocates strict financial regulation, applauded the appeals court for citing previous law making clear that judges should not merely ‘rubber stamp” agreements but ensure they are fair and reasonable.'”
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