“A federal appeals court Wednesday overturned a judge’s rejection of a $285 million settlement between the Securities and Exchange Commission and Citigroup, ruling that the judge failed to determine the deal would ‘disserve the public interest.’

“The much-anticipated decision by the U.S. Court of Appeals for the 2nd Circuit concluded that U.S. District Judge Jed Rakoff exhibited an ‘abuse of discretion’ by ‘applying an incorrect legal standard’ in blocking the 2011 agreement.

“The 28-page decision clarified what the appeals court said was the correct legal standard for such cases and sent the matter back to Rakoff — an outcome that’s likely to prompt final approval of the civil settlement.

“The ruling represents a mixed win for both Wall Street and the SEC in the legal push-and-pull between the financial industry and an important government regulator.”

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“‘While the SEC has and will continue to seek admissions in appropriate cases, settlements without admissions also enable regulatory agencies to serve the public interest by returning money to harmed investors more quickly, without the uncertainty and delay from litigation and without the need to expend additional agency resources,’ Ceresney said.

“Dennis Kelleher, president of Wall Street watchdog Better Markets, praised what he said was the ruling’s rejection of ‘the SEC’s extreme position that courts merely rubber stamp whatever settlement the SEC files.'”

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