Rakoff Takedown Reignites Debate Over Settlement Authority

Law360, New York (March 15, 2012, 8:23 PM EDT) -- When the Second Circuit sharply criticized a federal judge Thursday for rejecting the U.S. Securities and Exchange Commission's $285 million securities fraud settlement with Citigroup Inc., it betrayed a long-standing power struggle between the regulators who cut deals and the courts who scrutinize them, attorneys said.

The New York-based appeals court issued a nonfinal opinion questioning U.S. District Judge Jed S. Rakoff’s refusal to approve the settlement. The pact would resolve claims that Citigroup Global Markets Inc. failed to tell investors it had bet heavily against...
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