Citigroup Inc.'s proposal to $285 million settlement with the U.S. Securities and Exchange Commission over the sale of bad mortgage debt was thrown out by a federal judge Monday.
U.S. District Judge Jed Rakoff in Manhattan said he was concerned that the SEC's agreement to the settlement showed the regulator's lack of interest about learning what CitiGroup did wrong, Reuters reports. He set a trial date for July 16, 2012.
The settlement was "neither reasonable, nor fair, nor adequate, nor in the public interest," Rakoff said, as reported by Reuters.
"An application of judicial power that does not rest on facts is worse than mindless, it is inherently dangerous," he continued, as reported by Reuters. "In any case like this that touches on the transparency of financial markets whose gyrations have so depressed our economy and debilitated our lives, there is an overriding public interest in knowing the truth."
Both CitiGroup and the SEC maintain their agreement was fair.
The settlement was "a fair and reasonable resolution to the SEC's allegation of negligence," said CitiGroup spokeswoman Danielle Romero-Apsilos, as reported by Reuters.
