SEC defends rejected $285M SEC-Citigroup agreement

November 28, 2011 - 3:00 PM
SEC Citigroup

FILE - In this Nov. 23, 2010 file photo, the corporate logo for Citigroup is shown, in New York. A federal judge on Monday, Nov. 28, 2011, struck down a $285 million settlement that Citigroup reached with the Securities and Exchange Commission, saying he couldn't tell whether the deal was fair and criticizing regulators for shielding the public from the details of what the firm did wrong. (AP Photo/Mark Lennihan)

NEW YORK (AP) — The Securities and Exchange Commission is defending its $285 million settlement with Citigroup after a New York judge struck down the deal.

SEC Enforcement Director Robert Khuzami (COO'-zahm-ee) said in a statement that Judge Jed Rakoff made too much in a ruling Monday out of the fact that Citigroup was not required to admit any wrongful conduct in the deal.

Khuzami says forcing Citigroup to give up its profits and the imposition of financial penalties and mandatory business reforms outweigh the absence of an admission.

He says the amount the SEC secured from Citigroup in the deal is about what it could get after a successful trial.

The SEC had accused the bank of betting against a complex mortgage investment in 2007 while investors lost millions.