Thursday, November 10, 2011

Fed Judge With Good Questions on Citi

Gee.  Now and then you kinda have hope!

A federal judge sharply questioned the Securities and Exchange Commission about why it didn't force Citigroup Inc. to admit to "what the facts are" before the agency agreed to settle a mortgage-bond case for $285 million.

During an hour-long hearing Wednesday, U.S. District Judge Jed S. Rakoff, an outspoken critic of the SEC's approach to securities-fraud settlements, challenged the SEC on why the regulator allowed Citigroup to settle the case using boilerplate language in which it neither admits or denies wrongdoing.

"Why does that make any sense in this context?" the judge said.

... He questioned why the SEC only sought $160 million in alleged illicit profits—the regulator claims Citigroup profited from the deal—when investors may have lost more than $700 million in the deal.

"They're out something like $600 million, so the net effect of this is, you're only returning a small fraction of what the plaintiff's lost, yes?" the judge asked.
  --Mish quoting WSJ

Just sell off the damn company.

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