Citigroup's $285 Million Mortgage Settlement With SEC Blocked By Federal Judge

A federal judge blocked what would have been a $285 million mortgage settlement between Citigroup and the Securities and Exchange Commission, according to a tweet from The New York Times.

If the deal had passed muster, it would have settled accusations that the bank misled mortgage investors when selling securities, according to a separate NYT report. Jed Rakoff, the judge that blocked the settlement, criticized the SEC's enforcement practices at a hearing on the settlement earlier this month.

"Doesn't the S.E.C. have an interest in what the truth is?" Rakoff reportedly asked at the hearing.

Comments

[idisVA]

02:53 PM on 11/29/2011

Our prison population is filled with the wrong people. Those who should be occupying the cells are all in the halls of the Treasury Department, the FED, the SEC and Wall Street.

[Kyle10]

02:37 PM on 11/29/2011

Bravo, Judge Rakoff.

Here's hoping for some modicum of public airing of Citi's chicanery and the likely backlash once people begin to understand the cesspool of corruption that is running the entire show (yes, we export!).

[Terri Skau]

12:26 PM on 11/29/2011

Big Bank Profile: Bank of America

Federal taxpayer bailout funds received:

$199.0 billion

Profits for the years 1998-2008 :

$135.0 billion

Profits for the first half of 2009:

$7.47 billion

Bank account fees for last 10 years:

$66.9 billion

Bank account fees for first half of 2009:

$5.26 billion

Change in bank account fee revenue (2003-08):

+104.6%

Percent of first half 2009 profit from fees:

70%

Credit card income for first half of 2009:

$5.01 billion

Median BofA bank teller wage:

$10.73/hour, or $22,328 annually

2007-08 CEO Ken Lewis pay:

$34.8 million (779 times the median teller wage)

2008 bonus pool :

$6.9 billion

First half 2009 bonuses and compensation pool:

$16.6 billion

Cash bonuses (top 5 execs) last 10 years :

$459.9 million

Effective tax rate in 2008:

9.5%

Offshore subsidiaries in tax havens :

143

Lobbying fees in 9 months after bailout:

$3.6 million

Campaign contributions in 2008 federal elections:

$7.2 million

[UrbanAnna]

09:20 AM on 11/29/2011

When you have a Chicago politician thug like Obama and his dishonest agencies working for their own interests, it's great to see a judge tell them "no".

[devildog0311usmc]

10:26 AM on 11/29/2011

GOP JUDGE ?? LOOKING OUT FOR THE FAT CATS ---CROOKS.

[johnebigjohn]

12:04 PM on 11/29/2011

Just like the Republicans say no to the jobs bill. No to tax breaks for the middle class. No to anything that dosent enrich the wealthy.

[krazzicraig]

09:12 AM on 11/29/2011

ggggggggggggggggggggggggggggggggggggggggg

[jeviga]

08:53 AM on 11/29/2011

Many years ago I was involved in an SEC investigation into insider trading. I was told about a stock takeover and did purchase a nominal amout of shares. My total gain was less than $1,000.
In total nearly $1,000,000 was made by others who knew of the takeover.
I was informed by the SEC that if I cooperated with them and named names I would not be charged civilly nor would I have to repay treble damages. I told the SEC investigator to go f..k himself and to go f..k his bosses cause I wasnt going to rat anyone out.
I willingly paid back treble damages and thought that was the end of it.
4 months later i was referred to the justice department for criminal charges. The SEC accused me of perjury (such a common form of pressuring citizens) . I never perjured myself and when my lawyer asked for a copy of the transcript proving perjury there was none. The justice department immendiatly dropped the case.
The SEC is full of mediocre lawyers who can't get a job in private practice with any law firm. The heads of the SEC are no better than political hacks. The entire agency is a joke.

[rep9347]

08:51 AM on 11/29/2011

I can just hear the GOP's in Congress getting up in arms about the SEC now. Funny thing is the SEC only has the power to levy certain types and amounts for penalities. They sent a letter to Congress yesterday to get the limitations increased so they can levy a higher fine on CitiGroup. Thanks to a judge that finally stood up to the Wall Street thiefs!!!

[ssnwbrd]

09:18 AM on 11/29/2011

The fine is not the problem.

How the fine was arrived at was. Behind closed doors and used to hind the truth.

Letter came after the judge's ruling not before..... they were just covering their arses

[rracer619]

09:36 AM on 11/29/2011

I'm still waiting for WikiLeaks to release the negative info it supposedly has/had on one particular Bank. I suspect it was/is B o A. During my last re-finance to get out from under them, I was charged two months interest, which is standard from what I understand. Then I made my monthly payment ,which should have killed one months interest. Nope. Then, because I had money still left in my escrow acct., they decided to take another $500 from my escrow before refunding the leftover balance back to me. All told, B o A wound under getting around $2000 from me instead of the two months interest as was disclosed on the GFE. Go figure. And there is no pre-payment penalty in my documents whatsoever. But, They know I can't afford to fight them. Sounds like another investigation is way past due and perhaps a class action lawsuit. To make matters worse, the Bank I was dealing with turned around and sold my loan right back to B o A. Didn't find that out till the closing....kinda late to do anything about it then. I had too much invested. The great American banking system. It will bring us down ...just wait and see.

[No1Liberal]

08:33 AM on 11/29/2011

Thank goodness a federal judge had the sense to block a settlement with Citi-Bank in the mortgage scandal. It's time the Attorney Generals throughout the United States start asking the hard questions of these financial institutions that are foreclosing on millions of Americans and taking this country hostage. Where are the investigations, where are the criminal charges!!!!!!

[Articulus Rex]

08:28 AM on 11/29/2011

Losses in this case where something on the order of $7500M, Figure they paid about $100M in bonuses to employees, legal expenses, and 'fees' to the credit rating agencies. Add in $300M for the settlement and they still would have made a $350M profit! If the Judge sticks to this guns and makes them go to trial (which he didn't do when he rejected the BoA settlement a while back), Citi has $350M to spend on lawyers before this thing even costs them a dime. Watch for the Republicans to start talking about reigning in the 'out of control' SEC and threats to cut its budget.

[MissinAmerica]

08:16 AM on 11/29/2011

Matt Taibbi gives a great interview on KO re: this surprisingly decent move by a federal judge~

http://current.com/shows/countdown/videos/matt-taibbi-on-judge-rakoffs-decision-to-reject-the-secs-latest-settlement-with-citigroup

...Matt has been one of my heroes, a sane, informative voice in a wilderness of liars & crazies. And now Judge Jed is a hero too. There's hope for this country!

[sskepticall]

08:15 AM on 11/29/2011

Okay Mary Shapiro....get your act together. Either you are playing for the great reward on Wall Street or you do the job you were hired to do. Now do the job or get out of town.

She had such promise...but my God.....she is going off the rails. Sheeesh.....

Does it matter that the former Bush appointed FDIC chair is now on the B of A board of directors?

[crestmia]

07:45 AM on 11/29/2011

Good Work Judge....Nail these crooks to the wall. 285 million for all the grief and suffering they made possible??
If in the middle east they would have cut their hands off and maybe more...
Speaking of crooks, waiting to see how much the boys at MF Global stole.

[Rothay]

07:37 AM on 11/29/2011

Another "settlement" as outrageous as that of Bank of America. The banks took the SEC and the American taxpayers for a ride. Now they are attempting a free pass in court. It was reported yesterday that the banks received trillions in the government's zeal to shore up Wall Street. This rape of the American taxpayer can be placed squarely on BOTH Bush and Obama. Both these two conniving presidents exploited you and me. Obama is a hypocrite regarding lobbyists, at the very least. He promised no more lobbyists yet licks their boots. Democrat or Republican, there is no difference between them. Most of them are millionaires, multi-millionaires, passing laws that never affect them, while at the same time treating the people who put them in power like endentured serfs, paying the taxes and keeping their mouths shut. The choice for 2012 is depressing to say the least. Cheers to a judge who is asking questions.

[bobsoph]

07:31 AM on 11/29/2011

Someone tell Diogenese he can put down his lamp and quit searching. We have found an honest man !

[PrairieCal]

06:41 AM on 11/29/2011

Another brilliant 2 inch long article from the Huff. What wonderful in-depth reporing.

[snapper123]

08:50 AM on 11/29/2011

I was looking for the rest of the article ....

[Craig Woodward]

09:08 AM on 11/29/2011

same with me... I thought it got cut off... guess they have all that turkey to eat