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Citigroup’s proposed settlement with the SEC fits the norm

To much applause, Federal District Judge Jed S. Rakoff broke with the status quo on November 28 by refusing to approve a settlement between the Securities and Exchange Commission and Citigroup involving transactions in which the bank bet against mortgage-backed securities it sold to customers. Like many others in the financial industry – i.e., Goldman Sachs’s $550 million settlement with the SEC in 2010 – Citigroup had agreed to pay out a negligible sum of money to make the case go away without admitting to any wrongdoing. Outside of patently criminal acts like the insider trading scam involving Raj Rajaratnam or a Ponzi scheme like Bernard L. Madoff’s, securities cases usually played out in this manner. Read more in Forbes here.

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