A New York judge has begrudgingly approved a long-delayed $285 million settlement between Citigroup Inc. and government regulators over toxic mortgage securities.
Federal Judge Jed Rakoff approved the deal Tuesday, but only after making it clear he thinks the approval process was weakened by an appeals court finding that he overstepped his authority.
The judge wrote that a June 2nd U.S. Circuit Court of Appeal's decision means settlements reached by government regulatory bodies and enforced by the judiciary's contempt powers will in practice no longer be subject to meaningful oversight.
The SEC reached the settlement with Citigroup after saying it made $160 million by betting against a complex mortgage investment in 2007 while investors lost millions.
Rakoff criticized the deal in part because Citigroup was not required to admit wrongdoing.