A federal appeals court on Wednesday overturned Judge Rakoff’s decision in 2011 to reject an S.E.C. settlement deal with Citigroup, undercutting the judge’s concerns that the bank got off with little more than a slap on the wrist. In a long-awaited opinion, a three-judge panel of the United States Court of Appeals for the Second Circuit concluded that Judge Rakoff “abused” his discretion “by applying an incorrect legal standard” to the case. The court sent the case back to Judge Rakoff, who is expected to eventually approve the deal. The panel’s decision, which hands a win not only to Wall Street, but also to its federal regulator, will most likely rein in Judge Rakoff’s criticisms of S.E.C. settlements. For the agency, which came under fire from Judge Rakoff and others for settling without demanding admissions of wrongdoing, it is a moment of validation.
For more information, Overruled, Judge Still Left a Mark on S.E.C. Agenda - NYTimes.com
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