Citigroup has been ordered to face trial over alleged securities fraud in July of next year. A judge rejected a proposed $285 million mortgage securities fraud settlement between Citigroup and the Securities and Exchange Commission on Monday, saying the deal was "neither fair, nor reasonable, nor adequate, nor in the public interest," CNN reports.
Judge Jed Rakoff said that the settlement announced last month, under which Citi neither admitted nor denied the SEC's allegations, deprived the public "of ever knowing the truth in a matter of obvious public importance." He instead ordered Citi to face trial over the allegations in July 2012.
The SEC has alleged that in 2007, Citi created and sold a mortgage-related collatarized debt obligation, or CDO, called Class V Funding III. According to the SEC complaint, one CDO trader characterized the asset group in internal communications as "a collection of dogshit" and "possibly the best short EVER!"
Find out more at http://money.cnn.com/2011/11/28/news/companies/citigroup_settlement_rejected/
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