A settlement agreement reached last month between Citigroup and the Securities and Exchange Commission (S.E.C.) over a 2007 mortgage derivatives deal has been thrown out by a federal court judge who has ordered the case be sent to trial. Under the settlement announced on October 19, Citicorp had agreed to pay $285 million to settle a civil suit arising out of the sale of $1 billion in mortgage-linked collateralized debt obligations. The 2007 transaction took place just as the housing market was about to collapse, costing investors $700 million. Citigroup is alleged to have handpicked the securities and simultaneously wagered that some of the mortgages would fail while profiting by $160 million from the deal.
In a written statement Monday, Judge Jed S. Rakoff of the U.S. District Court in Manhattan, said that the proposed settlement was "neither reasonable, nor fair, nor adequate, nor in the public interest" because permitting a company to neither admit nor deny the charges against it does not satisfy the law. The limited information offered in the settlement, he said, made it difficult to discern whether the S.E.C. was getting anything from the settlement "other than a quick headline."
Settling claims in such a manner has become commonplace for the SEC and Rakoff said it "creates substantial potential for abuse because it asks the court to employ its power and assert its authority when it does not know the facts."
Citigroup Director, Brian Stoker is contesting similar charges to those made against Citigroup by the S.E.C. Rakoff has joined the two cases and ordered a trial to begin on July 16, 2012...
...(read more)
Source: http://www.mortgagenewsdaily.com/11282011_mortgage_fraud.asp
Vacation Properties Loans and Mortgages Household Moving House Plans
No comments:
Post a Comment