Point of Law reports that:
On November 28th, U.S. District Court Judge Jed S. Rakoff, in a 15 page opinion, rejected the proposed agreement between Citigroup and the Securities and Exchange Commission to settle charges filed by the SEC against Citigroup accusing the company of "selling investors slices of a $1 billion mortgage-bond deal called Class V Funding III, without disclosing it was betting against $500 million of those assets." The bulk of Judge Rakoff's criticism was aimed at the SEC's standard settlement practice of permitting agreements where the accused company does not deny nor admit wrongdoing.
Surprised I am. Why? (1) Suppose the highly influential (at least in securities law) Second Circuit agrees with Rakoff, thereby turning an outlier into a major national precedent? Then the SEC will be well and truly fraked.
(2) When the oral argument and eventual decision comes down there will be more rounds of media commentary on whether the SEC let Citigroup off with a slap on the wrist. It's not always truly that all publicity is good publicity.
(3) Given the volume of litigation it does in the SDNY, the SEC likely will have more cases before Judge Rakoff in the future ... and he already seems peeved with the agency.