Sen. Grassley Praises Judge Who Blocked Citigroup Settlement: ‘Judge Rakoff Is Right’

Yesterday, Federal Judge Jed Rakoff formally rejected a deal between Citigroup and the Securities and Exchange Commission that would have allowed the bank to pay $285 million to settle charges that it misled investors in mortgage securities. Rakoff said that there is “an overriding public interest in knowing the truth about the financial markets,” after previously deriding the settlement as “just for show.” Today, Sen. Chuck Grassley (R-IA) threw his support to Rakoff, saying in a statement, “Judge Rakoff is right to ask for information. The SEC needs to provide a clear rationale for the enforcement penalties in this case and in others. Otherwise, the public is in the dark about whether the settlements are adequate and the court’s role is reduced to a rubber stamp. A settle and slap-on-the-wrist approach has not and will not deter the defrauding of investors.”