Judge: Citi Can’t Settle Mortgage Case

For Citigroup, $285 million is not enough to make a problem go away. The big bank won’t be able to settle a case with the SEC involving allegations of misleading and betting against investors in a mortgage investment, a federal judge ruled today. The government had accused Citigroup of betting against a complex investment in 2007 that resulted in the bank making $160 million and investors losing millions. Though the company continues to deny these claims, it attempted to settle the case by offering a penalty of $285 million. But a New York federal judge, Jed Rakoff, determined that there is a public need for understanding the truth about the financial markets. A trial is expected to begin in July.