Judge questions bank's $285m settlement

28 October 2011

Citigroup's $285 million civil settlement with the US government may not go through after a federal judge spoke of his doubts about the proposal.

According to the New York Times, Judge Jed Rakoff of the Federal District Court in Manhattan has raised questions based around exactly why he should approve such a figure.

The official has revealed the queries he expects the bank and the Securities and Exchange Commission (SEC) to be able to answer at the hearing scheduled for next month that will decide if the settlement gets the green light.

For instance, Judge Rakoff wants to be informed how such a significant instance of fraud could be completely down to negligence and whether it is viable to approve a deal of $285 million when the defendant has not admitted or denied liability.

Recently, the same news source indicated that US banks are increasing their mortgage lending.

By Gary Cooper

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