Second Circuit Overrules Rakoff’s Controversial Rejection of SEC Settlement: Implications for FCPA Resolutions

U.S. District Court Judge Jed Rakoff has been overruled by the Second Circuit, which held that he abused his discretion in refusing to approve a settlement between the SEC and Citigroup unless the SEC provided more evidence about the truth of the allegations lodged against the company.  One of Judge Rakoff’s primary criticisms of the settlement was the SEC’s choice to allow Citigroup to neither admit nor deny the allegations in the complaint.  This article analyzes the decision and its effect on FCPA settlements with the SEC.  See also “After a Protracted Battle About Reporting Requirements, Judge Leon Approves a $10 Million FCPA Settlement Between IBM and the SEC” (Aug. 7, 2013).

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