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Judge challenges $285M Citigroup settlement

NEW YORK — A federal judge in New York is casting doubt on the fairness of a $285 million settlement that Citigroup reached with the Securities and Exchange Commission.

Judge Jed Rakoff in Manhattan scheduled a Nov. 9 hearing on the deal announced earlier this month.

He challenged lawyers to explain why he should approve a settlement of serious securities fraud allegations when Citigroup Inc. neither admits nor denies wrongdoing.

He also questioned whether there is an overriding public interest in determining whether the SEC’s charges are true.

He wants to know how a $95 million penalty will have a meaningful deterrent effect. He noted the penalty was one-fifth the amount imposed in a case against Goldman Sachs Group Inc. last year.

A Citigroup spokeswoman declined to comment Thursday.