Deference to the SEC: Second Circuit Overturns Lower Court’s Refusal to Approve Settlement Between SEC and Citigroup

Summary: In a long-awaited ruling, the Second Circuit reversed Southern District of New York Judge Jed Rakoff’s 2011 decision refusing to approve a settlement between the Securities and Exchange Commission (SEC) and Citigroup Global Markets Inc. (Citigroup). In so doing, the Second Circuit concluded that Judge Rakoff abused his discretion by refusing to accord sufficient deference to the SEC’s and Citigroup’s decision to enter into the settlement.