A federal judge said Friday she would "ultimately approve" the Securities and Exchange Commission's $75 million settlement with Citigroup Inc. after both sides agreed to add changes to the bank's disclosure policies.
Judge Ellen Segal Huvelle, who had earlier questioned the deal, said she was satisfied with the penalty and would "ultimately approve the settlement" once it included remedial steps already taken by the bank to change its policies and procedures around disclosure.
The SEC sued Citigroup and two executives earlier this year, saying they failed to disclose to investors nearly $40 billion in subprime-mortgage assets in 2007.
During a hearing Friday, Judge Huvelle compared the Citigroup pact to the SEC's settlement with Bank of America Corp., which included structural changes to address the company's alleged failure to disclose bonuses and other matters to its shareholders. Those changes included an independent disclosure lawyer for three years.
"That's what we're lacking here," Huvelle said. She said the pact should incorporate the changes Citigroup has made to require executives from nearly a dozen areas to sign statements of accountability that earnings statements and scripts of earnings calls are accurate and complete.
