An appeals court on Wednesday voided a controversial decision in 2011 by New York Judge Jed S. Rakoff, saying he erred in scuttling a $325 million settlement between the Securities and Exchange Commission and Citigroup (NYSE: C).

The Second Circuit Court of Appeals sent the high-profile case back to the lower court, arguing that it had "abused its discretion" by claiming the settlement was not reasonable, fair or "in the public interest."

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