How was the amount of the proposed judgment determined? In particular, what calculations went into the determination of the $95 million penalty? Why, for example, is the penalty in this case less than one-fifth of the $535 million penalty assessed in SEC v. Goldman Sachs & Co. Why should the Court impose a judgment in a case in which the S.E.C. alleges a serious securities fraud but the defendant neither admits nor denies wrongdoing?

This is not the first time that Rakoff has questioned settlements between the SEC and major financial corporations. In February 2010 he accepted a settlement [agreement; JURIST report] agreement between the SEC and Bank of America after twice rejecting it [JURIST report; JURIST report] as unfair to investors. This is also not the first time the SEC has taken issue with Citigroup's dealings with investors. In July 2010 the two sides reached [JURIST report] a settlement in regards to the SEC's claim that Citigroup misled investors about it's exposure to sub-prime mortgage-related assets. That agreement penalized the company $75 million. It was also rejected in August 2010 when a federal judge demanded to know how it was reached and why the investors were forced to bear the majority of the cost, but not the majority of the executives. The settlement was approved [Reuters report] October 2010.