Citigroup Settlement Rejected (Part 4)

Where might the Commission go with this case?  The court has ordered that it go to trial.  That is one possible outcome.

The Commission could seek an interlocutory appeal.  This would require approval by Judge Rakoff.  See Section 1292(b).  The SEC could dismiss the case.  See FRCP 41(a) (allowing for voluntary dismissal upon "a stipulation of dismissal signed by all parties who have appeared.").  If that were to occur, the case could be refiled and settled as an administrative proceeding.  That, however, would merely postpone the issue for another day.  The judges in the Southern District are repeat players in the securities litigation area and the SEC will be presenting other "substantial" settlements to Judge Rakoff.

Finally, Citigroup and the SEC could agree to some facts, meeting the narrow terms of the court's order.  To the extent that the facts merely established negligence, they would not provide significant collateral benefit in any private litigation.