At a hearing in New York City on Wednesday, U.S. District Court Judge Jed S. Rakoff, the same judge who on Tuesday gave Raj Rajaratnam a record $92.8 million penalty in a civil insider-trading case, questioned the proposed $285 million settlement between the SEC and Citigroup for Citi's $1 billion mortgage-bond deal called Class V Funding III. During the hearing, Judge Rakoff was critical of the proposed settlement amount and an agreement where Citigroup does not deny or admit wrongdoing.

The case is SEC v. Citigroup Global Markets Inc, No. 11-07387 (S.D.N.Y).