NYC Judge Stands Behind SEC-Citigroup Ruling

A New York City judge says his decision blocking a $285 million settlement over toxic mortgage securities should stand.

A ruling Tuesday by Federal Judge Jed Rakoff denied a request by the Securities and Exchange Commission and Citigroup to put the federal case on hold while both sides appeal.

Rakoff said he wouldn't agree to stay his ruling - issued last month - because their reasoning for an appeal was "patently defective."

The SEC had accused Citigroup of betting against a complex mortgage investment in 2007. It said the firm made $160 million in the process while investors lost millions.

The settlement would have imposed penalties on Citigroup but allowed it to deny allegations that it misled investors. Rakoff criticized the deal for allowing the firm to hide its misdeeds.