In 2009 judge Jed Rakoff rejected a $33 million settlement between the SEC and Bank of America, essentially arguing that deal let the bank off with too light a penalty for its crimes, to which it did not admit or deny. After a contentious hearing, the judge ultimately approved--with reservations--a revised settlement in which Bank of America agreed to pay $150 million to resolve a broader set of charges.

So how will Citigroup and the SEC--the latest odd pairing necessitated by Judge Rakoff--fare with their $285 million settlement? You can bet that neither side wants to go to court. Bloomberg suggests that the only other options is for the settlement to cost the bank more. No one thinks the cost will rise to Goldman Sachs settlement levels--about $550 million--but we could easily see the SEC and Citigroup sweetening the pot.

One issue is whether Rakoff will try and force the bank to admit guilt, which would be a radical move and would open the bank to more private litigation. It would be vociferously fought, and it might be enough for Citi to decide to go to trial. But my sense is that the after more discussion about the illogic of the current convention of allowing companies to neither admit nor deny guilt, the judge will approve a new deal. You can only roil the waters so much.

In the end, the ultimate losers may well be Citigroup shareholders. They will essentially pay the penalties. As for the company, though, these are serious charges. And, once again, there are no personal consequences.

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