Citigroup's $285 million settlement with the Securities and Exchange Commission over a mortgage-backed securities fund was rejected by a federal judge who said he hadn't been given enough facts to approve it. U.S. District Judge Jed Rakoff in Manhattan rejected the settlement in an opinion released Monday and set a trial date. He has criticized the SEC's practice of letting financial institutions such as Citigroup settle without admitting or denying liability. Citigroup, the third-biggest U.S. lender, agreed last month to settle a claim by the SEC that it misled investors in a $1 billion collateralized debt obligation linked to subprime residential mortgage securities. Investors lost about $700 million, according to the agency. A trial could establish conclusions that investors could use against Citigroup, as could a new settlement that includes admissions by the bank. Citigroup settlement with SEC rejected by judge Not seeing a downside to this.