A federal judge in New York has rejected a proposed $285 million settlement between Citigroup and the Securities and Exchange Commission over Citigroup’s sale of toxic mortgage debt. Judge Jed Rakoff said the proposed settlement was “neither reasonable, nor fair, nor adequate, nor in the public interest.” Rakoff described Citigroup as a recidivist and said a $285 million settlement was “pocket change to any entity as large as Citigroup.” The SEC had accused Citigroup of selling a $1 billion of deceptive mortgage-backed securities in 2007 just as the nation’s housing bubble was about to burst. Citigroup made $160 million in profits on the transaction, while investors lost $700 million.