Following in the footsteps of Federal Judge Jed Rakoff, Federal judge Rudolf Randa, who's based in Wisconsin, challenged an SEC settlement with Koss Corporation and its founder. Terms of the Settlement. The SEC agreed to settle with Mr. Koss and Koss Corporation over allegations the company prepared inaccurate financial statements and maintained poor internal controls from 2005 through 2009.  As part of the settlement, Mr Koss will reimburse the company $242K in cash and 160,000 share options.  Under a previous agreement, he also will repay the company $209K - his incentive bonuses for 2008-2009-1200 - as mandated under the clawback provision of Sarbanes-Oxley. Mr Koss did not admit or deny wrongdoing. Judge's Concerns. Citing a decision by Judge Jed Rakoff, who recently rejected the SEC’s $285m settlement with Citigroup, JudgeRanda expressed concern about several aspects of the settlement to prevent future violations of the securities laws - given that Mr. Koss and his family own 70% of the company’s shares.  “Without any factual predicate for how those disgorgement terms were determined and what more, if anything, could have been subject to disgorgement, the court cannot assess their fairness.” Judge Randa further questioned the SEC’s enforcement of the injunction it sought, noting:  “If enforcement becomes necessary, the terms of such a vague injunction would make it difficult for the court.” The SEC has until 1/24/12 to respond.  Meanwhile, an SEC spokesperson said the Commission will provide the court with the information as requested.”  [FT.com, 12/22/11]