SEC Rescinds Policy Regarding Denials of Settlements in Enforcement Actions

The SEC recently announced that it has rescinded its 2003 policy requiring, in certain circumstances, that defendants seeking to settle enforcement actions agree not to publicly deny the allegations underlying the settlement. The SEC’s press release indicated that the change is intended to provide the SEC with additional flexibility in resolving enforcement matters while continuing to protect investors and maintain market integrity.  The prior policy prohibited settling parties from making public statements denying allegations in SEC complaints or orders, even if settlements were reached based on a neither-admit-nor-deny basis. The SEC noted that parties settling enforcement actions will still be prohibited from making materially false or misleading statements regarding the resolution of those matters.

Click here for the SEC’s Press Release.