Regulatory Alerts2026-05-18
SEC Rescinds Policy Regarding Denials of Settlements in Enforcement Actions
The Securities and Exchange Commission has rescinded Rule 202.5(e), eliminating its longstanding requirement that defendants in settled enforcement actions agree not to publicly deny the agency’s allegations. This policy change grants the Commission greater settlement flexibility, aligns it with most federal agencies, and conserves resources by allowing defendants to criticize government findings without triggering settlement vacatur or proceeding reopening. The Commission will not enforce existing no-deny provisions upon breach and maintains its independent discretion to negotiate or waive factual admissions in future settlements.
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