pc
nid 92606
May 18, 2026
ggallwey@vixio.com
US Track 3
U.S. Securities and Exchange Commission
financial services
100% of draft length
draft in Generated
Generated
1752 charsU.S. Securities and Exchange Commission Rescinds No-Deny Settlement Policy
On May 18, 2026, the U.S. Securities and Exchange Commission (SEC) rescinded Rule 202.5(e) of its informal rules of procedures, which previously required defendants and respondents in settled enforcement actions to agree not to publicly deny the agency's allegations.
The policy change allows the SEC to settle enforcement actions without imposing restrictions on defendants' ability to publicly dispute the Commission's allegations. SEC Chairman Paul S. Atkins said the rescission "ends the policy prohibiting such criticism by settling defendants," noting that speech critical of the government is an important part of the American tradition. The SEC's previous no-deny requirement had been in place for more than 50 years.
The rescission aligns the SEC with the overwhelming majority of federal agencies, which do not maintain similar policies. The Commission determined that the effect on the public interest from public denials may be minimal and that the policy itself may have created an incorrect impression that the SEC was attempting to shield itself from criticism. The change provides the SEC greater flexibility in settling enforcement actions, which the agency said conserves resources, provides certainty, and potentially expedites the return of money to injured investors.
The SEC will not enforce existing no-deny provisions that have already been entered into settlement agreements. In the event of a breach of an existing no-deny provision, the Commission will take no action to ask a district court to vacate a settlement or to reopen an adjudicatory proceeding. The rescission does not affect the SEC's practice related to admissions in settlements or its discretion to negotiate for admissions as part of settlement agreements.
Agent draft
Not run yet.
Published
1746 charsU.S. Securities and Exchange Commission Rescinds No-Deny Settlement Policy
On May 18, 2026, the U.S. Securities and Exchange Commission (SEC) adopted a final rule removes paragraph (e) of Section 202.5 of Title 17 of the Code of Federal Regulations , formally eliminating the agency’s longstanding “no-deny” settlement policy in enforcement actions.
Since 1972, Rule 202.5(e) required defendants settling SEC enforcement actions involving sanctions to agree not to publicly deny the allegations contained in the complaint or administrative order. The SEC stated that rescinding the rule would provide greater flexibility in negotiating settlements, reduce litigation burdens, conserve enforcement resources, and potentially accelerate the return of funds to harmed investors.
The SEC concluded that the public-interest benefits of the rule had proven limited because the Commission had never sought to reopen a case based on violations of a “no-deny” clause and acknowledged concerns that the policy could create the perception that the SEC was attempting to shield itself from criticism.
The final rule also confirms that the SEC will no longer enforce existing “no-deny” provisions contained in prior settlements and will not seek to reopen previously settled administrative or civil proceedings if settling parties later publicly deny the allegations.
The SEC emphasized that the rescission does not alter its broader settlement practices, including its discretion to require admissions in particular cases or negotiate admissions as part of settlements involving parallel criminal proceedings.
The SEC stated the rule was adopted without notice-and-comment procedures on the basis that it concerns agency policy and procedural rules. The rescission will become effective upon publication in the Federal Register.