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On May 18, 2026, the SEC rescinded its long-standing policy that generally conditioned settlement of enforcement actions on a defendant or respondent’s agreement not to publicly deny the SEC’s allegations. The policy, codified in Rule 202.5(e) of the SEC's rules of informal procedure, had been in place since 1972, although most other federal agencies, including the DOJ, have not adopted comparable no-deny policies.
The practical effect is straightforward. The SEC may now settle enforcement actions without requiring a settling party to refrain from publicly denying the SEC's allegations or suggesting the allegations lack a factual basis. The SEC also stated that it will not enforce existing no-deny provisions in prior settlements or seek to reopen settled cases based on a breach of those provisions.
The change may provide flexibility in settlement negotiations and post-settlement communications. However, the SEC emphasized that the rescission does not affect its discretion to seek admissions in appropriate cases, including cases involving parallel criminal proceedings. Nor does it change the underlying settlement terms, sanctions, injunctions, undertakings, bars, or other remedies that may be imposed in an enforcement resolution.
Bottom line: The SEC has removed a settlement condition that has been criticized in recent years as unusually restrictive, potentially making settlement more attractive in some cases.
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