SEC Ends Longstanding Rule Requiring Defendants to Accept Enforcement Allegations
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Table of Contents
The Securities and Exchange Commission is formally removing a rule from 1972 that required people settling SEC enforcement cases to agree not to publicly deny the allegations against them. The agency is repealing Rule 202.5(e) of its informal procedures.
Why it matters: This is a procedural shift in how the SEC negotiates settlements. It removes a standard bargaining position that has been in place for over fifty years. Defendants will have more leverage to walk away from settlements or push back on allegations without losing the ability to settle. The change does not alter the SEC’s legal authority to investigate or bring cases, nor does it change the standard of proof required in court. It simply changes the terms the agency is willing to accept when closing a case without a trial.
Who it affects
- Defendants and their legal counsel in SEC enforcement settlements
This final rule was published by the Securities and Exchange Commission in the Federal Register; you should review the full text before relying on it for legal or compliance decisions.
Agency: Securities and Exchange Commission
Source: Federal Register — read the official document