Regulatory: SEC modifies settlement language for cases involving criminal convictions

Agency will no longer employ traditional “neither admit nor deny” approach

The Securities and Exchange Commission (SEC) announced on Jan. 6 that it would no longer allow a defendant to “neither admit nor deny” the allegations raised against it by the SEC when the defendant has already admitted to, or been convicted of, criminal violations stemming from the same conduct. Although the shift reflects a change to the SEC’s longstanding policy of using this language to facilitate settlement, the revision will only apply to the minority of its cases in which there is either a parallel criminal conviction (by plea or verdict) or an agreement with criminal authorities to defer prosecution or to not prosecute as part of a settlement (NPA/DPA).

Robert Khuzami, Director of Enforcement at the SEC, summarized the Commission’s new position:

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Lisa Noller

Lisa M. Noller is a partner and member of the Government Enforcement, Compliance & White Collar Defense; Business Litigation & Dispute Resolution and Securities Enforcement...

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