SEC Outlines Admission Policy Change

Submitted by rkoreto on Mon, 01/09/2012 - 11:42

Everyone is familiar with the standard phrase in SEC enforcement language: a defendant was allow to neither "admit nor deny" wrongdoing. But a recent statement from SEC Enforcement Director Robert Khuzami says "we modified our settlement language for cases involving criminal convictions where a defendant has admitted violations of the criminal law…" Eliminated is language "that may be construed as inconsistent with admissions or findings that have already been made in the criminal cases."

 
In the past, he continued, a defendant could be found guilty of criminal conduct but still settle related SEC charges while neither admitting nor denying civil liability. He said it "seemed unnecessary for there to be a 'neither admit' provision in those cases where a defendant had been criminally convicted of conduct that formed the basis of a parallel civil enforcement proceeding."
 
Khuzami said the policy change applies to cases involving parallel criminal convictions or deferred or non-prosecution agreements (DPAs or NPAs) that include admissions or criminal conduct. Under the new policy, for those settlements, the SEC will delete the "neither admit nor deny" language from the settlement documents.

 

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