For more than fifty years, a necessary feature of U.S. Securities and Exchange Commission (SEC or the Commission) enforcement settlements was a simple but controversial condition: defendants could virtually always settle without admitting wrongdoing, but they could not publicly deny the SEC’s allegations afterward. Critics long referred to the policy as the SEC’s “gag rule.”
That era has now ended.
On May 18, 2026, the SEC formally rescinded Rule 202.5(e), the agency policy that prohibited settling defendants who agreed to a sanction from publicly denying the allegations underlying SEC enforcement actions.1 The decision marks one of the more consequential changes to SEC settlement practice in decades.
