Second Circuit Upholds "Neither Admit Nor Deny"

On June 4, 2014, the United States Circuit Court for the Second Circuit endorsed the Securities and Exchange Commission's practice of settling enforcement cases on a "neither admit nor deny" basis. In its order issued in SEC v. Citigroup Global Markets, Inc., the Second Circuit vacated the decision of The United States District Court for the Southern District of New York, in which Judge Jed S. Rakoff refused to approve a negotiated consent decree between the SEC and Citigroup Global Markets, Inc. ("Citigroup").¹ The Second Circuit decision represents a win for both Citigroup and the SEC because it makes it easier for defendants to settle cases without an admission of liability and also affirms the SEC's longstanding practice of settling cases without admitting or denying the truthfulness of the allegations.