A Major Change In SEC Enforcement Settlements: SEC Rescinds ‘No-Deny’ Policy

On May 18, 2026, the Securities and Exchange Commission (SEC) announced that it had rescinded its longstanding “no-deny” (gag) settlement policy, codified in Rule 202.5(e) of its informal rules of procedure. For more than 50 years, the SEC would not settle an enforcement action involving a sanction unless the respondent agreed not to deny the Commission’s allegations publicly. The SEC’s action removes that condition and gives the Commission greater flexibility to resolve enforcement matters without requiring settling parties to remain silent about disputed allegations.

For broker-dealers and registered investment advisers, this is a major improvement. The prior policy often placed firms and associated persons in the difficult position of resolving an enforcement matter without admitting liability, while also agreeing not to deny the allegations publicly. The SEC’s rescission of the policy should give regulated entities more room to manage reputational, investor-relations, employment,