The Future Of Admitting When Settling SEC Enforcement Actions: Some Initial Considerations

Whether the Securities and Exchange Commission ("SEC") should continue its longstanding policy of permitting enforcement action defendants to settle by "neither admitting nor denying" the SEC allegations is currently a matter of much debate. The SEC's new chairman, Mary Jo White, has now voiced her view that a shift in the SEC's policy is likely. It seems that in the future, the SEC will require some defendants to admit civil securities law violations. Chair White has reportedly stated that, while most cases will still be eligible to settle on a neither admit nor deny basis, there will be a reconsideration of the policy as applied to cases that are especially egregious, intentional, or result in significant investor harm. Since the SEC already carved out from the neither admit nor deny policy those defendants who admit certain facts as part of a guilty plea in a criminal case, presumably the new policy will encompass enforcement cases beyond those with parallel criminal