Originally published in Risk Managment Magazine (April
2012)
A new SEC policy regarding admission of allegations could raise
important issues for D&O liability policyholders.
On January 6, 2012, the Securities and Exchange Commission
announced a change in a policy that had previously permitted
companies and their directors and officers to "neither admit
or deny" allegations as part of any SEC settlement,
notwithstanding any prior admissions in a criminal investigation or
prosecution. The change raises important considerations for D&O
liability policyholders.
New Policy Extends to Additional
Admissions
According to SEC enforcement director Robert Khuzami, the SEC,
reversing long-standing policy, will no longer permit companies or
individuals to "neither admit or deny" allegations that
have formed the basis of a conviction or have been admitted to in
parallel criminal investigations or proceedings. The SEC's new
policy is not limited to cases in which there has
