SEC settlements: neither admit nor deny
- Former rule
- 17 CFR 202.5(e), the no-deny policy, first published in 1972 at 37 Fed. Reg. 25224 2
- Rescission announced
- 18 May 2026, SEC press release 2026-45 1
- Effective date
- 21 May 2026 2
- Release numbers
- 33-11417, 34-105504, IC-6965, IA-36158 2
- Admissions
- "There is no rule equivalent to Rule 202.5(e) regarding admissions" 2
The 1972 policy
The SEC's final rule release of 18 May 2026 describes the 1972 policy as a "policy not to permit a defendant or respondent to consent to a judgment or order that imposes a sanction" and at the same time deny the allegations in the complaint 2. The SEC press release said that under the policy, a settlement with a sanction required the defendant or respondent to agree not to deny the allegations in public 1.
The policy sat in Rule 202.5(e) of the SEC's informal rules of procedure 1. Settling parties agreed not to admit the allegations and not to deny them in public. The page title uses the common shorthand for that pairing.
The 2026 rescission
The Commission announced the rescission on 18 May 2026 in press release 2026-45 1. The final rule took effect on 21 May 2026 2. The electronic Code of Federal Regulations, up to date as of 14 October 2026, shows 17 CFR 202.5(e) as "[Reserved]" 3.
SEC Chairman Paul S. Atkins said: "I am pleased that we are rescinding the no-deny policy today." He added: "Speech critical of the government is an important part of the American tradition." 1
Commissioner Hester M. Peirce said in a statement the same day that ending the policy "does not mean that the Commission will stop resolving cases through settlement" 4. She said "the public now will be able to assess the Commission's case in light of a defendant's denials" 4.
What changed and what did not
| Question | Position stated by the SEC |
|---|---|
| Must a settling defendant agree not to deny? 1 | No, the requirement was rescinded 1 |
| Must a settling defendant admit? 1 | Not as a rule. The SEC said it does not require settling defendants to admit allegations as a rule 1 |
| Can the SEC still negotiate for admissions? 1 | Yes, the rescission does not affect its discretion to settle with defendants who decline to admit facts or liability, or to negotiate for admissions 1 |
| What about old settlements with no-deny clauses? 2 | The SEC "will not seek or attempt to reopen an otherwise settled case" over a breach 2 |
| Parallel criminal matters 2 | The SEC may continue to address admissions and denials in settlement agreements for consistency 2 |
How to describe these settlements
An SEC settlement without admissions is not a finding of liability by a court after trial and not an admission. Quote the order or consent judgment. Where the SEC press release or order says the defendant did not admit or deny the findings, say that. Where the settlement contains admissions, quote them 1.
Staff may discuss with persons involved the disposition of matters by consent, by settlement, or in some other manner, under 17 CFR 202.5(f) 3.
Where to read SEC settlements
The SEC's Litigation Releases page lists "litigation releases concerning civil actions brought by the Commission in federal court" 5. It held 12,003 items going back to 1995 when checked for this page 5. It can be filtered by year and month and searched by text 5. Settled administrative orders sit on a separate Administrative Proceedings page linked from the same section 5.
Common questions
Does neither admit nor deny mean the company is guilty?
No. It means the company settled without admitting the allegations 1. An SEC civil settlement is not a criminal conviction.
Can a company now deny SEC allegations after settling?
The SEC rescinded its no-deny policy effective 21 May 2026 and said it will not reopen settled cases over breaches of existing no-deny clauses 2.
Is 17 CFR 202.5(e) still in force?
No. The eCFR, up to date as of 14 October 2026, shows paragraph (e) as reserved 3.
Does the SEC ever require admissions?
It said the rescission does not affect its discretion to negotiate for admissions 1.
Rules and fees change. Check the official site linked above before you apply or pay. Spotted an error? Email hello@settlementsexplained.org with the official link.
Sources
- U.S. Securities and Exchange Commission: press release 2026-45, SEC Rescinds Policy Regarding Denials of Settlements in Enforcement Actions (18 May 2026)
- U.S. Securities and Exchange Commission: final rule, Release No. 33-11417 (18 May 2026, effective 21 May 2026)
- Electronic Code of Federal Regulations: 17 CFR 202.5, Enforcement activities (up to date as of 14 October 2026)
- U.S. Securities and Exchange Commission: Commissioner Hester M. Peirce statement, Somewhere Between Cacophony and Euphony (18 May 2026)
- U.S. Securities and Exchange Commission: Litigation Releases
Related
- What a government settlement means
What civil settlements, DPAs, NPAs, plea agreements and SEC orders say about admission of liability or guilt, with the rules that govern each.
- FCPA resolutions explained
How U.S. Foreign Corrupt Practices Act cases end: declinations, NPAs, DPAs, guilty pleas and SEC actions, with the statute, penalties and DOJ policy.
- How to find a Justice Department settlement
Where to find official DOJ press releases, resolution agreements, court filings on PACER and SEC litigation releases, and what to check in each.
- Goldman Sachs 1MDB FCPA resolution (2020)
In October 2020 Goldman Sachs entered a DPA and its Malaysian unit pleaded guilty over 1MDB. Amounts, charges and admissions from DOJ, SEC and Fed records.