What a government settlement means
- Civil settlement wording (DOJ example)
- "The claims resolved by the settlement are allegations only and there has been no determination of liability" 1
- Settlement talks as evidence
- Not admissible to prove or disprove the validity or amount of a disputed claim, with exceptions 6
- DPA and NPA status
- Described by the Justice Manual as an "important middle ground" between declining prosecution and conviction 5
- Guilty plea
- Court must find a factual basis before entering judgment 3
- UK DPA statement of facts
- Treated as a formal admission in later criminal proceedings for the offence 8
Four kinds of resolution
Government enforcement cases end in several ways. Each carries a different meaning for admission. A civil settlement resolves a claim for money. A deferred or non-prosecution agreement resolves a criminal investigation of a company without a conviction at that stage. A plea agreement leads to a conviction. An SEC settled order or consent judgment resolves a civil securities case 5,3 4.
The U.S. Justice Manual says non-prosecution and deferred prosecution agreements "occupy an important middle ground" between declining prosecution and securing a conviction 5. It says that absent exceptional circumstances, corporate criminal resolution agreements will be published on the Department's website 5.
| Resolution | Conviction? | Admission of facts? | Main rule |
|---|---|---|---|
| Civil settlement (for example False Claims Act) | No 1 | Release can say allegations only, no determination of liability 1 | 31 U.S.C. 3729 9 |
| Deferred prosecution agreement | No conviction at that stage 5 | Can include facts the company admits in court documents 2 | Justice Manual 9-28.000 5 |
| Guilty plea | Yes, once the court accepts the plea 3 | Court must find a factual basis 3 | Federal Rule of Criminal Procedure 11 3 |
| SEC settlement | No 4 | SEC does not require admissions as a rule 4 | 17 CFR 202.5, paragraph (e) rescinded in 2026 7 |
Civil settlements: allegations only
The False Claims Act makes a person liable for a civil penalty plus three times the government's damages 9. In a release dated 24 January 2025 on a US$59,746,277 settlement, the Department wrote: "The claims resolved by the settlement are allegations only and there has been no determination of liability." 1
Federal Rule of Evidence 408 bars use of settlement offers and statements made in settlement talks to prove or disprove the validity or amount of a disputed claim 6. The rule has an exception for statements offered in a criminal case where the talks related to a claim by a public office acting in its regulatory, investigative or enforcement role 6.
Criminal resolutions: admitted facts and pleas
A deferred prosecution agreement is a criminal resolution. In its 7 January 2021 release on a deferred prosecution agreement, the Justice Department wrote that Boeing "admitted in court documents" certain facts about its dealings with the Federal Aviation Administration 2.
A guilty plea is a conviction once accepted. Rule 11 says that before entering judgment on a guilty plea, "the court must determine that there is a factual basis for the plea" 3. A plea of nolo contendere needs the court's consent 3.
SEC settlements after May 2026
From 1972 the SEC had a policy that a defendant or respondent could not consent to a judgment or order imposing a sanction and at the same time deny the allegations in the complaint 7. The Commission rescinded that policy, codified at Rule 202.5(e), on 18 May 2026 4. The rule change took effect on 21 May 2026 7.
The SEC said the change does not affect its discretion to settle with defendants who decline to admit facts or liability, or to negotiate for admissions 4. It said it will not seek to reopen a settled case over a breach of an existing no-deny provision 4.
UK deferred prosecution agreements
In England and Wales, a deferred prosecution agreement must contain a statement of facts 8. Once the court approves the agreement, the statement of facts is treated as a formal admission by the company in later criminal proceedings for the offence 8. The DPA Code of Practice says formal admissions of guilt are not required, but the company must admit the contents and meaning of key documents 10.
Common questions
Is a settlement a finding of guilt?
No. A civil settlement is not a conviction. The Justice Department release on a 24 January 2025 civil settlement, for example, says the claims are allegations only and there has been no determination of liability 1.
Does a deferred prosecution agreement mean the company admitted wrongdoing?
It depends on the agreement. Some include facts the company admits in court documents, as in the Justice Department's 7 January 2021 Boeing release 2. Read the statement of facts in the agreement 5.
Can a company deny SEC allegations after settling?
The SEC rescinded its no-deny policy on 18 May 2026 and said it will not reopen settled cases over breaches of existing no-deny provisions 4.
Can settlement talks be used as evidence?
Under Federal Rule of Evidence 408, they cannot be used to prove or disprove the validity or amount of a disputed claim, subject to stated exceptions 6.
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. Department of Justice, Office of Public Affairs: press release on Pfizer False Claims Act settlement (24 January 2025)
- U.S. Department of Justice, Office of Public Affairs: press release 21-17 on Boeing deferred prosecution agreement (7 January 2021)
- Legal Information Institute, Cornell Law School: Federal Rules of Criminal Procedure, Rule 11, Pleas
- 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. Department of Justice: Justice Manual 9-28.000, Principles of Federal Prosecution of Business Organizations (page modified 22 January 2026)
- Legal Information Institute, Cornell Law School: Federal Rules of Evidence, Rule 408, Compromise Offers and Negotiations
- U.S. Securities and Exchange Commission: final rule, Release No. 33-11417 (18 May 2026, effective 21 May 2026)
- legislation.gov.uk: Crime and Courts Act 2013, Schedule 17, Deferred prosecution agreements
- Legal Information Institute, Cornell Law School: 31 U.S. Code 3729, False claims
- Crown Prosecution Service and Serious Fraud Office: Deferred Prosecution Agreements Code of Practice (version dated 11 February 2014)
Related
- False Claims Act settlements explained
How the U.S. False Claims Act works, treble damages, qui tam whistleblower suits, relator shares, and what a DOJ FCA settlement says about liability.
- Deferred and non-prosecution agreements explained
How U.S. deferred prosecution agreements and non-prosecution agreements work for companies, the Justice Manual factors, and what the company admits.
- SEC settlements: neither admit nor deny
What an SEC settlement without admissions means, the 1972 no-deny policy in 17 CFR 202.5(e), and its rescission by the SEC on 18 May 2026.
- Plea agreements and settlements compared
The difference between a guilty plea, a deferred prosecution agreement and a civil settlement in U.S. cases, with Rule 11 and Justice Manual rules.
- UK deferred prosecution agreements explained
How DPAs work in England and Wales under Schedule 17 of the Crime and Courts Act 2013: who can enter one, court approval, terms, breach and admissions.