U.S. Securities and Exchange Commission Ends Longstanding Gag Rule in Settlements

The U.S. Securities and Exchange Commission (U.S. markets regulator) said Monday it rescinded a decades-old policy that had barred settlement defendants from publicly denying the agency’s allegations.

Summary

The U.S. Securities and Exchange Commission (U.S. markets regulator) has repealed a long-standing settlement policy that prevented defendants in enforcement cases from publicly denying the agency’s allegations. According to the regulator’s Monday statement, the change removes a rule that had shaped how SEC settlements were handled for decades. The move affects the agency’s enforcement framework by allowing settling parties to contest allegations in public after agreeing to resolve cases, marking a notable procedural shift in U.S. securities regulation.

Terms & Concepts
  • Enforcement settlement: A legal resolution in which a regulator and a defendant agree to settle alleged violations without going through a full court trial.
  • Securities and Exchange Commission: The main U.S. regulator overseeing securities markets, public companies, and many investment-related enforcement actions.