The U.S. Securities & Exchange Commission issued a final rule ending its longstanding requirement that parties settling enforcement actions with sanctions agree not to publicly deny the allegations. The rescission of Rule 202.5(e) also means the Commission will not enforce no-deny provisions already included in existing settlements and will not seek to vacate settled cases or reopen administrative proceedings if those provisions are breached. The Commission said the policy's public interest benefit had proved limited because its only practical remedy was to try to reopen a settled matter, and there is no known instance of it doing so. It also cited the difficulty of applying no-deny language to modern communications, alignment with most federal agencies that do not use a similar rule, and greater flexibility to reach settlements that conserve resources, provide certainty, and may speed the return of money to injured investors. The change does not alter the Commission's general practice of not requiring admissions in settlements or its discretion to negotiate admissions where appropriate, and the rule is set to take effect upon publication in the Federal Register.
U.S. Securities & Exchange Commission2026-05-18
U.S. Securities & Exchange Commission rescinds no-deny settlement rule and will not enforce existing provisions
The U.S. Securities & Exchange Commission has rescinded Rule 202.5(e), ending its requirement that parties settling enforcement actions with sanctions agree not to publicly deny the allegations. The Commission will not enforce existing no-deny provisions or reopen settled cases for breaches, and said the change aligns its practice with other federal agencies and supports more flexible, resource-efficient settlements without altering its general approach to admissions.