WASHINGTON, May 18, 2026 — The U.S. Securities and Exchange Commission said Monday it had rescinded a decades-old policy requiring defendants settling enforcement actions to agree not to publicly deny the agency’s allegations, marking a notable shift in the SEC’s enforcement framework.
In a statement, the SEC said it had rescinded Rule 202.5(e) of its informal rules of procedure, which previously conditioned settlements in certain enforcement actions on defendants agreeing not to publicly dispute allegations contained in SEC complaints or administrative orders.
The SEC said the change aligns the agency with “the overwhelming majority of federal agencies” that do not maintain similar restrictions and gives the Commission greater flexibility in resolving enforcement matters. The agency added that the policy may have created “an incorrect impression that the Commission is trying to shield itself from criticism.”
“For more than 50 years, the Commission has conditioned settlement on a defendant’s promise not to publicly deny the Commission’s allegations,” SEC Chairman Paul S. Atkins said in the statement. “Speech critical of the government is an important part of the American tradition. This rescission ends the policy prohibiting such criticism by settling defendants.”
Settlement framework and enforcement flexibility
The SEC said rescinding the policy could help conserve enforcement resources, provide greater certainty in negotiated resolutions, and potentially accelerate the return of funds to harmed investors.
According to the agency, there is no known instance in which the SEC sought to reopen a proceeding solely because a settling defendant violated a no-deny provision.
The Commission also said it will not enforce existing no-deny provisions included in prior settlement agreements. In cases involving future breaches of those provisions, the SEC said it would not seek to vacate settlements or reopen adjudicatory proceedings on that basis.
The policy change does not alter the SEC’s broader settlement practices regarding admissions of liability. The agency said it retains discretion to settle cases without admissions, as well as discretion to negotiate admissions as part of settlements.
Implications for enforcement oversight
The rescission represents a procedural change in the SEC’s enforcement approach, including in areas where negotiated settlements have played a central role in regulatory oversight.
Digital asset enforcement actions have been among the SEC’s most publicly scrutinized enforcement matters in recent years, with market participants, legal practitioners, and industry groups frequently debating the agency’s use of litigation and settlement mechanisms.
The SEC did not reference digital assets in Monday’s announcement.
