We have posted on the saga of Judge Rakoff’s criticism of the SEC’s settlement with Citigroup (see here, here and here). One of Judge Rakoff’s problems with the SEC’s handling of settlements - detailed in his November, 2011 opinion - is that the agency has not required admissions of guilt.
Yesterday, several news outlets reported on statements concerning an apparent shift in SEC policy that SEC Chairman Mary Jo White made at a Wall Street Journal CFO Network conference. From the Washington Post:
SEC Chairman Mary Jo White had signaled at a recent hearing that she was reviewing the neither-admit-nor-deny policy, which has been harshly criticized by some judges. On Tuesday, White said some misconduct warrants wringing out an admission.
“We are going to, in certain cases, be seeking admissions going forward,” White said at a Wall Street Journal CFO Network conference. “Public accountability in particular kinds of cases can be quite important, and if you don’t get them, you litigate them.”
Bloomberg Businessweek reported that the SEC’s co-directors of enforcement, Andrew J. Ceresney and George S. Canellos, outlined the decision in a letter sent to SEC staff June 17. Bloomberg reports that the letter states:
“We recognize that insisting upon admissions in certain cases could delay the resolution of cases, and that many cases will not fit the criteria for admissions,” Ceresney and Canellos wrote. “For these reasons, no-admit-no-deny settlements will continue to serve an important role in our mission and most cases will continue to be resolved on that basis.”
Thus, it appears no-admit-no-deny settlements will still be used, and it should be interesting to see what “certain cases” the SEC has in mind for its new policy.