A Change to Neither Admit nor Deny

The WSJ reported that the SEC has changed its policy of settling cases where defendants neither "admit nor deny" the alleged facts.  The Agency will not permit the practice where "the companies admit to or are convicted of criminal wrongdoing." 

Despite the timing, consideration of the policy change looks to have commenced before the current fracas over the Citigroup decision.  The Journal reported that the policy change came "after a review by senior enforcement staff last spring and separate discussions with commissioners 'over the last several months.'"

The change is a common sense one and will not affect a large number of cases.  Nonetheless, it does show that review of the practice resulted in a more nuanced application.  The Citigroup decision could have encouraged this type of analysis.  Unfortunately, by focusing on elimination of the practice rather than more nuance in application, this encouragement did not occur.