Tuesday, 9 February 2016
Last updated 34 min ago
Jun 20 2013 | 11:25am ET
Facing criticism for allowing defendants to settle without admitting wrongdoing, the Securities and Exchange Commission will limit the practice.
New SEC Chairman Mary Jo White said that some companies and individuals will have to accept liability in "cases where… it's very important to have that public acknowledgement." Most defendants will still be allowed to settle without admitting or denying guilt.
White said that decisions would be made on a "case-by-case" basis, and defended the SEC's standard practice, saying it would always "be a major tool in the arsenal and that the SEC "won't let" the new policy delay enforcement efforts.
While the practice has been derided, the SEC said it allows it to resolve cases more quickly and cheaply. But it has been moving to limit the practice, last year instituting a rule that bars defendants who have already admitted guilt in criminal proceedings from using the boilerplate.
Those defendants denied the "without admitting or denying" formula will now have the choice of accepting liability, or fighting the SEC's allegations in court.