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The Securities and Exchange Commission (“SEC”) prevails in the second circuit in defending its no-admission settlement policy

Terence Healy (Partner based at Locke Lord LLP, Washington, DC, USA)
Amy J. Greer (Partner based at Morgan Lewis & Bockius LLP, New York, New York, USA)
Daniel Z. Herbst (Associate based at Reed Smith LLP, Washington, DC, USA)

Journal of Investment Compliance

ISSN: 1528-5812

Article publication date: 28 October 2014

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Abstract

Purpose

To explain the impact of a recent decision by the USA Court of Appeals for the Second Circuit on the SEC’s “neither admit nor deny” practice on SEC enforcement matters after the practice was called into question by a federal district court judge.

Design/methodology/approach

Explains the background on the practice of no-admission, the challenge by Judge Rakoff to the practice, and the ruling of the Second Circuit and its practical approach on enforcement matters.

Findings

The ruling should resolve much of the uncertainty that has surrounded court approval of SEC settlements since Judge Rakoff’s decision to question the practice of no-admit or deny settlements. However, recent comments from SEC Chair Mary Jo White and Senior Enforcement Staff suggest that the SEC may continue to seek admissions in certain cases.

Originality/value

Practical guidance from experienced securities and financial services lawyers.

Keywords

Acknowledgements

© 2014 Reed Smith LLP

Citation

Healy, T., J. Greer, A. and Z. Herbst, D. (2014), "The Securities and Exchange Commission (“SEC”) prevails in the second circuit in defending its no-admission settlement policy", Journal of Investment Compliance, Vol. 15 No. 4, pp. 41-43. https://doi.org/10.1108/JOIC-09-2014-0039

Publisher

:

Emerald Group Publishing Limited

Copyright © 2014, Authors