Document Type


Publication Title

Cardozo Journal of Conflict Resolution



Publication Date



SEC, Jed S. Rakoff, fraud, settlement


Over the past several years, the Securities and Exchange Commission (the “SEC”) has settled the vast majority of the cases it has brought. Some people have suggested, however, that settlements by public agencies such as the SEC should be scrutinized more closely. For instance, in a series of recent opinions, Judge Jed S. Rakoff of the Southern District of New York has “question[ed] the wisdom” of the SEC’s well-established practice of permitting defendants to enter into consent judgments while neither admitting nor denying the allegations. During the past two years, the SEC has implemented new policies that have altered its established settlement practices. On January 6, 2012, the SEC’s then Director of Enforcement, Robert Khuzami, announced that defendants who are found guilty or admit to wrongdoing in criminal cases may only settle parallel civil cases with the SEC if they agree to admit to the allegations in the charge. More significantly, on June 18, 2013, SEC Chair Mary Jo White announced a further alteration to the SEC’s settlement policy, stating that the SEC will require admissions in particularly severe cases in which a large number of investors had been defrauded and the fraud was egregious. This Article will examine the SEC’s revised settlement policy in the aftermath of Judge Rakoff’s concerns about the SEC’s longstanding “no admit, no deny” policy.