For decades, the Securities and Exchange Commission has allowed companies and individuals to make settlements without admitting any wrongdoing. Even a company committing an egregious sin that cost investors millions of dollars could walk away from the proceedings without ever acknowledging its role.
But in mid-2013 the agency declared that it was doing an about-face.
“Heightened accountability or acceptance of responsibility through the defendant’s admission of misconduct may be appropriate, even if it does not allow us to achieve a prompt resolution,” Andrew Ceresney, the S.E.C.’s head of enforcement, said in a June 2013 email to his lieutenants.
The program represented a seismic shift in approach, but in practice it is still in its early stages. After two years, the S.E.C. has generated admissions of culpability in 18 different cases involving 19 companies and 10 individuals. Given the hundreds of settlements struck by the S.E.C. over this time, it is clear that most of the time defendants are still being allowed to settle without admitting to or denying the agency’s allegations.