May 21, 2026regulatory actionfinancial regulationsecurities lawenforcement policyinvestor protectionfinancial regulationderegulationcivil liberties
SEC Rescinds 54-Year No-Deny Settlement Rule
On May 21, 2026, the SEC rescinded Rule 202.5(e), a 1972 policy requiring defendants settling enforcement actions to agree not to publicly deny the agency's allegations. SEC Chair Paul Atkins acted without public notice-and-comment, invoking the APA's procedural-rule exemption, and announced the Commission would not enforce existing no-deny provisions in past settlements. Investor advocates warned the change would confuse retail investors who rely on enforcement records to evaluate misconduct; libertarian group NCLA called it a First Amendment victory after an eight-year legal campaign.
Sources
Federal Register: Rescission of Policy Regarding Denials in Settlements of Enforcement ActionsSEC Press Release 2026-45: Rescinds Policy on Denials in SettlementsSullivan and Cromwell: SEC Rescinds No-Deny Settlement RequirementNCLA: SEC Caves to Eight-Year Legal Campaign, Rescinds Unlawful Gag RuleBetter Markets: The SEC Is Demolishing Investor Protection