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Admitting Guilt: The Significance of the SEC’s Guilt Admission Policy Shift  


Author:  R. Daniel  O’Connor.; Steven S.  Goldschmidt.; Daniel V.  McCaughey.


Source: Volume 27, Number 03, January/February 2014 , pp.23-29(7)




Journal of Taxation and Regulation of Financial Institutions

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Abstract: 

For over 40 years, the Securities and Exchange Commission (SEC) has historically settled enforcement actions while allowing respondents to neither admit nor deny the SEC’s factual allegations. That practice changed with the recent announcement that the SEC will require certain respondents to admit wrongdoing as a condition of settling enforcement cases. This article considers the impact of this policy change; examines potential application of the policy by other regulators, including the Commodity Futures Trading Commission; and analyzes some of the early applications of the policy.

Keywords: civil enforcement actions; admitting liability; SEC v. Bank of Am. Corp.; SEC v. Vitesse Semiconductor Corp.; SEC v. Citigroup Global Mkts. Inc.; Falcone/Harbinger Settlement; JP Morgan Settlement

Affiliations:  1: Ropes & Gray; 2: Ropes & Gray; 3: Ropes & Gray.

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