Overview
- The SEC, which rescinded Rule 202.5(e) on Monday, removed the requirement that defendants who settle must not deny its claims.
- The agency said it will not enforce no‑deny clauses in past settlements and will not ask courts to reopen or vacate old cases over public denials.
- Leaders said the reversal protects speech and improves transparency, noting that most other federal regulators do not use similar gag clauses.
- The commission kept the option to demand admissions of fact or liability in future deals, a shift that could change how companies negotiate and explain settlements to investors and employees.
- The move followed White House OIRA review and arrived as a Supreme Court challenge to the policy was pending, drawing praise from industry groups and concern from investor advocates.