Overview
- The SEC rescinded Rule 202.5(e) on Monday, May 18, 2026, ending the long‑standing practice of requiring settling parties to agree not to publicly deny the agency’s allegations.
- The commission said it will not enforce existing no‑deny clauses or seek to reopen prior settlements because defendants breach those provisions.
- The rescission does not limit the SEC’s power to seek admissions of wrongdoing and the agency can still require admissions in particular cases.
- Lawyers, companies and investors now face a new settlement calculus: parties can settle for business reasons while publicly disputing allegations, which will complicate drafting, public relations and parallel civil or arbitration fights.
- The move follows interagency review and ongoing court challenges to the policy and has drawn mixed reactions from free‑speech advocates and investor‑protection groups as regulators such as FINRA consider whether to follow suit.