Media Coverage
Source: Inside Counsel
Media Coverage
08.08.13
The Securities and Exchange Commission announced that the agency would start requiring the settling party to make admissions of wrongdoing in certain cases where it would be in the public interest. In several recent cases, the SEC has been criticized for its “no admit, no deny” settlement policy.
Most famously, in November 2011, Southern District of New York Judge Jed Rakoff rejected the SEC’s proposed $285 million settlement of an enforcement action against Citigroup for allegations of negligent misrepresentation. Rakoff argued that the court could not determine whether the settlement meets the criteria of being fair, reasonable, adequate and in the public interest due to lack of information. Both the SEC and Citigroup appealed the decision, and in March 2012 the Second Circuit issued a stay of the district court proceedings.
Marc Axelbaum, a partner in Pillsbury’s litigation practice in San Francisco, commented, “It would be ironic if in the end the 2nd Circuit reverses Judge Rakoff and then we’re left with this policy at the SEC that, at least in certain cases, would require exactly what Judge Rakoff wanted.”