The Securities and Exchange Commission has changed the language it will use in settlement agreements, eliminating the familiar “neither admit nor deny” that has shielded many a firm from civil lawsuits. But the change will only apply to defendants whose guilt has already been established in a criminal proceeding, where a higher standard of proof is required than in civil courts. This development, not coincidentally, follows Federal District Court Judge Jed Rakoff’s rejection of a $285 million settlement between the SEC and Citigroup on a mortgage fraud matter. Judge Rakoff said the “neither admit nor deny” language leaves him without a way to gauge fairness. He also called the $285 million “pocket change.” Read CNBC report here.
