For over five decades, individuals facing an SEC enforcement action faced the tough question when deciding whether to settle: avoid the cost, expense and negative publicity of a trial, or accept a settlement on a neither admit nor deny basis, but with the requirement that you could not publicly deny the SEC’s allegations. In essence, you had to agree to a “gag rule” as provided for in the Commission’s Rule 202.5(e).
That has now changed. On May 18, 2026, SEC Chairman Paul S. Atkins publicly announced the immediate rescission of the “no-deny” policy, reasoning that speech critical of the government, including the SEC, is a core American value. In essence, a freedom of speech basis.
Understanding the implications of this new policy is potentially important and requires the guidance of an experienced SEC defense lawyer.
What Exactly Has Changed? The Freedom to Publicly Deny Post-Settlement
Historically, SEC settlements were approved on a “neither admit nor deny” basis. This meant that while you didn’t have to admit liability, you could not, however, deny or tend to deny the allegations of wrongdoing levelled against you in a public forum, such as issuing a press release, speaking with the media or communicating with investors.
The new policy has two immediate, practical effects:
- The Gag Rule is Eliminated Going Forward: This means defendants can resolve enforcement actions while openly, publicly and loudly maintaining that the agency’s allegations are false, exaggerated and/or simply untrue in whole or in part.
- The Change is Retroactive: The Commission stated it will no longer enforce existing “no-deny” clauses in prior settlements. This means that if you settled a SEC case years ago, you are no longer legally bound to remain silent — you can now publicly deny the SEC’s claims.
Even though You Can Now Publicly Deny: Should You?
Although you now have the right to publicly deny, the strategic question is: should you? A reckless, public denial can cause unforeseen negative consequences, including inadvertently making an implicit admission(s) as to the allegations you did not deny, or by unwittingly providing third parties, like plaintiff counsel, ammunition it may weaponize against you for future litigation. These material risks must be weighed against the perhaps minimal benefits from denying allegations that may be years old, which may serve only to breathe life back into a SEC case long, and perhaps best, forgotten.
Why Immediate Guidance from an SEC Subpoena Lawyer is Critical
The absolute worst time to start thinking about settlement strategy is after you have already potentially compromised your position during an investigation. The moment you receive an SEC subpoena; the clock begins ticking.
An experienced SEC subpoena lawyer knows how to strategically navigate you through the complex investigatory process, how to effectively communicate with the SEC as your advocate, while providing critical advice on how to respond to subpoenas, how to prepare for SEC testimony, and how to objectively assess potential legal exposure to formulate a defense designed to avoid you being charged.
Put a Former SEC Prosecutor’s Inside Knowledge to Work for You
When your profession, financial standing, and public reputation are squarely on the line, you cannot and should not rely on a general practice lawyer who handles securities cases only on occasion.
As a former SEC Enforcement Division Senior Counsel, David R. Chase spent several years inside the SEC in Miami conducting investigations and negotiating complex settlements. He possesses the precise institutional insight needed to anticipate the staff’s investigative tactics, settlement negotiation techniques, and prosecutorial decision-making. He will protect your rights and financial, reputational, and professional interests.
If you are facing an active investigation or have received a subpoena, contact David R. Chase, P.A. today at 800-760-0912 for a confidential consultation.
