On January 6, 2012, the SEC announced that it will no longer allow companies to "neither admit nor deny" charges in SEC civil settlements if they have admitted to or have been convicted of criminal conduct in parallel proceedings. This marks the first time that the SEC has modified its longstanding practice of allowing companies to settle civil proceedings with the SEC without admitting or denying wrongdoing. The change also comes on the heels of the Citigroup case where a federal district court judge rejected an SEC civil fraud settlement in part because the consent language stated that Citigroup neither admitted nor denied the SEC allegations.
SEC Enforcement Division Director Robert Khuzami, who announced the policy shift, noted that the change is "separate and unrelated to the recent ruling in the Citigroup case," which does not involve a criminal conviction. He also stressed that the modification will not affect the majority of the SEC's cases.