BUSINESS

SEC Policy Change: Agency To Require Companies To Admit Wrongdoing In Some Settlements

01/06/2012 03:08 pm 15:08:00 | Updated Mar 07, 2012

By Sarah N. Lynch

WASHINGTON (Reuters) - U.S. securities regulators will no longer let companies settle civil cases without admitting or denying the charges if they have already admitted to wrongdoing in parallel criminal cases.

The policy change, announced by Securities and Exchange Commission Enforcement Director Robert Khuzami, comes just over a month after a federal judge in New York rejected a proposed $285 million settlement between the SEC and Citigroup on the grounds that the bank had not admitted to wrongdoing. In that case, no parallel criminal charges have been filed.

Khuzami said the SEC's new policy only applies in limited circumstances where defendants have already admitted to misconduct in parallel criminal cases. (Reporting By Sarah N. Lynch; editing by John Wallace)

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