On Thursday, the Washington Post reported that the SEC is considering including detailed findings from investigations in its settlement agreements. Currently, companies and executives that reach settlement agreements with the SEC must pay fines and agree to other penalties, but are not required to admit to any wrongdoing.
The Washington Post reports that this idea comes on the heels of harsh criticism regarding the agency’s handling of the Bank of America settlement. Enforcement Director Rob Khuzami told the Washington Post that “[t]ypically our practice has been not to file in-depth factual findings of the investigation. We’re taking a look at the practice and deciding whether it makes sense to provide a more fulsome record” in an effort to be more transparent.
Some supporters of the idea such as Columbia University law professor John Coffee say that the current SEC settlement document is an “artifact” as “the SEC is premised on the idea that sunlight is the best disinfectant, and a nontransparent settlement harms the SEC’s reputation.”
Some lawyers like Russell G. Ryan of King & Spalding say, however, that inserting more details in settlements might make companies more reluctant to agree to a settlement.