The SEC and the courts may need an additional tool for a limited number of these high-profile cases: a two-stage settlement. The first stage would be the same as the current no admission settlement. Such a settlement would be conditioned on the defendant preparing an additional report that would make admissions and describe precisely how the breach of law occurred, set forth how the law applied to its conduct and admit culpability. If the SEC or the court were not satisfied with this report, the settlement would be terminated and the SEC would go ahead with litigation. To make this work, there would need to be a statute that said the report would not be admissible in private litigation.
‘Enforcement 40’ for 2020
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