United

Rule

when

<p style="text-align: justify">You can also read this news on COINTURK NEWS: <a href="https://en.coin-turk.com/sec-official-criticizes-rule-barring-defendants-from-publicly-disputing-allegations/" data-wpel-link="internal">SEC Official Criticizes Rule Barring Defendants from Publicly Disputing Allegations</a><br></p>
<p class="p1" style="text-align: justify">A member of the United States Securities and Exchange Commission (<a href="https://en.coin-turk.com/the-importance-of-crypto-exchanges-to-the-global-economy-project-atlas/" data-wpel-link="internal">SEC</a>) is saying that a rule forbidding defendants from criticizing the agency’s allegations when resolving enforcement actions damages regulatory integrity and freedom of expression. This issue has especially caught the attention of many officials in recent times with the crypto cases handled by the SEC.</p> 
<h2 class="p1" style="text-align: justify" id="noteworthy-statements-from-an-sec-official">Noteworthy Statements from an SEC Official</h2> 
<p class="p1" style="text-align: justify">SEC Commissioner Hester Peirce expressed her opposition on January 30 to the rejection of a petition to change the agency’s 1972 gag rule. This rule prohibits defendants from denying or not admitting the SEC’s allegations after a settlement. Peirce shared the following statement:</p> 
<blockquote> 
 <p class="p1" style="text-align: justify">“The policy of denying defendants the right to publicly criticize a settlement after signing it is unnecessary; it weakens regulatory integrity and raises First Amendment concerns.”</p> 
</blockquote> 
<p class="p1" style="text-align: justify"><img loading="lazy" loading="lazy" decoding="async" class="aligncenter wp-image-309343" src="https://coin-turk.com/wp-content/uploads/2024/01/hester-tweet.png" alt="" width="500" height="268"></p> 
<p class="p1" style="text-align: justify">The rule requires defendants to agree that they will not make any public statements that directly or indirectly deny any allegation in the complaint or create an impression that the complaint is not based on facts:</p> 
<blockquote> 
 <p class="p1" style="text-align: justify">“A defendant looking at this statement would have no idea where the statement ends. It effectively shields the Commission’s allegations from criticism.”</p> 
</blockquote> 
<p class="p1" style="text-align: justify">Peirce also said that the clause requiring defendants to agree not to deny the allegations is equally problematic because it prevents others from saying things that could cast doubt on the SEC’s judgment. According to Peirce, this no-denial policy is a mandatory, non-negotiable condition in settlements, which are the most common resolution for SEC enforcement actions. The SEC can bring defendants back to court if they violate this condition.</p> 
<h2 class="p1" style="text-align: justify" id="crypto-market-and-the-sec">Crypto Market and the SEC</h2> 
<p class="p1" style="text-align: justify">The regulatory agency’s enforcement actions against the crypto industry reached a 10-year high in 2023, with 46 actions against crypto firms and $281 million in fines from settlements. The SEC, when adopting the no-denial policy in November 1972, explained that it aimed to avoid creating the impression that the alleged behavior did not actually occur, or that a decree was entered or a sanction applied.</p> 
<p class="p1" style="text-align: justify">Peirce opposed this claim and wrote that before this policy, the SEC had decades of experience resolving cases and made settlements that allowed defendants to deny wrongdoing:</p> 
<blockquote> 
 <p class="p1" style="text-align: justify">“Such denials do not appear to weaken the Commission’s enforcement program. Other federal agencies like the Federal Trade Commission explicitly allow defendants who reach a settlement to deny allegations of misconduct.”</p> 
</blockquote> 
<h5><span style="font-weight:bold;font-size:16px">The post first appeared on COINTURK NEWS: </span> <a href="https://en.coin-turk.com/sec-official-criticizes-rule-barring-defendants-from-publicly-disputing-allegations/" data-wpel-link="internal">SEC Official Criticizes Rule Barring Defendants from Publicly Disputing Allegations</a></h5>

SEC Official Criticizes Rule Barring Defendants from Publicly Disputing Allegations

Table of Contents

COINTURK NEWS

Other articles published on Jan 31, 2024

BONK Dives Over 8% Amid Mounting Selling Pressure: Will Support Level Hold?

BRICS Nations Discussion with Cryptocurrency Exploration

How Blockchain Technology Will Revolutionize the Tech Industry

Klasha partners with FOMO Pay to power cross-border payment between Africa and Asia

Experts Warn of Financial System Risks as Bitcoin ETFs Bridge Gap between Crypto and TradFi

Coinbase Appoints Ex-UK Chancellor to Advisory Board Amid Lawsuit Tussle

Join our free newsletter for daily crypto updates!