For Execs, Losing Court Case To SEC May Be Better Than Settling

The SEC’s recent shift in policy away from “neither admit nor deny” will make settlements harder to come by. Defendants who admit fault may be vulnerable to parallel criminal action or investigation from DOJ, and provide ammunition for private litigants. Under some circumstances going to trial against the SEC and losing may actually be preferable to admitting to wrongdoing in a settlement, write former SEC senior counsel and assistant U.S. attorney John J. Carney and his Baker Hostetler colleagues David Choi and Francesca M. Harker.