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By: Susanna M. Buergel, Jessica S. Carey

On October 13, 2021, Gurbir Grewal, the SEC's new Director of Enforcement, announced in a speech that he intends to recommend "aggressive" use of available remedies in enforcement actions, including requiring admissions of wrongdoing in certain cases. Grewal emphasized his intention to use other remedial tools, including officer and director bars, conduct based injunctions, and undertakings. Grewal also explained that, unlike prior Directors of Enforcement, he or the Deputy Director would not participate in "Wells meetings" unless the matters "present novel legal or factual questions, or raise significant programmatic issues." Grewal's "aggressive" approach could have significant implications for market participants. In particular, admitting to a violation of the securities laws in an SEC settlement could lead to significant collateral consequences for the settling entity, including increased risk in parallel private securities class actions. Requiring admissions of wrongdoing in certain SEC settlements could also discourage settlement negotiations in those matters and lead to an uptick in litigated cases. That said, it remains to be seen how the SEC will actually utilize these practices.

Background on "No Admit No Deny" Settlements

Prior to 2012, the SEC "settled virtually all of its cases on a no-admit-no deny basis," in which the enforcement target would agree to the imposition of certain penalties without ......................

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