One more federal judge has joined the small, but growing, number of jurists who disagree with the SEC's long-standing policy that settling defendants can "neither admit nor deny" the agency's charges against them. Via Alison Frankel's "On the Case" column I see that U.S. Senior District Judge John L. Kane (D. Colo.) saw fit to blow up the SEC's proposed settlement with Bridge Premium Finance and certain of its executives in an Order dated January 17, 2013 for this very reason.
In denying the parties' motions to enter a final judgment in the case, Judge Kane wrote that "I refuse to approve penalties against a defendant who remains defiantly mute as to the veracity of the allegations against him. A defendant's options in this regard are binary: he may admit the allegation or he may go to trial." Judge Kane also noted his objection to language in the proposed consent order and final judgments "whereby the defendants waive their rights to the entry of findings of fact and conclusions of law pursuant to FRCP 52 and their rights to appeal. These findings are important to inform the public and the appellate courts. I will not endorse any final judgments including such provisions."
Judge Kane concluded his one-paragraph Order by stating that he would still be willing to "entertain" any future motions that the parties chose to file that omitted the "unacceptable language" described above.
According to On the Case, Judge Kane is at least the sixth federal judge to express serious reservations about the SEC's use of "neither admit nor deny" settlements--with Judge Jed Rakoff being the most well-known of this group. See the full list here. On February 8, the Second Circuit will hear oral argument in the Citigroup case in which counsel representing Judge Rakoff will argue his position on the issue.