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FOR: Neither admit nor deny

Brad Karp | September 6, 2017

[This article was written by both Brad Karp and Susanna Buergel of Paul Weiss. Their full bios are below.]

For nearly 50 years, regulatory and enforcement agencies entered into hundreds of consent judgments that all shared one critical attribute: the settling corporate defendant neither admitted nor denied the allegations asserted in the charging instrument. “Neither admit nor deny” settlements had become an article of faith, with district courts uniformly declaring them fair, reasonable, and adequate—with only two exceptions. And in both cases, federal courts of appeal emphatically ruled that those district courts had committed reversible error in rejecting the neither admit nor deny settlement structure.

Then, on November 28, 2011, highly regarded SDNY Judge Jed Rakoff condemned this practice in SEC v. Citigroup Global Markets, describing neither admit nor deny settlements as unfair, unreasonable, inadequate, and contrary to the public interest. Several...

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