The House Financial Services Committee announced this week that it plans to hold a hearing next year to examine the SEC's practice of settling cases with defendants where the defendants neither admit nor deny the SEC's allegations. As discussed often on this blog, this practice has been under a withering attack by Judge Jed Rakoff of the SDNY in three recent settlements: Bank of America, Vitesse, and, most recently, the proposed $285 million Citigroup that Judge Rakoff rejected in November.

Financial Services Committee Chairman Spencer Bachus said that "the SEC's practice of using ‘no-contest settlements' has raised concerns about accountability and transparency, and I'm pleased the Committee will examine these concerns in a bipartisan manner.” Ranking Member Barney Frank added that he believed that the "no admit, no deny" aspect of the SEC's settlement policy "raises serious issues.”

The date of the hearing as well as the witnesses who will be called to testify have not yet been announced.