Presently, defendants settling SEC cases are permitted to do so without admitting or denying the SEC's charges. In addition, the SEC's current practice is to use a settlement agreement that states only basic facts about the matter, and does not lay out in detail the SEC's findings leading up to the lawsuit.This combination is quite defendant-friendly, as it allows defendants to move on in many cases without any lingering admission or damning facts becoming public.

In yesterday's Washington Post, however, Zachary Goldfarb reports that the SEC is reconsidering its long-standing practice with respect to the details included in settlement agreements. SEC Enforcement Director Robert Khuzami said that "[t]ypically our practice has been not to file in-depth factual findings of the investigation. We're taking a look at the practice and deciding whether it makes sense to provide a more fulsome record" in an effort to be more transparent.

Securities lawyers came down on both sides of the issue. Defense lawyers like Russ Ryan of King & Spalding correctly observed that more detailed public records could make defendants less likely to settle, and could also provide fodder for shareholders in class action lawsuits. Gibson Dunn's Barry Goldsmith added that one of the benefits to a defendant in settling an SEC action is that "you have some say or ability to make sure the facts are at least reasonably stated." Inserting detailed findings "would result in more prolonged and protracted negotiations to make sure those facts are accurate."

Others like John Coffee, a law professor at Columbia University, said the change under consideration was needed, and that the current practice is an "artifact" that does not promote the SEC's goal of transparency.