The Securities and Exchange Commission has been taking a lot of heat recently after a federal judge refused to sign off on its $285 million settlement with Citigroup because, as is usual in these types of deals, the bank would neither admit its guilt nor profess innocence, and no evidence was ever entered into the record. But now the SEC says it won’t be letting rulebreakers get off so easily — well, at least not all the time.

Before anyone goes high-fiving the SEC for getting tough, the new rule mostly applies to settlements with parties that have admitted to or been convicted of criminal violations. According to the NY Times, it will also apply to cases where a company enters an agreement with criminal authorities to defer prosecution or to not prosecute as part of a settlement.

The SEC’s standard, “neither admit nor deny” agreement will apply to settlements wherein there are only civil securities law violations, which would include the pending Citigroup settlement.

But the rule change is an improvement, as the SEC had even been allowing companies that had admitted guilt to the Justice Department to get off without having to admit or deny guilt in the civil settlement.

Even though it’s only really come under the heat lamp in recent months, the SEC says it’s been mulling over this rule change since last spring. Of course, during that time period, it’s settled for billions of dollars with banks and other financial institutions that did not have to fess up to wrongdoing.

S.E.C. to Change Policy on Companies’ Admission of Guilt [NY Times]

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