SEC Reinstates Simultaneous Review of Settlements and Waivers

Last week, the U.S. Securities and Exchange Commission (SEC) made a significant procedural shift: companies under investigation can now present settlement offers and waiver requests together for simultaneous consideration.

[TL;DR: The SEC just made settling enforcement actions a lot more predictable.]

This marks a return to the approach adopted under former Chair Jay Clayton in 2019. That policy allowed settling parties to resolve enforcement actions while also requesting relief from collateral regulatory disqualifications—like becoming ineligible to register and offer securities as a well-known seasoned issuer (WKSI) or being labeled a “bad actor” under Rule 506 of Regulation D. The goal was efficiency, transparency, and faster resolution of cases.

In 2021, Acting Chair Allison Herren Lee moved away from that model. The Commission began requiring parties to finalize settlement agreements with the Enforcement Division before submitting waiver requests to another division. That separation created uncertainty, especially for parties unsure how the enforcement outcome might affect their ongoing business operations.

Under Chair Paul Atkins, the Commission has now reversed course . . . again. The 2025 policy restores the ability to package settlement and waiver considerations into a single, comprehensive submission.

Why This Matters

Collateral consequences may be significant. Enforcement actions may trigger automatic disqualifications that limit a company’s access to exemptions or bar participation in certain markets. These penalties are often more damaging than the enforcement resolution itself.

With simultaneous consideration, companies receive clarity on the entire package—enforcement penalties and regulatory relief—before finalizing a settlement. This enables better-informed decisions, reduces post-settlement risk, and accelerates the timeline for resolving cases.

A Practical Improvement

This policy change is not about softening the SEC’s enforcement posture. It is about ensuring that the settlement process functions effectively and that parties can reach resolution without navigating unnecessary uncertainty.

• Companies benefit from predictability and fewer procedural hurdles.
• The SEC benefits from increased efficiency and smoother negotiations.
• Investors benefit from faster remediation and greater regulatory certainty.

Bottom line: The reinstated policy streamlines the settlement process, supports fair outcomes, and promotes faster resolutions in SEC enforcement matters.

*Practice point: If you have a settlement offer pending that may trigger regulatory disqualifications—such as loss of WKSI status or designation as a “bad actor”—it’s worth engaging with SEC staff to assess how this updated policy could affect the contours of your deal.