The Securities and Exchange Commission is considering changing its settlement agreement policy to release more details about investigations, The Washington Post reported.
Currently, the SEC allows companies and individuals to negotiate settlements without a public trial or admission of wrongdoing and the only public records generated are settlement agreements, which are typically only one or two pages in length.
"The SEC is premised on the idea that sunlight is the best disinfectant, and a nontransparent settlement harms the SEC’s reputation," John Coffee, a securities law professor at Columbia University, told the Post.
Companies would still be able to avoid admitting fault, but now the public would be able to see more detail about the SEC’s investigation. Proponents say the new policy would aid in the filing of parallel class action suits and increase the public’s confidence in the SEC and its ability to regulate the financial sector.