SEC Proposes Ending Gag Rules in Corporate Settlements to Address Structural Impunity in Financial Enforcement
Original framing: “SEC Moves to End ‘Gag Rule’ on Firms Settling Agency Accusations” — Bloomberg
The 'neither admit nor deny' policy emerged in the 1970s as a response to corporate resistance to SEC enforcement, but its roots lie in the deregulatory wave of the 1980s and the neoliberal shift toward 'efficient' markets. This framework enabled the savings and loan crisis of the 1980s and the 2008 financial collapse, where firms like Goldman Sachs and Lehman Brothers settled without admitting guilt, perpetuating systemic risk. Historical parallels show that such policies are not neutral but actively shielded financial elites from consequences.
The SEC’s 'gag rule' is not a neutral policy but a structural enabler of corporate impunity, rooted in neoliberal deregulation and amplified by the revolving door between regulators and Wall Street.
Indigenous legal traditions, restorative justice models, and behavioral science all demonstrate that financial penalties alone cannot deter misconduct without public accountability and community reparations. The policy’s reversal must be paired with bans on the revolving door, mandatory admissions of wrongdoing, and reparative funds controlled by affected communities—otherwise, it risks becoming another performative reform that preserves the status quo. The trickster’s lens reveals how solemn legal fictions like 'neither admit nor deny' mask the absurdity of a system where wrongdoers profit from settlements while victims remain unacknowledged. True systemic change requires dismantling the legal and cultural architectures that prioritize corporate convenience over justice, a task that demands both structural reform and a return to values of relational accountability.