CFTC Rescinds Policy Prohibiting Defendants From Publicly Denying

On June 3, 2026, the Commodity Futures Trading Commission (the CFTC or Commission) rescinded its longstanding policy requiring defendants to refrain from publicly denying the Commission’s allegations as a condition of settlement. This follows a similar announcement by the SEC on May 19. This change carries meaningful implications for firms and individuals navigating CFTC enforcement actions and is likely to introduce several new considerations for clients negotiating settlements with the CFTC going forward.

Background: The Prior “No-Deny” Policy

For nearly three decades, the CFTC maintained a written policy stating that it would not accept settlement offers from defendants who continued to deny the allegations. In practice, settlements with the CFTC are publicly announced in an administrative order issued by the Commission or a Consent Order issued by a court that includes the Commission’s factual findings and legal conclusions. Before 2022, those orders generally provided that the respondent consents to the entry of the order without admitting or denying the allegations. Despite this language, the CFTC would not settle unless the order also prohibited the respondent from making any public statements that denied the findings or allegations or created “the impression that this Order was without factual basis.”[1]

This approach put the CFTC in a distinct minority among federal regulators. Most other agencies, including the SEC, which abandoned its own no-deny policy years ago, allow settlements without restricting defendants’ public statements.

What Has Changed

The CFTC has now formally rescinded the no-deny policy. The key elements of the change:

The Commission will no longer require, as a precondition to settlement, that defendants refrain from publicly denying the allegations against them. The rescission aligns the CFTC’s settlement framework with the “overwhelming majority of federal agencies,” giving the Commission greater flexibility in resolving enforcement actions. The Commission has also announced that it will not enforce existing no-deny provisions in prior settlements. The CFTC retains full authority to condition settlement on admissions or a requirement that respondents refrain from publicly denying the Commission’s findings and conclusions. The change has simply removed the blanket prohibition on denials.

CFTC Chairman Michael S. Selig stated: “For nearly three decades, the Commission has refused to settle cases unless the defendant promised not to deny the Commission’s allegations publicly. I am pleased that we are rescinding the no-deny policy consistent with regulators throughout the government.”

Implications for Clients

The exact practical consequences of this change remain to be seen, but there are several foreseeable implications for clients engaged in, or potentially subject to, CFTC enforcement proceedings:

First, under current Commission leadership, this policy change is likely to reduce friction in settlement negotiations and improve reputational risk management for anyone who settles an enforcement action. Respondents may now resolve matters without accepting a permanent constraint on their ability to defend their reputation publicly. 

Under the prior policy, settling parties were effectively muzzled—unable to publicly contest allegations even if they believed them inaccurate or overstated. The new framework allows firms and individuals to settle on financial terms while preserving their ability to communicate their own narratives to shareholders, counterparties and the public. The current Chairman and Director of Enforcement have both declared the end of regulation-by-enforcement—the policy of adopting new interpretations or applications of rules by announcing the commission’s view in an administrative order that imposes penalties on registrants. Given the Commission’s approach to enforcement, we expect that current leadership is likely to enter into settlements without requiring parties to refrain from publicly denying the conclusions and findings. 

One consequence of this is that clients will have to devote more resources to their own communication strategy in the wake of a CFTC settlement. Because public statements were severely limited under the previous no-deny policy, firms did not have to manage external messaging. Going forward, clients should start thinking about their own public statements and engage relevant stakeholders early in the negotiations process. 

While the new policy may allow for more efficient settlements in the short term, it may also, in some instances, complicate settlement decisions. Although policy no longer requires a limit on public denials, the Commission expressly preserved its authority to negotiate for admissions of facts or liability. As a result, a restriction on public denials may become one more issue to bargain over in settlement discussions with the CFTC. 

Similarly, the CFTC may be less willing in some cases to consider the respondent’s views on the appropriate language in a settlement order. It is common for Commission staff to consider the respondent’s suggestions on how settlement orders describe the relevant facts or violations. If respondents are free to make their own statements denying those findings, the Commission may be less willing to accede to any suggestions from respondents on how those findings should be worded. 

Finally, the Commission’s announcement that it will not enforce no-deny provisions in existing orders is notable for parties already bound by such restrictions. Clients with prior CFTC settlements may want to consider whether there is a benefit to making public statements about prior settlements. In many cases, the best course is probably to let sleeping dogs lie and not make new announcements about old matters. But there may be some recent settlements where that has value. Clients should also be aware that new leadership may decide to enforce the prohibitions in existing orders. Even though the Commission does not plan to enforce those orders now, to our knowledge, they are not amending those orders to remove the restrictions. 

Anyone considering these issues should consult with counsel about whether and how to make public statements regarding existing settlements that prohibit public denials. 

Further contributions to this article by Sam Bevenour.

* * *