Earlier this month, the Commodity Futures Trading Commission (CFTC or Commission) eliminated its rule barring settlement with defendants who continued to deny the allegations against them. The move follows the Securities and Exchange Commission’s rescission of a parallel no-deny policy in May 2026, a development we noted previously, and signals an accelerating consensus shift between the two agencies on the terms of civil enforcement settlements.
A Nearly 30-Year-Old Rule
The policy dates to 1998, when the CFTC codified it into its Rules of Practice at 17 C.F.R. Part 10, Appendix A. Appendix A stated, “a policy not to accept any offer of settlement in an administrative or civil proceeding if the respondent or defendant wished to continue to deny the allegations of the Commission’s complaint.” The Commission’s view at the time was that uncontested legal findings and ongoing public denials were fundamentally incompatible.
Under the framework that developed, defendants who settled CFTC cases were routinely required to agree not to publicly dispute any of the findings in the settlement order. Breaching that commitment could expose a defendant to contract claims or contempt proceedings and could result in the settlement being unwound entirely.
Four Reasons the Commission Changed Course
The Federal Register notice set out four distinct rationales for the change.
First, the enforcement mechanism was largely theoretical. Despite years of neither-admit-nor-deny settlements, the CFTC has never sought to reopen a case or pursue contempt following a public denial by a settling party, and no court has ruled on such a request. The passage of time works against these remedies: witnesses’ memories fade, evidence becomes stale, and courts are increasingly reluctant to revisit long-closed cases.
Second, social media has blurred the lines the rule was meant to enforce. The policy applied to public denials, but what counts as “public” has become genuinely unclear: a post directed at a small, self-selected group of followers is technically visible to anyone, yet may not be the kind of statement the policy was designed to reach. Resolving that question case by case would consume resources the Commission would rather spend elsewhere. The no-deny requirement also raised speech concerns and created friction in niche industries such as social media and crypto.
Third, the vast majority of federal regulators never adopted a comparable rule. Agencies such as the Department of Justice have long settled enforcement matters without restricting what defendants may say afterward, with no apparent harm to their ability to obtain meaningful resolutions.
Fourth, the restriction was limiting the Commission’s own dealmaking. By declining to negotiate with defendants unwilling to accept a no-deny clause, the CFTC effectively excluded itself from a category of cases that might otherwise settle. The rescission widens the field, allowing the agency to structure resolutions that conserve litigation resources, reach faster conclusions, and return money to harmed investors more quickly.
The Commission also acknowledged that the policy may have carried an unintended reputational cost. The no-deny requirement created a perception in some quarters that the CFTC was more concerned with protecting its own narrative than with achieving fair outcomes—a view the Commission conceded was corrosive to public confidence in the agency’s evenhandedness.
What the Change Does and Does Not Affect
The rescission is narrower than it might appear. The CFTC retains full discretion to demand admissions as part of a settlement when it deems that appropriate. The change simply removes the rule that made a no-deny clausea preconditionfor any settlement at all. The agency can still press defendants to acknowledge their conduct. It simply is no longer required to walk away if a defendant refuses to give up the right to dispute the allegations publicly.
There is also a carve-out for cases running in parallel with criminal proceedings. Where a defendant has pleaded guilty or is expected to do so in a related criminal matter, the CFTC may still address admissions and denials in the settlement agreement to keep the civil and criminal outcomes consistent.
As for parties under existing settlements, the Commission has declared that it will not enforce no-deny clauses already on the books. If a defendant who agreed to such a clause under the old regime now violates it, the CFTC will take no action—no contempt motion, no attempt to reopen the case, and no contract claim. The slate is effectively wiped clean for past settlements as well.
The Broader Significance
The CFTC’s move completes what is increasingly a consensus shift among U.S. financial regulators away from speech-restricting settlement conditions. Whether the practical result is faster outcomes for investors and more efficient use of agency resources—or a softer consequence for defendants—remains to be seen. What is clear is that the CFTC has aligned itself with how the rest of the federal enforcement community has operated for decades. Practitioners and regulated entities should monitor how the Commission exercises its newly restored flexibility in the cases ahead.
Written with the assistance of Skyelar Reel, a summer associate in Husch Blackwell’s Washington, DC office.