By Kara Altenbaumer-Price

For forty years, the Securities & Exchange Commission (SEC) has allowed defendants to settle SEC matters and pay monetary penalties and disgorgement while “neither admitting, nor denying” the truth of the allegations against them. This practice allowed the SEC to avoid overt denials of wrongdoing, while also allowing defendants avoid creating admissions that could be used against them in separate civil proceedings—or by D&O insurance carriers seeking to prove underlying facts necessary to exclude coverage under certain conduct-based exclusions....

By Kara Altenbaumer-Price

For forty years, the Securities & Exchange Commission (SEC) has allowed defendants to settle SEC matters and pay monetary penalties and disgorgement while “neither admitting, nor denying” the truth of the allegations against them. This practice allowed the SEC to avoid overt denials of wrongdoing, while also allowing defendants avoid creating admissions that could be used against them in separate civil proceedings—or by D&O insurance carriers seeking to prove underlying facts necessary to exclude coverage under certain conduct-based exclusions....

As enhanced regulations and the Dodd-Frank whistleblower incentives begin generating an increase in SEC investigations and enforcement actions, insurance companies are offering expanded coverage for the cost associated with defending against governmental investigations.  See Kara Altenbaumer-Price, MBIA Case: Second Circuit Takes Broad View of Investigations Coverage Under D&O Policy, SAGACITY (USI, Dallas, Tex.), Sept. 30, 2011 (copy with author).  From the insured’s standpoint, the inv ......