Last week, SEC Chairman Mary Jo White said the agency would not allow the SEC standard of "no admission or denial of wrongdoing," in every settlement.
The SEC has long used the policy of allowing companies to escape admitting guilt, as it is said to be a far quicker route to a settlement, which brings compensation faster to victims of corporate crimes. Critics have complained no admission of guilt lets criminals off the hook, and a federal judge has said he cannot sign off on a settlement, as required, if he has no idea who, if anyone, did anything wrong.
The current policy, White said, would allow "most" cases to be handled as they have always been handled, with a monetary settlement.
But that opens up the question of how the SEC will make the choice of who gets a "stay out of jail" card and who does not.
"The reality is that many companies likely would refuse to settle cases," given an admission of guilt could mean criminal charges filed or open the lawsuit floodgates, Robert Khuzami, a former SEC enforcement director, said last year.
An in-house memo at the SEC last week asked staff members to look at each case "with a view to whether the conduct and circumstances" warranted more stringent treatment.
"It's the mystery memo," said Stanford law professor Joseph Grundfest, a former SEC commissioner.
The implication is the precise criteria for figuring out what cases get the nod are still unknown, although White has said the most heinous crimes and the level of harm to victims would play into the decision.
Cases in which settlements are close will not be considered, but cases in which settlement talks are about to begin are ripe for the new policy, the Journal said.
The SEC expects to have its first settlement including an admission of guilt by Labor Day, the Journal said.