When a respondent to an SEC investigation submits an offer of settlement that includes a waiver request, the staff will now present both items together for Commission vote.
By Paul Vorndran and Javier Heres
November 2025
For companies negotiating with the Securities and Exchange Commission (SEC), collateral consequences often matter more than the penalty itself. Losing well-known seasoned issuer (WKSI) status, being disqualified under Regulation D, or facing a Section 9(a) bar can disrupt capital markets access for years.
Until now, settling with the SEC meant accepting these risks in the dark. Respondents would sign a cease-and-desist order, pay the fine, and wait—sometimes months—to learn whether the Commission would grant the waiver necessary to keep their business running.
That uncertainty just changed.
The September 2025 Policy Shift
On September 26, 2025, SEC Chair Paul S. Atkins announced a procedural overhaul restoring simultaneous Commission consideration of settlement offers and related waiver requests.
“An offer of settlement … that includes a contemporaneous waiver request will be presented to the Commission … for simultaneous consideration.”
— SEC Chair Paul S. Atkins, Sept. 26, 2025 (SEC Statement)
In plain English: when a respondent submits an offer of settlement that includes a waiver request (for example, a WKSI, Regulation D, or Investment Company Act § 9(a) waiver), the staff will now present both items together for Commission vote.
This marks a sharp return to the pre-2021 “bundled” policy that existed under Chair Jay Clayton. In 2021, Acting Chair Allison Herren Lee rescinded that practice, directing that settlements and waivers be handled separately. (Lee Statement)
Between 2021 and 2025, this separation created deep uncertainty. Enforcement staff negotiated settlements without knowing whether the Division of Corporation Finance or the Division of Investment Management would later recommend a waiver. Respondents faced a Hobson’s choice: accept the settlement now and hope for relief later, or litigate indefinitely.
What the New Policy Does—And Doesn’t—Change
Under the Atkins Statement, a respondent can once again request that the settlement and the waiver be considered together. If the Commission agrees, it votes on the full package at once. This procedural unity can be a powerful negotiation tool: a company may now propose settlement terms that are expressly contingent on waiver approval.
However, the change does not alter the substantive waiver standards. The Commission still must find “good cause” for relief under each rule—whether it’s Rule 405 (WKSI eligibility), Rule 506(d)(2)(ii) (Reg D bad-actor relief), or Section 9(c) (Investment Company Act). Nor does the policy compel the Commission to grant simultaneous consideration in every case; it simply permits it.
Chair Atkins emphasized that the Commission retains full discretion: it may consider the items separately, accept one and deny the other, or reject both. In those instances, respondents must decide whether to proceed with settlement absent the waiver or withdraw the offer.
In short: the new policy restores procedural leverage, not substantive guarantees.
Why This Matters for Issuers, Funds, and Advisers
By reuniting the processes, the Atkins policy enables regulated entities to assess business impact before committing to settlement—reducing the risk of post-settlement surprises that disrupt operations.
Strategic Considerations for Companies Facing SEC Action
The Bottom Line
The September 2025 Atkins Statement doesn’t guarantee outcomes—but it restores predictability. For the first time in years, respondents can once again approach SEC settlements with a clearer picture of their regulatory future.
As Chairman Atkins put it, the Commission will “enhance efficiency and certainty in the settlement process and avoid a siloed internal consideration of the matter,” which means fewer surprises, faster certainty, and smarter settlements.
If your company or fund is engaged with the SEC—or anticipates a potential settlement—now is the time to revisit your waiver strategy. The difference between signing blind and signing informed could define your capital-raising ability for years.
This post is for general informational purposes only and does not constitute legal advice. Every enforcement matter is unique, and the availability or success of any waiver request depends on its specific facts and the Commission’s discretion. For guidance tailored to your circumstances, contact a securities litigator or regulatory counsel experienced in SEC settlement and waiver practice.