The US Securities and Exchange Commission (SEC) has asked a federal court in New York to approve revised consent judgments in its enforcement case against Gautam Adani and Sagar Adani, following the regulator’s rescission of a long-standing policy that barred settling defendants from publicly denying allegations.
In a letter filed on May 30 before the US District Court for the Eastern District of New York, the SEC said the proposed final judgments submitted earlier in the case should be modified to reflect the Commission’s recent repeal of Rule 202.5(e), which required defendants settling enforcement actions to agree not to publicly deny allegations in complaints. The SEC said both Gautam Adani and Sagar Adani have consented to the revisions.
Read More: SEC scraps decades-old ‘no-deny’ rule to ease enforcement settlements
The regulator noted that on May 18, 2026, it announced the rescission of the rule and stated it would no longer enforce existing “no-deny” provisions in previously executed settlements. As a result, the SEC said language in the defendants’ consent agreements stating that they entered the settlement without denying the allegations, along with other restrictions on public denials, should no longer be incorporated into the final judgments.
However, the SEC said a provision related to bankruptcy proceedings would remain in effect. Under that clause, any disgorgement, interest, civil penalties or other amounts owed under the judgment would be treated as non-dischargeable debts arising from violations of federal securities laws.
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The SEC told the court that the proposed changes do not prejudice the defendants and instead remove restrictions they had previously agreed to under the now-rescinded rule. The agency urged the court to enter the revised final judgments based on the reasons set out in its earlier consent motion.
The request comes in the SEC’s civil enforcement action, SEC v. Adani et al., pending before Judge Nicholas Garaufis in the Eastern District of New York.
