Consent Order
Quick Definition
A regulatory agreement where a firm or individual agrees to cease certain practices without admitting guilt.
Key Takeaways
- Consent orders resolve regulatory disputes without formal litigation
- The respondent typically neither admits nor denies wrongdoing
- They are legally binding and enforceable like court orders
- Common remedies include fines, business practice changes, and enhanced compliance programs
What Is Consent Order?
A consent order is a formal enforcement action issued by a regulatory agency, such as the SEC, OCC, or CFPB, in which the respondent agrees to specific terms — typically including corrective measures, fines, and prohibitions — without admitting or denying the allegations. Consent orders resolve regulatory disputes more efficiently than contested litigation, allowing agencies to impose remedies while firms avoid drawn-out legal battles. They are legally binding and carry the force of a court order, meaning violations can result in contempt charges or additional penalties.
Consent Order Example
- 1A bank received a consent order from the OCC requiring it to improve its anti-money laundering controls within 180 days.
- 2The SEC issued a consent order against a broker-dealer for failing to supervise its registered representatives, resulting in a $2 million fine.
Related Terms
Consent Decree
A legal agreement between a regulatory agency and a company resolving alleged violations without the company admitting or denying wrongdoing.
SEC (Securities and Exchange Commission)
The primary U.S. federal agency responsible for regulating securities markets, protecting investors, and enforcing federal securities laws.
FINRA
A self-regulatory organization that oversees broker-dealers and their registered representatives in the United States.
Compliance Officer
A professional responsible for ensuring a financial institution adheres to all applicable laws, regulations, and internal policies.
FDIC
Independent federal agency that insures bank deposits up to $250,000 per depositor, per institution, and supervises financial institutions for safety and soundness.
Insider Trading
The illegal practice of trading securities based on material, non-public information obtained through a position of trust or confidence.
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