The Securities and Exchange Commission unveiled its long-anticipated settlement with Philip Falcone and his hedge fund, Harbinger Capital Partners. And it is a very strange creature.

The SEC noted in its news release about the deal that the defendants must “admit wrongdoing,” in addition to paying $18 million. That isn't the same thing as admitting liability for violating a specific federal rule or law. The defendants here didn’t make such an admission. The consent agreement filed in the case makes clear that the settlement doesn’t affect their “right to take legal or factual positions in litigation or other legal proceedings in which the commission is not a party.”

The SEC has endured much criticism over the years for its default position of allowing defendants to settle without admitting or denying the agency’s claims. The SEC’s new chairman, Mary Jo White, has pledged to change that policy, at least for some important cases. The Falcone case was intended to be a big step in that direction. And it’s preferable to the commission’s normal way of doing things. Yet it still falls short, because the defendants’ admissions were so convoluted.

Under the consent decree, Falcone and Harbinger admitted to a long list of facts that certainly look awful. For instance, Falcone agreed he “improperly borrowed $113.2 million” from one of his hedge funds, called SSF, to pay personal tax obligations. The interest rate was less than the fund was paying to borrow money. Plus, this came “at a time when Falcone had barred other SSF investors from making redemptions,” and he “did not disclose the loan to investors for approximately five months,” according to the parties’ agreed-upon statement of facts.

So, which specific federal rules or laws did he violate? The settlement terms don’t say. The SEC accused Falcone and his firm of fraud when it filed its complaints against them with a federal district court in New York. The last paragraph of the agreed-upon statement of facts makes a reference to “violations” by Falcone and Harbinger, without saying what the violations were. The defendants also admitted to acting “recklessly.” Again, though, there was no straight-up admission of liability by anyone for violating any specific rules or laws.

As the consent decree makes clear, the defendants admitted to the allegations in the SEC’s complaint “as to personal and subject matter jurisdiction.” However, they didn’t expressly admit to fraud, which is what the SEC alleged from the outset.

It gets more complicated, too. Under the settlement, the defendants agreed not to deny the SEC’s allegations against them. They also agreed not to make any public statement that “this consent contains no admission of the allegations.” On top of that, they are required to “withdraw any papers filed in this action to the extent that they deny any allegation in the complaints.”

Yet for all of that, the SEC still couldn’t get Falcone and Harbinger to simply admit as part of the settlement that they committed securities fraud. The SEC seems to be of the mind that getting defendants to admit to all of the factual elements of a violation is close enough, and that it is unnecessary to push them to go that extra step to eliminate any doubt about what laws they supposedly violated.

Yes, it’s good that the SEC got the defendants here to make specific factual admissions and penalized Falcone with a five-year ban from the securities industry. But it isn't sufficient. The SEC should be seeking specific legal admissions, too. In this instance, the question remains: Did Falcone admit in a court of law to committing securities fraud? The answer is he did not, regardless of whether he is allowed to say so publicly.

(Jonathan Weil is a Bloomberg View columnist. Follow him on Twitter.)