How the SEC Silences Criticism
Its unconstitutional 1972 ‘gag rule’ is overdue for repeal.
One of the strongest rules in free-speech law is that the government may not engage in “prior restraint” of speech except in extreme circumstances. Yet the Securities and Exchange Commission does so routinely. Under a rule adopted in 1972, the SEC demands that parties entering into settlements with the commission be silenced about the prosecution forever. If they question the merits of the case against them, the SEC reserves the authority to reopen it.
“The result is a stew of confusion and hypocrisy,” Judge Jed Rakoff observed...