Powell, et al. v. Securities and Exchange Commission

Thomas Joseph Powell and other petitioners are challenging the Securities and Exchange Commission’s (SEC) Gag Rule, alleging it coerces defendants into accepting a “lifetime ban on speech critical of the agency.” They seek review of the SEC’s denial of their rulemaking petition to amend the rule, arguing it violates the First Amendment.

The Institute for Free Speech filed an amicus brief supporting the petitioners in the U.S. Court of Appeals for the Ninth Circuit. The brief argues the Gag Rule is “a ban not just on speech but a ban on true political speech,” imposing “an eternal, viewpoint-discriminatory prior restraint.” It contends the rule “constitutes a classic prior restraint” and “imposes an unconstitutional condition on settlement.”

Further, the brief states the rule “eliminates defendants’ right to petition the government for redress of grievances” and “harm[s] the public interest, by depriving third parties and the press of the information needed to report effectively on securities enforcement.”

The Institute urges the court to vacate the SEC’s denial and remand with instructions to engage in rulemaking to remove the Gag Rule.

To read the amicus brief in the case, Powell, et al. v. Securities and Exchange Commission, click here.