Washington, D.C. — Senator Tom Cotton pulled no punches in today’s Banking Committee Hearing on Capitol Hill when questioning SEC Chairman Jay Clayton about an unconstitutional 1972 SEC “Gag” Rule that the agency has used for decades to silence defendants.
“I think the SEC should probably reconsider it. It was passed at a time in 1972 when First Amendment precedent was much different and … more favorable to the government than frankly, it should have been … it’s quite over broad, it’s not at all narrowly tailored anymore and it can undermine other legitimate public interests,” said Cotton. He also pressed Chairman Clayton about the SEC’s contradictory provisions on standard consent judgments and the constitutional infirmity of “gag” orders recognized by U.S. District Judge Jed Rakoff.
Senator Cotton specifically referenced an opinion piece written by NCLA Senior Litigation Counsel, Peggy Little, that appeared in the Wall Street Journal recently.
“Senator Cotton’s concern for public interest in this matter is commendable. “When the SEC silences citizens after bringing enforcement actions against them, the public remains in the dark about this opaque form of regulation. SEC should stop leaving its targets speechless and should start allowing sunshine on how it brings the power of government to bear upon ordinary Americans.” —Peggy Little, NCLA Senior Litigation Counsel
The New Civil Liberties Alliance filed a Petition for Rulemaking earlier this Fall, asking the U.S. Securities and Exchange Commission to amend its controversial Gag Rule, 202.5e.
Click here to watch video of hearing.
NCLA is a nonprofit civil rights organization founded by prominent legal scholar Philip Hamburger to protect constitutional freedoms from violations by the administrative state. NCLA’s pro bono public-interest litigation and other advocacy strive to tame the unchecked power of state and federal agencies and to foster a new civil liberties movement that will help restore Americans’ fundamental rights. For more information visit us online: NCLAlegal.org
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