Pursuant to the Administrative Procedure Act, 5 U.S.C. § 553(e), and 7 U.S.C. §2(a)(12) and Rule 13.2 of the U.S. Commodity Futures Trading Commission (“CFTC” or “Commission”), 17 C.F.R. § 13.2, the Petitioner New Civil Liberties Alliance (“NCLA”) hereby petitions the Commission to amend its rule restricting speech that is set forth in 17 C.F.R. § Pt. 10, App. A (“the Gag Rule”). See Exhibit A. The Rule is unconstitutional, without legal authority, and represents ill-conceived policy.
CFTC’s Gag Rule adopts a policy that will not “accept any offer of settlement submitted by any respondent or defendant in an administrative or civil proceeding, if [they wish] to continue to deny the allegations of the complaint or the findings of fact or conclusions of law to be made in the settlement order. The Commission does not believe that it would be appropriate for it to be making or inviting a court to make such uncontested findings of violations … [against a party who] is continuing to deny the alleged misconduct.” 17 C.F.R. § Pt. 10, App. A. The CFTC Gag Rule further demands: “The refusal of a settling respondent or defendant to admit the allegations in a Commission-instituted complaint or the findings of fact or conclusions of law in the settlement order entered by the Commission or a court shall be treated as a denial, unless the party states that he or she neither admits nor denies the allegations or the findings and conclusions. In that event, the proposed offer of settlement, consent or consent order must include a provision stating that, by neither admitting nor denying the allegations, findings or conclusions, the settling respondent or defendant agrees that neither he or she nor any of his or her agents or employees under his authority or control shall take any action or make any public statement denying, directly or indirectly, any allegation in the complaint or findings or conclusions in the order, or creating, or tending to create, the impression that the complaint or the order is without a factual basis.” The enacting publication for this rule states that the purpose of the rule is to “make clear that settling defendants and respondents cannot continue to deny either the allegations in the complaint or the findings of fact or conclusions of law in a settlement order that is entered by the Commission or a court.” Rules of Practice; Final Rules; Correction, 64 FR 30,902 (June 9, 1999).
Pursuant to this policy and Rule, the Commission has required persons or entities charged in judicial or administrative proceedings of an accusatory nature who enter into consents to agree in perpetuity not to take any action or to make or cause to be made any public statement denying, directly or indirectly, any allegation in the complaint or creating the impression that the complaint is without factual basis. The CFTC Gag Rule binds defendants to silence permanently.