…Any consent judgment with the SEC includes what is often called a “gag clause.” These clauses prohibit the defendant from challenging the truth of any allegation in the SEC’s complaint or making any statement that might be construed as saying that the complaint lacked a factual basis. This prevents defendants and their counsel from informing the public — including the press and Congress — about what they perceive to be unfair SEC tactics or factual assertions in the proceeding. The lawfulness of the SEC’s power to shield itself from review and criticism in this way was recently addressed by the Second Circuit Court of Appeals in SEC v. Romeril…

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