“The sole purpose of the gag regulation is to affect public perception of the SEC and the SEC’s enforcement activities,” the Cato lawsuit says. “It accomplishes its purpose by restricting constitutionally protected speech—specifically, speech critical of the SEC itself … The SEC demands blanket, perpetual gag orders of this sort in every case it settles without making any individualized determinations about the need for such an order or the appropriate scope of such an order in a given case.”
These clauses, Cato says, violate the First Amendment. It is asking the D.C. federal court to find all such agreements unenforceable, arguing that they are “content-based regulations of speech.”
via SEC faces lawsuit over ‘gag orders’ in enforcement settlements | Article | Compliance Week.