The Moraes and Novinger cases – along with another recently fizzled challenge to the SEC policy – show why it’s so hard, as a matter of procedure, for judges to impose change on the SEC, even when courts believe the government should not condone a policy that effectively forces defendants to waive their constitutional rights.
I want to be clear that Abrams, Jones and Duncan are offering a minority view among judges who have considered the SEC’s decades-old gag order policy. As the SEC told Abrams in an Oct. 18 letter responding to her sua sponte order calling on the agency to explain why its gag clauses don’t impinge on defendants’ 1st Amendment rights, the SEC has a compelling interest in litigating its cases in court, rather than in after-the-fact press releases or tweets.
The gag provision, the SEC said, simply gives the agency a right, if a defendant denies the agency’s accusations after settling, to vacate the deal and litigate to prove its allegations.
‘Enforcement 40’ for 2020
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