(TheLibertyRevolution.com)- Constitutional law academics describe the gag orders on defendants as a primary constraint on “steroids” and a “gun to the head” to protect the government from criticism. Victims of government overreach are unable to file a petition with Congress.
The chief financial officer of Xerox gave up his First Amendment rights to get the Securities and Exchange Commission off his back long before free-speech millionaires Elon Musk and Mark Cuban clashed with the agency.
They’re now backing Barry Romeril in a Supreme Court challenge to the SEC’s five-decade practice of applying for gag orders in settlements, which threaten penalties and jail time for defendants who later contradict the accuracy of agency claims.
Tesla’s CEO and Dallas Mavericks owner backed Romeril in court.
The New Civil Liberties Alliance (NCLA) alleges SEC’s in-house judges violate the separation of powers.
Before representing Romeril, NCLA sought the agency to repeal the 1972 gag-order regulation. The SEC’s stated goal is that it “colluded with wrongdoers” to minimize their penalties.
“Neither practice is likely,” the group wrote. “Muzzling the only other parties lets the government operate freely.”
Romeril’s 2019 appeal was denied 16 years after accepting the “no-deny provision” in his consent agreement. The three-judge majority ruled that parties might waive constitutional rights, including the right to a trial.
NCLA called the SCOTUS review a distraction. In 2012, the SEC said it settles most cases and “could never win” a gag order at trial. In 2013, he added that Cuban won one of those few trials, spending more on defense than fines. On the other hand, he slammed then-SEC chair Mary Jo White, for not defining “bright line standards” for investors.
Musk’s Tesla tweets were the target of his 2018 SEC settlement, which he’s now fighting in court.
In their Investor Choice Advocates Network brief, these businessmen want settled defendants to discuss the SEC’s false charges and why they settled.
“The legal expense of resisting an opponent with practically infinite resources would be disastrous.”
Musk and Cuban claimed the SEC realizes it’s not a trial.
A federal appeals court has denied the Cato Institute’s First Amendment challenge to gag restrictions, which barred it from releasing a personal SEC “overreach” account.
The D.C. Circuit Court of Appeals ruled in favor the Securities and Exchange Commission’s (SEC) settlement with four whistle-blowers. The gag orders restrict defendants from petitioning Congress, withholding essential information from lawmakers who supervise the administrative state.
