https://reason.com/2022/07/21/redacted/ Reason.com - Free Minds and Free MarketsReason.com - Free Minds and Free Markets Reason logoReason logo Reason logoReason logo * Home * Latest * Magazine + Current Issue + Archives + Subscribe * Video * Podcasts + All Shows + The Reason Roundtable + The Reason Interview With Nick Gillespie + The Reason Rundown With Peter Suderman + The Soho Forum Debates * Volokh * Newsletters * Donate + Donate Online + Donate Crypto + Ways To Give To Reason Foundation + Torchbearer Society + Planned Giving * Subscribe + Print/Digital Subscriptions + Gift Subscriptions Search for: [ ] [Search] You are now logged in. Email Address[ ] Password[ ] Log In Forgot your password? Create new account Free Speech How SEC Gag Orders Silence the Accused "They don't want the defendant to tell this side of the story," says Clark Neily of the Cato Institute. Christian Britschgi | From the August/September 2022 issue Share on FacebookShare on TwitterShare on RedditShare by emailPrint friendly versionCopy page URL Media Contact & Reprint Requests vignetteredactedvignetteredacted (Illustration: Joanna Andreasson) The Securities and Exchange Commission (SEC) doesn't just regulate the country's financial institutions: As a censor of books, it has no peer. Take its successful suppression of Bob's memoir. In the early 2000s, the pseudonymous Bob developed a new financial technology to make a lot of money in Texas' energy markets. He made so much money, in fact, that the SEC became suspicious and sued him. To avoid the ruinous penalties and potential criminal charges he was facing, Bob agreed to a favorable settlement with the agency. A nonnegotiable term of that settlement, and all SEC settlement agreements, is that Bob must never publicly profess his innocence. That's why we can't even use his real name in this story. Given that 98 percent of the people sued by the SEC settle with the agency, these gag orders have proven remarkably effective at shutting down critical speech. Bob maintains that his business was perfectly legal. He would have happily proved that in court if not for the severe penalties he was facing. He's so adamant about this that he wrote an entire book defending himself and attacking the SEC for its accusations. In 2018, he went about getting his book published through the Cato Institute, a libertarian think tank. "I read the memoir and thought, 'This story needs to be told,'" says Clark Neily, senior vice president for legal studies at Cato. But publishing the book would open up Bob, and potentially Cato, to legal liability for violating the agency's gag order. "This guy has been through hell with the SEC and [the Department of Justice] and didn't want to put a target on him again," says Neily. So in 2019, Cato sued the SEC. It argued that any attempt to enforce the commission's gag orders violates the First Amendment's free speech protections. It lost. In June 2021, the U.S. Court of Appeals for the District of Columbia Circuit ruled that the Cato Institute did not have standing to sue. That means Bob's book will go unpublished. It also means that his and countless other accusations of SEC maliciousness and incompetence will never see the light of day. "They don't want the defendant to tell this side of the story," says Neily. "They know that virtually every defendant is going to settle, so they have a strong interest in making sure that no one ever gets to assess the quality of their investigations or the validity of their allegations." This article originally appeared in print under the headline " [REDACTED]". Subscribe to Reason Roundup, a wrap up of the last 24 hours of news, delivered fresh each morning. [ ] [Subscribe] NEXT: Read the Real Romeo and Juliet, Not the Kid-Friendly Version Christian Britschgi is an associate editor at Reason. Free SpeechFree Press Share on FacebookShare on TwitterShare on RedditShare by emailPrint friendly versionCopy page URL Media Contact & Reprint Requests Show Comments (32) Latest Senate Candidate Dr. Oz, Who Once Sang Pot's Praises, Now Thinks Supporting Legalization Is Clearly Crazy Jacob Sullum | 8.24.2022 2:15 PM Biden's Student Debt Relief Plan Will Worsen Inflation Eric Boehm | 8.24.2022 2:00 PM Denver Police Hurt 6 Bystanders in a Shooting. So the City Cracked Down on Food Trucks. Fiona Harrigan | 8.24.2022 1:16 PM When Scientists Are Gullible Activists John Stossel | 8.24.2022 12:55 PM 2 Defendants in Whitmer Kidnapping Case Found Guilty in Retrial C.J. Ciaramella | 8.24.2022 12:16 PM Recommended * About * Browse Topics * Events * Staff * Jobs * Donate * Advertise * Subscribe * Contact * Media * Shop * Amazon Reason FacebookReason TwitterReason InstagramReason TikTokReason YoutubeReason ItunesReason on FlipboardReason RSS (c) 2022 Reason Foundation | Accessibility | Privacy Policy | Terms Of Use