WSJ TJP How the SEC Enforced a Gag Rule on Me and Others
In this Wall Street Journal Free Expression commentary, Thomas J. Powell, chairman of the Brehon Group and lead petitioner in Powell v. SEC, recounts his 2021 encounter with the U.S. Securities and Exchange Commission’s long‑standing “gag rule” that required settlement respondents to remain silent about the allegations against them. Powell describes how the SEC’s settlement against his firm was based on a “neither admit nor deny” provision, imposed a $75,000 penalty, and involved extensive subpoenas and document production without any disgorgement. He explains that the Supreme Court’s 2024 decision in SEC v. Jarkesy affirmed the right to a jury trial for civil penalties, a protection he lacked at the time. The piece details Judge Ronnie Abrams’s 2022 finding that the gag rule functioned as a prior restraint on speech, and notes that the SEC withdrew the rule after a constitutional challenge reached the Supreme Court, though the agency could reinstate it. Powell argues that the gag rule violated the First Amendment by allowing the agency to control the public record of its enforcement actions while enjoying broad freedom of expression itself. The article serves both as a personal narrative and a broader critique of the SEC’s enforcement practices and their constitutional implications.
Topics
SEC Gag Rule: Historical Enforcement and First Amendment Conflict
Overview of the SEC’s long‑standing “neither admit nor deny” gag rule that silenced settlement respondents from discussing their cases, and its clash with First Amendment protections.
Supreme Court’s SEC v. Jarkesy (2024) and Jury‑Trial Rights
Explanation of the 2024 Supreme Court decision granting civil‑penalty defendants the right to a jury trial, highlighting its relevance to Powell’s case and the broader enforcement regime.