Cato Institute Sues the Securities & Exchange Commission
IJ Attorneys File Complaint Claiming Violation of First Amendment Rights
Institute for Justice attorneys sued the Securities & Exchange Commission (SEC) in a U.S. District Court for the District of Columbia on behalf of the Cato Institute on January 9, 2019.
The complaint alleges "gag orders," which are routinely used by the SEC in settlements of alleged financial crimes to prevent the targets of SEC prosecutions from speaking about their cases, are a violation of defendants' First Amendment rights.
The filing explains that the Cato Institute wants to publish a book by an entrepreneur who believes he's the victim of prosecutorial overreach by the SEC. But he can't for fear of further prosecution.
As part of the settlement agreement with the SEC, the plaintiff had to accept a gag order that prevents him from discussing or criticizing the case, even though the settlement does not require him to admit guilt.