The Cato Institute has sued the SEC under the Free Speech Clause of the First Amendment. The suit is a facial challenge to 17 C.F.R. § 202.5(e), under which a defendant or respondent in an SEC enforcement action must agree not to deny the SEC’s allegations as a condition of settlement.  According to Cato, the regulation is an unconstitutional content-based restriction on free speech.  The Institute’s complaint states that it is seeking to publish a book by an author against whom the SEC brought an enforcement action that was ultimately settled.  According to Cato’s complaint, the manuscript asserts that the SEC’s allegations against the author were unfounded and unfair and that but for the challenged regulation, Cato would publish the book.  Cato seeks declaratory and injunctive relief.

Cato Institute Complaint