When the Securities and Exchange Commission settles with defendants, it extracts gag orders forbidding them forever after from making or causing to be made “any public statement denying, directly or indirectly, any allegation in the complaint.” We noted that fact briefly in yesterday’s roundup adding the question: Is it constitutional for the government to do that?
It isn’t according to the Cato Institute, which wants to publish as a book a businessman’s personal memoir telling his side of the story about his legal battles with the SEC, but cannot do so given that he consented to a settlement containing the gag order. Cato, represented by the Institute for Justice, has now filed suit seeking a court determination that the government cannot use gag orders in settlements to silence those it accuses of wrongdoing. [Clark Neily, Cato at Liberty]
IJ’s press release about the case has fun with redaction: