If The SEC Favors Full Disclosure, Why Does It Have A "Gag Rule"?

In 1972, the Securities and Exchange Commission announced its "policy not to permit a defendant or respondent to consent to a judgment or order that imposes a sanction while denying the allegations in the complaint or order for proceedings. In this regard, the Commission believes that a refusal to admit the allegations is equivalent to a denial, unless the defendant or respondent states that he neither admits nor denies the allegations".   In 2003, Barry Romeril settled with the SEC and was thereby unable to speak openly about this policy.  Now he is asking the U.S. Supreme Court to remove the muzzle.  Romeril v. Securities and Exchange Commission, S. Ct. No. 21-1284.  

Recently Mr. Romeril gained support from several other adversaries of the SEC - Mark Cuban, Phillip Goldstein, Elon Musk, Nelson Obus.  Together with the Investor Choice Advocates Network (ICAN),they have filed an amicus brief making the following points:

  • The SEC’s Gag Orders Conceal Information from the Market

  • The SEC’s “Hobson’s Choice” Settlements Are No Substitute for Market Transparency

  • The SEC Demands Transparency Regarding Settlements Between Private Parties

  • The SEC Is Not Infallible and Should Welcome Exposure of Its Unproven Allegations to Scrutiny

To this list, I would add this question that I posited a few years ago: Why Does The SEC Insist That Some Defendants Lie?

Happy Kodomo no Hi (子供の日)!