Flood of Supporters Urge SCOTUS to Hear NCLA Case on SEC’s Illegal Gag Rule Censoring Americans

Thomas J. Powell, et al. v. Securities and Exchange Commission

Washington, D.C., April 21, 2026 (GLOBE NEWSWIRE) -- Former Securities and Exchange Commission attorneys and targets, top private attorneys, research organizations, and advocacy groups have filed at least 16 amici curiae briefs asking the Supreme Court to hear the New Civil Liberties Alliance’s Powell, et al. v. SEC case seeking to set aside SEC’s “Gag Rule.” The Gag Rule forbids everyone who settles a regulatory enforcement case with SEC from publicly criticizing their cases forever. NCLA represents Thomas Powell, Cassandra Toroian, Gary Pryor, Joseph Collins, Michelle Silverstein, Rex Scates, Ray Lucia, Barry Romeril, and Christopher Novinger, who are silenced by the rule, as well as The Cape Gazette and Reason Foundation, media outlets eager to hear their stories. Joined by former U.S. Solicitor General Greg Garre and his Latham & Watkins colleagues as co-counsel at this stage, NCLA and our clients thank these amici and their counsel for their outstanding briefs supporting this effort.

Excerpts of the briefs filed by amici curiae in support of granting NCLA’s Supreme Court cert petition follow:

“When the government permanently silences those it has pursued—as the target’s price of ending that pursuit … [it] has secured for itself exactly what the First Amendment forbids. [E]ngineered fifty-four years ago to give the government a systemwide monopoly on the public narrative of its own conduct, [the Gag] is antithetical to the First Amendment.”
— Foundation for Individual Rights and Expression (FIRE), Freedom of the Press Foundation, Institute for Free Speech, and Rutherford Institute

“The Gag Rule wreaks havoc on the First Amendment rights of settling defendants from Fortune 50 companies to Average Joes … [and] is ripe for abuse. Settling defendants must not only avoid denying allegations … and police the language and statements of others … but also use the SEC’s preferred terminology to describe their cases. That result is downright Orwellian.”
— Floyd Abrams

“[F]undamentally, this case … is about the Constitution’s limitations on government power and whether the government can accomplish indirectly, whether by the consent of a private party or otherwise, what it could not accomplish directly. The answer, as this Court has recognized … is no. Americans cannot consent away their First Amendment rights.”
— Advancing American Freedom, American Association of Senior Citizens, American Land Rights Association, Frontiers of Freedom, and Many Others

“The Gag Rule’s outlier status is reason enough to doubt its legality … If the Ninth Circuit’s decision in this case is allowed to stand … other federal agencies may follow suit and adopt their own gag rules to thwart criticism of their enforcement practices.”
— American Securities Association

“The Gag Rule is categorically unconstitutional … The government cannot alter, much less ignore, the unalienable rights confirmed by the Bill of Rights on the theory that an individual or corporation has consented to forgo them in return for receiving a governmental benefit.”
— Atlantic Legal Foundation

“The rule also creates a coercive and one-sided enforcement scheme. In a bit of hypocrisy, the SEC only wants transparency when it fits the SEC’s narrative … Because the Gag Rule suppresses speech, exceeds the SEC’s regulatory authority, distorts the fairness of enforcement proceedings, and effectively evades judicial review, a petition for rulemaking presents the most viable—and perhaps only—mechanism for addressing its legality.”
— The Buckeye Institute

“Trapped in an escalating ecosystem of coercion, nearly every subject of an SEC enforcement action is forced to take the first off-ramp they encounter: a settlement. But this off-ramp comes at a weighty price, as these entities must also give up their right to speak against the SEC.”
— Cato Institute

“Settling defendants may not speak to journalists, write op-eds, or contradict the Commission’s version of events in any way, even if they are speaking truthfully or speaking to proceedings that concluded years ago … [SEC’s own] data [shows] that the gag rule falls hardest on the defendants least able to resist it.”
— Competitive Enterprise Institute

“Amici have spent their careers at the Commission … They know from experience what the Gag Rule does: it does not protect markets. It protects the SEC—from scrutiny, from accountability, and from the voices of the thousands of defendants who settled not because they were guilty, but because they could not afford the price of the truth. That is not a disclosure regime. It is the antithesis of one.”
— Former SEC Attorneys

“[Defendants] in the securities industry are thrust into professional purgatory as soon as the agency issues its first press release. The Gag Rule ensures many settling defendants stay there … [This] underscores a cruel irony: only if a defendant is convicted by the SEC, does he retain the right to share his point of view such that he may rehabilitate his reputation in the eyes of his peers and the public.”
— Former SEC Targets

“[I]t is both morally and legally absurd to suppose that the government can contract with a citizen—on pain of punishment—to permanently waive the citizen’s right to criticize (or even to speak in a manner that might be taken as criticism of) the government. Yet that is exactly what the ‘contract’ here purports to do.”
— Goldwater Institute

“Because the SEC has no power to seek an injunction restricting the discussion of enforcement actions, it has smuggled them in through the backdoor of its settlement authority. [T]he SEC’s enforcement authority acts as an in terrorem tool to impose speech-suppressing terms that it ‘could not lawfully obtain any other way.’”
— Hamilton Lincoln Law Institute and Manhattan Institute

“There is no real precedent for this large-scale, long-term suppression of speech. Indeed, both this Court and lower courts have repeatedly voided conditions on speech that were not nearly as sweeping, intrusive, and long-lasting as the one here … That this rule has been enforced against so many Americans and for so long is a national scandal.”
— Institute for Justice

“The SEC’s Gag Rule is clearly a prior restraint: it is an indefinite gag order that forbids individuals who have settled their cases with the SEC from communication about their cases for the rest of their lives … Their perspectives and experiences must be kept hidden from everyone forever.”
— Liberty Justice Center

“It beggars the imagination how a government agency can claim a legitimate, let alone compelling, interest in insulating itself from criticism … With its Gag Rule, the SEC effectively monopolizes the power to tell the story of how it is exercising its authority.”
— Thomas More Society

“Viewed against the backdrop of threatened or pending enforcement proceedings, settling defendants’ surrender of their speech rights under the SEC’s policy is anything but “voluntary.” … In evaluating the SEC’s uniform gag practice, the Ninth Circuit undercut this Court’s jurisprudence about coerced relinquishment of rights … [I]n light of the SEC’s broad prerogatives and voluminous enforcement docket, the Rule has grave consequences for businesses seeking to communicate with their customers, and for the Nation … The SEC’s policy has forever foreclosed thousands from freely speaking about the Commission’s allegations against them.”
— Chamber of Commerce of the United States of America

NCLA released the following statements:

“The power of these eloquent voices united in a just cause should never be underestimated.”
— Peggy Little, Senior Litigation Counsel, NCLA

“The cast of organizations that has lined up behind this petition for certiorari is truly impressive. Even more impressive is the array of First Amendment arguments they have brought to bear against the SEC’s Gag Rule.”
— Mark Chenoweth, President and Chief Legal Officer, NCLA

For more information visit the case page here.

ABOUT NCLA
NCLA is a nonpartisan, nonprofit civil rights group founded by prominent legal scholar Philip Hamburger to protect constitutional freedoms from violations by the Administrative State. NCLA’s public-interest litigation and other pro bono advocacy strive to tame the unlawful power of state and federal agencies and to foster a new civil liberties movement that will help restore Americans’ fundamental rights.

Joe Martyak
New Civil Liberties Alliance
703-403-1111
joe.martyak@ncla.legal

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