Connect with us

Hi, what are you looking for?


SEC’s Gag Rule on Settlements Criticized by Commissioner Hester Peirce

SEC Commissioner Hester Peirce has voiced her criticism against the US Securities and Exchange Commission’s (SEC) policy to uphold a gag rule impacting defendants who settle.

In a statement published on the SEC’s website on January 30, Peirce argued that the rule, which prevents defendants from criticizing allegations post-settlement, is particularly unfair to those less equipped than major crypto players like XRP-issuer Ripple and Grayscale Investments when entering litigation.

The rule, rooted in a policy adopted in 1972, prohibits defendants from denying allegations post-settlement.

According to Peirce, who is known as “crypto mom” for her crypto-friendly stance, the rule lacks a compelling rationale and undermines free speech rights.

My thoughts on the SEC’s unusual practice of telling defendants who settle with us that they can’t ever say anything bad about the settlement:

— Hester Peirce (@HesterPeirce) January 30, 2024

The Commission’s requirement that settling defendants either admit allegations or remain silent is a condition for resolving enforcement actions.

The mandatory language compels defendants to withdraw any documents that deny allegations and imposes penalties for breach.

The New Civil Liberties Alliance (NCLA) proposed a revision in 2018 to allow defendants in civil lawsuits or administrative proceedings to admit, deny, or state neither admission nor denial of allegations.

Americans Should Be Allowed to Criticize The Government

Hester Peirce said in her statement that she supports reconsideration of this issue, and stressed the importance of allowing Americans to criticize the government without fear of reprisal.

Peirce also challenged the historical basis for the policy, noting that its necessity “lacks firm footing.”

The policy’s “content-specific and permanent restraint” on speech raises First Amendment concerns, Peirce said, while questioning the Commission’s claim that settling defendants make significant concessions.

The Commissioner suggested that silencing defendants may shield the Commission from criticism, hindering public scrutiny and accountability.

In conclusion, Peirce urged the Commission to include reconsideration of the no-deny rule on its rulemaking agenda or to drop the rule altogether if deemed excessive.

“[…] if my colleagues have concluded that our agenda is too packed with other projects, perhaps we can just drop the no-deny rule in the same unceremonious way we adopted it,” she wrote.

The post SEC’s Gag Rule on Settlements Criticized by Commissioner Hester Peirce appeared first on Cryptonews.

Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!



The United States Securities and Exchange Commission (SEC) will continue to “ramp up” its ruling-by-enforcement approach in 2024, Norton Rose Fulbright’s 2024 FinTech Outlook...


A US appeals court has upheld the prior sentencing of “My Big Coin” fraud founder Russell Crater. Crater will serve over 8 years and...


On February 25, renowned crypto attorney Steven Nerayoff expressed concerns that the legal challenges faced by former Binance CEO and founder Changpeng Zhao could...


Cryptonews Podcast host Matt Zahab sat down once again with US-based blockchain entrepreneur and Founder of ETHDenver John Paller for another exciting interview. The two...


Leading DEX Uniswap has witnessed a sudden price retreat as the wider markets bounce from recent lows. This article will provide an analysis of...


Binance Labs, the venture capital arm of cryptocurrency exchange Binance, has demonstrated a significant vote of confidence in the future of Bitcoin by strategically...

You May Also Like

Financial Advisors


Financial Advisors


Financial Advisors

The humongous outbreak of the dreaded coronavirus has brought about a groundbreaking change in what the world perceived as ‘normal’. With an estimated 280,391,189...

Disclaimer: Respect, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2024 Respect Investment. All Rights Reserved.