The government cannot silence you.
Powell v. SEC
Until just a few months ago, settling with the U.S. Securities and Exchange Commission to avoid lengthy and costly litigation meant agreeing to a gag rule preventing individuals from publicly criticizing the SEC’s findings.
Thomas J. Powell, having settled, realized this meant accepting a tarnished reputation despite never having been found guilty of any wrongdoing by a court of law. So, he decided to fight.
On May 18, 2026, the SEC rescinded its “no-deny” rule while awaiting a decision from the U.S. Supreme Court on whether to hear Tom’s lawsuit, Powell v. SEC. The Supreme Court declined to hear the case after the SEC argued that in rescinding its rule, the case had been rendered moot. But the agency could reinstate the rule at any time, and so Tom is continuing his fight.
- The Case
What is Powell v. SEC?
Tom knew the SEC’s gag rule was unconstitutional and was determined to fight it. Working with the New Civil Liberties Alliance, he filed a lawsuit, which was rejected in August 2025 by the 9th U.S. Circuit Court of Appeals. That decision was appealed to the U.S. Supreme Court in March 2026. After the SEC decided to rescind the gag rule on May 18, 2026, the Supreme Court declined to take the case.
A bipartisan coalition of free-speech advocates, legal scholars, former SEC personnel, and the nation’s largest business federation filed amicus briefs in support of Tom and his fellow petitioners.
As Powell v SEC gained momentum, Tom received an outpouring of support from friends and strangers who had been affected by the gag rule.
The SEC GAG Rule
The gag rule, enacted in 1972, allowed the SEC to allege wrongdoing and issue a press release, leaving the public with the impression that the matter had been proven. But in many settlements, the individual accepts resolution without adjudication—in other words, they had never been found guilty of any wrongdoing. But the gag rule prevented them from issuing any real public response. Settlement meant staying silent on your side of the story.