SEC Commissioner Hester Peirce criticised the "gag rule" within the SEC that prohibits defendants from publicly criticising the agency's claims after settlements.
This rule, in place since 1972, pushes defendants to opt for settlements instead of legal battles.
Commissioner Peirce expressed concerns about its impact on free speech and regulatory integrity, emphasising First Amendment issues.
The rule prevents defendants from denying wrongdoing or defending their positions, even indirectly.
The debate within the SEC over the necessity and implications of this rule is gaining momentum, particularly in cases involving the cryptocurrency industry.