SEC Rescinds 50‑Year‑Old “Gag Rule” Policy Following Latham’s Supreme Court Challenge

Latham & Watkins represented the petitioners in Thomas Joseph Powell, et al. v. Securities and Exchange Commission, a challenge to the SEC's longstanding “Gag Rule,” which barred settling defendants from ever publicly denying the agency's allegations or criticizing the agency’s handling of their cases, requiring thousands of individuals to take their stories of mistreatment by the SEC to their graves with them.

Working alongside co‑counsel at the New Civil Liberties Alliance, Latham filed a petition for Supreme Court review in March 2026, with partner Greg Garre serving as counsel of record. The petition argued that requiring settling defendants to permanently waive their right to deny the SEC's allegations violated the First Amendment. While the petition was pending, the SEC took the extraordinary step of rescinding the policy and announced it would no longer enforce no‑deny provisions in prior settlements. Although the Supreme Court ultimately declined to hear the case in the wake of the SEC’s rescission of the rule, the SEC ended the policy that had governed SEC enforcement settlements for more than 50 years and harmed thousands of former SEC targets.

“We are thrilled that this litigation resulted in the rescission of the SEC's gag rule — a rule that for 50 years up to its rescission had improperly silenced countless Americans,” said partner Greg Garre.

The Latham team also included Washington, D.C. associates Blake Stafford and Derek Choi.