The Commodity Futures Trading Commission (CFTC) has rescinded a 30-year rule that prevented settling defendants from publicly denying allegations or defending themselves. The move, announced on Wednesday, abolishes the so-called “gag rule” immediately upon publication in the Federal Register. The agency stated that the rule “directly infringes upon the First Amendment rights of Americans and works to conceal the operations of agency enforcement from the American people.”
The 1998 gag rule had been criticized by conservatives and legal groups for undermining free speech and creating an imbalance where defendants paid penalties but were muzzled from protecting their reputations. The New Civil Liberties Alliance petitioned against the rule in 2019, arguing it restricted truthful expression and lacked legal basis. Supporters of the rescission say it harmonizes the CFTC with other federal agencies, enhancing enforcement flexibility and victim restitution. Director of the Division of Enforcement David Miller noted the change would ensure “fairer resolutions in enforcement matters.”
The SEC similarly ended its 50-year gag rule in May, with Chair Paul Atkins calling criticism of the government “an important part of the American tradition.” The CFTC will not enforce existing no-deny clauses in past settlements, and no action will be taken if parties violate them. The policy shift was welcomed by industry groups but drew some criticism for bypassing public consultation.
