Corporate First Amendment Rights and the SEC

About the Book

In the 1970s, the Supreme Court directly ruled for the first time that commercial speech is protected by the free speech clause of the Constitution. The Court, however, did not grant it the full protection afforded to political and artistic speech. The SEC regulates a vast array of corporate speech that it considers to be a type of commercial speech. In this book, Professor Nicholas Wolfson examines the SEC's considerable powers in the control of corporate information and argues that the Court's distinction between political-artistic speech and corporate speech is erroneous.

Wolfson demonstrates that much of so-called political speech is concerned with economic self-interest. He finds no fundamental difference between it and corporate speech. In the domain of SEC-regulated speech, he demonstrates that traditional notions of commercial speech do not fit the parameters of SEC-regulated speech. Wolfson proposes that the SEC's regulation of proxy statements, prospectuses, investment advisory literature, and hostile takeover information should be subject to full protection of the First Amendment. He fully delineates the doctrine of commercial speech as well as the court cases that have determined the status of SEC speech. He analyzes the law and economics literature on commercial speech. Finally, Wolfson compares governance of a publicly held corporation to the governance of a political entity, and demonstrates that shareholder democracy is a political notion that should lead to full rights of free speech and freedom of association. This important critique of the regulation of corporate speech will be a valuable reference for securities and corporate lawyers, First Amendment attorneys, and institutional investors, as well as for students in business and law programs. Corporate, law, academic, and public libraries will also find it to be a notable addition to their collections.

Table of Contents:

Introduction
Commercial Speech Doctrine
SEC Speech
Scholarly Evaluation of the Commercial Speech Doctrine
Economic Theory, Free Speech, and the SEC
The First Amendment and the SEC
Conclusion
Bibliography
Index

About the Author :
NICHOLAS WOLFSON is the Ellen Ash Peters Professor of Law at the University of Connecticut Law School. He was previously Branch Chief, Special Counsel and Assistant Director at the SEC in Washington, D.C. Professor Wolfson is the author of several books and numerous professional articles, and is a frequent speaker on securities regulation.

Review :
"[Wolfson's] book will be an invaluable resource for all who believe in the First Amendment and in defending corporations, investors, and critics from governmental (in this case the SEC) determination of economic orthodoxy and bounds of permitted comment. In addition to being an excellent sourcebook, it is written in a sprightly and fascinating style. It is fun to read."-George W. Bermant Gibson, Dunn & Crutcher Lawyers "Anyone interested in the scholarship underlying first Amendment issues will find this book provocative, ...informative, and required reading."-Ward S. Curran George M. Ferris Professor of Corporation Finance and Investment "Corporate First Amendment Rights and the SEC is a timely and provocative work that cuts to the heart of the SEC's role as a regulator of speech in the modern marketplace. . . . Whether you agree with Professor Wolfson's conclusions or not is beside the point, because this book will likely challenge preconceived notions and induce you to look at the world just a bit differently than before."-Joseph A. Grundfest Assoc. Professor of Law Stanford Law School Former SEC Commissioner "Professor Nicholas Wolfson uses numerous cases and sound theoretical analysis to expose the false dichotomy and mindless ambiguity of the commercial speech doctrine."- Henry N. Butler Director, Law and Economics Center George Mason University School of Law "Professor Wolfson's book is one of those rare scholarly works that pushes a legal proposition to its fundamental logical limits... It sets a high standard for how such difficult constitutional issues should be examined when regulatory law has become so complex that the usual approaches do not even reveal a problem. One can only hope that there will be other parallel investigations of the same high quality."-Henry G. Manne Dean, School of Law George Mason University "Wolfson is at once fair, searching, and bold. His conclusion, like his analysis, is radical. No one who cares about free speech or regulation of security in America can disregard this definitive study."-Tom Gerety President Trinity College ?The author offers a critique of the regulation of corporate speech and examines the SEC's powers in the control of corporate information, arguing that the Supreme Court's distinction between political-artistic speech and corporate speech is erroneous. He delineates the doctrine of commercial speech and outlines the court cases that have determined the status of SEC speech. There is an analysis of the law and economics literature on commercial speech.?-Business Information ALERT ?Wolfson . . . challenges the main argument the justices have made to give less protection to commercial speech, the most important of which is the claim that the latter's truth or falsity is 'more verifiable' than the truth of political speech. . . . In contrast, the professor argues that the line between commercial speech and political speech is impossible to draw. . . . Wolfson offers plenty of evidence to show that SEC censorship does more harm than good. He likens battles for control of corporations to corporate democracy. . . . We can be grateful that bureaucrats haven't found a way to ban the good Prof. Wolfson from voicing his cogent opinions about how the Constitution is supposed to protect markets and ban censorship.?-L. Gordon Crovitz Barron's "The author offers a critique of the regulation of corporate speech and examines the SEC's powers in the control of corporate information, arguing that the Supreme Court's distinction between political-artistic speech and corporate speech is erroneous. He delineates the doctrine of commercial speech and outlines the court cases that have determined the status of SEC speech. There is an analysis of the law and economics literature on commercial speech."-Business Information ALERT "Wolfson . . . challenges the main argument the justices have made to give less protection to commercial speech, the most important of which is the claim that the latter's truth or falsity is 'more verifiable' than the truth of political speech. . . . In contrast, the professor argues that the line between commercial speech and political speech is impossible to draw. . . . Wolfson offers plenty of evidence to show that SEC censorship does more harm than good. He likens battles for control of corporations to corporate democracy. . . . We can be grateful that bureaucrats haven't found a way to ban the good Prof. Wolfson from voicing his cogent opinions about how the Constitution is supposed to protect markets and ban censorship."-L. Gordon Crovitz Barron's