Writer Registration - people who write about the commodities market do not need to be regulated - Brief Article

Reason, Nov, 1999 by Brian Doherty

A federal judge has freed a class of writers from having to register with the government before they can have their say.

Until recently, the Commodity Futures Trading Commission, an independent federal agency that oversees the commodities market, enforced registration requirements on anyone giving advice about futures trading, whether through traditional print publications or the Internet. (Mainstream publications such as Money, Fortune, and The Wall Street Journal were exempt, since the regs applied only to those publications for which giving such advice was a primary profit-making purpose.) Would-be commodity pundits had to register, provide fingerprints, pay a fee, go through a background check, and file reports - and subscriber lists, on occasion - with the CFTC.

Three such writers and five of their customers filed suit challenging the subscriber list requirement, claiming it was an unconstitutional restriction on their freedom to write about whatever they pleased. The D.C-based Institute for Justice represented them. The writers did not execute trades for their readers or control any reader's money; they merely wrote their opinions about what might be happening in the markets. Hence, argued the plaintiffs, despite the fact that their subject matter was the highly regulated commodities markets, the government had no proper regulatory interest in their work.

In June, U.S. District Judge Ricardo Urbina decided that the CFTC's requirements amounted to the regulation of speech, rather than the acceptable regulation of a profession. He also noted that giving advice about financial matters is not commercial speech and does not have any less protection against prior restraint than any other kind of speech. The CFTC regulation was struck down as an "impermissible prior restraint upon the exercise of free speech."

The decision could help stymie future attempts to control speech in the name of day-to-day business regulation. The CFTC filed an appeal in August and the case will now be heard in the D.C. circuit of the U.S. Court of Appeals sometime in spring 2000.