Corporate Speech, Securities Regulation, and an Institutional Approach to the First Amendment

By Siebecker, Michael R. | William and Mary Law Review, November 2006 | Go to article overview

Corporate Speech, Securities Regulation, and an Institutional Approach to the First Amendment


Siebecker, Michael R., William and Mary Law Review


ABSTRACT

Does the First Amendment shield politically tinged corporate speech from the compelled disclosure and reporting requirements embedded in the U.S. securities laws? The question arises in the securities regulation context because of an impending jurisprudential train wreck between the Supreme Court's commercial speech doctrine and its approach to corporate political speech. As corporations begin mixing commercial messages with political commentary, First Amendment jurisprudence simply provides insufficient guidance on the role government should play in regulating that speech. Although First Amendment jurisprudence generally counsels against governmental restrictions on corporate political speech without regard to the truth or falsity of the message, a different branch of that same jurisprudence suggests governmental regulation of commercial speech remains essential to ensure consumers receive accurate information and to maintain market efficiency. Unfortunately, the Supreme Court has never articulated sufficiently clear definitions of "commercial" or "political" speech, or the boundaries between them, to address claims of politically tinged corporate speech. Because the securities laws essentially operate through content-based regulation of compelled speech, which often touches inherently political matters, the securities laws seem especially vulnerable to constitutional attack.

Considering the limitations of current speech jurisprudence, this Article examines whether the "institutional approach" to the First Amendment advocated by Frederick Schauer provides a theoretical basis for maintaining a robust securities regulation regime. Following that approach, a determination of speech rights in any particular institutional setting should depend on an assessment of the societal importance of the institution as well as the relationship between speech rights and the institution's basic role. The Article concludes that an institutional approach to First Amendment jurisprudence not only provides sufficiently strong reasons for insulating the securities regulation regime from the First Amendment's reach, but also lends strong support for embracing a new institutional approach to First Amendment jurisprudence itself.

TABLE OF CONTENTS

INTRODUCTION
I. THE IMPENDING JURISPRUDENTIAL COLLISION BETWEEN
    COMMERCIAL SPEECH AND CORPORATE
    POLITICAL SPEECH
    A. The Rise of Socially Responsible Investing
    B. Corporate Responses to Socially
       Responsible Investing
    C. Nike, Inc. v. Kasky
II. THE LIMITATIONS OF FIRST AMENDMENT THEORY  628
    A. Commercial Speech Doctrine
    B. Corporate Political Speech
    C. Securities Regulation Adrift
III. A NEW INSTITUTIONAL APPROACH  646
    A. The Nature of the Problem
    B. The Tenets of Schauer's Solution
IV. SECURITIES REGULATION AND THE
    INSTITUTIONAL APPROACH
    A. The Institutional Importance of Securities Regulation
    B. The Nexus Between Speech Restrictions and
        Securities Regulation
        1. Gun Jumping and Market
           Conditioning Encouraged
        2. Investor Solicitation Rules Thwarted
        3. Securities Act Antifraud Provisions Sidestepped
        4. Exchange Act Fraud Rules Circumvented
        5. Periodic Reporting Rendered Unreliable
        6. "Super Safe Harbors" Created
        7. Plain English Requirement Ignored
        8. Shareholder Proposals Threatened
V. NIKE REVISITED
CONCLUSION

INTRODUCTION

Does the First Amendment protect from regulation any corporate speech that touches some political chord or matter of public concern? If so, does the First Amendment shield politically tinged corporate speech from the compelled disclosure and reporting requirements embedded in the U.S. securities laws and regulations? For those especially concerned with the integrity of the U.S. capital markets, obtaining an answer to that second question remains a paramount concern. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Corporate Speech, Securities Regulation, and an Institutional Approach to the First Amendment
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.