MRC Free Speech America update summary: On Dec. 11, 2024, the U.S. Court of Appeals for the Fifth Circuit struck down the Biden Nasdaq board diversity rules, according to National Review. As a result of the ruling, Nasdaq-listed companies are no longer required to comply with the Environmental, Social and Governance-style requirements.
The following article is a supplement to the MRC Report: The Biden Administration Waged War on Free Speech with 57 Censorship Initiatives.
Initiative #44: The NASDAQ Compelled Speech
Type of Censorship: Policy or rulemaking
Agencies Involved:
- Securities & Exchange Commission (SEC)
Summary:
Most censorship victims are simply silenced. The most egregious manifestations of censorship, though, require others to declare something they do not wish to say. Thankfully, our Constitution prevents such censorship. As the U.S. Supreme Court said, “freedom of speech prohibits the government from telling people what they must say.”
Nevertheless, Chairman Gary Gensler’s Security & Exchange Commission (SEC) attempted to compel speech on the most sensitive, personal topics.
The SEC instituted new “diversity rules” applying to corporations trading on the NASDAQ (National Association of Securities Dealers Automated Quotations). The rules generally required corporations to have either a non-white, queer or transvestite person on its board of directors, as well as a person who “self-identifies as a female.” Alternatively, a company would need to explain why its board members were the sex, race and sexual orientation they were.
In defending the rules — rules which required each member of a corporation’s board to declare what type of person they were sexually attracted to — the SEC’s allies insisted that the First Amendment did not apply because the NASDAQ would be carrying out the order. This argument that a government entity can direct a third party to engage in censorship was the same one the Biden administration made in Murthy v. Missouri and NRA v. Vullo (see Initiative #39).
Key Individuals:
- Caroline Crenshaw, SEC Commissioner
- Gary Gensler, SEC Chair
- Allison Lee, SEC Commissioner
