Quo Vadis, Licensing the Word on the Street: The SEC's Role in Regulating Information

Securities regulation historically addressed market manipulation through restrictions on information dissemination, yet the Securities and Exchange Commission's regulatory approach to speech about securities has evolved substantially. Dombalagian examines the SEC's role in licensing information distribution, particularly regarding recommendations and analysis accessible to retail investors. The article traces the legal and regulatory framework governing securities information, from the foundational insider trading prohibitions and disclosure requirements through contemporary enforcement actions addressing selective information distribution and research access restrictions. The article argues that the SEC's regulatory scope extends beyond traditional fraud prevention to encompassing structural control over who may communicate what information about securities to whom, effectively licensing participants in securities markets. Dombalagian examines how analyst independence rules, research publication restrictions, and Fair Disclosure provisions have created a regulatory architecture governing information access and distribution. The article addresses tensions between investor protection objectives and free speech principles, questioning whether the SEC's information-licensing approach appropriately balances market efficiency with constitutional constraints on speech regulation. Dombalagian contends that as securities markets have become increasingly sophisticated and information-dependent, regulatory questions about information licensing take on heightened significance for market functioning and investor access. The article concludes that examining the SEC's information-regulatory function illuminates broader questions about securities law's compatibility with information-age market structures and constitutional speech protections.

Topics: Administrative Law · Corporate Law

Keywords: Securities and Exchange Commission · SEC · information dissemination · insider trading · disclosure requirements · Fair Disclosure · analyst independence · securities regulation