CFTC Challenge

Taucher v. Born
IJ Defeats the Commodity Futures Trading Commission’s Licensing of Internet & Software Publishers

In one of the first cases to extend First Amendment protections to the Internet, the Institute for Justice successfully defeated an attempt by the Commodity Futures Trading Commission to license Internet and software publishers.  If the regulators had prevailed, development of software and online content would have been dramatically curtailed as government agencies would have aggressively licensed and regulated information providers across these evolving media.

In this case, the Institute for Justice represented publishers of online content, websites, software, books and newsletters designed to assist people in analyzing the commodity and futures markets, and consumers who subscribed to the sites, on-line services and publications to find information and make their own decisions.  Like most content providers, the Institute’s clients did not invest customer funds; nor did they give person-to-person trading advice.  Instead, they simply provided information and analysis to their customers.

The federal government, specifically the Commodity Futures Trading Commission (CFTC), however, wanted to establish its authority to regulate and license anyone who spoke on topics under its jurisdiction—in this case the commodity markets.  The CFTC claimed that it, and only it, could grant the right to publish information on commodity trading.  The agency demanded registration as a “Commodity Trading Advisor” before one could publish any information on these markets.  Registration required fees, fingerprinting, background checks and perhaps most onerously, handing over a list of one’s subscribers and being subject to on-demand audits by the CFTC.  Even after obtaining government’s approval to speak, the license could be revoked if the agency believes the licensee does not operate in “the public interest.”  If one failed to register, he or she risked $500,000 in fines and up to five years in prison.

This case halted the next wave of government regulation—a regime under which individuals and companies would have had to secure government approval before developing software or publishing online.

Essential Background


Backgrounder: The CFTC vs. the First Amendment: The Federal Government’s Assault on Free Speech

Client Photo

Client Video - none available

Latest Release: First Amendment Lawsuit Ends CFTC's Campaign Against On-Line Publishers and Software Developers (March 6, 2000)

Legal Briefs and Decisions

none available

Launch Release: Publishers and Subscribers Take on CFTC In Free Speech Case (July 30, 1997)

Case Timeline

Filed Lawsuit:

July 30, 1997

Court Filed:

U.S. District Court for the District of Columbia


April 23, 1998, U.S. District Court for the District of Columbia denied the Commodity Futures Trading Commission’s (CFTC) attempt to dismiss a First Amendment lawsuit


June 21, 1999, U.S. District Court held that Internet publishers and computer software developers as well as traditional newsletter publishers can publish without first being licensed by the CFTC



Victory for Internet & Software Publishers

Additional Releases


Maps, Charts and Facts

Release: Federal Regulators Attack Online Free Speech Decision (August 19, 1999)


Facts about the CFTC case website: Taucher et al. v. Born et al.: The federal government, through the Communications Decency Act, seeks to control the content of speech on the Internet.

Release: Institute for Justice Scores Major Victory For Internet/Software Speech (June 21, 1999)


Release: Federal Trial Examines Government Regulation Of Internet Speech (April 20, 1999)




Op-eds, News Articles and Links

Release: First Amendment Case Against CFTC To Go to Trial in March Case Could Set Broad Precedent For Financial/Internet Speech (January 14, 1999)


Article: CFTC Surrenders on Licensing Speech; Liberty & Law (April 2000)

Op-Ed On this Case: No Future for Futures Speech?

The Red Herring: Don't Let the Feds Regulate On-line Financial Advice (May, 1999)

Release: U.S. District Court Rejects Attempt To Dismiss Free Speech Challenge To The CFTC

Investor's Business Daily: Feds Target Financial Software (April 29, 1999)

Release: Free Speech Suit Against CFTC Has First Hearing, Publishers & Readers Try To Stop Licensing of Speech (March 11, 1998)


SV Tech Week: Does the Constitution Protect Software? (April 9, 1999)

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