Publishers and Subscribers Take on CFTC In Free Speech Case

John Kramer
John Kramer · July 30, 1997

Washington, D.C. ­The latest battle over free speech in print media and on the Internet was launched today when a group of small newsletter publishers, software developers, and Internet users took on the Commodity Futures Trading Commission’s campaign to license speech.

“In America, you do not need permission from the government before offering your opinions, whether on car buying or commodity trading,” said Scott Bullock, an attorney at the Institute for Justice, which represents a group of ten publishers of and subscribers to commodity reports. “This case will decide who controls the flow of financial investment information: consumers and publishers-or the federal government.”

The Commodity Futures Trading Commission (CFTC) is the federal agency charged with regulating the commodity markets in the United States. Not content to oversee firms managing investor accounts and to root out fraud, the CFTC began in 1995 to demand registration of anyone who for compensation publishes information, analysis or advice about commodity trading. Selling a book or a piece of software, or charging a newsletter subscription fee forces the publisher to register.

Registration is akin to licensing-publishers must be fingerprinted, have a background check conducted on them, pay fees, be subject to on-demand audits, and so on. Publishing without registration subjects one to fines of up to $500,000 and imprisonment of five years in jail-a felony offense. The plaintiffs in this case do not invest customer funds nor do they give person-to-person trading advice; they only publish information and offer impersonal advice to their subscribers.

“I risk investigation and prosecution merely because I publish an advisory newsletter about commodity trading,” said Stephen Briese, publisher of the Bullish Review. “Because of the CFTC’s unconstitutional actions, I must consider switching my analysis to the stock and bond markets, where my opinions receive First Amendment protection.”

In 1985, the U.S. Supreme Court in Lowe v. SEC ruled that individuals who publish impersonal advice about stock trading cannot be forced to register with the Securities and Exchange Commission. Astonishingly, the CFTC believes it is not bound by Lowe because it regulates commodity trading rather than securities.

“If the CFTC has its way, it will patrol and regulate not only those who publish traditional commodity newsletters, but individuals on the Internet as well,” said plaintiff Frank Taucher, another commodity publisher. “A whole new Internet free speech battle is about to begin,” he said.

Indeed, the CFTC has a proposal pending that would require registration of virtually anyone who writes about commodities on the Net. Those who establish webpages, hyperlinks, and usergroups that mention commodity trading would be forced to register. The CFTC’s proposal heralds the beginning of new federal efforts to regulate the Internet outside the area of indecency, with potentially far more damaging consequences to emerging communications technology. (To learn more about the CFTC’s proposed Internet rule go to

“Investors function more successfully when they have more access to information,” said plaintiff Roger Rines, director of research for Commodity Traders Consumer Report, a publication that tracks who are the most accurate advisors, serving as an important source of information for readers of commodity publications. “The CFTC’s campaign suppresses speech, hurts investors, and does nothing to protect the public,” added Rines.

The publishers challenging the CFTC in this action are Bruce Babcock, a long-time commodity publisher; Stephen Briese; Robert Miner, publisher of Dynamic Trader Analysis Report; Frank Taucher; and Bo Thunman, manager of Club 3000 a forum on commodity trading. Five subscribers to these publications have also joined in the suit to protect their right to receive useful information without government interference.

The Institute’s First Amendment lawsuit seeks to end government-compelled registration of those who either through traditional publications, software, or over the Internet offer impersonal analysis and advice about commodities. The suit was filed in the U.S. District Court for the District of Columbia.

The Institute for Justice advances a rule of law under which individuals control their destinies as free and responsible members of society. Through strategic litigation, training, and outreach, the Institute secures greater protection for individual liberty, challenges the scope and ideology of the Regulatory Welfare State, and illustrates and extends the benefits of freedom to those whose full enjoyment of liberty is denied by government. The Institute was founded in September 1991 by William Mellor and Clint Bolick.