The Collision Between the First Amendment and Securities Fraud

72 Pages Posted: 7 Jun 2013 Last revised: 28 Apr 2014

Date Written: June 6, 2013


This Article seeks to correct the imbalance that occurs when the First Amendment and securities fraud collide. Under current precedent, securities analysts, credit rating agencies, and financial journalists are subject to differing liability standards; depending on whether they are sued for defamation or for securities fraud. Under New York Times v. Sullivan, 376 U.S. 254, 279-80 (1964), First Amendment protections apply in the defamation context in order to prevent the chilling of valuable speech, yet courts have declined to extend these protections to the securities fraud context. This imbalance threatens to chill valuable speech about public companies. To prevent the dangerous chilling effect of potential securities fraud liability, this Article contends that the New York Times protections should apply equally in securities fraud cases. Therefore, under this Article’s recommendation, a securities fraud claim asserted against a non-commercial speaker for speech concerning a public company cannot prevail absent a showing of actual malice, by clear and convincing evidence, and subject to independent appellate review.

Keywords: securities regulation, securities litigation, securities fraud, First Amendment, defamation

Suggested Citation

Couture, Wendy Gerwick, The Collision Between the First Amendment and Securities Fraud (June 6, 2013). Alabama Law Review, Vol. 65, p. 903, 2014. Available at SSRN:

Wendy Gerwick Couture (Contact Author)

University of Idaho College of Law ( email )

PO Box 83720
Boise, ID 83720-0051
United States
208-364-4547 (Phone)


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