In the wake of mounting controversy over whether federal securities laws can withstand first amendment scrutiny, the United States Supreme Court granted certiorari in Lowe v. SEC to consider whether the first amendment prohibits an injunction against publication and distribution of an investment advisory newsletter by an unregistered investment advisor. However, the Court bypassed this constitutional question, and instead adopted a statutory construction of the Investment Advisers Act of 1940 (the "Act") that excluded Lowe's newsletters as "bonafide financial publications" of general circulation under section 80(b)- 2(a)(11)(D). The majority ruled that the petitioners were not investment advisers, and therefore did not need to be registered with the Securities and Exchange Commission (SEC). Consequently, there was no justification for restraining future publication of Lowe's newsletters.
Stacy P. Thompson,
Lowe v. SEC: Investment Advisors Act of 1940 Clashes with First Amendment Guarantees of Free Speech and Press,
U. Rich. L. Rev.
Available at: http://scholarship.richmond.edu/lawreview/vol21/iss1/8