Thomas J. Powell, 59, built Resolute Capital Partners, a firm that helped companies raise money privately. Often that meant using Regulation D, a rule that lets businesses sell securities without going through a full public offering. At its peak, the firm handled more than $2 billion in assets and worked across offices in Texas, California and Nevada. In 2021, after a yearslong investigation, the U.S. Securities and Exchange Commission accused Powell of misleading investors in connection with how those offerings were marketed and disclosed. He settled and paid a $75,000 fine. The case was resolved without him admitting or denying the claims.

Powell would like to explain what happened. When asked, he starts to answer. Then he stops. His lawyer, Peggy Little, 71, a senior litigation counsel at the New Civil Liberties Alliance, a Washington, D.C.-based nonprofit that challenges government overreach, cuts in. He can’t discuss the allegations, she says. Not in detail. Not even to correct what he believes is wrong.

That silence isn’t a choice. The SEC requires defendants who settle to agree to what’s known as a gag rule which bars them from publicly denying the agency’s allegations or suggesting the charges were unfounded. They can’t even say anything that creates the impression of a denial. The agreement requires them to say they don’t deny the claims. That, Little argues, means the government isn’t just stopping speech, but forcing people to repeat its version of events. This is known as “compelled speech” and it is a violation of the First Amendment.

That’s the position Powell is in now. And it’s why the New Civil Liberties Alliance took up his case and is now asking the Supreme Court of the United States to weigh in. The group argues........

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