Sunday, July 11, 2010

The Right to Be Wrong

New York Times
July 2, 2010

The Supreme Court has long held that newspapers and other publications have the right to be wrong, as long as they did not err deliberately or with negligence. As Justice Lewis F. Powell Jr. wrote in 1974, “the First Amendment requires that we protect some falsehood in order to protect speech that matters.” Unfortunately, the court missed an opportunity to uphold that principle when it refused to take an important First Amendment case last week.

In the case, the publisher of a financial newsletter promised a hot stock tip, based on inside information, to people willing to pay $1,000. About 1,200 people agreed to pay, but the tip did not pan out, and the stock failed to soar. The Securities and Exchange Commission sued the publisher for securities fraud, and the lower courts agreed that the publisher, Frank Porter Stansberry and his company, Agora Inc., should be penalized.