Keywords
First Amendment, Financial Algorithms, Algorithmic trading, Free Speech and code, SEC Oversight, Fintech Regulation, Financial Innovation
Abstract
As algorithms become a function of decision-making in the financial sector, policymakers, the judiciary, and academics grapple with regulatory questions. With the increased reliance on algorithms in finance, the Securities and Exchange Commission (SEC) proposed a rule to mitigate potential conflicts of interest that can arise out of financial firms using algorithms. Algorithm users, including financial firms, are finding novel ways to protect algorithm use, such as by offering them First Amendment protections.
This Note considers to what extent algorithms can be considered protected speech amidst the complexity of algorithms and relationship within the financial sector. The Note argues that algorithms, particularly those with traceable human involvement, should be protected under the First Amendment. However, it also acknowledges the challenges in regulating algorithmic speech, especially with “black box” systems where human decision-making is less discernible.
Through examining the SEC’s proposed rule, relevant First Amendment doctrine, and the varying complexity of financial algorithms, the note highlights the need for a nuanced approach to regulation that balances investor protection with the constitutional rights of financial firms. The conclusion underscores the importance of adapting First Amendment protections to reflect the evolving role of technology in finance, advocating for a case-by-case approach in scrutinizing algorithms under regulatory frameworks.
Recommended Citation
30 Fordham J. Corp. & Fin. L. 237 (2025).
Included in
Administrative Law Commons, Agency Commons, Banking and Finance Law Commons, Business Administration, Management, and Operations Commons, Business Intelligence Commons, Corporate Finance Commons, Other Law Commons, Securities Law Commons
