Overlawyered points to this incredible story about securities disclosure in Spain:

In an attempt to crack down on insider trading, the directors of companies quoted on Spain's stock exchange will have to come clean, on a twice-yearly basis, about anyone with whom they are having an 'affectionate relationship'. ... Company directors must also provide information about their wives or husbands and family, but it is the idea of a 'lovers' register' -- in which bosses could have to admit to having affairs or out themselves as gay -- which has sparked reactions ranging from disbelief to fury among businessmen.

When I was practicing securities law, I remember more than one occasion on which an executive balked at SEC disclosure requirements. For example, one executive was required to disclose a personal bankruptcy filing, precipitated by his signing a loan guaranty for his sister. But the sort of disclosure discussed above is light years beyond existing standards.

It raises the question, Could Congress or the SEC impose such a disclosure requirement? Leaving arcane questions regarding the scope of SEC v. congressional authority to the side, we probably need to enlist Eugene Volokh or Ann Althouse here because this is not a matter on which securities regulation would provide the constraint; instead, constitutional law would come into play. I assume that such a requirement would be open to challenge under the due process clause of the 14th Amendment as a violation of the right of privacy, requiring a compelling state interest. And it is hard for me to imagine that the state would be able to make the case that disclosure of this sort would address a compelling state interest in reducing insider trading.

UPDATE: Interesting analysis from Michael Dorf of the question, "Is There A Constitutional Right to Sexual Privacy?"

UPDATE II: Larry Ribstein uses this disclosure regulation to contemplate several questions, including this: "why should the costs of disclosure that bear on personal privacy be weighed more heavily than those that bear on other concerns," such as competitive advantage? Good question. Larry notes that executives can avoid the disclosure requirement by working for private firms, "just as US firms are 'going dark' to avoid Sarbox."

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