Elon Musk seeks to end pre-approval of his tweets, calls SEC mandate a “government-imposed muzzle”

Elon Musk Seeks to End Pre-Approval of His Tweets, Calls SEC Mandate

Elon Musk’s lawyers urged a federal appeals court with the US Securities and Exchange Commission (SEC) to exclude a provision in its 2018 consent decree that required Tesla’s attorney to review some of his posts on Twitter .

In a brief filed late Tuesday with the Second U.S. Circuit Court of Appeals in Manhattan, Musk’s lawyers called the pre-approval mandate a “government-imposed muzzle” that disrupted his legitimate speech on a wide range of topics and cooled down.

He also said that the requirement violated the US Constitution, and undermined public policy by running “contrary to American principles of free speech and open debate”.

The SEC did not immediately respond to a request for comment outside market hours. It is expected to file its brief with the Court of Appeal.

Musk wants to overturn part of US District Judge Lewis Lyman’s April 27 ruling that rejected his bid to overturn the consent decree in its entirety.

Lyman said Musk’s arguments were meant as a “lament” of the requirements he no longer wanted to comply with that “his company, in his estimation, has become all but unstoppable.”

Forbes magazine said on Wednesday that 51-year-old Musk is worth $259.8 billion (about Rs 21,25,878 crore), almost twice as much as anyone else.

The decree resolved a lawsuit accusing Musk of defrauding investors with an August 7, 2018 tweet that he had “secured funding” to take his electric car company private, although a buyout was not close. Musk has told the tweet the truth.

In the settlement, Musk agreed to screen tweets to a Tesla attorney that may contain material information about the company.

He and Tesla paid $20 million (about Rs 163 crore) in civil fines, and Musk relinquished his role as Tesla’s chairman.

But the SEC later opened an investigation and summons documents regarding Musk and Tesla’s compliance, after Musk asked his followers in a November 6, 2021 tweet if they needed to pay their Tesla taxes to cover tax bills on stock options. 10 percent of the stake should be sold.

In Tuesday’s filing, Musk’s lawyers said it is time to rein in the SEC.

“Under the shadow of the Consent Decree, the SEC has increasingly surveyed, polished, and attempted to curb Mr. Musk’s protected speech that does not touch federal securities laws,” the lawyers wrote. “Any purpose achieved by the pre-approval provision has been served.”

Musk is trying to drop his April agreement to separately buy Twitter for $44 billion (about Rs 3,37,465 crore), saying the company misled him by downplaying the number of fake accounts.

Twitter has sued Musk to force it to complete the merger at an agreed-upon price, which is 23 percent higher than what its shares closed on Tuesday. A non-jury trial is scheduled for October 17 in Delaware Chancery Court.

The case Musk v. SEC, 2nd US Circuit Court of Appeals, no. 22-1291.


Affiliate links may be generated automatically – see our ethical statement for details.

LEAVE A REPLY

Please enter your comment!
Please enter your name here