Elon Musk seeks to narrow SEC consent decree, end pre-approval of tweets




  • In Business
  • 2022-09-28 04:05:14Z
  • By Reuters
 

By Jonathan Stempel

NEW YORK (Reuters) -Elon Musk's lawyers urged a federal appeals court to throw out a provision in his 2018 consent decree with the U.S. Securities and Exchange Commission (SEC) requiring a Tesla Inc lawyer to vet some of his posts on Twitter.

In a brief filed late on Tuesday with the 2nd U.S. Circuit Court of Appeals in Manhattan, lawyers for Musk called the pre-approval mandate a "government-imposed muzzle" that inhibited and chilled his lawful speech on a broad range of topics.

They also said the requirement violated the U.S. Constitution, and undermined public policy by running "contrary to the 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 own brief with the appeals court.

Musk wants to overturn part of an April 27 decision by U.S. District Judge Lewis Liman that rejected his bid to throw out the consent decree altogether.

Liman said Musk's arguments amounted to a "bemoaning" of requirements he no longer wanted to adhere to now that "his company has become, in his estimation, all but invincible."

Musk, 51, is worth $259.8 billion, nearly twice as much as anyone else, Forbes magazine said on Wednesday.

The decree resolved a lawsuit accusing Musk of defrauding investors with a Aug. 7, 2018 tweet that he had "funding secured" to take his electric car company private, though a buyout was not close. Musk has said the tweet was truthful.

In settling, Musk agreed to let a Tesla lawyer screen tweets that might contain material information about the company.

He and Tesla each also paid $20 million in civil fines, and Musk gave up his role as Tesla chairman.

But the SEC later opened a probe and subpoenaed documents concerning Musk's and Tesla's compliance, after Musk asked his followers in a Nov. 6, 2021 tweet whether he should sell 10% of his Tesla stake to cover tax bills on stock options.

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

"Under the shadow of the consent decree, the SEC has increasingly surveilled, policed, and attempted to curb Mr. Musk's protected speech that does not touch upon the federal securities laws," the lawyers wrote. "Any objective served by the pre-approval provision has been served."

Musk is separately trying to abandon his April agreement to buy Twitter for $44 billion, saying the company misled him by downplaying the number of fake accounts.

Twitter has sued Musk to force him to complete the merger at the agreed-upon price, which is 23% higher than where its shares closed on Tuesday. An Oct. 17 nonjury trial is scheduled in Delaware Chancery Court.

The case is Musk v SEC, 2nd U.S. Circuit Court of Appeals, No. 22-1291.

(Reporting by Jonathan Stempel in New York; Editing by Clarence Fernandez and Christopher Cushing)

COMMENTS

More Related News

Live coverage of Sam Bankman-Fried
Live coverage of Sam Bankman-Fried's first public appearance since FTX collapsed

Former FTX CEO Sam Bankman-Fried is expected to speak in a virtual interview at the New York Times' Dealbook Summit about the collapse of his crypto empire, ...

Wall Street Analysts Haven
Wall Street Analysts Haven't Been This Bullish on Tesla Since 2015

(Bloomberg) -- Tesla Inc. is getting a strong show of faith from a group that Chief Executive Officer Elon Musk once blasted for doubting the company's...

No spot bitcoin ETFs approved so far - U.S. SEC official
No spot bitcoin ETFs approved so far - U.S. SEC official
  • US
  • 2022-11-30 08:48:21Z

SINGAPORE (Reuters) -The U.S. Securities and Exchange Commission has yet to approve any spot bitcoin exchange-traded fund (ETF) listings to date, the...

'About life and death': Community members slam Chicago Police Department's reform efforts
  • US
  • 2022-11-30 00:55:00Z

In what is now a familiar refrain in Chicago, residents told alarming stories Tuesday to a federal judge about what they described as racist and traumatic...

Ex-mayor, elected at age 23, loses corruption case appeal
Ex-mayor, elected at age 23, loses corruption case appeal
  • US
  • 2022-11-29 20:40:56Z

A federal appeals court has upheld the extortion and fraud convictions of a once-celebrated young Massachusetts mayor who was found guilty of extorting...

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: Business