Musk Files Appeal to End SEC Oversight of His Twitter
2022.06.15 18:12
Musk Files Appeal to End SEC Oversight of his Twitter
By Michael Elkins
Tesla (NASDAQ:TSLA) CEO, Elon Musk, filed an appeal Wednesday against a judge’s refusal to end his 2018 agreement with the U.S. Securities and Exchange Commission. The agreement stems from a settlement with federal regulators over misleading statements posted by Musk on Twitter. Musk posted that he had had the funding to take the company private.
According to the settlement, Musk was required to step down as chairman of the board, pay $20 million in penalties, and comply with new company procedures for any future communications related to Tesla, including via his Twitter account. The new procedures require a Tesla lawyer to screen tweets that might contain material information about the company before they go out.
In a court filing, Musk said that he will ask the 2nd U.S. Circuit Court of Appeals in Manhattan to overturn an April decision by U.S. District Judge Lewis Liman that upheld the settlement.
Musk asked judge Liman in March to terminate the consent decree. Musk said in court papers that he was coerced into making the deal with the SEC, claiming that he “never lied to shareholders” in his initial tweet that he had secured funding to take Tesla private.
U.S. District Judge Linman said in the written opinion at the time, “Musk, by entering into the consent decree in 2018, agreed to the provision requiring the pre-approval of any such written communications that contain, or reasonably could contain, information material to Tesla or its shareholders.”
“He cannot now complain that this provision violates his First Amendment rights. Musk’s argument that the SEC has used the consent decree to harass him and to launch investigations of his speech is likewise meritless and, in this case, particularly ironic,” he added.
Musk is currently in a $44 billion agreement to acquire Twitter. The deal is still pending and many questions remain about if it will close, including Musk’s criticism of Twitter’s bot problems.
