• Wed. Apr 24th, 2024

Musk loses appeal of SEC ‘Twitter Sitter’ ruling on Tesla tweets

Bynewsmagzines

May 15, 2023
Musk loses appeal of SEC ‘Twitter Sitter’ ruling on Tesla tweets

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A federal appeals court rejected Elon Musk’s challenge to his 2018 agreement with the U.S. Securities and Exchange Commission that required him to have his Twitter posts related to Tesla screened.

The court in Manhattan on Monday ruled against Musk’s free speech claims just days after a three-judge panel heard arguments in the case on Thursday.

Musk, Tesla’s chief executive officer and now the owner of Twitter, had claimed that the agreement with the SEC violated the First Amendment to the U.S. Constitution and that the agency was harassing him. The court quickly rejected those arguments in a seven-page order.

“We see no evidence to support Musk’s contention that the SEC has used the consent decree to conduct bad-faith, harassing investigations of his protected speech,” the panel said, upholding a lower-court ruling last year.

Ellyde Thompson, who argued the case for Musk on Thursday, didn’t immediately return a phone message seeking comment on the ruling.

Musk has been battling with the SEC over his social media posts since he tweeted in 2018 that he had “funding secured” to take Tesla private, sending shares of the electric car maker surging. The regulator sued, claiming Musk and Tesla had misled shareholders. Musk and Tesla settled with the SEC, with each paying $20 million and agreeing that Musk’s Tesla-related tweets would be reviewed before he posts them.

Last year, U.S. District Judge Lewis Liman refused to release Musk from the deal and end his “Twitter Sitter” requirement, saying the CEO was “simply bemoaning that he felt like he had to agree to it at the time” and now “wishes that he had not.” Liman also denied Musk’s effort to block an SEC subpoena seeking information on his tweets.

The case is US Securities and Exchange Commission v. Musk, 22-1291, 2nd US Circuit Court of Appeals (Manhattan).

 

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