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

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

NEW YORK, Sept. 28 (Reuters) – Elon Musk’s attorneys urged a federal appeals court to throw out a provision in its 2018 consent decree with the U.S. Securities and Exchange Commission (SEC) that a Tesla Inc. (TSLA.O) lawyer to go through some of his posts on Twitter.

In a lawsuit filed late Tuesday in the 2nd U.S. Circuit Court of Appeals in Manhattan, Musk’s attorneys called the pre-approval mandate a “government-imposed muzzle” that hindered his lawful speech on a wide variety of topics and cooled.

They also said the requirement violated the US Constitution and undermined public order by “violating US principles of free speech and open debate.”

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The SEC did not immediately respond to a request for comment outside of market hours. It is expected to file its own memorandum with the appeals court.

Musk wants part of an April 27 decision by U.S. District Judge Lewis Liman, who rejected his bid to repeal the consent decree.

Liman said Musk’s arguments amounted to a “lament” of demands he no longer wanted to meet now that “his company has become almost invincible in his opinion.”

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

The decree resolved a lawsuit in which Musk was accused 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 said the tweet was truthful.

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

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

But the SEC later opened an investigation and subpoenaed documents related to Musk 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 stock option tax bills. .

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

“In the shadow of the consent decree, the SEC has increasingly monitored, monitored, and attempted to curb Mr. Musk’s protected speech that has nothing to do with federal securities laws,” the attorneys wrote. “Every purpose served by the pre-approval provision has been served.”

Musk is separately trying to cancel his April deal to buy Twitter for $44 billion, because the company misled him by downplaying the number of fake accounts. read more

Twitter has sued Musk to force him to complete the merger at the agreed price, which is 23% higher than where his shares closed on Tuesday. A non-jury trial is scheduled for Oct. 17 in Delaware Chancery Court.

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

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Reporting by Jonathan Stamp in New York; Editing by Clarence Fernandez and Christopher Cushing

Our standards: The Thomson Reuters Trust Principles.



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