Elon Musk has appealed a judge’s decision not to let him get out of an agreement with the Securities and Exchange Commission, which requires him to let lawyers review some of his tweets. A district court ruled that the Tesla and SpaceX CEO’s consent decree with the SEC must remain in effect. Now Musk hopes the Second Circuit Court of Appeals in Manhattan will overturn that decision, as Reuters reports.
Musk’s pact with the SEC stems from a notorious 2018 incident in which he tweeted that he had “secured funding” to turn Tesla into a private company, although that was reportedly not the case. The SEC has filed a securities fraud suit against Musk, who failed to delete the tweet in question nearly four years later.
He quickly settled the matter by agreeing to step down as Tesla chairman (but remain as CEO), while paying him and the company a $20 million civil fine each. In addition, Musk agreed to allow a lawyer to tweet that could contain material information about Tesla. He later claimed he was “forced” into the settlement, but attempts to get under the tweet screening scheme have proved unsuccessful.
Musk can’t now try to revoke the agreement he knowingly and willingly entered into by simply complaining that he felt he had to agree to it at the time, but now – once the specter of the lawsuit is a distant memory and his company, in his estimation, virtually invincible — wishes he didn’t have,” U.S. District Judge Lewis Liman wrote in April.
Musk is in the process of buying Twitter for $44 billion, despite threatening to pull out. The deal is expected to close this year, pending regulatory and Twitter shareholder approval. As things stand, Musk is about to buy a social media platform that he cannot speak freely about. That’s despite Musk himself telling the SEC that his purchase of Twitter would be a boon to free speech.
Meanwhile, Musk is being sued by Tesla investors for the same incident. Shareholders accuse Musk of making false and misleading statements that have sent stock prices soaring and inflicted billions of dollars in damages. Musk insists he did have funding, although a judge in May ruled that “there was nothing concrete” about his claims. Musk has also been sued by an investor for allegedly failing to comply with the terms of the SEC deal.
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