Elon Musk asks Supreme Court to undo 'Twitter sitter' agreement with SEC

C.E.O. of Tesla, Chief Engineer of SpaceX and C.T.O. of X Elon Musk takes the stage through the New York Times annual DealBook summit on November 29, 2023 in New York City. 

Michael M. Santiago | Getty Images

Tesla CEO Elon Musk is asking the U.S. Supreme Court to undo a settlement agreement that he and the automaker struck with the Securities and Exchange Commission requiring an organization lawyer, or a “Twitter sitter,” to evaluate and approve his Tesla-related tweets.

In a petition on Dec. 7, Musk’s attorneys alleged that the “Twitter sitter” provision within the agreement violated their shopper’s free speech rights. They argue Musk was coerced into agreeing with “unconstitutional circumstances.”

The SEC charged Musk with civil securities fraud after he posted a sequence of tweets in 2018 saying he had “funding secured” to take Tesla non-public for $420 per share, and that “investor assist” for such a deal was “confirmed.” Trading in Tesla was halted after his tweets, and shares remained unstable within the weeks that adopted.

Musk and Tesla settled with the regulator after which revised the agreement in April 2019. Since then, the SEC has continued to examine Musk and Tesla to be certain that they’re complying with the phrases.

The settlement “restricts Mr. Musk’s speech even when truthful and correct,” his legal professionals wrote. “It extends to speech not coated by the securities legal guidelines and with no relation to the conduct underlying the SEC’s civil motion in opposition to Mr. Musk. And it chills Mr. Musk’s speech by the endless menace of contempt, fines, and even imprisonment for in any other case protected speech if not pre-approved to the SEC’s or a courtroom’s satisfaction.”

Musk bought Twitter in 2022 and renamed it X this yr. He is the corporate’s chairman and chief expertise officer.

Columbia Law School professor Eric Talley, who focuses on company and enterprise regulation, described the hassle as a “swing for the fences” transfer in an e mail to CNBC. A circuit courtroom has already refused to hear the attraction. To win a listening to from the Supreme Court, Musk would want 4 of the 9 justices to agree to take the case.

Talley mentioned the “unconstitutional circumstances” doctrine that is on the coronary heart of Musk’s argument is often “in play when the federal government is doling out varied kinds of basic public advantages,” comparable to getting a tax break for promising not to criticize the Supreme Court.

“It’s at core a really slippery doctrine,” Talley mentioned. “But this case is extra like the federal government agreeing to forebear from pursuing expenses in opposition to somebody in trade for his or her agreement to cooperate with the phrases of the settlement. That’s not basic doling out of advantages.”

Talley added that for an individual of means like Musk, it might be price “spinning the judicial roulette wheel.”

The SEC did not instantly reply to a request for remark.

Separately, Tesla traders have sued the corporate and Musk over the “funding secured” tweets and their impression to the inventory value. In February, a jury in a San Francisco federal courtroom discovered Musk and Tesla were not liable in a class action securities fraud trial. The shareholders have filed for an attraction to the ninth Circuit.

Read the petition to SCOTUS right here:

Source link

Leave a Reply

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