Elon Musk Asks SEC to End Tweet Pre-Approval Settlement

Mandatory Credit: Photo by Action Press/Shutterstock (12276248n)Armin Laschet (l), CDU Federal Chairman and Prime Minister of North Rhine-Westphalia and Elon Musk, Tesla head, speak to journalists before the later main entrance to Tesla Gigafactory.
Action Press/Shutterstock / Action Press/Shutterstock

Tesla CEO Elon Musk has asked a federal court to terminate the 2018 decision to require him to have some of his tweets pre-approved. That order stemmed from the feud Musk had with regulators over a tweet that had negative consequences for some investors.

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The Wall Street Journal reports that in a motion filed in Manhattan federal court, Musk’s lawyers argued that the Twitter oversight policy has become unworkable, while the Securities and Exchange Commission (SEC) has abused the deal to make “round after round of demands for voluminous, costly document productions, with no signs of abatement.”

Musk’s lawyer asked the court to terminate or modify the settlement, which was revised in 2019, claiming complying with its rules “has become impossible under the SEC’s skewed conception of its authority,” according to CNBC.

“The more the SEC monitors Mr. Musk’s Twitter activity, and forces others to do the same, the more Mr. Musk’s freedom of expression is infringed,” the document alleges, according to CNBC.

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In 2018, Musk tweeted that he planned to take the Tesla business private, but he maintained in a Feb. 1 court filing that his tweet was “entirely truthful” and that investors who claim the missive was fraudulent are wrong, as GOBankingRates previously reported.

“Am considering taking Tesla private at $420. Funding secured,” Musk tweeted in August of 2018. “Shareholders could either to sell at 420 or hold shares & go private.”

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Following the 2018 tweets, the SEC sued Musk, claiming, “Musk knew or was reckless in not knowing that each of these statements was false and/or misleading because he did not have an adequate basis in fact for his assertions. When he made these statements, Musk knew that he had never discussed a going-private transaction at $420 per share with any potential funding source, had done nothing to investigate whether it would be possible for all current investors to remain with Tesla as a private company via a ‘special purpose fund,’ and had not confirmed support of Tesla’s investors for a potential going private transaction,” per the relevant Sept. 2018 SEC filing.

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About the Author

Yaël Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.
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