Elon Musk’s Tweets Will Remain Subject to SEC Approval
The Securities and Exchange Commission (SEC) said that Tesla CEO Elon Musk will have to continue facing scrutiny of his tweets.
“So long as Musk and Tesla use Musk’s Twitter account to disclose information to investors, the SEC may legitimately investigate matters relating to Tesla’s disclosure controls and procedures, including Musk’s tweets about Tesla, as well as the accuracy of Tesla’s public statements about its controls and procedures,” the SEC said in a court filing, according to Bloomberg.
The SEC said it has a “legitimate purpose” in investigating whether Tesla has institutional controls over its corporate disclosures and if Musk is complying with them, Bloomberg reported.
Earlier this month, Elon Musk 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, as GOBankingRates previously reported.
At the time, 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.”
“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 alleged, according to CNBC.
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.”
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,” according to the 2018 SEC filing.
And in February, Tesla revealed it received another SEC subpoena in November, “seeking information on our governance processes around compliance with the SEC settlement, as amended,” according to an SEC filing. The development sent Musk on a Twitter rant on Feb. 7., making him wonder “Why is the “traditional” media such a relentless hatestream? Real question.”
The Nov. 16, 2021, subpoena came on the heels of the others issued “in connection with Elon Musk’s prior statement that he was considering taking Tesla private. The take-private investigation was resolved and closed with a settlement entered into with the SEC in September 2018 and as further clarified in April 2019 in an amendment,” according to the filing. The new subpoena was also issued a few days after Musk’s Twitter poll, asking his 63 million Twitter followers whether he should sell 10% of his Tesla stock, as GOBankingRates previously reported.
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