The U.S. Securities and Exchange Commission (SEC) has said Tesla CEO Elon Musk must get prior approval from his lawyers before tweeting Tesla-related information.
The SEC took a new position this week in a letter to the Second Circuit Court of Appeals in New York, arguing that the previous settlement agreement between the SEC and Musk was fully constitutional and valid.
In 2018, Musk tweeted that he had “secured funding” to take Tesla private at $420 a share, confirming investor support for the deal. , an SEC investigation was conducted into whether Musk committed securities fraud.
Musk and Tesla did not admit wrongdoing and settled. .
In September 2022, Musk’s attorneys filed a brief with the Court of Appeals to release the “government-imposed muzzle” from the “government-imposed muzzle.”[s] and cool[s] Musk’s legitimate speech.” This comes a month after a federal judge denied Musk’s motion to terminate the same SEC settlement clause.
Earlier this week, Musk’s attorneys argued that a recent jury verdict in a separate trial should be considered on appeal. In early February, Musk was not held liable for securities fraud in a class action lawsuit filed against executives by shareholders who suffered losses after Musk tweeted that “funds were secured.” found.
“In light of the jury’s finding that Mr. Musk’s tweets did not violate Rule 10b-5, the SEC lacks support for both of the consent decrees themselves. And about that allegation on appeal,” Spiro wrote. “This ruling provides further reason why the public interest of avoiding an unconstitutional settlement readily subsumes the SEC’s alleged interest in a consent decree.”
If the attorney finds new legal powers that are directly related to the issues raised in the appeal and may affect the outcome of the case, after submitting the brief and before the court makes a decision, the court of appeals Supplemental authority can be submitted to .
The SEC dismissed Spiro’s allegations, saying jury verdicts in private securities fraud litigation did not qualify as “proper and material” authority. The agency also argued that when Musk “voluntarily agreed[twice]to the Consent Decision, he waived the opportunity to test the Commission’s claims at trial.”
The agency argued that the verdict did not address the public interest involved in the negotiated settlement and did not prevent Musk from tweeting accurately about Tesla or other topics. It also questioned the legal basis for revoking the settlement a year later.
The court can choose to either accept Spiro’s letter or dismiss it. Oral arguments on the appeal are scheduled for the spring, but no date has been set.
