Defending Elon Musk, his lawyers said it was time to limit the SEC’s power on the billionaire’s tweets.
Legal representatives of American billionaire Elon Musk have called on a Federal Court of Appeal to re-examine and terminate a 2018 consent decree that controls his tweets. The businessman is currently bound by the SEC consent decree, which requires that a Tesla lawyer approves his Twitter posts before they go live.
On Tuesday, the lawyers filed a brief with the 2nd US Circuit Court of Appeals in Manhattan. They stated that the pre-approval mandate was a “government-imposed muzzle” hampering his freedom of speech on various topics. Per the legal practitioners, Musk cannot offer opinions on even topics unrelated to the statement that yielded the consent decree. They further noted that the imposed requirements on tweets limiting Elon Musk violate his right. In addition, the lawyers pointed out that the restrictions violate the US Constitution on free speech and open debate.
However, the US Securities and Exchange Commission (SEC) is yet to react to the appeal. The firm is expected to file its own brief with the presiding court.
Elon Musk also desires to revoke a portion of the April 27th decision by US District Judge Lewis Liman. The judgment prevented him from getting rid of the consent decree. The judge regarded the billionaire’s arguments as a “bemoaning” of requirements he no longer wants to abide by since his company has become invincible by estimations. According to the Bloomberg Billionaires Index, the 51-year-old Tesla CEO is the richest person in the world, with a net worth of $253 billion.
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Musk was accused of defrauding investors with his tweet on Aug.7, 2018. He wrote that he had “funding secured” to privatize his electric car company without a closed buyout. The consent decree resolved the lawsuit against him, although he admitted the tweet was genuine. Musk agreed to allow a Tesla lawyer to vet tweets containing sensitive information about the company. In addition, Elon Musk and Tesla paid $20 million each in civil fines. Since then, he has stopped being the chairman of the EV company.
Later, the SEC opened a probe and subpoenaed documents on the compliance of Elon Musk concerning his tweets. The fresh lawsuit resulted from another tweet on Nov. 6, 2021. He asked his followers if he should sell 10% of his Tesla stake to cover tax bills on stock options.
Defending Elon Musk, his lawyers said it was time to limit the SEC’s power on the billionaire’s tweets. They noted that the restrictions had kept his tweets under” constant threat” of being rejected despite the pre-approval.
“Under the shadow of the consent decree, the SEC has increasingly surveilled, policed, and attempted to curb Mr. Musk’s protected speech that does not touch upon the federal securities laws. Any objective served by the pre-approval provision has been served,” the attorneys argued.
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