Musk appeals ruling that upheld securities fraud settlement

Jun 16, 2022, 8:43 AM | Updated: 8:56 am
FILE - Elon Musk, Tesla CEO, attends the opening of the Tesla factory Berlin Brandenburg in Gruenhe...

FILE - Elon Musk, Tesla CEO, attends the opening of the Tesla factory Berlin Brandenburg in Gruenheide, Germany, March 22, 2022. Musk appealed a federal court ruling Wednesday, June 15, 2022, that upheld a securities fraud settlement over Musk’s tweets claiming that he had the funding to take Tesla private in 2018. (Patrick Pleul/Pool via AP, File)

(Patrick Pleul/Pool via AP, File)

DETROIT (AP) — Tesla CEO Elon Musk is appealing a federal court ruling that upheld a securities fraud settlement over Musk’s tweets claiming that he had the funding to take Tesla private in 2018.

Musk’s lawyer Alex Spiro filed a notice of appeal Wednesday with the federal appeals court in Manhattan. No grounds were stated, and a full filing with the Second Circuit Court of Appeals is expected later.

In April, U.S. District Judge Lewis Liman rejected Musk’s bid to throw the settlement that Musk signed with the Securities and Exchange Commission.

He also denied a motion to nullify a subpoena of Musk seeking information about possible violations of the settlement.

The settlement required that Musk’s tweets be approved by a Tesla attorney before being published. The SEC is investigating whether Musk violated the settlement with tweets last November asking Twitter followers if he should sell 10% of his Tesla stock.

Limon’s ruling said that Musk made the tweets without getting pre-approval, but the judge later wrote that he didn’t mean to pass judgment on that issue.

The whole dispute stems from an October 2018 agreement with the SEC that Musk signed. He and Tesla each agreed to pay $20 million in civil fines over Musk’s tweets about having the “funding secured” to take Tesla private at $420 per share.

The funding was far from locked up, and the electric vehicle company remains public, but Tesla’s stock price jumped. The settlement specified governance changes, including Musk’s ouster as board chairman, as well as pre-approval of his tweets.

Limon’s ruling cleared the way for the SEC to seek a court order enforcing the subpoena, and for an investigation into another possible violation of the settlement by Musk.

Spiro contended the SEC is using the settlement and “near limitless resources” to chill Musk’s speech. He wrote in court documents that Musk signed the settlement when Tesla was a less mature company and SEC action jeopardized the company’s financing at a critical time.

He also alleged that the subpoena from the SEC is illegal, and that the agency can’t take action about Musk’s tweets without court authorization.

But in a 22-page ruling, Liman wrote that Musk’s claim that economic duress caused him to sign the settlement is “wholly unpersuasive.”

Even if Musk was worried that litigation with the SEC would ruin Tesla financially, “that does not establish a basis for him to get out of the judgment he voluntarily signed,” Liman wrote.

The judge also said the argument that the SEC had used the settlement order to harass Musk and launch investigations was “meritless.”

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

This undated photo provided by the U.S. Marshals Service shows Kaitlin Marie Armstrong. Police were...
Associated Press

Texas woman accused in cyclist death arrested in Costa Rica

AUSTIN, Texas (AP) — A Texas woman suspected in the fatal shooting of professional cyclist Anna Moriah Wilson at an Austin home has been arrested in Costa Rica, the U.S. Marshals Service said Thursday. Kaitlin Marie Armstrong, 34, was arrested Wednesday at a hostel on Santa Teresa Beach in Provincia de Puntarenas, the Marshals Service […]
10 hours ago
Associated Press

Qatar donates $60 million to Lebanon’s army during crisis

BEIRUT (AP) — Qatar has donated $60 million to the Lebanese army, hard hit by the Mediterranean nation’s unprecedented economic meltdown, Qatar News Agency reported Thursday. The announcement came shortly after Qatar’s Foreign Minister Mohammad bin Abdulrahman Al Thani arrived in Beirut, where he is expected to meet senior Lebanese officials. Lebanon’s nearly three-year crisis […]
10 hours ago
FILE - A Northwell Health registered nurse fills a syringe with a COVID-19 vaccine at a pop up vacc...
Associated Press

Tweaked COVID boosters in US must target newer omicron types

U.S. regulators told COVID-19 vaccine makers Thursday that any booster shots tweaked for the fall will have to add protection against the newest omicron relatives. The Food and Drug Administration said the original vaccines would be used for anyone still getting their first series of shots. But with immunity waning and the super-contagious omicron family […]
10 hours ago
FILE - A man from Nicaragua sits at a shelter for migrants, April 21, 2022, in Tijuana, Mexico. The...
Associated Press

Supreme Court: Biden properly ended Trump-era asylum policy

WASHINGTON (AP) — The Supreme Court ruled on Thursday that the Biden administration properly ended a Trump-era policy forcing some U.S. asylum-seekers to wait in Mexico. The justices’ 5-4 decision for the administration came in a case about the “Remain in Mexico” policy under President Donald Trump. Chief Justice John Roberts wrote the decision and […]
10 hours ago
Associated Press

Cyberattack disrupts unemployment benefits in some states

NASHVILLE, Tenn. (AP) — A cyberattack on a software company has disrupted unemployment benefits and job seeking assistance for thousands of people in several states. In Tennessee, the website for unemployment benefits remained down Thursday morning after the vendor, Geographic Solutions Inc., told the state Sunday that service would be interrupted. Some 12,000 Tennesseans rely […]
10 hours ago
Security works outside of the Supreme Court, Thursday, June 30, 2022, in Washington. (AP Photo/Jacq...
Associated Press

Supreme Court says several gun cases deserve a new look

WASHINGTON (AP) — The Supreme Court said Thursday that gun cases involving restrictions in Hawaii, California, New Jersey and Maryland deserve a new look following its major decision in a gun case last week. In light of last week’s ruling — which said that Americans have a right to carry a gun outside the home […]
10 hours ago

Sponsored Articles

...
Carla Berg, MHS, Deputy Director, Public Health Services, Arizona Department of Health Services

Vaccines are safe if you are pregnant or breastfeeding

Are you pregnant? Do you have a friend or loved one who’s expecting?
...
CANVAS ANNUITY

Best retirement savings rates hit 4.30%

Maximize your retirement savings with guaranteed fixed rates up to 4.30%. Did you know there is a financial product that can give you great interest rates as you build your retirement savings and provide you with a paycheck for life once you retire? It might sound too good to be true but it is not; this product is called an annuity.
...
Arizona Division of Problem Gambling

Arizona Division of Problem Gambling provides exclusion solution for young sports bettors

Sports betting in Arizona opened a new world to young adults, one where putting down money on games was as easy as sending a text message.
Musk appeals ruling that upheld securities fraud settlement