Elon Musk must still have his tweets approved by Tesla lawyer, federal appeals court rules

May 15, 2023, 7:52 AM | Updated: 2:52 pm

NEW YORK (AP) — Elon Musk cannot back out of a settlement with securities regulators that was reached after his 2018 tweets claiming he had secured funding to take Tesla private caused the electric vehicle maker’s share price to jump and led to a temporary halt in trading, an appeals court ruled Monday.

The summary order by the 2nd U.S. Circuit Court of Appeals in Manhattan was released just days after a three-judge panel heard lawyers’ arguments in the case.

Musk had challenged a lower court judge’s ruling last year requiring him to abide by the deal on the grounds that circumstances have changed and because the decree contains a “prior restraint” that Musk contends violates the First Amendment.

The settlement with the Securities and Exchange Commission required that his tweets be approved first by a Tesla attorney. It also called for Musk and Tesla to pay civil fines over the tweets in which Musk said he had “funding secured” to take Tesla private at $420 per share.

The funding wasn’t secured, and Tesla remains public.

In its ruling, the 2nd Circuit said it saw “no evidence to support Musk’s contention that the SEC has used the consent decree to conduct bad-faith, harassing investigations of his protected speech.”

Instead, it said, the SEC had opened “just three inquiries into Musk’s tweets since 2018” and each challenged tweet “plausibly violated the terms of the consent decree.”

The appeals court also rejected Musk’s prior restraint argument, saying parties entering consent decrees may voluntarily waive their First Amendment and other rights.

Alex Spiro, an attorney for Musk, said in a statement: “We will seek further review and continue to bring attention to the important issue of the government constraint on speech.”

Musk can appeal to the full 2nd Circuit or to the U.S. Supreme Court.

Lawyers for the government did not immediately respond to messages seeking comment.

The SEC was investigating whether the Tesla CEO’s November 2021 tweets asking Twitter followers if he should sell 10% of his Tesla stock violated an October 2018 settlement that Musk signed after the SEC brought an enforcement action against him alleging that his tweets about going private violated antifraud provisions of securities laws.

In a written ruling in April 2022, Judge Lewis Liman said Musk sent the tweets without getting pre-approval.

Musk’s deal with the SEC called for Musk and Tesla to each pay $20 million in fines over Musk’s tweets about having secured funding to take Tesla private. The funding was not secured, but Tesla’s stock price jumped in response to the tweets. Trading in the shares was subsequently halted.

___

Associated Press Auto Writer Tom Krisher in Ann Arbor, Michigan, contributed to this report.

United States News

FILE - White House national security adviser Jake Sullivan speaks at a press briefing at the White ...

Associated Press

White House wants to engage Russia on nuclear arms control in post-treaty world

WASHINGTON (AP) — The White House is ready to have talks with Russia without preconditions about a future nuclear arms control framework even as it is the last nuclear arms control treaty between the two countries. White House national security adviser Jake Sullivan will make clear the Biden administration’s desire for talks on building a […]

3 hours ago

US Secretary of State Antony Blinken disembarks from the airplane at the Helsinki-Vantaa airport in...

Associated Press

US reopens embassy in Seychelles after 27-year absence

WASHINGTON (AP) — The United States has reopened its embassy in the Seychelles after a 27-year absence during which China and other U.S. rivals made significant inroads in the Indian Ocean islands. The U.S. State Department announced the move late Thursday, after having unveiled plans to open a diplomatic mission in northern Norway, which will […]

1 day ago

Associated Press

US expands slots for asylum app at land crossings as demand overwhelms supply

HARLINGEN, Texas (AP) — U.S. authorities on Thursday expanded slots to seek asylum at land crossings with Mexico through a mobile app for the second time in less than a month, seeking to dispel doubts it isn’t a viable option. There are now 1,250 appointments at eight land crossings, up from 1,000 previously and 740 […]

1 day ago

In this photo provided by Vernon Tyau, Jarek Agcaoili, left, with his mother Danielle, sister Jessi...

Associated Press

3 dead, 2 missing after family fishing trip in Alaska becomes a nightmare

JUNEAU, Alaska (AP) — An Alaska fishing adventure became a nightmare for a family of eight when disaster struck one of the two boats they chartered over the Memorial Day weekend, leaving three people dead and two more missing despite a desperate search over hundreds of square miles of ocean. The tragedy tore the Tyau […]

1 day ago

FILE - The sign for Fort Bragg, N.C., is displayed, Jan. 4, 2020. Fort Bragg will shed its Confeder...

Associated Press

Fort Bragg to drop Confederate namesake for Fort Liberty, part of US Army base rebranding

RALEIGH, N.C. (AP) — Fort Bragg will shed its Confederate namesake to become Fort Liberty in a Friday ceremony that some veterans view as a small but important step in making the U.S. Army more welcoming to current and prospective Black service members. The change is part of a broad Department of Defense 2020 George […]

1 day ago

FILE - Tennessee Gov. Bill Lee responds to questions during a news conference, April 11, 2023, in N...

Associated Press

In gun law push, Tennessee governor’s office memo says NRA prefers to ’round up mentally ill people’

NASHVILLE, Tenn. (AP) — Tennessee Gov. Bill Lee’s administration accused the National Rifle Association of wanting to use involuntary commitment laws “to round up mentally ill people and deprive them of other liberties,” according to documents drafted by the Republican’s staffers as part of their initial attempt to pass a gun control proposal earlier this […]

1 day ago

Sponsored Articles

...

OCD & Anxiety Treatment Center

5 mental health myths you didn’t know were made up

Helping individuals understand mental health diagnoses like obsessive compulsive spectrum disorder or generalized anxiety disorder isn’t always an easy undertaking. After all, our society tends to spread misconceptions about mental health like wildfire. This is why being mindful about how we talk about mental health is so important. We can either perpetuate misinformation about already […]

(Desert Institute for Spine Care in Arizona Photo)...

Desert Institute for Spine Care in Arizona

5 common causes for chronic neck pain

Neck pain can debilitate one’s daily routine, yet 80% of people experience it in their lives and 20%-50% deal with it annually.

...

Day & Night Air Conditioning, Heating and Plumbing

Company looking for oldest air conditioner and wants to reward homeowner with new one

Does your air conditioner make weird noises or a burning smell when it starts? If so, you may be due for an AC unit replacement.

Elon Musk must still have his tweets approved by Tesla lawyer, federal appeals court rules