Mar 8, 2022 - Economy

Elon Musk asks judge to terminate 2018 settlement with SEC

Tesla CEO Elon Musk near Gruenheide, Germany, in September 2020.

Tesla CEO Elon Musk near Gruenheide, Germany, in September 2020. Photo: Maja Hitij/Getty Images

Tesla CEO Elon Musk asked a federal judge Tuesday to terminate a 2018 settlement with the Securities and Exchange Commission that resolved a federal lawsuit over Musk's allegedly false statements about efforts to take Tesla private.

Why it matters: The settlement, which required Musk to step down as the chair of Tesla, pay a $20 million fine and get pre-approval for all of his tweets about the company, has generated friction between the billionaire and federal regulators.

  • The SEC last year accused Musk of violating the settlement on at least two occasions with tweets about Tesla's solar roof production volume and its stock price, while Musk last month accused the SEC of undertaking a "harassment campaign" in an effort to "chill his exercise of First Amendment rights."

What they're saying: Lawyers for Musk in a motion filed Tuesday argued that the requirement to preapprove all of his tweets has "no basis in the securities laws" and violates protected speech.

  • "Mr. Musk and companies in which he holds leadership roles or financial stakes have been subject to one investigation after another, accompanied by round after round of demands for voluminous, costly document productions, with no signs of abatement," the motion reads.
  • Musk in a separate motion disputed the SEC's 2018 fraud lawsuit against him, saying he "never lied to shareholders. I would never lie to shareholders. I entered into the consent decree for the survival of Tesla, for the sake of its shareholders."

The big picture: A Tesla filing last month included a disclosure that the company received a subpoena from the SEC in November to ensure compliance with the settlement.

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