Apr 27, 2022 - Economy

Judge rejects Musk's bid to end 2018 SEC settlement

Elon Musk. Photo: Al Drago/Bloomberg via Getty Images

A federal judge on Wednesday denied Elon Musk's request to scrap a 2018 settlement with the Securities and Exchange Commission that required some of his tweets to be preapproved.

Why it matters: The decision means Musk could remain barred from freely tweeting about Tesla despite reaching an agreement to buy Twitter for $44 billion.

  • Musk asked a federal judge in March to terminate the consent decree, which required Tesla's counsel to vet his tweets about the company after he had claimed on Twitter to have "funding secured" to take Tesla private.
  • The settlement also required him to step down as Tesla's chair and pay a $20 million fine.

Between the lines: Musk said in court papers that he was coerced into making the deal with the SEC, claiming that he "never lied to shareholders" in his initial tweet that he had secured funding to take Tesla private.

  • Since asking the court to end the SEC settlement, Musk launched a campaign to take over Twitter that resulted in him purchasing the company for $54.20 a share.

What they're saying: "Musk, by entering into the consent decree in 2018, agreed to the provision requiring the pre-approval of any such written communications that contain, or reasonably could contain, information material to Tesla or its shareholders," U.S. District Judge Lewis Linman said in the written opinion.

  • "He cannot now complain that this provision violates his First Amendment rights. Musk's argument that the SEC has used the consent decree to harass him and to launch investigations of his speech is likewise meritless and, in this case, particularly ironic," he added.
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