May 15, 2023 - Technology

Appeals court rules against Musk in 2018 SEC settlement

Tesla CEO Elon Musk on Jan. 24 in San Francisco. Photo: Justin Sullivan/Getty Images

A federal appeals court affirmed Monday that Elon Musk can't scrap a 2018 settlement with the Securities and Exchange Commission that required some of his tweets to be preapproved.

Driving the news: "We see 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," the summary order by the 2nd U.S. Circuit Court of Appeals in Manhattan states.

  • "To the contrary, the record indicates that the SEC has opened just three inquiries into Musk’s tweets since 2018," the order continues.

Catch up quick: The ruling comes days after arguments in the case were presented to a three-judge panel.

  • The consent decree 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 both Musk and Tesla to pay fines over tweets in which he claimed he'd secured funding to take the company private at $420 per share.
  • Musk had appealed a lower court judge's ruling that required him to remain barred from freely tweeting about Tesla, despite buying Twitter for $44 billion.
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