A judge quashed Elon Musk’s attempt to end the consent decree established by the Securities and Exchange Commission to limit the influence of his tweets on Tesla’s stock prices.
Musk filed a request in March to end his 2018 settlement with the SEC that required lawyers to review his tweets in case they influence Tesla stock prices, claiming it infringed on his freedom of speech and was being used by the SEC in “bad faith.” A New York Southern District Court judge ended that attempt, stating Musk’s claims were “meritless.”
“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,” wrote U.S. District Judge Lewis Linman, according to documents filed on Wednesday. “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.”
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Musk agreed to the settlement and consent decree in September 2018, saying he would pay the relevant fees and have a lawyer review all relevant tweets.
However, Musk has been on tense terms with the SEC for many years, referring to the regulatory agency as “bastards” during an appearance at the TED2022 conference. He claimed he only agreed to the SEC’s settlement so that bankers would stop threatening to end his access to capital for his various operations.
Tesla has failed to adhere to the SEC’s requirements regarding Musk’s tweets, according to a July 2021 ruling. That failure led to Tesla shareholders suing Musk in December 2021 over his tweets affecting the stock market. An additional filing from Tesla shareholders on April 18 requested that the court stop Musk from continuing to talk about the legal conflict with the SEC.
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That feud has created tension for the Tesla CEO. Harvey Pitt, a former SEC chairman, said in a Yahoo Finance interview that Musk’s attempts to thwart the SEC are just “plain stupid” and have made him “his worst enemy.”
Musk acquired Twitter on Monday, giving him private ownership of the platform for $44 billion. The deal is set to be finalized in the next six months.
