Elon Musk will not be able to get out of his agreement that requires monitoring of his tweets about the company. Bloomberg informed. A judge rejected his request to abandon a 2018 settlement made with the US Securities and Exchange Commission (SEC) that required a company lawyer to approve any Tesla-related tweets. The judge also denied Musk’s request to block an SEC subpoena related to possible insider trading.
Musk can’t now try to back out of the deal he knowingly and voluntarily signed by simply lamenting that he felt he had to accept it at the time, but now, once the specter of litigation is a distant memory and his company has become, his almost invincible estimate wishes he hadn’t,” wrote U.S. District Judge Lewis Liman.
Musk may wish it were otherwise, but he remains subject to the same enforcement authority, and has the same means to challenge the exercise of that authority, as any other citizen.
After Musk tweeted in 2018 that he had “funds secured” to take Tesla private at $420, the SEC sued saying Musk had misled investors. The parties eventually settled, with Musk and Tesla agreeing to pay $20 million each and have lawyers review Musk’s Tesla-related tweets.
However, last month, Musk asked a federal court to rescind the deal, saying he felt “obliged” to sign the consent decree during a period when Tesla’s financial health was at risk. A self-described “free speech absolutist,” he also claimed through his attorney that the settlement affected his First Amendment rights.
The judge also denied Musk’s request to vacate an SEC subpoena related to a twitter poll made by asking users if they should sell Tesla shares or not. Officials were concerned that he might have told his brother Kimbal about the survey, prompting the brother to sell 88,500 shares just one day before the November 6, 2021, tweet. In response, Musk said that the Twitter survey in question was only intended to gather information and not to disclose information that would have to be reported to the SEC.
“Musk may wish it were otherwise, but he remains subject to the same enforcement authority, and has the same means to challenge the exercise of that authority, as any other citizen,” Liman wrote. “In fact, to conclude otherwise would be to hold that a serial or repeat securities offender would enjoy greater protection from SEC enforcement than a person who has never been charged with a securities law violation.” .
In response, Musk’s attorney, Alex Spiro, said the court’s ruling still means he can address SEC subpoenas on a case-by-case basis. “The court simply says that we can act to rescind these summonses when compelled,” he said. Bloomberg. “Nothing will change the truth, which is that Elon Musk was considering taking Tesla private and could have; all that is left half a decade later is remnant litigation that will make the truth ever clearer.”
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