The Supreme Court on Monday rejected an appeal from Elon Musk over a settlement with securities regulators that requires him to get approval in advance of some tweets that relate to Tesla, the electric vehicle company he leads.
Quick Read
- Supreme Court Decision on Musk: The U.S. Supreme Court rejected an appeal from Elon Musk regarding a settlement that mandates prior approval of some of his Tesla-related tweets by a company attorney.
- Background of the Case: The legal issue originated from Musk’s 2018 tweets claiming secured funding to take Tesla private, which significantly affected Tesla’s stock price and trading activities.
- Settlement Details: The settlement with the Securities and Exchange Commission (SEC) requires tweet approvals to prevent misinformation, following Musk’s misleading tweets about privatizing Tesla at $420 per share.
- First Amendment Concerns: Musk challenged the settlement arguing it constitutes “prior restraint” of his speech, violating the First Amendment. However, the court upheld the lower-court rulings.
- Ongoing SEC Scrutiny: The SEC has continued to monitor Musk’s compliance with the settlement, investigating potential violations related to unapproved tweets about selling his Tesla stock.
- Musk’s Acquisition of Twitter: Since acquiring Twitter in 2022, now called X, Musk’s use of the platform for communicating about business decisions remains under close watch.
The Associated Press has the story:
Supreme Court rejects Musk appeal over tweets that must be approved by Tesla
Newslooks- WASHINGTON (AP) —
The Supreme Court on Monday rejected an appeal from Elon Musk over a settlement with securities regulators that requires him to get approval in advance of some tweets that relate to Tesla, the electric vehicle company he leads.
The justices did not comment in leaving in place lower-court rulings against Musk, who complained that the requirement amounts to “prior restraint” on his speech in violation of the First Amendment.
The case stems from tweets Musk posted in 2018 in which he claimed he had secured funding to take Tesla private. The tweets caused the company’s share price to jump and led to a temporary halt in trading.
The settlement with the Securities and Exchange Commission included a requirement that his tweets be approved first by a Tesla attorney. It also called for Musk and Tesla to pay civil fines over the tweets in which Musk said he had “funding secured” to take Tesla private at $420 per share.
The funding wasn’t secured, and Tesla remains public.
The SEC’s initial enforcement action against Musk alleged that his tweets about going private violated antifraud provisions of securities laws. The agency began investigating whether Musk violated the settlement in 2021 when he did not get approval before asking followers on Twitter, now X, if he should sell 10% of his Tesla stock.
Musk acquired Twitter in 2022.
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