Musk Seeks to End SEC Oversight on Tesla-Related Tweets
After winning a securities fraud trial, Elon Musk’s attorney has once again requested that an appeals court throw out his 2018 deal with the Securities and Exchange Commission (SEC). The deal required a company lawyer to review Musk’s Tesla-related tweets before he shared them.
On February 3, a San Francisco federal court jury found that Musk and Tesla were not liable in a class-action securities fraud trial linked to tweets Musk made in 2018. Musk faced a lawsuit from Tesla shareholders over a series of tweets he posted in August 2018, claiming that he had “funding secured” to take the automaker private for $420 per share and that “investor support” for the deal had been “confirmed.” Following Musk’s tweets, trading in Tesla was suspended, and the company’s stock price remained unstable for weeks.
In 2018, Musk settled with the SEC over the tweets and subsequently agreed to a modified settlement deal requiring a legal and regulatory compliance individual at Tesla (known informally as a “Twitter sitter”) to approve any of Musk’s tweets containing information about the publicly traded company that could affect its stock price.
Musk’s lawyer, Quinn Emanuel Partner Alex Spiro, wrote in a letter to the court this week that the SEC lacks support for their revised settlement agreement in light of the recent jury verdict. “The jury’s verdict provides further reason why the public interest in avoiding unconstitutional settlements easily subsumes the SEC’s purported stake in the consent decree,” Spiro wrote in a filing.
Musk and the SEC have yet to respond to requests for comment. The attorneys for the shareholders who sued Musk and Tesla over the tweets about taking the company private still have time to file an appeal. Levi & Korsinsky Partner Nicholas Porritt, the lead attorney for the shareholders in that case, did not respond to a request for comment.
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