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A federal judge has rejected Elon Musk’s bid to overturn a deal with regulators requiring him to get his tweets about Tesla pre-approved, meaning the billionaire still won’t be able to tweet freely even after his acquisition of Twitter closes.
Musk, who makes no secret of his hostility toward the Securities and Exchange Commission, has for years been battling his 2018 settlement with the regulator over his infamous ‘funding secured’ tweets.
The deal requires Musk to have all of his tweets about Tesla reviewed by company lawyers, after the SEC accused him of misleading investors by claiming to have financial backing to take the company private at $420 per share.
Musk claims the settlement infringes on his free speech rights — but in a ruling on Wednesday, US District Judge Lewis J. Liman rejected his bid to scrap the requirement.
A federal judge has rejected Elon Musk’s bid to overturn a deal with regulators requiring him to get his tweets about Tesla pre-approved
Judge Liman wrote that Musk had freely agreed to the settlement and its requirements, negating his claim that the SEC is harassing and oppressing him.
‘He cannot now complain that this provision violates his First Amendment rights,’ wrote Liman in the motion.
US District Judge Lewis J. Liman rejected Musk’s attempt to overturn the settlement
‘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,’ the judge added.
In a statement to DailyMail.com, Musk’s attorney Alex Spiro insisted that the basis of the SEC’s allegations about the 2018 tweets is false, and that Musk did in fact have funding secured to take Tesla private.
‘Nothing will ever change the truth which is that Elon Musk was considering taking Tesla private and could have – all that’s left some half decade later is remnant litigation which will continue to make that truth clearer and clearer,’ said Spiro.
As part of the SEC settlement, Musk also paid a $20million fine and stepped down as Tesla’s chairman.
Musk has been battling his settlement with the SEC over his August 7, 2018 tweets, which caused the share price of Tesla to fluctuate wildly for several days
In Wednesday’s motion, the judge also denied Musk’s request to quash a SEC subpoena seeking documents related to tweets the Tesla CEO made on November 6, 2021.
The tweets asked his followers if they supported his selling 10 percent of Tesla stock to pay income taxes, and said that he would abide by the poll results.
The SEC is investigating whether those November tweets violated Musk’s 2018 settlement.
Musk, who is the world’s richest man with an estimated net worth of $219 billion according to Forbes, has repeatedly claimed that his ‘funding secured’ tweet was not misleading, as regulators allege.
He reiterated the claim earlier this month, telling the audience at the TED2022 conference in Vancouver, British Columbia: ‘The SEC knew that funding was secured but they pursued an active, public investigation nonetheless at the time. Tesla was in a precarious financial situation.’
In the past, the billionaire entrepreneur has said he was in talks at the time with Saudi Arabia’s sovereign wealth fund and that he was confident he would reach a deal. But no agreement was ever announced.
During a TED Conference on Thursday, Musk said he felt forced into the deal with the SEC to save Tesla and called financial regulators in the SEC’s San Francisco office ‘bastards.’ Musk (right) is pictured Thursday with head of TED Chris Anderson (left)
Musk has said he felt forced into the deal with the SEC to save Tesla.
‘I was told by the banks that if I did not agree to settle with the SEC, that the banks would cease providing working capital and Tesla would go bankrupt immediately,’ Musk said at the TED2022 conference.
‘That’s like having a gun to your child’s head,’ he said. ‘So I was forced to concede to the SEC unlawfully — those bastards.’
Separately, Musk also faces a lawsuit from Tesla shareholders alleging that he defrauded them with the ‘funding secured’ tweets.
The trial date for the lawsuit has been set for May 31 in San Francisco federal court. However, the trial date could still change.
Meanwhile, Musk on Monday revealed that he does have ‘funding secured’ to acquire Twitter in a $44 billion deal that is expected to close by late October.
‘Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated,’ Musk said in a statement announcing the deal.
‘I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans,’ he added.
‘Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it.’