Elon Musk asks Supreme Court to weigh in on the SEC's consent decree

December 8, 2023
by
Robert Ayers

Elon Musk is asking the justices of the U.S. Supreme Court to weigh in on the legality of the consent decree that he previously entered into with the Securities and Exchange Commission (SEC), Reuters reports

The consent decree came after Musk, in August 2018, posted a message on X (then known as Twitter) in which he said two things: that he had secured the funding necessary to make his electric car company, Tesla, private for $420 per share and that he had "confirmed" the "investor support" needed for the deal.

NBC News reports, "Trading in Tesla was halted after his tweets, and shares remained volatile in the weeks that followed."

The SEC ended up charging Musk with civil securities fraud, alleging that Musk's social media posts improperly influenced the price of Tesla stock.

The consent decree

Musk would go on to reach a settlement agreement with the SEC, and this settlement included a consent decree.

As part of the agreement, Musk and Tesla were each required to pay $20 million in fines, Musk was required to step down as the chairman of Tesla, and Musk was required to have a Tesla lawyer preapprove some of his social media posts.

Musk has particularly taken issue with this last requirement, which he has referred to as a "muzzle." He has taken the matter to the courts, arguing that this amounts to a violation of his free speech rights under the First Amendment to the U.S. Constitution.

Musk, at the lower court level, was unsuccessful.

Reuters reports, "In its ruling, the three-judge panel said Musk could not revisit the screening of Twitter posts because he had 'changed his mind.' The 2nd Circuit in July denied Musk's request to rehear the case."

Musk petitions the Supreme Court

On Thursday, Musk and his lawyers asked the justices of the U.S. Supreme Court to get involved.

NBC quotes Musk's lawyers as writing that the settlement "restricts Mr. Musk’s speech even when truthful and accurate."

Musk's lawyers continue, writing, "It extends to speech not covered by the securities laws and with no relation to the conduct underlying the SEC’s civil action against Mr. Musk. And, it chills Mr. Musk’s speech through the never-ending threat of contempt, fines, or even imprisonment for otherwise protected speech if not pre-approved to the SEC’s or a court’s satisfaction."

Essentially, Musk and his legal team are arguing that this part of the consent decree is an impermissible prior restraint.

We'll have to see if the justices of the U.S. Supreme Court agree. But, first, they'll have to decide whether or not to hear the case.

Latest News

© 2024 - Patriot News Alerts