On Tuesday, March 8, 2022, Tesla CEO Elon Musk urged a federal judge to terminate a 2018 settlement with the Securities and Exchange Commission (SEC), which required some of his Twitter posts be pre-approved. Elon claimed that his right to freedom of speech is being violated.
Musk’s attorney Alex Spiro filed a motion, arguing that the SEC’s subpoena of documents related to Musk’s sale of Tesla stock and the review process of his tweets do not have a basis in the law. Spiro stated that the SEC cannot take action on Musk’s tweets without court authorization and that this is a ‘harassment’ to the CEO and his company. Musk filed a separate motion with the U.S. District Court, disputing the SEC’s 2018 fraud lawsuit against him.
The SEC had charged that Musk committed securities fraud when he tweeted in August 2018 that he secured funding over Tesla stock and has the money to take Tesla private at $420 per share. The funding was far from secured and the company remains public, but the tweet had drove up the stock price and created a disturbance in the stock market. Must went on a campaign against the SEC, but ultimately, Tesla and Musk ended up reaching a settlement. Musk agreed to step down from the role of chairman of the board, and Tesla and Musk each had to pay $20 million in fines. Also, Musk had to agree to have his tweets reviewed by the SEC’s legal department.
SEC declined to make any comments or answers to the latest demands from Musk and Spiro. How or whether this court filing would impact the Tesla stock is yet to be known.