The SEC still is contending that lawyers should monitor Elon Musk when he tweets about Tesla, his car company.
Musk has tried to fight the SEC order. But in a filing Tuesday in federal court, SEC lawyers said that Musk had not met a “high burden” to set aside a 2018 order. That required Tesla lawyers to approve and/or monitor Musk’s tweets about the publicly-traded car company.
Elon Musk Tesla Tweets: What to Know
- Musk tweeted in August, 2018, that he had funding to take Tesla private.
- Tweet impacted stock prices. Some stockholders filed suit against him.
- Musk and Tesla paid a combined $40 million fine.
- In SEC settlement, regulators required Tesla lawyers vet the billionaires posts about the company.
- SEC also is concerned about tweet from November
Anyone who frequents Twitter knows that Elon Musk, the eccentric billionaire, loves to post on the platform. He has nearly 80 million followers and has tweeted more than 17,000 times. He gives his thoughts on a variety of topics. This month, he’s taken on Russia’s Vladimir Putin and furnished satellite internet services to the people of Ukraine. And on Tuesday, Musk tweeted his thanks to Germany. This week, Musk danced to celebrate the opening of the first Tesla factory in Europe.
But the SEC takes issue with what he tweets about Tesla. The regulators accused him of defrauding investors in August 2018. That’s when he told his social media following that he’d secured funding to take Tesla from a public to private company. But there apparently was no buyout, although Musk contended he had an offer of $420 a share from Saudi Arabia’s sovereign wealth fund.
Musk’s tweet impacted Tesla’s stock prices. Eventually, the SEC settled with Musk and Tesla. Musk paid a $20 million civil fine and stepped down as chairman of Tesla’s board. Tesla also paid a $20 million fine. As part of the settlement, the SEC required monitoring of Musk’s tweets.
Some Tesla shareholders joined in a class-action lawsuit against Musk. The suit is asking for a summary judgment.
Musk contends that the SEC order about his tweets is harassment. He claims it violates his First Amendment rights for free speech and is payback for criticizing the government. So he is trying to have it struck down.
The SEC said it has the authority to require Tesla attorneys to vet Musk’s tweets about the company.
“Musk complains about ‘the sheer number of demands’ by the SEC from 2018 to the present, which he characterizes as harassment,” the SEC said in its filing.
“But Musk’s own chronology of alleged demands is both underwhelming and reflects legitimate inquiries as to new potentially violative conduct by Tesla and Musk.”
The SEC also is seeking more information behind Musk’s November 2021 tweet. That’s when he polled his followers on whether he should sell 10 percent of his Tesla stock. The poll he took said yes. Tesla prices fell, And Musk, since then, sold more than $16 billion of his stock.