A federal appeals court on Monday rejected Elon Musk’s bid to modify or end his 2018 securities fraud settlement with the U.S. Securities and Exchange Commission that required a Tesla Inc. lawyer to approve some of his tweets in advance.
The 2nd U.S. Circuit Court of Appeals in Manhattan rejected Musk’s claim that the SEC exploited his consent decree to conduct bad-faith, harassing investigations that violated his First Amendment free speech rights under the U.S. Constitution.
Musk’s decree resolved an SEC lawsuit accusing him of defrauding investors with an Aug. 7, 2018, tweet that he had “funding secured” to take his EV company private.
It required advance review of tweets that might contain material information about Tesla. Musk and Tesla each also paid $20 million in civil fines, and Musk gave up his role as chairman.
In the appeal, Musk’s lawyers called the pre-approval mandate a “government-imposed muzzle” that amounted to an illegal prior restraint on his speech.
