Elon Musk asks judge to throw out court agreement for Twitter posts approval

A lawyer for the Tesla chief said a subpoena from the US Securities and Exchange Commission has no basis in law.

Elon Musk
Elon Musk

Tesla chief executive Elon Musk is asking a federal judge to nullify a subpoena from securities regulators and throw out a 2018 court agreement in which he had to have someone pre-approve his posts on Twitter.

In a motion filed on Tuesday in US District Court in Manhattan, Musk lawyer Alex Spiro contends that the subpoena from the US Securities and Exchange Commission has no basis in law.

He also says the SEC cannot take action about Mr Musk’s tweets without court authorisation.

Mr Spiro says the SEC has used the court agreement “to trample on Mr Musk’s First Amendment rights and to impose prior restraints on his speech”.

The SEC has in the past denied issuing subpoenas in the Musk Twitter case.

Tesla
(Niall Carson/PA)

The dispute, which had been limited to letters to Judge Alison Nathan this year, stems from an October 2018 agreement in which Mr Musk and Tesla each agreed to pay 20 million dollars in civil fines over his tweets about having the money to take Tesla private at 420 dollars per share.

The funding was far from secured and the company remains public, but the tweet drove up the stock price.

The settlement specified governance changes, including Mr Musk’s removal as board chairman, as well as pre-approval of his tweets.

Mr Spiro’s motion asks Judge Nathan to scrap the agreement, alleging the SEC is using it and “near limitless resources” to chill Mr Musk’s speech.

It says Mr Musk signed the agreement when Tesla was a less mature company and SEC action jeopardised the company’s financing.

It says the SEC subpoenaed Tesla in November after Mr Musk tweeted about a plan to sell 10% of his Tesla stock to pay taxes.

The subpoena sought information about whether he received approval from Tesla before his tweets, and how the firm complied with the court agreement.

Mr Spiro contends the subpoena is one in a “winding parade” of investigations into Mr Musk and his companies that are being done without factual basis.

Most Read

Most Read

Sorry, we are not accepting comments on this article.

Top Stories

More from the Shropshire Star

UK & International News