: Elon Musk seeks to end SEC’s supervision over ‘going private’ tweets
Tesla Inc. Chief Executive Elon Musk has fired another volley in his fight to end securities regulators’ oversight of his tweets, asking a judge to end a consent decree governing the “going private” 2018 fraud settlement and to block recent subpoenas.
The decree is “inequitable,” allowing the U.S. Securities and Exchange Commission’s “roving and unbounded investigations” of Musk’s “exercise of his First Amendment rights,” his lawyers said in a letter filed on Tuesday to U.S. District Judge Allison Nathan, who presided over the SEC settlement.
Musk is also asking the judge to block subpoenas sent to Tesla and Musk in November connected with the settlement. The lawyers have asked the court to keep the subpoenas off the public record.
The SEC did not immediately return a request for comment.
The regulators have used the decree “to trample on Mr. Musk’s First Amendment rights and to impose prior restraints on his speech,” the lawyers said. “Contrary to the SEC’s conception, the consent decree is not a charter for subjecting Mr. Musk to unwarranted scrutiny for exercising his constitutional right to speak his mind in public.”
In a now famous tweet in August 2018, Musk told his millions of followers he had “funding secured” to take Tesla private for $420 a share, then a substantial premium over the stock’s trading price.
Musk and Tesla
settled with the SEC in late September of that year, with Musk agreeing to step down as Tesla’s board chairman, Tesla agreeing to appoint independent board directors, among other requirements, including the monitoring and pre-approval of Musk’s Twitter accounts.
Musk and Tesla agreed to settle the charges against them without admitting to nor denying the SEC’s fraud allegations.
In a separate filing, Musk said that due to the SEC’s “unrelating regulatory pressure,” and with the intent to limit the fallout for Tesla, “caused a scenario in which I was forced” to sign the consent decree, Musk said.
“I entered into the consent decree for the immediate survival of Tesla,” Musk said. “I never lied to shareholders. I would never lie to shareholders. I entered into the consent decree for the survival of Tesla, for the sake of its shareholders.”
Last month, Musk’s lawyers accused the SEC of going “beyond the pale” to “try to muzzle and harass” Musk and the electric-vehicle maker.
Musk and Tesla requested a “course correction” for an SEC “gone rogue” with investigations and for not distributing to shareholders the $40 million in settlement fines as agreed, the February letter said.
Shares of Tesla rose more than 2% in midday trading Tuesday. The stock is up 45% in the last 12 months, compared with an advance of 9.6% for the S&P 500 index.