Elon Musk is still bound to have Tesla tweets approved by a company attorney
Drew Angerer/Getty Images News
A summary order issued by the 2nd U.S. Circuit Court of Appeals on Monday in Manhattan will keep Elon Musk bound to the terms of a settlement reached with the SEC in 2018 to have his Tesla (NASDAQ:TSLA)-related tweets approved by a company attorney.
The settlement was signed by Musk amid an investigation over his "funding secured" tweet that shocked shareholders into thinking Tesla had been bought out at $420 per share. Recently, Musk challenged a lower court judgeâs ruling last year requiring him to abide by the agreement on the grounds that circumstances have changed and because the decree contains a prior restraint that Musk contends violates the First Amendment.
However, in the ruling, the 2nd Circuit appeals court said it saw "no evidence to support Muskâs contention that the SEC has used the consent decree to conduct bad-faith, harassing investigations of his protected speech."
The SEC has opened just three inquiries into Musk's tweets since 2018. The 2nd Circuit found that each of those tweets plausibly violated the terms of the consent decree. The court also rejected Musk's prior restraint argument, saying parties entering consent decrees may voluntarily waive their First Amendment and other rights.
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