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Elon Musk fights “government imposed muzzle” over Tesla tweets

Elon Musk

Elon Musk has accused US security regulators of illegally silencing him by repeatedly attempting to enforce a 2018 securities fraud settlement.

Musk's lawyer made the claims in a court filing that this breaches his client's free speech rights.

The document was submitted to the federal appeals court in Manhattan on Tuesday, September 27.


It was meant to back Musk's appeal of a lower court's April decision to uphold the Securities and Exchange Commission settlement.

The brief states a condition in the deal which forces Musk to obtain prior approval before tweeting about the electric car company.

The document claims it is an illegal “government-imposed muzzle on Mr. Musk’s speech before it is made.”

The settlement called for his tweets to be reviewed by a Tesla attorney before they were published.

The SEC is probing whether Musk broke the legal settlement by asking Twitter followers last November if he should sell 10 percent of his Tesla stock.

However, Musk's attorney Alex Spiro claims in the brief that the SEC is constantly probing Musk for matters not included in the settlement.

It requests that the previous approval provision be struck or modified by the Second Circuit Court of Appeals.

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Mr Spiro wrote: “The pre-approval provision in the consent decree qualifies as a prior restraint on speech that runs afoul of the First Amendment.

“It forbids future lawful speech on a range of topics absent approval.”

The brief said the risk of SEC investigations and penalties for contempt of court limits Musk's free speech.

Why is the case being heard?

The entire controversy comes from Musk's October 2018 agreement with the SEC.

He and Tesla agreed to pay $20 million in civil fines over Musk's tweets claiming of having "funding secured" to take Tesla private at $420 per share.

It turned out the money was far from locked up, and the electric vehicle firm is still publicly traded, yet Tesla's stock price increased.

The deal required governance reforms, such as Musk's removal as board chairman and pre-approval of his tweets.

In April, US District Judge Lewis Liman in New York denied Musk's request to vacate the deal he struck with the SEC.

He also refused a motion to dismiss Musk's demand for information on potential settlement breaches.

Source: NBC News

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