Elon Musk has failed in his latest attempt to challenge a ruling that requires a lawyer’s approval for some Tesla-related tweets. A federal appeals court in Manhattan has rebuffed Musk’s claim that the 2018 consent decree with the Securities and Exchange Commission (SEC) is an unfair “prior restraint” on his speech. The CEO could have defended himself against the charges or negotiated a different deal if he’d wanted to tweet without a legal monitor, the court panel says.
Musk reached a settlement with the SEC in 2018 after the regulator claimed that he lied when he had “funding secured” for taking Tesla private. On top of requiring approval, the deal also had Musk step down as Tesla chairman. He and his company paid separate $20 million fines. The SEC wanted to find Musk in contempt when he claimed that Tesla would make 500,000 cars one year, but a judge pushed the parties involved to negotiate a 2019 arrangement that gave Musk more freedom in return for requiring legal team approval for finance-related tweets.
The tech leader has fought with the SEC in the years since, and more recently has been calling for courts to undo the settlement. Musk claims the Commission pressured him to strike a deal and overstepped its authority. The pact violated free speech rights, Musk’s side claimed. A judge denied a request to cancel the deal last April, prompting the appeal.
It’s not certain how Musk and Tesla will respond. Tesla disbanded its communications team years ago. If this latest decision stands, though, Musk won’t have much choice but to either have his tweets screened or risk a regulatory crackdown.