Tesla CEO Elon Musk is asking a federal judge to initiate a consent decree with the Securities and Exchange Commission that requires his tweets to be cleared by a lawyer before they can be published.
The executive order, which was signed in 2018 after Musk’s infamous ‘funding secure’ tweet, is being used ‘to trample on Mr. Musk’s First Amendment rights and place prior restrictions on his speech,’ his lawyers said. in a filing filed Tuesday. Musk is also seeking to block an SEC subpoena related to his tweets regarding the sale of his 10% stake in Tesla.
Musk sent the notorious tweet on August 7, 2018, in which he claimed to have the funding to take Tesla private at $420 per share. (Tesla has been a publicly traded company since 2010.)
The SEC immediately launched an investigation, eventually concluding that, despite having held a few meetings with the Saudi sovereign wealth fund, Musk “never discussed a $420-per-share takeover transaction with a potential funding source. , had done nothing to investigate”. whether it would be possible for all current investors to remain with Tesla as a private company through a “special purpose fund”, and had not confirmed Tesla’s investor support for a possible going-private transaction.
But in a new filing in court on Tuesday, Musk says “funding has been secure, and there has been investor support. He said he felt pressure to fix the issue with the SEC or risk Tesla’s financial security.
“Despite this, the relentless regulatory pressure from the SEC, combined with the collateral consequence of the SEC’s complaint against me, caused a scenario in which I was coerced into signing the consent decree in 2018,” Musk said. . “Tesla was a less mature company and the SEC action risked jeopardizing the company’s funding.”
Musk said he plans to sign the executive order until he learns it could also negatively affect his other companies – Space X, Neuralink and The Boring Company. He said he tried to get out of it but finally gave in after the SEC sued him for securities fraud and several major Tesla shareholders threatened to sell their stake in the company. .
“I just wanted to just help Tesla, but I didn’t want to hurt other companies,” Musk said. “It was wrong to do so.”
The SEC is investigating whether recent stock sales by Musk and his brother Kimbal Musk potentially violated insider trading rules. The investigation began late last year after Musk and his brother sold $108 million worth of Tesla stock, according to the the wall street journal. This sale came the day before Elon Musk polled his Twitter followers on whether he should sell 10% of his stake in the company – and promised to respect the poll results.
In this week’s filing, Musk defended his actions as his attorneys seek to overturn the agency’s subpoena. “I have never lied to shareholders,” Musk writes. “I would never lie to shareholders. I entered into the consent decree for the survival of Tesla, for the benefit of its shareholders.
Musk’s dispute with the SEC has erupted in recent weeks. The billionaire CEO accused the agency of subjecting him and his company to “endless and baseless investigations”. He also alleged the agency was ignoring his pledge to distribute $40 million in fines to Tesla shareholders, as per the 2018 settlement. And he claimed the SEC was disclosing information regarding federal investigations without providing specific evidence. to support his assertions.