Judge Rejects Elon Musk's Bid to Throw out Settlement
Facts
- On Wed., a federal judge denied Elon Musk's bid to terminate a settlement with the Securities and Exchange Commission (SEC) requiring him to clear any tweets related to Tesla prior to publication.1
- Musk reached the settlement with the SEC over a 2018 tweet, in which he allegedly falsely claimed that he had secured funding to take Tesla private. Musk filed a motion on Mar. 8 to end the consent decree.1
- Tesla shares rose after the tweet, and the SEC accused Musk of manipulating the market and defrauding investors. Tesla and Musk were each required to pay $20M in civil fines, and the CEO was made to step down as chairman.2
- Musk had also moved to halt a separate SEC investigation into tweets he posted last year about the sale of some of his Tesla stock - it was also denied.2
- The ruling comes just as an agreement was made for Musk to buy Twitter for roughly $44B - a deal that is expected to close later this year. The financing of the purchase is substantially dependent on the value of Musk's shares in Tesla.3
Sources: 1Forbes, 2Reuters and 3Itn.
Narratives
- Right narrative, as provided by Wall Street Journal. The SEC is abusing the deal in order to make unreasonable demands for voluminous and costly document productions. The attempt to enforce the pre-clearance rule is a violation of Musk's freedom of speech, and the SEC's vendetta must be put to a stop.
- Left narrative, as provided by Verge. Freedom of speech doesn't extend to corporate leaders engaged in fraud or the violation of securities regulations. This issue was already settled in 2018, and Musk can't wiggle his way out now by complaining about something that he already willingly agreed to.