US Appeals Court Orders Musk to Abide by SEC Tweet Settlement

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Facts

  • The US Second Circuit Court of Appeals in Manhattan on Monday ruled that Elon Musk cannot back out of the settlement he agreed to with the Securities and Exchange Commission (SEC) following his 2018 tweets that claimed he had the funding to take Tesla private.1
  • In upholding the settlement, which requires Musk's tweets to be approved by a lawyer before he can post them, the court rejected Musk's claim that the SEC was exploiting the consent decree "to conduct bad-faith, harassing investigations of his protected speech."2
  • The three-judge panel added that since the settlement, which also required both Musk and Tesla to pay fines over "funding secured" tweets, the "SEC has opened just three inquiries into Musk’s tweets since 2018."3
  • The three tweets investigated include the original 2018 tweet as well as one that contained misleading information about Tesla’s vehicle production and another regarding a poll proposing that Musk sells 10% of his Tesla stock.2
  • While Musk also argued the settlement forcibly violated his right to free speech, the court added that parties entering consent decrees may voluntarily waive their First Amendment and other rights.4
  • Musk's attempts to remove himself from the consent decree come as no one has been able to uncover the name of the company lawyer charged with reviewing his tweets. Tesla has declined to identify the individual.2

Sources: 1Al Jazeera, 2Verge, 3Axios, and 4Washington Post.

Narratives

  • Narrative A, as provided by Ars Technica. As this consent decree is a government-imposed muzzle on Elon Musk, the Twitter CEO's lawyers are right to pursue further litigation until his First Amendment rights are returned. Musk agreed to acknowledge his past poor judgment and pay some fines — not to allow the SEC to monitor his every thought and block him from exercising his free speech rights on his own social media platform.
  • Narrative B, as provided by SFGate. Even though Elon Musk agreed to have his tweets reviewed by a lawyer and the SEC had the right to investigate breaches of the agreement, the agency still only probed three out of his countless tweets since the settlement was signed. Despite Musk's decision to waive his First Amendment rights, the government has not come close to violating his freedom of speech.