Tech billionaire Elon Musk filed a Supreme Court appeal Thursday to a Securities and Exchange Commission order that he limit public communications about his businesses, claiming that the 2018 agreement is a “muzzle” on his free speech rights.
The case stems from allegations that Musk was influencing the price of Tesla stock with social media posts. Musk agreed to an SEC demand for preapproval from lawyers on posts, but he is now appealing that agreement, calling it unconstitutional.
The appeal, first reported by Reuters, argues that the SEC agreement falls under a “prior restraint” of Musk’s First Amendment speech rights and should be thrown out.
“The pro-approval provision in Mr. Musk’s consent decree … is a quintessential prior restraint that the law forbids,” Musk’s attorneys wrote in the appeal. “It chills Mr. Musk’s speech through never-ending threats of contempt, fines or even imprisonment for otherwise protected speech if not pre-approved to the SEC’s or a court’s satisfaction.”
The 2018 agreement was made after Musk posted on Twitter — before he purchased the site years later — that he intended to make Tesla a private company, resulting in the company’s stock rising.
He was accused of attempting to manipulate Tesla stock prices again in 2021, after he polled his Twitter followers over whether he should sell a 10th of his stock, a move that would have drastically changed the market price.
A federal appeals court shot down his challenge to the agreement in May.
“We see no evidence to support Musk’s contention that the SEC has used the consent decree to conduct bad-faith, harassing investigations of his protected speech,” according to the appeals court ruling. “To the contrary, the record indicates that the SEC has opened just three inquiries into Musk’s tweets since 2018. The first resulted in the consent decree that is the subject of this appeal.”
Musk also faces a separate SEC investigation over his purchase of Twitter, which he renamed to X. The agency sued Musk in October in a bid to force him to testify.
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Originally posted 2023-12-07 21:15:09.