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Washington – On Monday, the Supreme Court dismissed a bid by tech mogul and Tesla’s CEO, Elon Musk, to contest the conditions of a settlement he had made with the Securities and Exchange Commission (SEC). This settlement mandated that a lawyer vet certain social media posts made by Musk.
The justices dismissed Musk’s appeal against a decision made by the 2nd U.S. Circuit Court of Appeals in New York, which favored the government agency. Musk argued that the SEC had unfairly restricted his ability to discuss Tesla-related matters online, referring to it as the “Twitter sitter” provision.
Formerly known as Twitter, X is now under the ownership of Elon Musk, who acquired the social media platform in 2022. Musk, known for his impulsive use of social media, particularly Twitter, faced scrutiny from the SEC following his 2018 tweets claiming to have secured funding to privatize Tesla. These tweets initially caused a surge in Tesla’s shares but were later deemed by the agency as “materially false and misleading,” constituting a violation of securities law.
Musk consented to resolve a civil securities action initiated by the SEC, culminating in the acceptance of the social media provision as part of the agreement. Additionally, in a distinct civil case, a jury ruled last year that Musk was not responsible for misleading investors.
Presently, Musk asserts that the constraints on his speech are unconstitutional, contending that he was essentially pressured into consenting to them. According to his legal team, outlined in court documents, Musk argues that the SEC has been conducting a continuous effort against him.
The provision “limits Mr. Musk’s speech, even when it’s truthful and accurate. It applies to speech beyond the scope of securities laws and unrelated to the behavior underlying the SEC’s civil action against Mr. Musk,” stated the lawyers. In response, the SEC argued in court documents that Musk had relinquished his right to raise this argument when he agreed to the settlement.
