SEC defends TSLA 'funding secured' settlement, says Elon Musk still needs a 'Twitter sitter'
Musk and his lawyers have argued that some of the terms of the settlement are unconstitutional, but the SEC is remaining stalwart on the matter.
If there are two things that we can be certain Elon Musk is not fond of, it’s the US Securities and Exchange Commission and the settlement he was forced into after a 2018 tweet in which he heavily affect Tesla stock activity, prompting action from the agency. One result of this was Musk agreeing to have a “Twitter sitter” that would check any of his Tesla-related tweets before they went out. Musk has been on record several times sharing contempt for the situation and even tried to appeal, claiming the stipulation is unconstitutional. The SEC argued in a recent letter that it’s still necessary and they are headed for a court date in spring in the appeal.
The SEC’s recent letter was published on February 22, 2023, as reported by CNBC. The settlement in question relates to 2018 legal activity by the SEC after Musk wrote on Twitter that he had “funding secured” to take Tesla private and that investor support was also “confirmed.” The action halted Tesla stock trading for a while and the price on the stock went wildly erratic for a few weeks after. The SEC charged him with civil securities fraud in response to those tweets.
In addition to Elon and Tesla having to pay fines of around $20 million and Musk being forced to step down from Chairman of the Board at Tesla, he also agreed to have a “Twitter sitter” that would observe his Tesla-related tweets before they went out. Since then, Musk has repeatedly claimed that he doesn’t respect the SEC’s decision and he has further suggested that nobody reviews his tweets before he posts.
Nonetheless, Elon Musk has shared no lack of contempt for the settlement and has appealed it. Recently, Musk’s lawyers convinced jurors in a shareholder class action lawsuit that Musk did not violate securities laws with his tweets in 2018. The SEC shot back that the outcome of the class action suit “says nothing about the continuing public interest in a negotiated settlement term that does not preclude Musk from tweeting accurately about Tesla or other topics, but rather requires Tesla to review Musk’s Tesla-related communications before publication, including through Musk’s Twitter feed — a communication channel designated by Tesla for disclosure.”
Elon Musk’s legal team and the SEC are scheduled to meet for an oral argument in the appeal this Spring. Stay tuned as we continue to monitor this story for further updates.
TJ Denzer posted a new article, SEC defends TSLA 'funding secured' settlement, says Elon Musk still needs a 'Twitter sitter'