Musk Asks Judge to End SEC Oversight of His Tesla Tweets

Elon Musk
Elon Musk says his tweets in 2018 were true about him considering taking Tesla private and that the funding had been secured. (Jeenah Moon/Bloomberg News)

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Tesla Inc. Chief Executive Officer Elon Musk asked a judge to end the U.S. Securities and Exchange Commission’s oversight of his Twitter posts under a 2018 agreement because he claims it is being used to “trample” his free speech rights.

Musk also asked the judge to block an SEC subpoena for documents relating to the review of his tweets and his sale of stock and options, a court filing on March 8 showed. An SEC spokesperson didn’t immediately respond to a request for comment.

The SEC is investigating whether Musk and his brother Kimbal violated securities laws when selling shares in the company late last year, according to a person familiar with the matter. Last month, Tesla disclosed that it had received an SEC subpoena on Nov. 16 seeking information about its governance processes and compliance with the September 2018 agreement.

In that deal, Tesla pledged to institute oversight of his Twitter posts and other communications about the company after the regulator alleged he had committed securities fraud by saying on the social media platform in 2018 that he had secured funding for the company to go private.

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Tesla and Musk complained last month to U.S. District Judge Alison Nathan that the SEC is targeting them with “unrelenting investigation” for criticizing the government, while failing to pay Tesla shareholders the $40 million that the agency collected in the 2018 settlement.

Musk said in a court affidavit he was “forced to sign” an agreement with the SEC because the agency’s “unrelenting regulatory pressure” and “collateral consequence” of the government complaint against him “stood to jeopardize” Tesla’s ability to raise money. At the time, “Tesla was a less mature company” than it is today, he said.

“I never lied to shareholders,” Musk said, adding that his tweets in 2018 were true about him considering taking Tesla private and that the funding had been secured. “I would never lie to shareholders. I entered into the consent decree for the survival of Tesla, for the sake of its shareholders.”

—With assistance from Christian Berthelsen.