Tesla’s Musk wants judge to remove muzzle from US SEC

March 8 (Reuters) – Tesla Inc (TSLA.O) chief executive Elon Musk on Tuesday asked a judge to terminate or vary a 2018 agreement with the U.S. securities regulator requiring some of his tweets to be verified by a lawyer.

Musk also asked the court to block a subpoena from the US Securities and Exchange Commission (SEC) seeking pre-approval records of a Twitter poll he conducted in November about the potential sale of some of his shares. .

“The SEC’s lawsuit against Mr. Musk crossed the line into harassment, which is the epitome of bad faith,” Musk’s attorneys said in papers to the Manhattan judge.

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Musk’s lawyers said the 2018 consent decree authorized the SEC’s “travelling and unlimited investigations” of the outspoken government critic while imposing restrictions on the exercise of his constitutional freedom of speech rights. expression.

In early November last year, Musk tweeted that he would sell 10% of his stake in the electric car maker if users on the social media network approved. The poll, which won the approval of the majority of those polled, sent Tesla shares plummeting, and since then Musk has sold $16.4 billion worth of stock.

Musk’s tweet renewed the question of whether he was in compliance with the 2018 agreement that requires him to obtain attorney approval before releasing written communications about material material to Tesla or its shareholders. .

Tesla said Tuesday that Musk’s tweet about stock sales “is behavior the SEC should encourage: a CEO’s transparency with the public and shareholders on a proposed stock sale.”

The SEC did not immediately respond to a request for comment.

“I NEVER LIE”

The SEC sued Musk in August 2018 after he tweeted that he had “secure funding” to potentially take his electric car business private at $420 a share. In reality, a takeover was not close.

Tesla and Musk have settled by agreeing to each pay $20 million in civil fines and let Tesla’s attorneys pre-screen some of Musk’s communications, including Twitter posts that could affect the price of the market. stock of Tesla. Musk has also given up the presidency of Tesla.

“I have never lied to shareholders. I would never lie to shareholders. I entered into the consent decree for the survival of Tesla, for the sake of its shareholders,” Musk told U.S. District Judge Alison Nathan in a court case.

Musk added that he later learned from Tesla’s Investor Relations team that several of the company’s major shareholders “may divest their ownership of Tesla – significantly impacting Tesla’s financing – if the deal doesn’t end.” was not settled quickly”, which he says contributed to his decision to settle.

He said the decision was made to ensure Tesla’s “immediate survival”.

Musk said in the filing that he withdrew his consent to the settlement in September 2018 after learning that the SEC’s executive order could require his companies Tesla, SpaceX, The Boring Company and Neuralink “to request a publicly available waiver letter. regarding the SEC’s claims or risks”. their future ability to raise funds” through certain offers.

This prompted the SEC to file a lawsuit.

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Reporting by David Shepardson in Washington and Hyunjoo Jin in San Francisco Editing by Will Dunham and Matthew Lewis

Our standards: The Thomson Reuters Trust Principles.

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