Famed businessman and Twitter (TWTR) – Get Free Report user-turned-owner Elon Musk got some bad news about his social media account today thanks to a federal appeals court. On Monday, May 15, Manhattan’s 2nd U.S. Circuit Court of Appeals decided that Musk’s claims against the U.S. Securities and Exchange Commission (SEC) were without merit.
Musk was seeking an appeal to his 2018 consent decree with the SEC regarding what he is and is not allowed to post to his Twitter account about his electric vehicle company Tesla (TSLA) – Get Free Report. Musk’s lawyers claim that the regulator’s rules and conditions infringe on Musk’s right to free speech and that the decree’s pre-approval mandate was “a government-imposed muzzle.”
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The decree was part of the resolution to a 2018 case in which the SEC claimed that Musk had committed fraud when he tweeted that he had “funding secured” for Tesla to go private, despite not being close to any kind of buyout. The case was settled with a few stipulations on top of the consent decree, which ordered that a Tesla lawyer approves of any Twitter posts that may contain information about the company.
Musk and Tesla both were required to pay $20 million in civil fines, and the settlement also resulted in the billionaire’s step down from his role as Tesla chairman.
Federal regulators seem to have their eyes fixed on Musk — the SEC is also investigating a late-2021 tweet in which Musk asked Twitter users if he should sell shares of the electric vehicle company. Meanwhile, the Federal Trade Commission (FTC) has requested documents related to the massive layoffs at Twitter that began when Musk took over the platform.
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