May 27, 2024

Biden administration urges US Supreme Court to reject Musk's appeal in SEC dispute – March 22, 2024 at 10:42 pm

President Joe Biden's administration asked the US Supreme Court on Friday to dismiss billionaire Elon Musk's legal battle with the Securities and Exchange Commission (SEC).

Musk asked the justices in December to allow his appeal after a lower court upheld his deal with the SEC after he tweeted in 2018 that he had “safe funding” to take his electric car company private, now known as X. The SEC accused Tesla Musk of defrauding investors.

Musk's deal was part of a settlement with the SEC in which he and Tesla each paid $20 million in fines, Musk stepped down as Tesla's chairman, and he agreed to allow a Tesla lawyer to approve certain Twitter posts. Musk bought the social media site in 2022 and changed its name.

Musk called the consent decree “a muzzle” on constitutional rights to free speech.

In its filing, the Justice Department said, “The agreement reached here has the legitimate purpose of reducing the likelihood that petitioner (Musk) will make future false or misleading statements in violation of the securities laws.”

2nd U.S. in Manhattan A three-judge panel of the Circuit Court of Appeals rejected Musk's claim that the SEC had used the order to conduct harassment investigations into his use of Twitter.

In its ruling, the 2nd Circuit ruled that Musk could not reconsider his Twitter posts if he had “changed his mind.” The 2nd Circuit denied Musk's request for a retrial in July 2023.

Musk's lawyers have said the SEC does not have the right to impose a “gag rule” as a condition of settling the case, which they say violates the US Constitution's First Amendment, which prohibits government restrictions on free speech. In a December filing, Musk's lawyers told the justices that authorizing the SEC to require Musk to pre-approve certain social media posts gave the agency “unbearable power.”

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In a separate case involving Musk, the 5th U.S. Circuit Court of Appeals in New Orleans agreed to review its March ruling in May 2018 that Musk violated federal labor laws by saying Tesla employees could lose stock options if they joined Twitter. A trade union. The 5th Circuit Court of Appeals heard arguments in the case in January.