Musk Files To Lift SEC Decree Over Tweets

Business

Billionaire Elon Musk is appealed against the US District judge’s refusal to end his feud with the SEC regarding some of his tweets, that the SEC deemed to have undermined the investors of his skyrocketing EV company, Tesla, Inc. (TSLA).

The filing said that Musk will appeal to the 2nd U.S. Circuit Court of Appeals in Manhattan in order to reverse District Judge Lewis Liman’s verdict on April 27 where he allowed his consent decree that resolved SEC’s issue with Musk to stand.

Musk, back in March, asked a federal judge to end his 2018 agreement with the top US securities regulator that some of his tweets need to be inspected by a lawyer. Musk had also asked the judge to block a US Securities and Exchange Commission subpoena asking for records of pre-approval of a poll conducted on Twitter in November on the possibility of selling some of his stock. Elon Musk’s lawyers wrote to US District Judge Alison Nathan in Manhattan had ruled, “The SEC’s pursuit of Musk has crossed the line into harassment, which is quintessential bad faith.”

Earlier in 2018, before the stratospheric rise of Tesla, Musk had tweeted that he has secured sufficient funding to take Tesla private. This resulted in chaos which led to Musk having to pay $20 million in fines and giving up his role as the chairman of Tesla.

Again in November 2021, Musk conducted a Twitter poll that he would offload 10 percent of his Tesla stake if the votes were in favor. They came back positive and Tesla shares took a hit. Musk has since sold $16.4 billion of his stock.

The tweet reignited questions about whether Musk abided by his SEC agreement to obtain approval from a Tesla lawyer before giving written communications regarding the company to his people and shareholders.

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

In his lawsuit, Musk said that he was “forced” to sign the decree, talking about the SEC’s “unrelenting regulatory pressure” and as the “SEC’s action stood to jeopardize the company’s financing”. He said the company’s several large shareholders “could cede their ownership in Tesla, substantially affecting Tesla’s financing, if the case was not settled in a proper manner.

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