Elon Musk Still Needs Lawyer to Approve Tesla Tweets: SEC

Lavina Daryanani
Source: Metro Philadelphia

Elon Musk’s tweets have always been unfiltered and unadulterated. Right from opining under various threads and participating in banter to revealing his political inclination and randomly tweeting about dogs, the Tesla executive has time and again proven to be just like any normal Twitter user.

A couple of years ago, the SEC flagged Elon Musk’s behavior. In October 2018, the executive and the regulatory agency agreed to a deal saying Musk needed to get prior permission from a securities lawyer to tweet any information “material to the company” that could move Tesla’s stock.

In an April Fool’s prank, Musk once proclaimed that Tesla had gone bankrupt. Then, time and again, he tweeted about the financial health, potential mergers, forecasts/projections, expansion details, earnings estimates of the company, etc. His tweets have frequently influenced the price of TSLA, and as a result, the regulatory agency pushed the “permission” deal. When broken down, there were around nine aspects that the executive had to get approval before tweeting about.

Now, according to the latest reports, the SEC has doubled down on its stance by proclaiming that Musk still ought to get prior approval from lawyers before tweeting Tesla-related information.

In 2018, Musk tweeted that Tesla had secured funding to take it private at $420 a share. Even though the executive had had discussions with officials from a Saudi sovereign wealth fund, he was reportedly far from closing a deal at that price.

He soon let go of the plans to privatize the company. It was this tweet that triggered regulators to sue Musk because he allegedly misled shareholders. Resultantly, investors sued Musk over the same, claiming that he defrauded them.

Also Read: Elon Musk Announces Dogecoin’s Shiba Inu Dog as the New CEO of Twitter

Is Musk still bound to honor the permission deal?

Now, the judge in charge of the SEC case is against letting Musk out of the deal. Thus, the executive ended up appealing to the 2nd US Circuit Court of Appeals. Lawyers argued that the prior San Francisco verdict confirmed that Musk’s tweets did not violate securities laws. The federal jury just took a couple of hours to clear him.

The SEC is now contending that the aforementioned verdict is irrelevant because it had no role to play in that case. In the filing, it is stated that the executive let go of his chance of challenging the SEC’s claims by voluntarily agreeing to settle twice. The SEC further contended,

“Even if the verdict were somehow relevant, Musk reads too much into it. [The settlement] was not conditioned upon the outcome of the private litigation.“

The SEC further added,

“The Commission had no role in that case.”

Leaving aside Tesla, Musk’s tweets have also impacted the price of crypto assets, especially dog-themed meme-coins like Dogecoin, Shiba Inu, and Floki Inu. There have been several instances in the recent past where a single tweet from the executive manipulated the price of these assets and sent them up the price ladder.

Also Read: Elon Musk Makes New Dogecoin-Related Confession, DOGE Spikes