A federal appeals court rejected a challenge Monday from Tesla CEO Elon Musk asking the court to terminate an agreement he made with the Securities and Exchange Commission (SEC).
Musk made a settlement with the federal regulators after he posted tweets in 2018 that claimed he secured funding to take Tesla private, which ended up causing Tesla’s stock prices to jump and halt in trading. The agreement he made required Musk to have his tweets approved by a Tesla attorney before being posted. Musk and Tesla were also fined civil fees over the tweets that said he had the “funding secured” to make Tesla private at $420 per share.
The SEC was looking into whether Musk violated this settlement in 2021 when he asked his Twitter followers in a poll whether he should sell 10 percent of his stock.
Musk then challenged a lower court ruling last year that required him to keep up the deal. He argued the circumstances have changed and that a “prior restraint” in the decree violated his First Amendment rights.
The 2nd U.S. Circuit Court of Appeals in Manhattan issued the summary order Monday.
“We see no evidence to support Musk’s contention that the SEC has used the consent decree to conduct bad-faith, harassing investigations of his protected speech,” the ruling reads. “To the contrary, the record indicates that the SEC has opened just three inquiries into Musk’s tweets since 2018. The first resulted in the consent decree that is the subject of this appeal.”