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Elon Musk Loses Bid to End SEC Oversight Agreement On Tesla Tweets

Elon Musk Loses Bid to End SEC Oversight Agreement On Tesla Tweets

A U.S. District Judge in Manhattan rejected requests from Tesla CEO and potential new owner of Twitter, Elon Musk, to block an SEC investigation into tweets that Musk posted last year regarding the sale of some of his Tesla stock.

Just two days after it was announced that Twitter had accepted Musk’s $44B offer, Judge Lewis Liman slammed the multibillionaire for trying to escape a settlement with regulators requiring oversight of his Tesla’s tweets, saying he was “bemoaning” the 2018 deal now that he felt Tesla was “invincible.”

[Photo by SUZANNE CORDEIRO/AFP via Getty Images]
The dispute stems from the claim by the Securities and Exchange Commission (SEC) that Musk defrauded investors on Aug. 7, 2018, by tweeting that he had “funding secured” to potentially take the electric car company private at a premium, when in reality a buyout was not close. Tesla shares rose following the tweet. The SEC’s probe related to Musk’s sale of some of his Tesla shares is over tweets he sent on November 6th last year that asked readers if they supported his selling 10% of his Tesla stake, and saying that he would abide by the poll results. The SEC has subpoenaed Musk and Tesla to determine if those tweets were vetted before they were published.

The 2018 agreement required Musk and Tesla to each pay $20 million civil fines and for Musk to step down as Tesla’s chairman. The consent decree also required Musk to obtain pre-clearance from Tesla lawyers for tweets and other public statements that could be material to Tesla.

“Musk cannot now seek to retract the agreement he knowingly and willingly entered by simply bemoaning that he felt like he had to agree to it at the time but now — once the specter of the litigation is a distant memory and his company has become, in his estimation, all but invincible — wishes that he had not,” Judge Liman wrote in his decision.

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Musk’s open hostility for the SEC just might impact that final sale of Twitter. Musk has been escalating his attack, saying earlier this month he referred to them as “those bastards.”

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