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Elon Musk is asking Supreme Court to undo Tesla settlement agreement

Elon Musk is asking Supreme Court to undo Tesla settlement agreement

Elon Musk has asked the Supreme Court to undo a settlement agreement that required a company lawyer to review and approve all his Tesla-related tweets.

The Tesla CEO and his company struck a settlement agreement with the Securities and Exchange Commission in 2018 after he was charged with civil securities fraud by the SEC for tweets in which he said he had “funding secured” to take Tesla private for $420 per share, and that “investor support” for such a deal was “confirmed.”

The settlement was then amended in April 2019 to require a “Twitter sitter” to approve any tweet Mr Musk published regarding Tesla.

But Mr Musk’s lawyers are now asking for the agreement to be undone, arguing that he was coerced into agreeing with “unconstitutional conditions.”

The settlement “restricts Mr Musk’s speech even when truthful and accurate,” his lawyers wrote. “It extends to speech not covered by the securities laws and with no relation to the conduct underlying the SEC’s civil action against Mr Musk. And it chills Mr Musk’s speech through the never-ending threat of contempt, fines, or even imprisonment for otherwise protected speech if not pre-approved to the SEC’s or a court’s satisfaction.”

Elon Musk has asked the Supreme Court to undo a settlement agreement (AP)
Elon Musk has asked the Supreme Court to undo a settlement agreement (AP)

Following Mr Musk’s tweets in 2018, trading in Tesla was halted and shares remained volatile for weeks.

Tesla’s investors also sued the company and Mr Musk over his tweets and their impact on the stock price.

In February, Mr Musk and Tesla were found not liable in a class action securities fraud trial stemming from his tweets in a San Francisco federal court.

The shareholders who filed the class action lawsuit filed for an appeal to the 9th Circuit.

Mr Musk’s legal troubles took place before he purchased Twitter in 2022 and renamed it X this year.

Since then, he has proclaimed himself a “free speech absolutist,” tweeting: “Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated”.

Since taking over, Mr Musk has also reversed a ban that kept former president Donald Trump off Twitter after a pro-Trump mob attacked the US Capitol on January 6 2021 as Congress was poised to certify Joe Biden’s election victory.

He also reinstated the Twitter account of right-wing conspiracy theorist Alex Jones, who falsely claimed the Sandy Hook massacre was a hoax.

Meanwhile, earlier this year, X Corp, Mr Musk’s firm that owns X, launched a lawsuit against the Center for Countering Digital Hate (CCDH) after the group published research criticising the platform for an increase in hate speech under Mr Musk’s leadership.

The Independent has contacted the SEC, Tesla and Mr Musk for comment.