The new Twitter buyer, Elon Musk still must have his tweets about his electric car company, Tesla pre-approved after a US judge on Wednesday rejected an appeal to free him from oversight.
Musk filed a motion last month to overturn Securities and Exchange Commission (SEC) restrictions imposed following his 2018 tweet, in which he said he had acquired funding to take Tesla private, but did not provide proof or file paperwork with the securities regulator.
The tweet, which caused the share price to fluctuate wildly was ruled to be “false and misleading” after shareholders accused Tesla of security fraud.
The SEC also charged Musk with fraud and ordered him to step down as chair of Tesla’s board of directors, and pay a fine of $20 million. However, after another tweet by Musk in 2019, he acclaimed that the tweets are directly related to the business of the company, of which he demanded a pre-approval by a competent lawyer. Musk said he was forced to agree to the deal and denied lying to shareholders.
However, the Judge said Musk’s agreement that the SEC has used the agreement to harass him and investigate his speech is meritless and particularly ironic since free speech rights do not allow him to make statements that are considered fraudulent or violate securities laws.
Musk is now finding it difficult 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.
The judge has also rejected Musk’s request to quash part of the SEC’s demand for documents about his November 6 2021 tweet calling for followers to vote on whether he should sell 10 percent of his Tesla stock.
The tweet has since then crashed the company’s share price and the SEC wants to know if it was approved as required. The agency also is investigating possible insider trading after Musk’s brother – a Tesla board member – sold $108 million in the carmaker’s stock a day before the poll.
Thus, Musk’s headline-grabbing deal to buy Twitter comes with a clause specifying that he is free to tweet about the pending $44 billion mergers provided his posts “do not disparage the company or any of its representatives,” a copy filed with US regulators shows.
However, this did not stop Musk on Wednesday from tweeting his displeasure with content moderation moves made by Twitter’s top attorney Vijaya Gadde who is seen as a moral champion of the platform.