Tesla CEO Elon Musk remains banned from tweeting about the company without pre-approval from the electric vehicle maker's lawyers after a federal appeals court Monday ruled Musk must continue to abide by the requirement included in his 2018 settlement with the Securities and Exchange Commission.
Musk's lawyers filed a brief last year with the 2nd U.S. Circuit Cort of Appeals in Manhattan arguing against a lower court's decision to uphold the deal with the SEC, saying the government is unlawfully muzzling the billionaire with the provision.
But in its ruling, the court said it saw "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 appeals court also rejected Musk’s prior restraint argument, saying parties entering consent decrees may voluntarily waive their First Amendment and other rights.
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The settlement with the SEC was reached to resolve securities fraud charges related to a now infamous tweet in which Musk claimed he had "funding secured" to take Tesla private at $420 per share.
The agency filed a lawsuit against Musk claiming he made "false and misleading" statements about Tesla’s privatization plans and that he "knew or was reckless in not knowing" that his statements were false and/or misleading.
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During the TED2022 conference, Musk maintained that funding to take Tesla private "was indeed secured" at the time and that he was "forced to concede to the SEC unlawfully" in order to save Tesla.
In addition to the pre-approval requirement, Tesla and Musk each paid $20 million in fines. Tesla was also required to add two new independent board directors and Musk was stripped of his chairman title. Under the terms of the settlement, Musk and Tesla neither admitted nor denied wrongdoing.
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The Associated Press contributed to this report.
