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Despite the attempts of Elon Musk to abandon the subpoena from the SEC, the regulators insist on monitoring the billionaire’s tweets, saying that the information Musk provides is misleading.
On Tuesday, the US Securities and Exchange Commission (SEC) reminded Elon Musk about the deal regarding pe-approval of his Tweets that they agreed on back in 2018. According to the SEC, ‘a deal is a deal’ and Musk’s Tweets must be monitored. The regulators and Musk have taken their arguements to the Manhattan federal court.
According to a court filing prepared earlier this month by Elon Musk’s lawyers, the 2018 agreement between the SEC and Musk violates his free speech. However, the SEC disagrees, saying that the information Musk provides in his Tweets is misleading and can cost a fortune to investors. In a federal court document filed on March 22, the regulator said as long as Musk uses his Twitter account to give information to investors, the SEC “may legitimately investigate matters relating to Tesla’s disclosure controls and procedures, including Musk’s tweets about Tesla, as well as the accuracy of Tesla’s public statements about its controls and procedures.”
Besides, in response to Musk’s attempts to abandon the subpoena, SEC stated:
“When it comes to civil settlements, a deal is a deal, absent far more compelling circumstances than are here presented.”
Musk himself has described the pre-approval process “unworkable”, referring to it as “harassment”.
How Elon Musk Got a ‘Twitter Sitter’
It all started back in 2018 when Elon Musk wrote a tweet saying that he secured sufficient financing for a substantial private buyer of Tesla Inc (NASDAQ: TSLA) stock at $420 per share. However, the stock fluctuated throughout the month, and there was nothing to show for the funding deal the CEO mentioned. As a result, the SEC charged Musk with making “false and misleading” statements. In addition, the billionaire paid $20 million in fines and had to step down as chairman of Tesla for a minimum of three years. The SEC also obliged Musk to get a kind of pre-approval for his Tweets.
In November last year, Musk also posted a poll asking his followers whether or not to sell 10% of his Tesla shares. He promised to follow the conclusion of the vote, regardless of whatever answer it may be. The Twitter crowd voted in favor of offloading, but Musk had already started selling shares before the poll. Shortly after the poll, Tesla got a subpoena about if the company has been living up with the terms of the 2018 deal.
Currently, Alex Spiro, lawyer at Tesla, is in charge of monitoring and in some cases pre-approving Musk’s tweets.