STORY: Another legal defeat for Elon Musk.
A U.S. federal appeals court on Monday rejected the Tesla CEO’s bid to end a requirement that a Tesla lawyer approve some of his tweets in advance.
Musk’s lawyers argued the mandate was a “government-imposed muzzle” that violated his free speech rights.
He agreed to the restriction as part of a 2018 securities fraud settlement with the U.S. Securities and Exchange Commission or SEC.
It resolved an SEC lawsuit accusing Musk of defrauding investors with a tweet that he had “funding secured” to take his electric car company private.
It required advance review of tweets that might contain material information about Tesla.
Musk and Tesla each also paid $20 million in civil fines, and Musk gave up his role as chairman.
In this case, the court said the SEC had made limited, appropriate inquiries and not made complying more onerous.
It also pointed out the SEC had just opened two subsequent inquiries into Musk’s tweets, and those tweets “plausibly violated” the decree’s terms.
Plus, Musk had agreed to the arrangement and had no right to revisit it because he changed his mind.
Monday’s decision upheld an April 2022 ruling by a lower court.
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