Elon Musk's Twitter Saga Continues: An In-depth Look at His Ongoing Dispute with the SEC
In the ever-unfolding drama surrounding Tesla's CEO Elon Musk and the U.S. Securities and Exchange Commission (SEC), the latest chapter sees the billionaire entrepreneur continue to grapple with the agency over his freedom of speech on Twitter. This skirmish follows Musk's 2018 settlement with the SEC, which requires his tweets pertaining to Tesla to be pre-approved by an attorney—a provision that Musk's legal team now seeks to overturn.
The contentious relationship between Musk and the SEC traces back to the entrepreneur's infamous "funding secured" tweet in 2018, a declaration that sparked controversy, raised eyebrows, and attracted SEC scrutiny. An investigation led to Musk's agreement to let a lawyer, now known on the internet as his "Twitter sitter," review material Tesla-related tweets before posting. This agreement, however, has been a thorn in Musk's side and is now under appeal.
In a bold move, Musk's legal team submitted a brief to the U.S. Court of Appeals for the Second Circuit in New York in September 2022, characterizing the agreement as a "government-imposed muzzle." They argue it unconstitutionally inhibits Musk's freedom of speech—a claim that the SEC fiercely contests, asserting that the agreement is both valid and constitutional. The ensuing legal battle highlights the tension between corporate accountability, personal freedom, and the power of social media in the corporate world.
Interestingly, the appeal comes on the heels of a significant legal victory for Musk. A class-action securities fraud trial revolving around the same "funding secured" tweet ended with a jury exonerating both Musk and Tesla of any liability. This victory prompted Musk's legal team to contend that the jury's verdict should be factored into the appeal against the CEO's SEC settlement provision.