The U.S. Supreme Court on Monday ruled on Elon Musk’s lawsuit seeking to throw out part of a securities fraud settlement with the Securities and Exchange Commission that would limit the billionaire businessman’s public comments about electric car company Tesla. He refused a hearing.
The justices rejected an appeal of a lower court’s decision to uphold a 2018 settlement after Musk said on social media that he had “funded the funds” to take Tesla private. In the lawsuit, the SEC argued that this statement was false and misleading.
Musk’s settlement resolves an SEC lawsuit that accused him of defrauding investors.
Under the agreement, Musk and Tesla each paid a $20 million fine and Musk relinquished his role as chairman.
Musk also agreed to have Tesla’s lawyers pre-approve some posts he called Twitter on the social media platform before Musk bought the company and changed its name to “X.” .
Musk later sought to have the preclearance requirement lifted, but his lawyers said in a court filing that it amounted to a “government-imposed muzzleloader” and an illegal pre-restriction on Musk’s speech. Ta.
In 2022, U.S. District Judge Louis Lehman in Manhattan rejected Musk’s request.
In 2023, a three-judge panel of the Manhattan-based U.S. Second Circuit upheld the decision.
The 2nd Circuit said Musk chose to allow review of his Twitter posts, but did not have the right to reconsider the matter because he “changed his mind.”
The 2nd Circuit denied Musk’s request to rehear his case last year, and he appealed to the Supreme Court.
Musk’s lawyers argued that the SEC had no right to impose a “gag rule” as a condition of the settlement, which they say violates First Amendment restrictions on government restrictions on free speech.
