Elon Musk to Appeal SEC Dispute to Supreme Court
Elon Musk is escalating his dispute with the Securities and Exchange Commission (SEC) by appealing to the highest court in the land. Attorney Alex Spiro has verified that Musk intends to seek the Supreme Court’s intervention in determining whether the SEC exceeded its authority in imposing restrictions on Musk’s Twitter statements regarding Tesla’s financials (now X). Musk is contesting a recent appeals court ruling on May 15th, which dismissed his claims that the SEC misused the consent decree to subject him to unwarranted investigations related to his Twitter activity.
The new appeal comes a day after a judicial panel rejected Musk’s request to reexamine the judges. The entrepreneur previously argued that he was forced into the regulation and had to waive his right to challenge the constitutionality of the SEC’s terms if he wanted to pursue a final settlement. The truce meant a total of $40 million in fines between Musk and Tesla, and required Musk to step down as chairman and seek legal approval to disclose the company’s finances.
Musk caught the SEC’s attention in August 2018 when he tweeted that he was considering taking Tesla private and that he had “funding secured” with “investor support.” The deal never went through, and shareholders attributed the losses to Musk’s duties. The commission sued Musk over the tweets, claiming they could be considered fraud.
During the shareholder lawsuit, Musk argued that people didn’t necessarily believe or respond to his tweets as expected. He pointed to one example where Tesla’s stock price went up despite a tweet saying the value was too high. At the same time, he admitted that he has ignored requests to stop tweeting about sensitive topics, such as when he accused a Thai cave diver of being a “beast guy”.
There is no certainty that the Supreme Court will take up the case or reverse the outcome. Either way, the court’s response should have a significant impact on Musk’s social media posts, either by forcing him to respect the SEC’s rulings or by giving him more flexibility in what he says online.
