Elon Musk claims consent decree used to ‘trample’ right to free speech

‘I would never lie to shareholders. I entered into the consent decree for survival of Tesla’

Tesla chief executive Elon Musk asked a judge to end a 2018 consent decree with the US Securities and Exchange Commission (SEC) that he claims is being used "to trample" on his "First Amendment rights and to impose prior restraints on his speech".

The Tesla founder also asked the judge to block an SEC subpoena for documents relating to the review of his Twitter posts and his sale of stock and options, a court filing on Tuesday showed. An SEC spokesperson did not immediately respond to a request for comment.

The SEC is investigating whether Mr Musk and his brother Kimbal violated securities laws when selling shares in the company late last year, according to a person familiar with the matter.

Last month, Tesla disclosed that it had received an SEC subpoena on November 16th seeking information about its governance processes and compliance with a settlement it reached with the agency in September 2018 over Mr Musk’s tweets.

In that agreement, Tesla pledged to institute oversight of its chief executive’s Twitter posts and other communications about the company after the regulator alleged he had committed securities fraud by saying on the social media platform that he had secured funding for the company to go private.

‘Unrelenting investigation’

Tesla and Mr Musk complained last month to US district judge Alison Nathan that the SEC is targeting them with "unrelenting investigation" for criticising the government, while failing to pay Tesla shareholders the $40 million (€36.8 million) that the agency collected in the 2018 settlement.

Mr Musk said in a court affidavit he was “forced to sign” the consent decree because the “SEC’s unrelenting regulatory pressure” and “collateral consequence” of the government complaint against him “stood to jeopardise” Tesla’s ability to raise money.

“I never lied to shareholders,” said Mr Musk on Tuesday. “I would never lie to shareholders. I entered into the consent decree for the survival of Tesla, for the sake of its shareholders.” – Bloomberg

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