Elon Musk, the new owner of Twitter, must still have his tweets about his electric car company Tesla pre-approved after a US judge rejected an appeal to free him from oversight on Wednesday.
Musk filed a motion last month to overturn Securities and Exchange Commission (SEC) restrictions imposed in the aftermath of his 2018 tweet, in which he claimed to have obtained funding to take Tesla private but did not provide proof or file paperwork with the securities regulator.
The tweet, which caused wildly fluctuating stock prices, was ruled “false and misleading,” and Tesla shareholders have accused the company of securities fraud.
The SEC also charged Musk with fraud and ordered him to resign as chair of Tesla’s board of directors, pay a $20 million fine, and, following another embarrassing tweet in early 2019, to have all tweets directly related to the company’s business pre-approved by a competent lawyer.
Musk claims he was forced to agree to the deal and denies deceiving shareholders.
However, “Musk’s claim that he was the victim of economic duress is wholly unpersuasive,” Judge Lewis Liman wrote in his ruling.
The judge said Musk’s argument that the SEC has used the agreement “to harass him” and investigate his speech is “meritless” and “particularly ironic,” since free speech rights do not allow him to make statements that are “considered fraudulent” or violate securities laws.
“Musk cannot now seek to retract the agreement he knowingly and willingly entered by simply bemoaning that he felt like he had to agree to it at the time but now — once the specter of the litigation is a distant memory and his company has become, in his estimation, all but invincible — wishes that he had not.”
The judge also rejected Musk’s request to quash part of the SEC’s demand for documents about his November 6, 2021 tweet calling for followers to vote on whether he should sell 10 percent of his Tesla stock.
The tweet sent the company’s share price lower, and the SEC wants to know if it was approved as required. The agency also is investigating possible insider trading after Musk’s brother — a Tesla board member — sold $108 million in the car-maker’s stock a day before the poll.
Musk’s headline-grabbing deal to buy Twitter comes with a clause specifying that he is free to tweet about the pending $44 billion merger provided his posts “do not disparage the company or any of its representatives,” a copy filed with US regulators shows.
That did not stop Musk on Wednesday from tweeting his displeasure with content moderation moves made by Twitter’s top attorney Vijaya Gadde who is seen as a moral champion of the platform.
Musk additionally tweeted a meme critical of Gadde.