DETROIT (AP) – Elon Musk’s request to terminate an agreement with securities regulators over 2018 tweets alleging he has the funding to make Tesla private has been rejected by a federal judge in New York. York.
Judge Lewis Lyman also on Wednesday rejected a request to cancel Musk’s summons for information on possible violations of his agreement with the US Securities and Exchange Commission.
Musk asked the court to reject the agreement, which required his tweets to be approved by a Tesla lawyer before they were published. The SEC is investigating whether Tesla’s CEO violated the tweet agreement last November by asking Twitter followers if he should sell 10% of his shares to Tesla.
The whole dispute stems from an October 2018 agreement with the SEC in which Musk and Tesla agreed to pay $ 20 million in civil fines for Musk’s tweets for “secured funding” for Tesla’s private receivables at $ 420 a share.
Funding was far from blocked and the electric vehicle company remained public, but Tesla’s share price jumped. The agreement sets out changes in governance, including the removal of Musk as chairman of the board, as well as the prior approval of his tweets.
Musk’s lawyer, Alex Spiro, said the SEC was using the agreement and “almost unlimited resources” to cool Musk’s speech. It says Musk signed the deal when Tesla was a less mature company and SEC actions jeopardize the company’s funding.
He also claims that the SEC summons was illegal and that the agency could not take action on Musk’s tweets without court permission.
But in a 22-page decision, Lyman wrote that Musk’s claim that economic coercion led him to sign the agreement was “completely unconvincing.”
Even if Musk was worried that litigation with the SEC would ruin Tesla financially, “this does not create a basis for him to come out of the decision he voluntarily signed,” Lyman wrote.
The judge also said the argument that the SEC had used the agreement order to harass Musk and launch investigations was “useless”.
“Musk could hardly have imagined that by the time he entered the ordinance, he would have been immune to non-public SEC investigations,” Lyman wrote. “It is not surprising that when Musk tweets that he is considering selling 10% of his stake in Tesla …, the SEC will have some questions.
A statement was issued Wednesday asking Spiro to comment on whether Musk would appeal Lyman’s order.
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