Elon Musk‘s appeal over a 2018 SEC settlement surrounding his iconic “funding secured” tweet was denied by the US Supreme Court on Monday. According to Ars Technica, the conservative-majority court granted Musk’s request to overturn the accord, which obliged him to pay penalties, resign from Tesla’s board, and have his tweets pre-screened by an attorney, while it was taking a break from debating whether US presidents should be above the law.
Musk’s plea was refused by the court without a statement. Their refusal to hear the billionaire’s appeal upholds an appeals court decision from the previous year that severely limited the creator of Tesla’s claims of victimization.
The saga began in 2018 when Musk tweeted, “Am considering taking Tesla private at $420. Funding secured.” He also posted, “Investor support is confirmed. Only reason why this is not certain is that it’s contingent on a shareholder vote.” Tesla’s stock rose by more than six percent.
There was only one tiny problem: The funding wasn’t secured, and the SEC takes false statements that affect investors very seriously. The SEC said, “Musk had not even discussed, much less confirmed, key deal terms, including price, with any potential funding source” and that he “knew that he had not satisfied numerous additional contingencies.” The government agency claimed the post caused “significant confusion and disruption in the market for Tesla’s stock.”
The SEC settlement hit his wallet hard, requiring Musk and Tesla to each pay $20 million in penalties. He also had to step down from his board chairman role at the automaker and have a Tesla attorney screen any investor-related tweets before posting. Of course, Musk later bought Twitter and changed its name to X. But at least that’s going splendidly!
His appeal said the settlement forced him to “waive his First Amendment rights to speak on matters ranging far beyond the charged violations.” Musk, who currently has an estimated net worth of $185 billion, claimed he was a victim of “economic duress” when agreeing to the settlement, which he described as a tactic to “muzzle and harass” him and his company.
The 2nd Circuit appeals court, whose ruling will now be the final word on the matter, shot down Musk’s arguments. “Parties entering into consent decrees may voluntarily waive their First Amendment and other rights,” they said. The appeals court saw “no evidence to support Musk’s contention that the SEC has used the consent decree to conduct bad-faith, harassing investigations of his protected speech.”
