The Securities and Exchange Commission's prohibition against Elon Musk is now serving as a firewall to his sentiments or declarations for the famed electric vehicle company he owns, Tesla. The company and his lawyer would have to pre-screen the CEO's tweets before it is published online, and this is because of the recent appeal that was rejected by a federal court that fought for the billionaire's right to free speech.
Elon Musk, Tesla, and the lawyer are now tied to regulating the co-founder's tweets so that an incident like in 2018 would happen again and rattle investors.
Tesla is Now Responsible for Pre-Screen Elon Musk's Tweets
Tesla CEO Elon Musk is now subjected to pre-screening by the electric car company for every tweet he makes regarding the company, as per a court order. This move comes as a result of a court order stemming from the Securities and Exchange Commission (SEC) lawsuit filed against Musk in 2018, and it was because of the CEO's tweets that misled investors.
The legal battle between Musk and the SEC ensued when he tweeted about taking Tesla private, claiming that he had secured funding for the move. These tweets caused a significant stir in the financial markets and raised concerns about potential market manipulation.
The SEC alleged that Musk's statements were misleading and violated securities laws.
The recent court order further restricts Musk's right to free speech on social media, effectively granting Tesla and his lawyer the authority to monitor and approve his tweets before they are published.
Elon Musk filed for an Appeal, but Got Rejected
This recent court order was after the tech billionaire filed an appeal to a federal court, claiming that the SEC's consent decree is violating his First Amendment rights in limiting his online speech. Instead of emerging victorious, Musk is now stuck to a pre-screening every time he wants to talk about Tesla and its plans.
Musk is now compelled to always be in check for his tweets, or else, they are bound for legal consequences should there be any scrutiny in future statements made by the CEO.
Elon Musk vs. SEC on Tesla Tweets
Almost four years later, Musk faced the scrutiny of his "take private" tweet in 2018 which had investors and shareholders gunning for the CEO to pay for his "misleading tweets" from before. The billionaire previously claimed that the funding is already secured to take the company private again, and has affected concerned individuals regarding this.
However, it was recently found that Musk was not liable for this tweet, despite the fraud charge significantly affecting the company's stocks and public view.
The implications of this court order extend beyond Tesla and Musk. It raises important questions about the power of social media and the influence of public figures on financial markets.
While some may argue that this curtails Musk's freedom of expression, the court's decision underscores the need for responsible communication from corporate leaders.
As Tesla and Musk move forward under this new scrutiny, the company has to keep its CEO in check to avoid further run-ins regarding this issue, with the SEC and the courts.
