Tesla CEO Elon Musk has asked a Federal Judge to withdraw his 2018 agreement with the largest U.S. securities regulator. He required a lawyer to examine some of his tweets.
Musk further asked the Judge to chunk a U.S. Securities and Exchange Commission (SEC) subpoena. Musk seeks pre-approval records for Twitter in its November poll about possibly selling some of its shares to end SEC settlement.
The Attorneys of Musk wrote to U.S. District Judge Alison Nathan that the SEC’s prosecution of Mr. Musk had crossed the line into harassment, which is fundamental bad faith.
The Lawyers of Musk said that the 2018 approval decree settling the SEC’s securities fraud charges should not allow unlimited mobile investigations of the Tesla CEO. At the same time, it is also hampering his legitimate right to freedom of speech.
Legal analysts said that the push of Musk to end the approval decree might boomerang.
Urska Velikunga, a law professor at Georgetown University Law Center, said it is clear that the Securities and Exchange Commission has the authority to enforce the approval decree. A federal court can issue it without needing a new investigation.
He added concerns that the consent decree is excessive and difficult to implement, which seems reasonable. Other legal arguments of Musk are legally absurd.
Musk posted on Twitter earlier in November that he would dissociate from his 10% stake in Tesla if users agreed.
Most did, and the Send Arrow Tesla poll stalled. Musk has since sold stock worth $16.4 billion.
The tweet renewed ‘questions’ about whether Musk acted in accordance with his agreement with the Securities and Exchange Commission to obtain approval from the attorney Tesla before publishing ‘written releases’ on media materials for his company or its shareholders.
Tesla said on Tuesday that the tweet by Musk about the stock sale was the performance the SEC should support: CEO transparency with the public and shareholders about the proposed stock sale.
According to Stephen Crimmins, Musk faces a real uphill battle, a partner at Murphy & McGonigle in New York City.
Crimmens, who is not related to the Musk case, said that Courts generally give the Securities and Exchange Commission a great deal of latitude in enforcing subpoenas.
Judges generally take the option of keeping it if you accept the consent decree. You won’t get through this by saying you don’t like the deal.
The Securities and Exchange Commission did not instantly respond to a request for comment.
The Regulator sued Musk after he had tweeted in August 2018 that he had financed to privately convert his electric car company at $420 a share.
The acquisition agreement was not closed.
Seeks to the end of the SEC settlement issues, Tesla and Musk settled through an agreement to pay $20 million in civil penalties and allow attorneys to examine some of the communications of Musk in advance. It also includes Twitter posts that could affect the ‘stock price of Tesla.’ Elon Musk also resigned from the ‘Presidency of Tesla.’
Musk told Nathan in a separate lawsuit that he had never lied to shareholders. He entered into a decree of approval for the very survival of Tesla for the good of its shareholders.
Musk said they forced him to sign the executive order in his filing, citing relentless regulatory pressure from the Securities and Exchange Commission. Given that SEC action would endanger the financing of the Company.
He said that the investor relations teams of Telsa at the time that numerous major shareholders could renounce ownership of Tesla. It significantly impacts Tesla’s financing if not resolve the issue properly.
The company accused the SEC of using the approval decree to manage and retaliate against the Twitter activity of Musk for criticizing the agency.
Musk also mocked the agency in his tweets since the 2018 investigation: SEC, three-letter acronym, Elon’s middle word.
He also made a Tweet in 2020 that Tesla would make bright red satin shorts with gold trim and submit them to the SEC. He called it the’ Shorts Fertilization Commission.’