SEC Battle Over Tesla Tweets: Elon Musk Cites Jury Verdict

Musk has filed legal paperwork in an attempt to parlay a recent court victory he gained over his tweets in 2018 about possibly taking Tesla Inc. Tesla -3.54%decrease; red down-pointing triangle private into a win also in a long-running legal battle with the Securities and Exchange Commission into a win. 

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In recent years, Mr. Musk has been trying to get rid of a settlement he reached with securities regulators in 2018 that required some of his tweets to be approved by them beforehand. It was in 2018 that the Securities and Exchange Commission (SEC) accused Musk of misleading investors with tweets that were not truthful, resulting in the odd settlement. 

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Investors who claimed they lost money as a result of Mr. Musk's statements were also in front of a federal court this year in a class-action case.  The nine-member jury found that the investors who sued Mr. Musk and the electric-car company failed to prove their claims against these companies or Mr. Musk himself, in a verdict they returned this month.

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Mr. Musk's attorney argued in a legal filing on Tuesday that, “in light of the jury’s finding that Mr. Musk’s tweets didn’t violate Rule 10b-5, the SEC lacks support both for the consent decree itself and for its arguments on appeal.” 

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In response to a request for comment, the SEC did not respond immediately.

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Tesla's CEO, Elon Musk, has never really been able to agree on how the policy regarding Tesla's pre-approval of some of its tweets should be enforced, according to the SEC. SEC had informed Tesla in 2019 and 2020 that Mr. Musk had tweeted about the company's business without receiving pre-clearance from the SEC. It has been disputed by lawyers for both the company and Mr. Musk that the statements were covered by the agreement, which covers only information about financial, production, and management matters.

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Last year, a Manhattan federal court judge refused to end the settlement. Mr. Musk filed the Tuesday legal filing as part of his appeal with the Second Circuit Court of Appeals. 

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The 2018 settlement between Mr. Musk and Tesla also required the two companies to pay each other $20 million and for Mr. Musk to step down from his position as Tesla's chairman.