According to reports, according to the agreement signed by Elon Musk, Tesla and the US Securities and Exchange Commission (SEC) in 2018, Elon Musk’s posts about Tesla on Twitter must go through a Lawyer review, colloquially known as the “Twitter babysitter” agreement.
In this regard, Elon Musk filed an appeal, hoping to cancel this clause, but the appeal was defeated a few days ago.
At the earliest, the US District Court for the Southern District of New York ruled that the above-mentioned Twitter prior review clause could not be revoked. On Monday, a US federal appeals court upheld the ruling of the basic court.
In 2018, Elon Musk had a “privatization Tesla storm” on Twitter. He posted that he would privatize Tesla (delisting) at a price of $420 per share, and that the acquisition funds had been secured. The SEC launched an investigation and found that the content of Elon Musk’s post had no factual basis. The SEC accused him of publishing false information to mislead investors.
In 2019, Elon Musk, Tesla, and the SEC reached a settlement on related allegations, with the above-mentioned Twitter posting first-trial clause, but Elon Musk has not been convinced and has continued to fight.
According to court documents, according to Twitter’s nanny clause, if Elon Musk’s tweets include information that has a substantial relationship with the listed company Tesla, they must be reviewed by the company’s lawyers in advance. Posting behavior of administrators.
In February of this year, Elon Musk’s lawyer Alex Shapiro told the court that the prior review clause stipulated by the SEC violated the US Constitution and violated Elon Musk’s right to free speech.
However, in a ruling on Monday, the U.S. Court of Appeals for the Second Circuit rejected Shapiro’s lawyer’s claim that Elon Musk claimed that the SEC used the prior review clause to conduct a malicious and harassing investigation of his remarks. But the appeals court found no evidence to support Elon Musk’s claims.
The appeals court said that since 2018, the SEC has only launched an investigation into Elon Musk’s three Twitter posts: one related to “funding to take Tesla private” and another error about Tesla’s annual production of electric vehicles. Description, in the third article, Elon Musk launched an online poll about whether he should sell 10% of his Tesla shares.
The appeals court said the SEC’s investigation of the posts was done without malice and that, in turn, Elon Musk’s posts violated his prior review agreement with the SEC.
A law in the United States stipulates that if the circumstances of a case change significantly or the laws of the United States change, the parties can request a retrial. Elon Musk’s legal team also made a request based on this law. Elon Musk’s compliance with prior review protocols has become quite onerous.
The Court of Appeal also rejected this reasoning. Under the agreement, Elon Musk was only required to consult with Tesla’s general counsel or an in-house securities attorney before posting, the court said.
For a long time, Elon Musk’s speech activities on Twitter have aroused great attention from the SEC and Tesla shareholders. For example, due to the above-mentioned privatization tweets, Elon Musk was sued by Tesla shareholders for “securities fraud”, but in February this year, the court ruled that Elon Musk was not guilty.
On Twitter, Elon Musk has also been sued for his high-profile support for the virtual currency “Dogecoin”, and the case is still ongoing.
The appeals court also stated that if Elon Musk does not want the SEC to interfere with his right to “freely post without review,” he should express his opinion when facing the SEC’s securities fraud charges and the two parties negotiate a settlement agreement and sign another settlement agreement, but Elon Musk did not do so.
The court stated that Elon Musk made his own choice to review the post in advance, and his legal team should not ask the court to make a new ruling because he himself repented today.
Regarding the judgment of the appeals court, Shapiro’s lawyer said that the legal team will conduct a detailed assessment, and will continue to draw American society’s attention to the issue of government restrictions on speech.
