Elon Musk is stuck with his “Twitter sitter” as court rejects bid to toss SEC settlement

Elon Musk’s so-called Twitter sitters are here to stay.

Given the frequency and volume of Musk’s tweets — and the fact that he now owns Twitter — it’s unclear whether Musk is complying with Twitter’s order to let the sitter review his tweets. But his argument that the SEC was exploiting the consent decree “to conduct a bad faith, vexatious investigation of his protected speech” was found meritless by the court, according to a ruling released today.

The court noted that, in contrast, the SEC has only investigated three of his tweets: the infamous 2018 “Funding Secured” tweet that resulted in a consent decree, a $40 million fine, and Musk losing the Tesla presidency; and two other tweets, one containing misleading information about Tesla’s vehicle production, and another about a survey in which Musk proposed to sell 10 percent of his Tesla stock.

“Each tweet violated the terms of the consent decree,” the Court of Appeals for the Second Circuit in New York City wrote in its ruling.

The whole process began with a tweet on August 7, 2018, in which Musk claimed to have funding to take Tesla private at $420 per share. (Tesla has been a publicly traded company since 2010.)

The SEC immediately launched an investigation, eventually concluding that, while he had had some meetings with Saudi Arabia’s sovereign wealth fund, Musk “never discussed the ongoing private transaction at $420 per share with any potential funding source”. Didn’t.” Musk eventually reached a settlement with the SEC that required him to step down as Tesla chairman and establish a Twitter sitter position.

Last February, Musk was found not liable for losses suffered by investors who accused him of fraud based on his tweet in August 2018 that he was looking to take the company private. Musk was on the hook for potentially billions of dollars in damages should the jury find him liable for those damages.

But Musk has been trying to get his way out of a consent decree since agreeing to settle with the SEC that he had a lawyer review tweets that could have a material impact on Tesla before publishing them. . If the Twitter sitter does in fact exist, no one has stepped forward to claim the job. Tesla has declined to identify the person. And Bloomberggrain plowThose who have been investigating the Twitter siter for years have not yet given a name.

Whatever the mystery lawyer, the court was unimpressed by Musk’s argument that he should be allowed to tweet unfettered by consent decree. “If Musk wanted to preserve his right to tweet without limited internal oversight with respect to certain Tesla-related topics, he would have ‘the right to prosecute and defend against[the SEC]’s allegations’ or enter into a separate agreement.” had the right to negotiate – but they chose not to do so,” wrote the Court of Appeal. “Having made that choice, he cannot use Rule 60 to collaterally reopen the final decision simply because he has now changed his mind.”