The Securities and Exchange Commission says Elon Musk is still in need of what it calls a “Twitter sitter” to monitor his social media posts that revolve around Tesla and other companies he owns.
In a letter to the U.S. Court of Appeals for the Second Circuit in New York this week, the SEC said the settlement it brokered with Musk in 2019 after his “funding secured” post was still valid. Musk has petitioned the court to have it struck down.
“Musk waived his opportunity to test the Commission’s allegations at trial when he voluntarily agreed (twice) to a consent judgment,” the SEC argued in its letter replying to one filed by Musk and his attorney, Alex Spiro.
"Am considering taking Tesla private at $420. Funding secured," Musk wrote in an August 2018 tweet, getting into trouble with authorities.
When the SEC charged Musk with civil securities fraud soon afterward, Musk agreed to pay a fine, give up his role as chairman of Tesla’s board, and work with a securities lawyer, who would review and approve his tweets before he posted them whenever they might contain information considered “material” about the company.
Musk has since regularly railed against that restriction (and the SEC), saying he was intimidated into signing it.
A judge, last year, denied another attempt to scrap the settlement.
As part of his most recent argument to do away with his "Twitter sitter," Musk pointed to his recent court victory in San Francisco, when a jury said that he didn’t deceive investors when he tweeted in 2018 that he had "funding secured" to take Tesla private, as a reason the agreement should be terminated.
The SEC said the verdict “says nothing about the continuing public interest in a negotiated settlement term that does not preclude Musk from tweeting accurately about Tesla or other topics, but rather requires Tesla to review Musk’s Tesla-related communications before publication, including through Musk’s Twitter feed—a communication channel designated by Tesla for disclosure.”
Oral arguments for Musk’s appeal are expected in the coming months, but no firm date has been set.
