- The U.S. Supreme Court has called for the Biden administration’s opinion on Elon Musk’s appeal against the SEC’s pre-screening requirement of his Tesla posts.
- Musk’s ongoing legal battle with the SEC stems from a 2018 tweet about Tesla, leading to a $20 million settlement and the imposition of post-screening measures.
Court’s Intervention Signals New Phase in Musk-SEC Saga
In an escalating legal conflict poised to redefine free speech limits for prominent individuals, the U.S. Supreme Court has exhibited a heightened interest in Elon Musk’s efforts to void his agreement with the Securities and Exchange Commission (SEC). This recent move by the court to solicit the Biden administration’s viewpoint adds another dimension to the intense skirmish between the Tesla CEO and the regulatory body.
Supreme Court’s Call for Government Insight
The Supreme Court has requested input from Solicitor General Elizabeth Prelogar on Musk’s petition to invalidate an SEC mandate that requires pre-approval of his Tesla-related social media posts. Musk argues that this condition infringes upon his constitutional right to free speech. This request for a government response, due by January 22, doesn’t necessarily reflect the court’s collective opinion but could indicate interest from at least one justice.
Musk’s Constitutional Challenge
Musk’s legal confrontation with the SEC dates back to his 2018 “funding secured” tweet about Tesla, a statement that significantly impacted the company’s stock price. Following an SEC lawsuit alleging misinformation, Musk and Tesla agreed to a settlement involving a $20 million fine each and a condition for Musk’s Tesla-related tweets to be pre-screened by an in-house attorney.
Musk’s Supreme Court Appeal
In December 2022, Musk’s legal team filed an appeal with the U.S. Supreme Court, challenging the pre-screening requirement as a violation of his free speech rights. The appeal, which seeks to annul the agreement, brands this arrangement as a
“quintessential prior restraint”
and questions its constitutionality.
Broader Implications of Musk’s Case
Musk’s struggle with the SEC goes beyond individual tweets; it underscores broader regulatory challenges faced by companies like Tesla. In discussions with prominent figures like Cathie Wood, Musk has expressed concerns over shareholder pressures, the role of stock pickers due to passive investing, and the advantages and drawbacks of public versus private company status.
As this high-profile case unfolds, it could set a precedent for how free speech rights are interpreted for public figures in the context of financial disclosures, potentially influencing future regulatory approaches and corporate governance standards.