Following Elon Musk’s recent victory in a securities fraud trial, the Tesla CEO’s lawyer has asked an appeals court to overturn his 2018 agreement with the Securities and Exchange Commission requiring him to have a company lawyer review his Tesla-related tweets before sharing them.
On February 3, a jury in a federal court in San Francisco found Musk and Tesla not liable in a class-action securities fraud trial stemming from tweets Musk made in 2018.
The billionaire, who also runs SpaceX and Twitter, was sued by Tesla shareholders in August 2018 for a series of tweets claiming he had “funding secured” to take the automaker private for $420 per share and that “investor support” for such a deal was “confirmed.”
Tesla stock was halted following his tweets, and its share price remained volatile for weeks.
Musk previously settled with the SEC over the tweets in 2018, and later reached a revised settlement agreement that required a legal and regulatory compliance point person at Tesla (informally, a “Twitter sitter”) to pre-approve any of Musk’s tweets containing any information about the publicly traded company that could affect its stock price.
In light of the jury’s recent finding, Musk’s attorney, Quinn Emanuel Partner Alex Spiro, wrote in a letter to the court this week that the SEC lacks support for their revised settlement agreement.
“The jury’s verdict demonstrates yet again why the public interest in avoiding unconstitutional settlements easily outweighs the SEC’s alleged stake in the consent decree,” Spiro wrote in a filing.
Requests for comment from Musk and the SEC were not immediately returned.
Shareholders’ attorneys who sued Musk and Tesla over the take-private tweets still have time to file an appeal. Levi & Korsinsky Partner Nicholas Porritt, the lead attorney for the shareholders in that case, did not respond to a request for comment.
Porritt told CNBC via e-mail on Feb. 3, 2023, at the time of the jury’s decision, “We are disappointed with the verdict and considering next steps.”