NEW YORK, May 15 (Reuters) - A federal appeals court on Monday rejected Elon Musk's bid to modify or end his 2018 securities fraud settlement with the U.S. Securities and Exchange Commission that required a Tesla Inc (TSLA.O) lawyer to approve some of his tweets in advance.<\/p>\n
The 2nd U.S. Circuit Court of Appeals in Manhattan rejected Musk's claim that the SEC exploited his consent decree to conduct bad-faith, harassing investigations that violated his First Amendment free speech rights under the U.S. Constitution.<\/p>\n
Musk's decree resolved an SEC lawsuit accusing him of defrauding investors with an Aug. 7, 2018, tweet that he had \"funding secured\" to take his electric car company private.<\/p>\n
It required advance review of tweets that might contain material information about Tesla. Musk and Tesla each also paid $20 million in civil fines, and Musk gave up his role as chairman.<\/p>\n
In the appeal, Musk's lawyers called the pre-approval mandate a \"government-imposed muzzle\" that amounted to an illegal prior restraint on his speech.<\/p>\n
But the three-judge appeals court panel said the SEC had opened just two subsequent inquiries into Musk's tweets, and those tweets \"plausibly violated\" the decree's terms.<\/p>\n
The panel said the SEC's \"limited, appropriate inquiries in this case have not made compliance with the consent decree 'substantially more onerous'\" for Musk, as he had argued.<\/p>\n
It also said Musk chose to allow screening of his tweets, and had no right to revisit the matter \"because he has now changed his mind.\"<\/p>\n
Alex Spiro, a lawyer for Musk, said in an email: \"We will seek further review and continue to bring attention to the important issue of the government constraint on speech.\"<\/p>\n
The SEC declined to comment.<\/p>\n
Monday's decision upheld an April 2022 ruling by U.S. District Judge Lewis Liman in Manhattan.<\/p>\n
Liman called Musk's arguments a \"bemoaning\" of requirements he no longer wanted to adhere to now that Tesla had \"become, in his estimation, all but invincible.\"<\/p>\n
Musk bought Twitter for $44 billion in October, and runs rocket and spacecraft manufacturer SpaceX. He is the world's second-richest person, according to Forbes magazine.<\/p>\n
In February, a San Francisco jury found Musk not liable for investor losses over his \"funding secured\" tweet.<\/p>\n
The case is SEC v Musk, 2nd U.S. Circuit Court of Appeals, No. 22-1291.<\/p>\n
Reporting by Jonathan Stempel in New York<\/p>\n
Our Standards: The Thomson Reuters Trust Principles.<\/p>\n
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Elon Musk loses bid to end SEC 'muzzle' over tweets - Reuters.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" NEW YORK, May 15 (Reuters) - A federal appeals court on Monday rejected Elon Musk's bid to modify or end his 2018 securities fraud settlement with the U.S. Securities and Exchange Commission that required a Tesla Inc (TSLA.O) lawyer to approve some of his tweets in advance. The 2nd U.S. Continue reading