Elon Musk has asked a judge to cancel an agreement he signed with the US Securities Exchange Commission (SEC) that means his tweets about Tesla have to be approved by a lawyer.
The agreement was signed by Musk, CEO of Tesla, back in 2018, after his tweet saying he had 'funding secured' to take the company private sent stock prices into a frenzy.
Now, Musk is alleging he was coerced into the agreement, sometimes called a consent decree, and is seeking to have it removed.
The motion was filed to Judge Alison Nathan by Musk's lawyer Alex Spiro on Tuesday, March 8, at the US District Court in Manhattan.
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In 2018, the SEC alleged that Musk misled investors with his tweets and they came to the unusual agreement.
There was never a clear policy relating to how the agreement would be enforced.
Last year, the SEC accused Musk of violating the court agreement with two tweets, claiming that the CEO's posts about Tesla’s solar roof production volumes and its stock price were not pre-approved by Tesla's lawyer.
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Musk is now arguing that the SEC enforcing the agreement infringes on his right to free speech.
According to a court filling, Musk signed the agreement due to 'the SEC's unrelenting regulatory pressure'.
With Musk's lawyers arguing that at the time of signing the agreement, Tesla was 'a less mature company' and thus thought that the agreement might be in the best interest of the company.
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Musk notes in the filing: 'As Tesla's CEO and chairman at the time, I perceived that the company and its shareholders would be placed at undue risk unless I settled the matter promptly.'
However, as Tesla has continued to expand in the last two years, with share prices climbing from $90 in January 2020 to $800 today, the agreement is being questioned.
The filing follows tensions between Tesla and US regulators, with Spiro saying that SEC was pursuing Musk because he 'remains an outspoken critic of the government'.
Spiro continued: 'The SEC's outsized efforts seem calculated to chill his exercise of First Amendment rights.'
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However, Donna Nagy, an Indiana University law professor said that it may be hard for Musk to get the court to scrap the agreement.
Nagy told the Wall Street Journal: 'It is exceedingly difficult to convince a federal court to terminate a consent decree.'
The professor explained that this was the precedent set by similar cases in the same area.
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Namely, a federal appeals court in Manhattan recently rejected a SEC defendant's attempt to invalidate his own settlement, citing his first amendment right to free speech.
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Topics: Elon Musk, Technology, US News, Tesla, Twitter
Shola Lee