Elon Musk could soon take ownership of Twitter, but his own use of the platform will be limited by a 2018 agreement he signed with securities regulators.
A federal judge in New York rejected a request by Mr. Musk to terminate the agreement, which would require him to have his social media posts run by a corporate lawyer if the statements contained material information about his electric car company, Tesla.
Mr. Musk had argued that the agreement to settle allegations of securities violations violated his right to freedom of expression and that the Securities and Exchange Commission had used the agreement as an excuse to conduct “endless, limitless” investigations into his public statements. start. He claimed that he only accepted the settlement in the first place because the lawsuit would have put too much financial pressure on Tesla.
“None of the arguments hold up,” Judge Lewis J. Liman of the U.S. District Court for the Southern District of New York wrote in a ruling issued Wednesday dismissing Mr. Musk’s claims.
Mr. Musk’s claim that he agreed to the SEC’s terms over the financial burden was “completely inconclusive,” Judge Liman wrote. Mr Musk, the judge said, “was already a multibillionaire in 2018 and one of the richest individuals in the world.”
Alex Spiro, an attorney at the Quinn Emanuel Urquhart & Sullivan firm that represents Mr. Musk, suggested an appeal was likely.
“Nothing will ever change the truth, which is that Elon Musk considered taking Tesla private and it could have been — all that’s left about half a decade later are relics that will make that truth increasingly clear,” Spiro said in a statement. a statement, adding: “Stay tuned.” He declined to comment further.
The decision came two days after Twitter’s board of directors agreed to sell the company to Mr. Musk for $44 billion — a transaction that has yet to receive shareholder approval. He had previously criticized the social network for censoring free speech and said he believes people should be able to speak more freely on Twitter, which has tried in recent years to curb misinformation, hate speech and other problematic statements on its platform. to limit.
Tesla shareholders, who are not allowed to vote on the Twitter acquisition, do not appear to be in favor of the proposed acquisition of Mr. Musk. Tesla’s stock price has fallen 17 percent since early April. The drop reflects investor concerns about Mr. Musk’s use of Tesla stock as collateral for bank loans and the risk that Twitter oversight could distract him from car trading.
The court’s ruling was the latest round in Musk’s protracted battle with the SEC, an agency he has often mocked. The dispute pending Wednesday has its roots in a 2018 Twitter post from Mr. Musk, in which he claimed he had “secure” enough money to take Tesla private. It later emerged that he had only had preliminary talks with investors. The SEC charged him with fraud.
How Elon Musk Bought Twitter
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A blockbuster deal. Elon Musk, the world’s richest man, put an end to what seemed an unlikely attempt by the famed mercurial billionaire to buy Twitter for about $44 billion. Here’s how the deal unfolded:
The first offer. Mr. Musk made an unsolicited offer of more than $40 billion for the influential social network, saying he wanted to turn Twitter into a private company and that he wanted people to speak more freely about the service.
As part of an agreement to settle that civil suit, Mr. Musk agreed to delete his social media posts with company lawyers. Mr. Musk, notorious for his riotous public statements, was clearly annoyed by the restriction and was accused of violating it multiple times.
Mr Musk can’t get out of the deal “simply complaining that he felt he had to agree to it at the time, but now — once the specter of the lawsuit is a distant memory and his company, in his estimation, is all but invincible – wishes he didn’t have,” Judge Liman wrote.
