SEC Urges Supreme Court to Reject Musk’s ‘Twitter Sitter’ Appeal

The Securities and Exchange Commission told the US Supreme Court it should to turn away an Elon Musk appeal and leave intact his agreement to have an in-house lawyer pre-approve his social media posts about Tesla Inc.

Musk, the chief executive officer of Tesla and owner of the social media company X Corp., asked the Supreme Court to intervene in December, saying the accord he signed in 2018 now violates his constitutional free speech rights. A federal appeals court rejected his contentions last year just days after the panel heard arguments in the so-called “Twitter sitter” case.

Musk has battled the SEC over his social media posts since he tweeted in 2018 that he had “funding secured” to take Tesla private, sending shares of the electric carmaker surging.

The regulator claimed in a lawsuit that Musk had misled shareholders. As part of the settlement, Musk also agreed to pay $20 million.

In his Supreme Court appeal, Musk called the agreement a “quintessential prior restraint that the law forbids.”

US Solicitor General Elizabeth Prelogar, arguing on behalf of the SEC, urged the court Friday to reject those arguments without a hearing. “This court has consistently held that, in resolving litigation, parties may choose to waive even fundamental constitutional rights,” said Prelogar, the Biden administration’s top Supreme Court lawyer.

The case is Musk v. SEC, 23-626.

To contact the reporter on this story:
Greg Stohr in Washington at gstohr@bloomberg.net

To contact the editors responsible for this story:
Elizabeth Wasserman at ewasserman2@bloomberg.net

Steve Stroth

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