by Tom Hals
(Reuters) – A U.S. judge criticized Elon Musk on Wednesday for trying to evade a deal with regulators that required Tesla to oversee his tweets.
The dispute stems from the US Securities and Exchange Commission (SEC) claim that Tesla chief executive Musk defrauded investors on Aug. when in reality it wasn’t right.
Musk’s lawyers sought to end the 2018 consent decree that settled these fraud allegations, arguing that the regulator’s pursuit of Musk “crossed the line of harassment” and barred his constitutional right to free speech.
District Judge Lewis Liman rejected those arguments, as well as Musk’s request to block a separate SEC investigation into the tweets he posted last year about the sale of some of his Tesla shares.
“Musk cannot now attempt to revoke the agreement he knowingly and voluntarily entered into simply regretting that he felt he had to agree to it at the time, but now – since the specter of litigation is a distant memory and his company has become, in his near-invincible estimate – wishes he hadn’t,” Liman wrote.
The 2018 settlement required Musk and Tesla to pay civil fines of $20 million each and for Musk to step down as president of Tesla. The consent decree also required Musk to have prior approval from Tesla’s lawyers for tweets and other public statements relevant to the automaker.
Tesla did not immediately respond to a request for comment.
The SEC investigation linked to Musk’s sale of Tesla shares stems from his tweet from November last year asking readers if they supported his sale of a 10% stake in Tesla, saying he would respect the poll results. The SEC subpoenaed Musk and Tesla to determine whether these tweets were vetted before they were published.
(Reporting by Tom Hals and Peter Henderson)
