Supreme Court Spurns Musk’s Twitter Sitter Appeal in SEC Win

(Bloomberg) -- The US Supreme Court rejected an appeal from Elon Musk in his “Twitter sitter” case, leaving intact his agreement with the Securities and Exchange Commission to have an in-house lawyer pre-approve his social media posts about Tesla Inc.

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The justices, without comment, refused to hear contentions from the billionaire Tesla chief executive officer that the accord he signed in 2018 now violates his constitutional free speech rights.

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

The regulator claimed in a lawsuit the following month that Musk misled shareholders with that post. Two days later, Musk settled with the SEC, agreeing to resign as Tesla chairman and pay $20 million as part of the deal.

Musk reignited the dispute in 2021 when he posted a Twitter poll asking whether he should sell 10% of his stock. The SEC then sent subpoenas to Musk and Tesla, and he went back to court seeking to void his pre-screening agreement. A federal appeals court rejected his contentions last year.

His agreement with the SEC is a “quintessential prior restraint that the law forbids,” Musk’s lawyers argued in the Supreme Court appeal. “The pre-approval provision at issue continues to cast an unconstitutional chill over Mr. Musk’s speech whenever he considers making public communications.”

The SEC urged the court 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,” the SEC said in a brief filed by US Solicitor General Elizabeth Prelogar, the Biden administration’s top Supreme Court lawyer.

It isn’t clear who at Tesla is vetting Musk’s tweets. Yun Huh, the company’s former deputy general counsel, handled the task until he left in 2021.

Musk and his attorneys didn’t respond to requests for comment.

The SEC said it was pleased the court declined to hear the case. “There should be little controversy in holding defendants to terms they agreed to in order to obtain a settlement,” the commission said in a statement.

Musk is also embroiled in an SEC probe over his 2022 acquisition of Twitter, now know as X Corp. A judge in February gave him a new chance to avoid testifying, saying she had erred in ordering him to comply with a subpoena.

The SEC fights are part of a long list of courtroom clashes involving Musk and his companies, including employment discrimination cases, investor claims, defamation complaints against him, and his suit against OpenAI and its Chief Executive Officer Sam Altman.

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

--With assistance from Ed Ludlow, Lydia Beyoud and Dana Hull.

(Updates with SEC reaction in 10th paragraph.)

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