Elon Musk to Take Setback in SEC Case to Supreme Court

Elon Musk intends to request the US Supreme Court to rule on whether the Securities and Exchange Commission (SEC) exceeded its power in imposing a consent decree that he has characterized as a "muzzle" on his free speech.

According to Reuters, the order stemmed from Musk's August 2018 tweet in which he claimed to have "funding secured" to take the electric vehicle firm Tesla private, and Musk has said that he intends to fight the decision of the 2nd US Circuit of Appeals in Manhattan to sustain the decree.

A three-judge panel dismissed Musk's argument that the SEC, which accused the billionaire of scamming investors, used the order to harass him and investigate his usage of Twitter, which he now controls and renamed X recently.

SEC vs. Musk

(Photo: ALAIN JOCARD / AFP via Getty Images)
SpaceX, Twitter, and electric car maker Tesla CEO Elon Musk looks on as he speaks during his visit at the Vivatech technology startups and innovation fair at the Porte de Versailles exhibition center in Paris, on June 16, 2023.

On Monday, July 24, the court of appeals issued a ruling rejecting Musk's bid to have the three-judge panel or the whole bench of 13 review the matter again. Musk's lawyer Alex Spiro stated the following day that he would file an appeal with the Supreme Court.

As part of the settlement that included the consent decree, Musk and Tesla paid $20 million in penalties, he resigned as chairman of the automaker, and he also agreed to have a Tesla lawyer review and approve some tweets before they were posted.

The appeals court panel said in its May 15 judgment that Musk could not "change his mind" and request another review of the tweet filtering. However, Musk's legal team argued that the SEC lacked the authority to demand an unlawful "gag rule" as part of any agreement.

The verdict "posits that Mr. Musk either had to forego a settlement with the SEC or give up his right to challenge the constitutionality of the SEC's demands," the attorneys wrote last month. According to them, Supreme Court has ruled differently.

In March, a federal appeals court in New Orleans concluded that Musk had broken federal labor law when he tweeted in May 2018 that Tesla workers would lose stock options if they joined a union. Last week, the court agreed to revisit this judgment.

This is appeal No. 22-1291 from the 2nd US Circuit Court of Appeals: SEC v. Musk.

What's New With Twitter?

Musk has replaced the bird in the Twitter logo with an X, signifying his intention to develop a "super app" in the vein of WeChat, the dominant messaging service in China. Since Musk paid $44 billion to acquire the social networking site last year, this is easily the most significant shift that has occurred.

However, this backfired on Musk at some point. Users have been drawing similarities between the new Twitter X logo and the pornographic website "Xvideos."

As soon as Twitter updated its new logo, the term "Xvideos" began trending. Many Twitter users have joked that from now on, Twitter videos will just be referred to as "X videos."