US Supreme Court Declines Elon Musk’s Appeal Over Misleading Tweets

The US Supreme Court dismissed an appeal by Tesla CEO Elon Musk, leaving in place a ruling that upheld the terms of a 2018 settlement with the Securities and Exchange Commission (SEC). 

The settlement, which followed Musk's misleading tweets about securing funding to take Tesla private, included a USD 20 million fine and requirements that Musk step down as chairman and have future tweets screened by a company lawyer.

Musk's attempt to overturn the settlement was based on claims that it unfairly restricted his First Amendment rights and was signed under economic duress. He argued that the agreement was an attempt by the SEC to "muzzle and harass" him and Tesla. However, the 2nd Circuit appeals court previously rejected these arguments, noting that parties can voluntarily waive certain rights, including First Amendment rights, in such agreements. The appeals court also found no evidence of bad-faith or harassing investigations by the SEC against Musk's protected speech.

The original controversy began in August 2018 when Musk tweeted, "Am considering taking Tesla private at $420. Funding secured." A subsequent tweet claimed investor support was confirmed, contingent only on a shareholder vote. These statements caused Tesla’s stock price to surge more than 6 per cent, though it was later revealed that the funding was not secured. The SEC took action against Musk, stating he had not confirmed key deal terms with any potential funding source and had misled investors, causing significant market confusion.

The Supreme Court’s decision not to review the case effectively puts an end to Musk's legal challenge of the SEC settlement. The outcome confirms the obligations imposed on Musk, including the ongoing screening of his investor-related tweets—a measure put in place to prevent further misleading statements that could impact Tesla's stock and investor interests.