Elon Musk, Tesla CEO.
Michael Gonzalez/Getty Images
Elon Musk has lost an appeal to get rid of his “Twitter sitter” for tweets about Tesla.
In 2018, Musk agreed that his Tesla-related tweets would be reviewed by other company executives.
Musk had been fighting back against the clause, saying it violated his freedom of speech.
Elon Musk has lost an appeal against an SEC agreement that landed him with a “Twitter Sitter.”
The “Twitter sitter” clause means that Musk’s Tesla-related tweets must be reviewed by another company executive. This clause came as a result of the “false and misleading” statements Musk was found to have made when he said he had “funding secured” to take Tesla private at $420 a share, per Reuters.
Musk has been fighting back against the clause for some time, saying it violated his freedom of speech.
However, on Monday a panel of three judges dismissed those claims, saying that the court saw “no evidence to support Musk’s contention that the SEC has used the consent decree to conduct bad-faith, harassing investigations of his protected speech.”
Musk wrote his infamous “funding secured” tweet to the 22 million Twitter followers he had at the time. However, the deal failed to materialize and investors subsequently accused him of manipulating Tesla’s share price.
As part of the resulting settlement, Musk and Tesla also each agreed to pay $20 million worth of fines and Musk agreed to step down as chair of Tesla’s board.
In a September brief, Musk’s team urged the courts to throw out the “Twitter sitter” agreement, calling it a “government-imposed muzzle” restricting the CEO’s freedom of speech, Reuters reported.
In February, Musk’s attorney Alex Spiro said the restriction was an unconstitutional infringement of the CEO’s free-speech rights, per CNBC.
In the Monday ruling, the judges disagreed. “To the contrary, the record indicates that the SEC has opened just three inquiries into Musk’s tweets since 2018,” they said.
Representatives for Musk did not immediately respond to Insider’s request for comment, made outside normal working hours.