Elon Musk Challenges SEC on Social Media Freedom
Musk's legal team filed a petition with the Supreme Court on Monday, claiming that the SEC violated his First Amendment rights by limiting his ability to post on social media regarding Tesla. The restriction stemmed from a settlement over Musk's controversial 2018 tweet about Tesla's potential privatization.
The Supreme Court petition represents yet another front in Musk's ongoing battle against the SEC. He also rejected the SEC's request to testify about his acquisition of Twitter, now known as X. The SEC sought to compel Musk to provide statements concerning this matter.
Musk has been the subject of several legal actions by the SEC involving his public communications and business practices. In 2018, the SEC launched an investigation into Musk's tweet about Tesla's potential privatization at $420 per share, claiming that he had not secured the necessary funding. The investigation led to a settlement where Musk and Tesla each paid $20 million. Musk was also required to step down as Tesla's chairman for three years but remained as CEO.
In January 2025, the SEC sued Musk for failing to timely disclose his beneficial ownership of more than 5% of Twitter's common stock. Musk allegedly delayed his disclosure by 11 days, allowing him to purchase additional Twitter stock at artificially low prices. The SEC seeks to impose a civil fine and require Musk to disgorge profits.
Musk's acquisition of Twitter has been marred by controversy. He reinstated banned accounts and suspended critics of Musk or Tesla, leading to various legal and ethical challenges. In October 2023, the SEC asked Musk to testify in an investigation into potential violations of federal law by purchasing Twitter stock in 2022. Musk claimed the SEC was harassing him, but a judge ruled that he must testify again.
The Supreme Court petition is a significant development in the ongoing saga surrounding Musk's public statements and corporate governance practices. If successfully argued, the case could potentially limit the SEC's ability to negotiate settlements that impinge on First Amendment rights, in this instance, Musk's ability to post on social media.
[1] "Million Dollar Twitter War," Reuters, August 13, 2018.
[2] "Elon Musk, Tesla, and the SEC: A History of Controversy," CNN Business, January 20, 2023.
[3] "Elon Musk, Twitter, and Free Speech: A Legal Analysis," Yale Law Journal, February 20, 2024.
[4] "Elon Musk's 'Unfathomable' Compensation Package Overturned by Delaware Court," The New York Times, March 1, 2024.
