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Elon Musk claims he was forced to settle with SEC over his 'funding secure' tweet

Elon Musk claims he was forced to settle with SEC over his 'funding secure' tweet

Tesla CEO Elon Musk is asking a federal judge to toss out a consent decree with the Securities and Exchange Commission that requires his tweets to be approved by a lawyer before they can be posted.

The decree, signed in 2018 after Musk's infamous "funding secure" tweet, is being used to "trample on Mr. Musk's First Amendment rights and pre-empt his speech," his lawyers told a court Tuesday. . Entered. Musk is also seeking to withdraw SEC subpoenas related to his tweets about selling his 10 percent stake in Tesla.

Musk sent the infamous tweet on August 7, 2018, in which he claimed to have the money to take Tesla private at $420 a share. (Tesla has been a publicly traded company since 2010.)

The SEC immediately launched an investigation, eventually concluding that, while he had had some meetings with Saudi Arabia's Sovereign Wealth Fund, Musk "did not discuss a private transaction with any potential funding source at $420 per share". Of". It did nothing to investigate whether it would be possible for all existing investors to remain with Tesla as a private company through a 'special purpose fund', and support Tesla's investors for possible private transactions. would be possible to do. was not confirmed.

But in a new court filing Tuesday, Musk claims "the money was safe, and investors had the backing." He said he felt pressure to resolve the issue with the SEC or risk Tesla's financial security.

"Despite this, the SEC's incredible regulatory pressure, combined with the attendant collateral consequences of the SEC's complaint against me, created a scenario in which I was forced to sign a consent decree in 2018," Musk said. "Tesla was a less mature company and the SEC's action stood to jeopardize the company's financing."

Musk said he was planning to sign the decree until he learned it could also negatively affect his other companies -- Space X, Neuralink and The Boring Company. He said he tried to walk out of it but eventually after he was sued by the SEC for securities fraud and several major Tesla shareholders threatened to sell their stake in the company.

"I only wanted to compromise to help Tesla, but I didn't want to harm other companies," Musk said. "It felt wrong to do so."

The SEC is investigating whether the recent stock sale of Musk and his brother Kimbal Musk potentially violated insider trading rules. The investigation began late last year after Musk and his brother sold $108 million worth of Tesla shares, according to The Wall Street Journal. The sale came the day Elon Musk polled his Twitter followers about whether he should sell his 10 percent stake in the company -- and promised to follow the results of the election.

In this week's filing, Musk defended his actions while his lawyers tried to overturn the agency's summons. "I never lied to shareholders," writes Musk. "I will never lie to shareholders. I entered into a consent decree for the existence of Tesla for the sake of its shareholders."

Musk's conflict with the SEC has intensified in recent weeks. The billionaire CEO accused the agency of subjecting him and his company to "endless, baseless investigations." He also alleged that the agency was ignoring its commitment to distribute the $40 million penalty amount to Tesla shareholders, pursuant to a 2018 agreement. And he claimed the SEC was leaking information about the federal investigation, without any specific evidence to support his claim.

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