"Government-Imposed Muzzle" Musk Files Lawsuit Over 'Freedom of Expression' Violation

U.S. Securities and Exchange Commission Files Lawsuit Over Musk's Earlier Tweet... Stock Fraud Allegations

Elon Musk, CEO of Tesla, has appealed against the SEC measure requiring him to obtain prior approval from the company's in-house lawyer before posting tweets related to the company's financial situation. Photo by AFP Yonhap News

[Asia Economy Reporter Bang Je-il] Elon Musk, CEO of Tesla, who has actively expressed his opinions through Twitter, is continuing a legal battle with the U.S. Securities and Exchange Commission (SEC), claiming that his freedom of expression has been violated.

According to major foreign media on the 28th (local time), Musk's attorney filed a lawsuit at the U.S. Court of Appeals for the Second Circuit in Manhattan, New York, demanding the annulment or modification of the 2018 agreement with the SEC.

In the complaint submitted to the appellate court the day before, the attorney argued that the prior approval requirement for Musk's tweets is a "government-imposed muzzle" and that "this measure restricting Musk's lawful speech violates the Constitution."

In March, Musk requested the court to issue an order to stop monitoring his tweets, arguing that the agreement with the SEC infringes on his freedom of expression, but the trial court dismissed the request.

The agreement between Musk and the SEC originated from the Tesla delisting controversy four years ago. At that time, Musk tweeted that he was considering delisting Tesla but later retracted the statement. The SEC filed a lawsuit accusing Musk of stock fraud, holding him responsible for causing market confusion.

Musk subsequently paid a total fine of $40 million and agreed with the SEC that Tesla's in-house lawyers would pre-approve some of his tweets.

Later, both parties specified the agreement to require prior approval only for tweets related to Tesla's production figures, new business areas, and financial status.

In this regard, in February, the SEC launched an investigation into whether Musk complied with the 2018 agreement following the controversy over his tweet about selling Tesla shares. In November last year, Musk tweeted asking whether he would dispose of 10% of his Tesla shares, and Tesla's stock price fell more than 15% over the following week.