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Elon Musk’s Twitter restrain upheld by court judge even as he inches closer to owning the platform

Elon Musk may be getting set to own Twitter, but he still has some restrictions on what he can tweet about. A judge has refused to lift the limitations placed on him by the Securities Exchange Commission as a fallout of his posts about taking Tesla private.

The billionaire is trying to get the court to lift restrictions he claimed he was coerced into agreeing to, but the judge is hearing none of it. Musk had got the SEC investigating him after he tweeted he had secured funding from Saudi Arabia to take Tesla private, as he is about to do with Twitter.

US District Judge Lewis Liman opted to let the agreement stand.

Musk also wanted the court to void a subpoena served by the SEC, which is investigating whether his tweet last that polled his followers on whether he should sell 10 percent of his Tesla shares broke the agreement. The agency was interested in whether he got consent or had the tweet vetted first, as stipulated by his agreement. Musk claimed to be frustrated by an endless investigation and accused the SEC of trying to chill his exercise of First Amendment rights.

On this subpoena, Liman said the court was not in a position to determine whether it had been served correctly. However, if the court had done so, it would have found that SEC had the right to commence a probe.

The judge noted that even Musk agreed his right to free speech did not permit him to tweet what could be considered fraudulent or otherwise violative of the securities laws. Musk had objected to the restrains by quoting lyrics from American rapper Eminem. According to the judge, “Musk, by entering into the consent decree in 2018, agreed to the provision requiring the pre-approval of any such written communications that contain, or reasonably could contain, information material to Tesla or its shareholders. He cannot now complain that this provision violates his First Amendment rights.”

Musk also argued the scope of the restriction was too broad, but the judge disagreed. He ruled that the conditions by the SEC were not out of the ordinary. To the Tesla CEO’s claim of being under economic duress at the time of the agreement, the judge wrote, “Musk was not forced to enter into the consent decree; rather, “for [his] own strategic purposes, [Musk], with the advice and assistance of counsel, entered into these agreements voluntarily, in order to secure the benefits thereof, including finality.” Securities and Exchange Commission v. Conradt, 309 FRD. 186, 187–88 (SDNY 2015). Musk cannot now seek to retract the agreement he knowingly and willingly entered by simply bemoaning that he felt like he had to agree to it at the time but now—once the specter of the litigation is a distant memory and his company has become, in his estimation, all but invincible—wishes that he had not.”

However, Musk went home with a victory as the Delaware Supreme Court agreed with him on a case brought by some Tesla shareholders on the acquisition of SolarCity in 2016. Musk would have been in the hole for more than $2 billion if he had lost.

It is ironic that the incoming owner of Twitter, who is a self-professed champion of free speech, is limited in what he can post on Twitter.

Written by HackerVibes

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