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Billionaire Elon Musk is well-known for his frequent posting on social media, including the X platform which he acquired for $44 billion in 2022.
Musk is not allowed to post certain items on social media as part of a settlement made six years ago.
What Happened: On Monday, the U.S. Supreme Court rejected an appeal from Musk to remove a provision related to a 2018 settlement with the Securities and Exchange Commission (SEC).
Musk and Tesla Inc (NASDAQ:TSLA) each agreed to pay $20 million as part of a settlement with the SEC in 2018, which was related to a tweet made by Musk announcing that funding had been secured to take the electric vehicle company private.
Part of the settlement also included the "oversight of communications relating to the company made in any format." This so-called "Twitter Sitter" provision limited what Musk could post on X, formerly known as Twitter, and other social media platforms related to Tesla.
As part of a settlement agreement, Musk is required to obtain approval from an internal attorney before making any posts about Tesla on X.
Musk asked the Supreme Court to take up an appeal in December, as he believed the provision on social media posting violated free speech and his First Amendment rights.
With the rejection by the Supreme Court to hear the case, the provision remains in place.
Related Link: 52 Facts And Figures About Tesla, SpaceX CEO Elon Musk
Why It's Important: Musk's lawyers said the SEC has waged an "ongoing campaign" against Musk. The lawyers also said the provision known as the "Twitter Sitter" restricts Musk's speech.
"It extends to speech not covered by the securities laws and with no relation to the conduct underlying the SEC's civil action against Mr. Musk," lawyers for Musk said.
The SEC began investigating Musk recently, as his tweet about whether he should sell 10% of his Tesla shares may have violated the settlement provision.
Musk's tweet that funding was secured was said to have misled investors, according to the original complaint by the SEC. Tesla was not taken private and remains a public company today.
The news of the Supreme Court rejecting the case comes as Tesla shares are trading higher Monday, with Musk making a surprise visit to China.
Musk has not acknowledged the Supreme Court rejecting the case publicly as of the time of writing.
TSLA Price Action: Tesla shares are up 15% to $193.94 on Monday, versus a 52-week trading range of $138.80 to $299.29. Shares of Tesla are down 22% year-to-date in 2024.
Image generated using artificial intelligence via Midjourney.
Posted In: TSLA
