A federal judge has ruled that Tesla Inc TSLA CEO Elon Musk will not be subjected to a “gag order” that stops him from discussing a lawsuit claiming he defrauded shareholders with his 2018 tweet about taking the electric vehicle firm private, Reuters reported on Thursday.
What Happened: U.S. District Judge Edward Chen in San Francisco called the proposed temporary restraining order overbroad as it prevented Musk from speaking to "anyone" about the case.
Tesla shareholders sued Musk and the company in 2018 over a controversial tweet that led to a massive share sell-off.
The tweet said that Musk was considering taking the electric vehicle maker private for $420 per share and that he had the “funding secured,” leading to the stock’s course reversal and turning volatile.
See Also: 'A Deal Is A Deal:' Elon Musk's Tweets Can't Skirt Investigation Under 2018 Agreement, Says SEC
Gag Order: A gag order was imposed on April 15, a day after Musk revealed he had the funding secured to take Tesla private. The billionaire entrepreneur was sued by U.S. regulators for fraud over his tweets.
Tesla lawyers said the proposed gag order "evokes a level of censorship" and does not follow the U.S. Constitution's guarantee of free speech, as per the report.
Price Action: Tesla stock closed 4.96% lower at $977.2 a share on Wednesday.
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