The Biden administration has reportedly advised the U.S. Supreme Court to dismiss Tesla Inc TSLA CEO Elon Musk‘s appeal against the Securities and Exchange Commission.
What Happened: The administration on Friday recommended that the Supreme Court not entertain Musk’s appeal, reported Reuters. The appeal was filed by Musk in December after a lower court upheld his consent decree with the SEC.
In 2018, Musk posted on X, then Twitter, that he had secured funding to take his EV company private, a move the SEC deemed as defrauding investors.
As per Musk’s settlement with the SEC, he and Tesla each paid $20 million in fines and agreed to allow a Tesla lawyer to approve some of his posts on Twitter. Musk has termed the consent decree a muzzle on his right to free speech.
The Justice Department, in its filing, defended the settlement terms as a means to prevent future false or misleading statements by Musk. The 2nd U.S. Circuit Court of Appeals in Manhattan previously rejected Musk’s argument that the SEC was using the decree to conduct intrusive investigations into his Twitter use.
Musk’s lawyers have argued that the SEC had no right to impose a “gag rule” as a condition of the settlement, claiming it violated the First Amendment’s constraints on governmental limits on free speech.
This is, however, not Musk’s first run-in with the SEC. Last month a California federal court ordered Musk to testify again as part of an SEC investigation into Musk’s takeover of Twitter in 2022. Musk refused to attend an interview previously in September, following which the regulator sued him in October.
Price Action: Tesla shares closed down 1.15% at $170.83 on Friday. The stock is down 31.2% year-to-date, according to data from Benzinga Pro.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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