When Tesla boss Elon Musk expressed a desire to buy Twitter last week, citing an absolutist vision of free speech as at least one reason behind his motivations, one had to wonder if his running afoul of the Securities and Exchange Commission over one of his tweets played a part.
To be sure, even if Twitter had no regulations moderating speech on the platform, Musk (or anyone in a similar position) could violate SEC regulations via tweet — a platform’s rules don’t protect someone from the Feds’ regs.
Still, Musk has shown a thin skin for criticism and it often appears that he desires to be able to say what he wants on Twitter without consequences. Consequences like having a federal judge rule that Musk knew certain infamous tweets about taking the company private having secured funding at $420 a share were misleading.
Tesla investors sued after the tweets hurt the company’s stock and lost them money. It’s a class-action suit and Musk and Tesla could be on the hook for billions in damages.
Lawyers for the shareholders are seeking a restraining order against Musk, to prevent him from speaking publicly about the tweets before the trial.
The shareholders have expressed concern that tweets from Musk could taint the jury pool. “[Musk] has used his fame and notoriety to sway public opinion in his favor, waging battle in the press having been defeated in the courtroom,” their lawyers wrote in the filing.
Obviously, this doesn’t mean Tesla and Musk have lost the lawsuit. It only means that U.S. District Court Judge Edward Chen believes Musk knew his tweet was “false and misleading” and “held that he recklessly made the statements with knowledge as to their falsity.”
As for Musk’s defense? First, his lawyer, Alex Spiro, claims Musk really was thinking about taking Tesla private in 2018 and had the financing to do so. Second: “free speech”.
“All that’s left some half decade later is random plaintiffs’ lawyers trying to make a buck and others trying to block that truth from coming to light, all to the detriment of free speech,” he said.
Here are the case specs, if you’re curious: In re Tesla Inc Securities Litigation, U.S. District Court, Northern District of California, No. 18-04865.
As for this author, I cannot pretend to know if Musk knowingly lied for whatever reason (including a poorly received attempt at humor) or if he really was sincere about going private. I do think, however, that “free speech” doesn’t necessarily apply when your words can move markets and possibly violate SEC regulations.
Actions, consequences, et cetera.
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