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Musk aims to end the SEC’s “muzzle” that requires pre-approval of tweets



(Reuters) — Elon Musk’s lawyers urged a federal appeals court to throw out a provision in his 2018 decree with the U.S. Securities and Exchange Commission that requires a Tesla Inc. lawyer to review some of his Twitter posts.

In a brief filed late Tuesday with the 2nd U.S. Circuit Court of Appeals in Manhattan, lawyers for Mr. Musk the pre-approval mandate for a “government-enforced muzzle” that inhibited and chilled his legal speech on a wide range of topics.

They also said the requirement violated the U.S. Constitution and undermined public policy by running “contrary to the American principles of free speech and open debate.”

The SEC declined to comment on Wednesday. It is expected to submit its own notification to the Court of Appeal.

Mr. Musk wants to overturn part of an April 27 ruling by U.S. District Judge Lewis Liman that rejected his bid to throw out the consent decree entirely.

Judge Liman said Musk̵

7;s argument amounted to a “regret” over demands he no longer wanted to comply with now that “his company has become, in his estimation, almost invincible.”

The decree settled a lawsuit that accused Musk of defrauding investors with an Aug. 7, 2018, tweet that he had “secured financing” to take his electric car company private, even though a takeover was not imminent. Musk has said the tweet was truthful.

Musk agreed to have a Tesla lawyer review tweets that may contain material information about the company.

Musk and Tesla also each paid $20 million in civil fines, and he gave up his role as Tesla chairman.


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