(Reuters) – A US judge criticized Elon Musk on Wednesday for trying to evade a settlement with regulators demanding oversight of his Tesla Inc. tweets, saying the billionaire “regretted” the 2018 deal now that he felt Tesla was “invincible” “.
The verdict comes after Twitter Inc.’s board on Monday accepted Musk’s $ 44 billion deal to buy the social media platform.
The dispute stems from the Securities and Exchange Commission’s claim that Mr. Musk, Tesla’s CEO, deceived investors on August 7, 2018 by tweeting that he had “secured financing” to potentially take the electric car company privately at a premium, when a buyout was not close in reality . Tesla stock rose after the tweet.
Musk̵7;s lawyers had sought to end the 2018 Consent Decree, which resolved these allegations of SEC securities fraud, arguing that the regulator’s pursuit of Musk “crossed the line into harassment” and hindered his constitutional right to freedom of expression.
U.S. District Judge Lewis Liman in Manhattan rejected those arguments as well as Musk’s request to block a separate SEC investigation into tweets that Musk posted last year regarding the sale of some of his Tesla shares.
“Musk can now not try to withdraw the agreement that he consciously and willingly entered into by simply regretting that he felt he had to agree to it at the time, but now – when the ghost of the trial is a distant memory and his company has become, in his estimation, almost invincible – wish he had not done so “, wrote Judge Liman.
The 2018 agreement required that Musk and Tesla each pay a $ 20 million civil fine and that Musk resign as Tesla’s chairman. The consent decree also required Musk to obtain prior approval from Tesla’s attorneys for tweets and other public statements that may be important to Tesla.
Tesla did not immediately respond to a request for comment on Wednesday.
Tesla’s shares were about 2.4% higher at $ 897.62 and the Twitter share fell 2% to $ 48.67 in afternoon trading.
The SEC’s investigation related to Musk’s sale of some of its Tesla shares is over tweets he sent on November 6 last year asking readers if they supported his sale of 10% of his Tesla stake and saying he would follow the survey results. The SEC has asked Musk and Tesla to determine if these tweets were reviewed before they were published.
A majority of readers supported such a share sale, and the survey caused Tesla’s share price to fall. Musk has since sold more than $ 16 billion in Tesla shares.
Judge Liman said it was “unsurprising” that the SEC would have questions about the unusual way in which Musk went about deciding to sell his stake.
Musk has escalated its attacks on the SEC. Earlier this month, he referred to the regulator as “those bastards.”
Mr Musk calls himself an “absolute freedom of speech” and has criticized Twitter’s policy of moderating speeches aimed at curbing harassment.
“By ‘freedom of speech’ I simply mean what is in accordance with the law,” Musk tweeted on Tuesday, the day after Twitter’s board accepted his offer. “If people want less freedom of speech, they will ask the government to pass laws for this purpose. Going beyond the law is therefore against the will of the people.”