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Biden Administration Urges Supreme Court to Reject Musk’s Dispute with SEC

 |  March 24, 2024

President Joe Biden’s administration has thrown its weight behind the Securities and Exchange Commission (SEC) as billionaire entrepreneur Elon Musk seeks to challenge his dispute with the regulatory body. The administration, in a filing on Friday, urged the US Supreme Court to dismiss Musk’s appeal concerning his clash with the SEC.

Musk’s legal tussle with the SEC stems from a tweet he made in 2018, where he claimed to have secured funding to take Tesla private, sending shockwaves through financial markets. The SEC subsequently accused Musk of defrauding investors, leading to a settlement where both Musk and Tesla agreed to pay $20 million fines each. Additionally, Musk relinquished his role as Tesla’s chairman and consented to having a Tesla lawyer vet some of his Twitter posts.

Despite the settlement, Musk has been vocal about his discontent, referring to the agreement as a “muzzle” on his constitutional right to free speech. His appeal to the Supreme Court seeks to challenge the SEC’s authority in imposing restrictions on his social media activity, particularly concerning his posts on the platform he now owns, which he renamed “X.”

Related: Elon Musk & Spotify Unite Against Apple’s App Store Rules

The Justice Department, backing the SEC’s stance, argued that the settlement terms were essential in curbing the likelihood of Musk making false or misleading statements in the future, thereby upholding the integrity of securities laws, per Reuters.

Musk’s legal team has vehemently opposed the SEC’s actions, contending that the regulatory body overstepped its bounds by imposing what they described as a “gag rule.” They argue that such restrictions infringe upon Musk’s First Amendment rights, granting excessive power to the SEC over his communications.

The 2nd U.S. Circuit Court of Appeals previously rejected Musk’s claims of harassment by the SEC and upheld the terms of the settlement. Despite Musk’s attempts to challenge the ruling, the court denied his request for a rehearing, further intensifying the legal showdown.

As the case unfolds, all eyes are on the Supreme Court to determine the balance between regulatory oversight and individual liberties in the realm of corporate governance and social media communication. The outcome of this legal saga could have significant implications for both Musk and the broader landscape of corporate accountability and free speech in the digital age.

Source: Reuters