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Elon Musk Must Solicit Pre-approval from a Securities Lawyer Before Posting on Twitter

David Peterson

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Elon Musk is permitted to tweet as he wants baring specific events or financial milestones. As per the agreement filed with Manhattan federal court, Musk needs pre-approval from a securities lawyer in those scenarios.

The U.S. Securities and Exchange Commission set certain guidelines for Tesla and Elon Musk regarding limited freedom to use Twitter. So, there will be no fear of being held in contempt for violating an initial court order.

The SEC sued Musk a year ago after his tweet on Aug. 7 that he had secured funding to carry Tesla privately at $420 per share. The firm said that tweet raised Tesla’s share price to around 13.3 percent, which violated securities laws. Musk’s privatization plan was stable in the beginning period, and funding was not set up.

So, Tesla and Musk settled with the SEC a year ago without conceding immoral behavior. The settlement comprises of:

  • Musk agreed to venture down as chairman of Tesla for a minimum of three years.
  • Tesla consented to pay a $20 million fine.
  • The organization needed to name two independent directors to the board.
  • Tesla was likewise advised to set up a strategy to screen Musk’s statements to people in general about the organization which included Twitter posts.

Then the fight rekindled after Musk’s February 19 tweet. The SEC argued, that tweet by Musk infringed the agreement between the two. Musk has stated the tweet was “immaterial” and complied with the settlement.

Musk’s legal advisors have contended that the February tweet didn’t include new information which was material to investors. Furthermore, under the agreement Musk didn’t require pre-approval for every tweet about Tesla.

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David Peterson is a goal driven Sales Manager equipped with analytical and problem-solving skills that make him. With strong communication and interpersonal skills, he had always been a dedicated team player. In his free time, David loves to watch action movies and some of his top favorites are Mad Max, Die Hard, and Kill Bill.

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