Tesla CEO Elon Musk’s legal skirmish with the US Securities and Exchange Commission continues, with the executive invoking popular rapper Eminem in a filing submitted to a Manhattan federal court on Tuesday. Musk is currently looking to throw out his 2018 agreement with the SEC, which requires him to get pre-approval for tweets that are of material importance to Tesla.
The recent filing revealed Musk’s renewed efforts at preventing an SEC subpoena for details about whether the CEO and Tesla have been complying with their 2018 consent decree with the agency, especially when he polled his Twitter followers if he should sell TSLA stock last year. While arguing his points, Musk noted in his recent filing that requiring Tesla lawyers to screen his tweets is unconstitutional and a restraint on his free speech. Musk claimed that this violated his First Amendment rights.
“The First Amendment requires that agencies proceed with caution when constitutional rights are at stake, not seek to pursue any and all novel theories that broaden their authority at the cost of individual freedom. Compare Eminem, ‘Without Me’ (2002) (‘The [SEC] won’t let me be or let me be me so let me see / They tried to shut me down . . .’) with Citadel Broad. Co., Mem. Op. and Order, 17 FCC Rcd 483 (2002) (rescinding penalty against radio station for playing Eminem song and noting ‘the First Amendment is a critical constitutional limitation that demands we proceed cautiously and with appropriate restraint’),” Musk’s new filing noted .
For some context, Eminem’s lyrics referenced the US Federal Communications Commission (FCC), which fined radio stations for playing one of his popular songs, “The Real Slim Shady,” which featured themes and lyrics that the FCC considered offensive. The SEC, for its part, has declined to comment on Musk’s recent filing, though considering their ongoing legal skirmish, it would not be surprising if the agency files a response against the CEO in the near future.
Apart from referencing the popular rapper, Musk also argued that the SEC had issued its subpoena in bad faith. The CEO also dubbed the agency’s efforts as a “fishing expedition” of sorts that is aimed at harassing him. “The Formal Order is not an open invitation for any fishing expedition the Commission may wish to pursue, and the Commission errs in assuming that a court may not look behind its veil. To that end, the SEC twice denies that ‘its subpoenas are issued under the consent decree,’ instead unequivocally stating ‘the subpoenas were issued under the authority granted by the Formal Order of Investigation,’” Musk’s filing noted.
Musk and the SEC’s agreement was the result of the CEO’s “funding secured” fiasco in 2018. During the time, Musk attempted to take Tesla private, and he announced on Twitter that funding had been secured for the deal. The SEC accused Musk of fraud over his alleged false and misleading statements. In the end, Musk had to step down as Tesla’s Chairman, and he and Tesla paid a $20 million fine each. Musk did, however, not admit that he misled investors with his “funding secured” announcement.
Musk’s recent filing can be accessed below.
gov.uscourts.nysd.501755.80.0 by Simon Alvarez on Scribd
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