Musk trial win a 'non sequitur' in Twitter sitter sase, says US SEC

The US Securities and Exchange Commission said Elon Musk is reading too much into his win at a securities fraud trial in San Francisco if he thinks the result has any bearing on his 2018 deal with the agency requiring a Tesla Inc. lawyer to screen his company-related tweets.
 

The SEC said the jury verdict earlier this month is a “non sequitur.”

Musk has battled with the SEC over his social media posts since he tweeted in 2018 that funding was secured to take Tesla private. That prompted the regulator to sue, claiming Musk and Tesla had misled shareholders. Both settled with the SEC, each paying $20 million and agreeing that Musk’s Tesla-related tweets would be reviewed by a lawyer — often referred to as a Twitter sitter — before he posts them.

The judge handling the SEC case has refused to let Musk out of the deal, prompting the Tesla CEO to appeal to the 2nd US Circuit Court of Appeals.

Musk’s lawyer argued to the appeals court that the San Francisco verdict confirms that Musk’s tweets didn’t violate securities laws. Investors had sued Musk over the “funding secured” tweet, claiming he defrauded them. A federal jury took just two hours to clear him, sending shares of the electric car maker surging. 

That verdict is irrelevant, the SEC said in response Thursday. Musk forfeited his chance to test the SEC’s claims at trial when he twice voluntarily agreed to settle, according to the filing.

“Even if the verdict were somehow relevant, Musk reads too much into it,” the SEC said. The settlement “was not conditioned upon the outcome of the private litigation,” lawyers for the agency added. “The Commission had no role in that case.”

Musk’s lawyer, Alex Spiro, didn’t immediately respond to an email sent late Thursday seeking comment on the SEC filing.

Musk has argued that the SEC is harassing him and that a consent decree he signed violates his free speech rights.

The case is US Securities and Exchange Commission v. Musk,  22-1291, 2nd US Circuit Court of Appeals (Manhattan).