SEC CLAIMS AUTHORITY TO SUBPOENA ELON MUSK ABOUT TWEETS

U.S. securities regulators say they have legal authority to subpoena Tesla and CEO Elon Musk about his tweets, and that Musk’s move to throw out a 2018 court agreement that his tweets be pre-approved is not valid.

The Securities and Exchange Commission also disclosed publicly that it is investigating Musk’s Nov. 6, 2021 tweets that asked followers whether he should sell 10% of his Tesla stake. The commission confirmed that it issued administrative subpoenas while investigating whether Musk and Tesla are complying with disclosure controls in the 2018 agreement.

The commission also is investigating whether Tesla described accurately in public filings with the agency whether it complied with disclosure controls.

Details of the investigation were revealed in the SEC’s response to a motion from a Musk attorney asking a Manhattan federal judge to nullify a subpoena and throw out the 2018 agreement, including a requirement that Musk’s tweets be pre-approved by a company attorney.

Musk attorney Alex Spiro also contended that the SEC has used the court agreement “to trample on Mr. Musk’s First Amendment rights and to impose prior restraints on his speech.”