📺 Stream EntrepreneurTV for Free 📺

Elon Musk's Lawyers Say His First Amendment Rights Are Being Violated By Required Pre-Approval of Tesla Tweets Musk agreed to tweet approval in 2018 after he announced on the platform he had "funding secured" to take Tesla private.

By Gabrielle Bienasz

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Robyn Beck | Getty Images
Elon Musk.

Elon Musk is taking another swing at the "Twitter sitter" requirement.

On Tuesday, his lawyers filed a brief saying the agreement Musk signed with the SEC back in 2018 — which requires him to have Tesla-related tweets reviewed and approved — violates his First Amendment rights, according to Bloomberg.

Elon Musk has a storied history of free-wheeling tweeting and facing (or shirking) various consequences.

In May, a shareholder sued him for market manipulation because he tweeted his deal to buy Twitter was "on hold." In the same month, he began to tweet about backing out of his bid to buy the company, which he is currently attempting to do. The SEC has also questioned Musk about tweets he posted about Twitter before disclosing he had purchased a stake in the social network.

But this week Musk's lawyers went after a different controversy. They tried again to remove an agreement the world's richest man signed in 2018 after a different tweet-related controversy.

On August 7, 2018, he tweeted he had "funding secured" to take Tesla private. The company's stock price rose that day by about 10%.

The SEC brought a securities fraud charge against him that September as a result of the tweet, and the billionaire settled the following week. He and Tesla were fined $20 million each under the agreement.

"Tesla will establish a new committee of independent directors and put in place additional controls and procedures to oversee Musk's communications," the SEC said at the time.

This means a Tesla lawyer, or Twitter sitter, if you will, has to approve his tweets about the company, according to NBC.

Musk's lawyers said this qualifies as "prior restraint," Bloomberg reported, which is when the government suppresses speech. This is mostly prohibited under the First Amendment, except in limited cases.

They have also said the SEC uses the agreement to continuously look into his speech, NBC noted.

In April, federal judge Lewis Liman declined to let Musk out of the tweet agreement with the SEC, Bloomberg noted. Musk is "simply bemoaning that he felt like he had to agree to it at the time" and now "wishes that he had not," Liman wrote.

Musk's lawyers have also claimed that he was forced to sign the agreement because of economic issues and that it is too-far reaching because it covers circumstances far into the future.

Lawyer Alex Spiro of Quinn Emanuel Urquhart & Sullivan, who also just started working for Ye (formerly known as Kanye West), was involved in the brief.

Elon Musk signed a merger agreement with Twitter in April but then moved to back out of it, which has resulted in a court battle between him and the platform. In one of the first hearings Tuesday, Twitter asked for Musk to be censured for getting rid of evidence.

Spiro did not immediately respond to a request for comment.

Gabrielle Bienasz is a staff writer at Entrepreneur. She previously worked at Insider and Inc. Magazine. 

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Business News

Elon Musk Reveals His Tactics for Building Successful Companies, Including Sleeping Under His Desk and 'Working Every Waking Hour'

Musk shared the secrets on a podcast with Nicolai Tangen, CEO of the $1.6 trillion Norges Bank.

Business News

Ring Camera Owners Will Receive $5.6 Million in Payments After FTC-Amazon Settlement. Here's How Many Customers Are Eligible — And How They'll Get the Cash.

The payouts are a result of a June 2023 settlement with Amazon over privacy violation allegations against the camera company.

Business News

'My Mouth Dropped': Woman Goes Viral For Sharing Hilarious Cake Decorating Mishap at Walmart

Peyton Chimack has received over 703,000 views on her TikTok post of her birthday cake.

Side Hustle

3 Secrets to Starting a Small Business Side Hustle That Gives Your Day Job a Run for Its Money, According to People Who Did Just That — and Made Millions

Almost anyone can start a side hustle — but only those ready to level up can use it to out-earn their 9-5s.

Business News

Jeff Bezos and Amazon Execs Used An Encrypted Messaging App to Talk About 'Sensitive Business Matters,' FTC Alleges

The FTC's filing claims Bezos and other execs used a disappearing message feature even after Amazon knew it was being investigated.

Real Estate

Is It More Profitable to Buy a Single-Family or Multi-Unit Property? Here's What Beginner Real Estate Investors Need to Know.

Making the most profitable decision means having a clear eye towards risk tolerance, time availability and management training enthusiasm, among other factors.