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Tesla shareholders fail to silence Elon Musk in 2018 ‘funding secured’ suit

Credit: Tesla

Tesla shareholders suing CEO Elon Musk for losses they possibly incurred from the frontman’s 2018 “Funding secured” Tweet have lost a request to silence Musk from publicly discussing the case.

U.S. District Judge Edward Chen rejected the shareholders’ request, which evidently was not justified as Musk is protected by his first amendment rights, Reuters said.

Shareholders pushed Judge Chen to keep Musk from making any additional comments regarding his “interpretation and opinions” of the case after making several new declarations about the lawsuit during an interview last Thursday.

“Funding was indeed secured,” Musk said while being interviewed by Head of TED, Chris Anderson. “I should say, ‘Why do I not have respect for the SEC’ in that situation. I don’t mean to blame everyone at the SEC, but certainly the San Francisco office. The SEC knew that funding was secured. They pursued an active public investigation, nonetheless.”

The SEC ultimately came to an agreement with Tesla and Musk, who both were required to pay a $20 million fine, while Musk was subjected to additional sanctions. However, Musk also stated during the TED interview that he was forced into agreeing to the SEC’s terms or he would lose the ability to finance Tesla’s daily operations.

Elon Musk’s ‘funding secured’ Tweet draws skeptical reaction from judge in hearing

“I was told by the banks that if I chose not to settle with the SEC, the banks would cease providing working capital, and Tesla would go bankrupt immediately. That’s like having a gun to your child’s head,” Musk said. Musk stated he agreed to the terms to “save Tesla’s life,” but did not appreciate the perception that came as a result of the 2018 consent decree, which he argues made it look like he admitted to lying about the funding.

Shareholders filed a motion the following day to keep Musk from discussing the matter publicly, as they argued it could taint the opinion of the millions of potential jurors who will hear the case when it heads to trial in January 2023.

Musk’s attorneys argued that the investors suing him “ask this court to trample on Elon Musk’s First Amendment rights by barring him from publicly discussing this case or its underlying facts.” Lawyers said the request to restrict the CEO from speaking openly about the case “cannot be reconciled with the Constitution’s guarantee of free speech and should be denied.”

Chen agreed and threw out the request yesterday.

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Tesla shareholders fail to silence Elon Musk in 2018 ‘funding secured’ suit
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