Judge rejects gag order in suit over 2018 Elon Musk tweets

DETROIT –

California federal judge rejects shareholder request to make Elon Musk stop discussing his 2018 tweets. saidHe was able to raise the capital necessary for Tesla to become a private business.

U.S. District Judge Edward Chen’s Wednesday ruling came hours after Tesla CEO’s lawyer had filed a document in this case stating that a gag order would violate Musk’s freedom of speech rights.

Musk’s lawyers argued that Musk was trying to influence jurors in order to get them to vote against him before the lawsuit goes to trial on January 17. According to the lawsuit, Musk’s August 2018 tweets were designed to manipulate Tesla’s stock prices and cost shareholders money.

Chen confirmed Wednesday that Musk’s tweets in 2018 about having the money for Tesla privatization at $420 per Share were untrue.

He wrote, however, that the gag order was not granted to the shareholder who filed the class-action suit. Chen stated that the trial was rescheduled for next year and that public attention during or right before trials is a greater concern. He stated that the jury would come from a large metropolitan area and that Musk’s remarks are consistent with other public positions in a related court case.

The plaintiffs’ lawyers also claimed that Musk had violated an October 2018 settlement reached by the U.S. Securities regulators. Musk agreed to pay a $20m fine and not make statements debunking the allegations of securities fraud. Musk has challenged the agreement and claimed it is unconstitutional.

The decision comes just a week following Musk’s controversial offer to buy Twitter and make it a private business with a $43billion offer equaling $54.20 per shares. Twitter’s board adopted a poison pill strategy Friday, which would make it prohibitively cost-prohibitive for Musk to purchase shares.

Musk’s April 14 interview during the TED 2022 conference is at issue. saidHe claimed that he had funding available to take Tesla private for 2018. He called Securities and Exchange Commission a profane term. saidHe only settled the case after bankers warned him that they would cease providing capital to him if he did not. If he did, Tesla, a Texas-based company, would have gone bankrupt.

Musk’s statements in the interview, according to lawyers representing the shareholders, were an “unsubtle” attempt to exonerate himself in court of public opinion over misrepresentations made in his Aug. 7, 2018, tweets.

Musk attorney Alex Spiro responded that shareholders did not show that Musk’s speech presented a “clear danger” that the community would be corrupted or that it would be impossible to find 12 objective jurors.

According to his motion, Musk is currently in the middle of a public bid to take over Twitter. This has sparked debate about censorship. This is a similar situation to Musk’s earlier statements about taking Tesla private, he said.

Musk was asked by TED if the funding for the Twitter deal was secured. This was a reference to the 2018 Tesla tweets. Spiro wrote, “Mr. Musk should have the freedom to respond truthfully and meaningfully to questions like this,”

Musk could be charged with securities fraud if he violated the SEC agreement. The SEC refused to comment.