WASHINGTON (dpa-AFX) - Tesla Inc. (TSLA) CEO Elon Musk has asked a federal judge to end his 2018 agreement with top US securities regulator that some of his tweets need to be inspected by a lawyer.
Musk also asked the judge to block a US Securities and Exchange Commission subpoena asking for records of pre-approval of a poll conducted on Twitter in November on the possibility of selling some of his stock.
Elon Musk's lawyers wrote to US District Judge Alison Nathan in Manhattan on Tuesday, 'The SEC's pursuit of Musk has crossed the line into harassment, which is quintessential bad faith.'
The lawyers were of the opinion that the 2018 consent decree resolving SEC securities fraud charges was leading to widespread interference into the Tesla CEO whereabouts, while impeding his constitutional right to free speech.
Commenting on the developments, Urska Velikonja, a law professor at Georgetown University Law Center, said, 'The SEC clearly has authority to enforce a consent decree issued by a federal court without having to conduct a new investigation.'
In early November, Musk conducted a Twitter poll that he would offload 10 percent of his Tesla stake if the votes were in favor. They came back positive and Tesla shares took a hit. Musk has since sold $16.4 billion of his stock.
The tweet reignited questions about whether Musk abided by his SEC agreement to obtain approval from a Tesla lawyer before giving written communications regarding the company to his people and shareholders.
In a statement about the issue, Tesla said that Musk's tweet on stock sales 'is behavior the SEC should encourage, a CEO's transparency with the public and shareholders about a proposed stock sale'. The SEC was not available for any comment on the whole issue.
In his lawsuit, Musk said that he was 'forced' to sign the decree, talking about the SEC's 'unrelenting regulatory pressure' and as the 'SEC's action stood to jeopardize the company's financing'. He said the company's several large shareholders 'could cede their ownership in Tesla, substantially affecting Tesla's financing, if the case was not settled in a proper manner.
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