Elon Musk settles himself in lawsuit with SEC with Eminem

Elon Musk compared himself to foul-mouthed rapper Eminem in a court filing, claiming that the Securities and Exchange Commission is ruthlessly treating his First Amendment rights by cracking down on his Twitter habit.

The billionaire Tesla CEO’s legal salvo quotes Eminem and his song “Without Me,” the lyrics of which include “The FCC will’t let me be or let me be me” — a $7,000 penalty lawsuit filed by Federal Communications Commission in 2002 on a Colorado radio station, Citadel Broadcasting, for playing Eminem’s obscene ditty “The Real Slim Shady”.

In Musk’s filing Tuesday in the US Southern District of New York, his attorneys cite Eminem’s texts — putting “SEC” in parentheses instead of FCC — noting that the FCC eventually vacated its sentence and ruled that “the First Amendment a critical condition is a limitation that requires us to proceed cautiously and with appropriate restraint.”

It concerns a request by the SEC — led by stubborn Chairman Gary Gensler — for a sweeping subpoena on his tweets from April 30, 2019 to date, to determine whether Musk received pre-approval for each of them from a Tesla attorney before publication .

SEC Chairman Gary Gensler
SEC Chairman Gary Gensler

The Twitter regulations were imposed as part of a 2018 consent decree to settle a shutter over Musk’s now-infamous Aug. 7, 2018 tweet in which he claimed he had “secured funding” to privatize Tesla for $420 a share . Musk – who at the time said the $420 price tag was a hoax to impress his then-girlfriend Grimes – has recently claimed that he did in fact have backing from Saudi investors to fund a takeover of Tesla.

Musk is asking US Judge Alison Nathan to vacate the subpoena and overturn the first consent decree of its kind. In a court filing last week, the SEC alleged that Quinn Emanuel’s Musk attorney, Alex Spiro, told the agency on Feb. 25 that Musk would not provide documents for preapproval or verification of his tweets.

“The sporadic nature of the SEC’s harassment underscores this [consent decree’s] chilling effect because it is impossible to know in advance which tweets will incur the wrath of the commission,” Musk’s attorney wrote in Tuesday’s filing. “Even the SEC seems unsure which tweets require pre-approval, leaving only two conclusions: the consent decree is overly vague, or the agency is maliciously pursuing its investigation.”

Eminem performs at the Super Bowl LVI halftime show on February 13 at SoFi Stadium.

The SEC is reportedly investigating whether Musk or his brother Kimbal’s stock sales in November violated insider trading rules the day before he questioned Twitter users about giving up 10 percent of his Tesla stake.

Last week, when the SEC asked New York federal court to enforce the subpoena, it said it disagreed with Musk’s First Amendment arguments.

“This argument ignores the critical fact that Musk — represented by an experienced, capable attorney — voluntarily consented to entering the court orders that created the pre-approval requirement.”

“Musk can’t work now [this] because it has determined that compliance with Tesla’s procedures is less convenient than it had hoped, or because it wishes the SEC not to investigate whether Tesla’s disclosure controls and procedures are actually being maintained and followed,” the SEC added.

Judge Nathan is expected to hold a hearing on the matter in the next few weeks, sources said. Elon Musk settles himself in lawsuit with SEC with Eminem


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