Developments in Securities Regulation, Corporate Governance, Capital Markets, M&A and Other Topics of Interest. MORE

Elon Musk, in a court filing, offered the following three reasons why he should not be held in contempt of court for violating a court Order in a recent tweet:

  • There is no clear and convincing evidence that an unambiguous court order was violated. According to Musk, Tesla has confirmed Musk has complied with its policies, which permits Musk to exercise his reasonable discretion in the first instance to determine whether his communications contain information requiring pre-approval.
  • There is no evidence that Musk did not diligently attempt to comply with the order.
  • The Order as the SEC interprets it would raise serious First Amendment issues and implicate other constitutional rights. The SEC seeks to rewrite the Order to eliminate Musk’s discretion, effectively requiring Musk to seek pre-approval of any tweet that relates to Tesla, regardless of its significance, prior dissemination, or nature.