Fact Check: Does SEC Make Elon Musk Clear His Tesla Tweets Before Posting?

Elon Musk has defined his takeover of Twitter as an effort to liberalize the platform’s moderation of free speech.

But this week, a number of journalists had their Twitter accounts suspended, including reporters from CNN, The Washington Post, and The New York Times. Musk said the suspensions are linked to an account that tracked the movement of his private jet.

The billionaire cited his personal safety and that of his family as motivation for pursuing these suspensions. But the journalists dispute Musk’s characterization of their activity as endangering him or his family.

However, according to at least one social media post, Musk has had at least some of his own free speech on Twitter curbed following an encounter with the U.S. Securities and Exchange Commission (SEC).

Twitter CEO Elon Musk, who has overseen the suspension of several journalists’ accounts recently, reportedly requires oversight before tweeting about his electric car company, Tesla. Pictured here, Elon Musk smiles as he addresses guests at the Offshore Northern Seas 2022 meeting in Stavanger, Norway on August 29, 2022. CARINA JOHANSEN/NTB/AFP via Getty Images

The Claim

A tweet posted on December 16, 2022, with more than 19,000 engagements, states that Elon Musk has to have a “babysitter” to review any tweets he sends about Tesla, as per an SEC consent decree.

“Not for nothing, but Musk is under an SEC consent decree for using Twitter to LIE about Tesla and artificially inflate its stock. He literally has a *babysitter* review his Tesla-related tweets. He’s a conman. Should have been disqualified from owning it.”

So are Musk’s Tesla tweets under formal oversight?

The Facts

Consent decrees, a judgment or order agreed between parties backed by the courts, are used as a dispute resolution tool by the SEC among other government agencies.

In 2018, Elon Musk settled a securities fraud charge brought by the SEC through this process. The Commission argued that he used his Twitter account to manipulate the price of Twitter shares.

Court papers related to the case, filed in the Southern District of New York when Musk attempted to appeal the decree in 2022, alleged that “Musk published a series of false and misleading statements to millions of people, including members of the press, using the social media platform Twitter.”

The papers continued: “In particular, the SEC alleged that in August 2018, Musk tweeted to his then over twenty-two million Twitter followers that he could take Tesla, Inc. (‘Tesla’) private at $420 per share (a substantial premium to its trading price at the time), that funding for the transaction had been secured, and that the only remaining uncertainty was a shareholder vote.

“The tweet allegedly was false: Musk had not discussed specific deal terms with any potential financing partners, and he knew the potential transaction was uncertain and subject to numerous contingencies.

“His tweets caused Tesla’s stock price to jump by over six percent on August 7, 2018 and led to significant market disruption.”

The consent decree, which Musk has since attempted to appeal, stated he had to “comply with all mandatory procedures implemented by Tesla regarding (i) the oversight of communications relating to Tesla made in any format including posts on social media (e.g., Twitter) and on Tesla’s website” and “the pre-approval of any such written communications that contain, or reasonably could contain, information material to Tesla or its shareholders.”

Court files from the 2018 case, which were also filed in the Southern District of New York, are available from the SEC’s website.

As a result, the now second-richest man in the world (according to Forbes’ list of the World’s Richest people) requires oversight before tweeting about Tesla by an experienced securities lawyer employed by the company.

The Twitter CEO’s attempt in April 2022 to appeal the consent decree was denied by District Judge Lewis Liman of the Southern District of New York, who stated: “Musk argues that the consent decree in this case should be terminated because it intrudes on Mr. Musk’s First Amendment right to be free of prior restraints…has been misused to launch endless, boundless investigation of his speech… and was extracted from Musk through the exercise of economic duress.

“None of the arguments hold water.”

Twitter’s own suspension of several journalists who wrote about its CEO has faced criticism.

Executive editor of The Washington Post, Sally Buzbee, said in a statement sent to Newsweek that the suspension of its reporter Drew Harwell “directly undermines Elon Musk’s claim that he intends to run Twitter as a platform dedicated to free speech.”

She added: “Harwell was banished from Twitter without warning, process or explanation, following the publication of his accurate reporting about Musk,” read the statement. “Our journalist should be reinstated immediately.”

Newsweek has contacted Twitter and Tesla for comment.

The Ruling

True.

While the arrangement is more formal and professional than the image of a “babysitter” may invoke, it is nonetheless true that Musk has been restricted from tweeting about Tesla without oversight from others.

The restriction was part of a consent decree, agreed with the SEC in 2018, which had brought a securities charge against the Twitter CEO, alleging he had used Twitter to inflate the price of Tesla stock.

FACT CHECK BY Newsweek’s Fact Check team