Prior restraint: Elon Musk claims government-imposed muzzle unlawful

Elon Musk’s lawyer claims the Tesla CEO is under constant threat that the SEC will disagree with his interpretation of what he can say. (AP)
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Updated 28 September 2022

Prior restraint: Elon Musk claims government-imposed muzzle unlawful

  • Court brief: Musk’s speech is chilled by the threat of SEC investigations and prosecution for contempt of court

DETROIT: US Securities regulators are unlawfully muzzling Tesla CEO Elon Musk, violating his free speech rights by continually trying to enforce a 2018 securities fraud settlement, Musk’s lawyer contends in a court brief.
The document, filed late Tuesday with the federal appeals court in Manhattan, was written to support Musk’s appeal of a lower court’s April decision to uphold the settlement with Securities and Exchange Commission.
The brief says that a provision in the settlement requiring Musk to get prior approval before tweeting about the electric car company is an illegal “government-imposed muzzle on Mr. Musk’s speech before it is made.”
The settlement required that his tweets be approved by a Tesla attorney before being published. The SEC is investigating whether Musk violated the settlement with tweets last November asking Twitter followers if he should sell 10 percent of his Tesla stock.
But in the brief, Musk attorney Alex Spiro contends that the SEC is continually investigating Musk for topics not covered by the settlement. It asks the Second Circuit Court of Appeals to strike or modify the prior approval provision.
“The pre-approval provision in the consent decree qualifies as a prior restraint on speech that runs afoul of the First Amendment,” Spiro wrote. “It forbids future lawful speech on a range of topics absent approval.”
Further, Musk’s speech is chilled by the threat of SEC investigations and prosecution for contempt of court, the brief said.
The whole dispute stems from an October 2018 agreement with the SEC that Musk signed. He and Tesla each agreed to pay $20 million in civil fines over Musk’s tweets about having the “funding secured” to take Tesla private at $420 per share.
The funding was far from locked up, and the electric vehicle company remains public, but Tesla’s stock price jumped. The settlement specified governance changes, including Musk’s ouster as board chairman, as well as pre-approval of his tweets.
In April, US District Judge Lewis Liman in New York rejected Musk’s bid to throw out the settlement that he signed with the SEC. He also denied a motion to nullify a subpoena of Musk seeking information about possible violations of the settlement.
Liman’s ruling said that Musk made the tweets without getting pre-approval, but the judge later wrote that he didn’t mean to pass judgment on that issue.
A message was left early Wednesday seeking comment from the SEC.
Spiro writes that Mr. Musk’s waiver of his First Amendment rights in the settlement was not voluntary because there was no way for Musk to know how far reaching it was. “The provision applies to future speech about circumstances no one could anticipate in advance,” he wrote.
Musk, he said, is under constant threat that the SEC will disagree with his interpretation of what he can say. Musk also agreed to the deal when Tesla was a smaller company and the SEC action could have jeopardized its financing.
“The SEC has maintained constant investigations into Mr. Musk’s speech, employing nebulous interpretations of the consent decree seemingly designed to curb and chill his future speech, all regarding speech entirely unrelated to the 2018 tweet for which the SEC initiated this action,” Spiro wrote.
Tesla is now the most valuable automaker in the world, and Musk is the world’s wealthiest person.
Liman ruled that Musk’s claim that economic duress caused him to sign the settlement is “wholly unpersuasive.”
Even if Musk was worried that litigation with the SEC would ruin Tesla financially, “that does not establish a basis for him to get out of the judgment he voluntarily signed,” Liman wrote.
The judge also said Musk’s argument that the SEC had used the settlement order to harass Musk and launch investigations was “meritless.”

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Turkiye detains four over quake social media posts

Updated 29 sec ago

Turkiye detains four over quake social media posts

ISTANBUL: Turkish police on Tuesday said they had detained four people over “provocative” social media posts following a massive 7.8-magnitude earthquake in southern Turkiye.
The quake struck the region early on Monday, killing more than 4,800 people in Turkiye and Syria, injuring thousands and leaving many more without shelter in the bitter cold.
The four individuals were detained after officers found accounts that shared “provocative posts aiming to create fear and panic,” the police said.
It added that a wider investigation into social media accounts was ongoing but offered no information on the content of the posts.
Turkish social media have been filled with posts by people who complain about a lack of search and rescue efforts in their area, particularly in Hatay.
The police appeared to address such claims on Tuesday.
“The address and location information of citizens who seek help is immediately ascertained and coordination is established,” they said.
Turkish authorities have in the last few years cracked down on social media posts, especially those considered to support “terror,” but this has led to accusations that freedom of expression has been curtailed.

Disney+ in Hong Kong drops ‘Simpsons’ episode with ‘forced labor’ mention

Updated 23 min 44 sec ago

Disney+ in Hong Kong drops ‘Simpsons’ episode with ‘forced labor’ mention

HONG KONG: An episode of “The Simpsons” that refers to “forced labor camps” in China is nowhere to be found on the Disney+ streaming service in Hong Kong amid growing censorship concerns in the city.
Hong Kong once boasted significant artistic and cultural freedoms compared to mainland China, but authorities have clamped down on dissent following democracy protests in 2019, including stepping up film censorship.
Episode 2 of the US animated hit’s 34th season included the line: “Behold the wonders of China. Bitcoin mines, forced labor camps where children make smartphones and romance.”
“One Angry Lisa,” which first aired last October, could not be accessed on Disney+ using a Hong Kong connection but is available elsewhere, AFP confirmed.
It is the second time in three years that the streaming service’s Hong Kong version has dropped a Simpsons episode that satirised China.
The previously affected episode showed the Simpsons visiting Beijing’s Tiananmen Square — the site of a deadly 1989 crackdown on democracy protesters — finding a sign there that read: “On this site, in 1989, nothing happened.”
The Hong Kong government and Disney did not immediately provide comment.
In 2021, Hong Kong passed censorship laws forbidding broadcasts that might breach a broad national security law that China imposed on the city.
Censors have since ordered directors to make cuts to their films and refused permission for others to be shown.
While those rules do not cover streaming services, authorities have warned that online platforms are still subject to the national security law, which criminalizes the broadly defined crimes of subversion, secession, terrorism and collusion with foreign forces.
In recent years, Hollywood has been accused of bending to China’s censorship regime to tap into its vast consumer base and billion-dollar box office.
A recent United Nations report found allegations of torture and forced labor in the far-western Xinjiang region were credible, accusations Beijing denies.
Rights groups say more than a million Uyghurs and other Muslim minorities are detained in what the US State Department and others have said amounts to genocide.
In 2020, Disney came under fire for filming the live-action Mulan remake in Xinjiang, with local government agencies thanked in the credits.


Twitter saved from bankruptcy, Musk claims

Updated 07 February 2023

Twitter saved from bankruptcy, Musk claims

  • Responding to a Wall Street Journal report, Musk said the business is ‘trending to breakeven’ but admitted that it still faces challenges
  • The platform expanded its Twitter Blue paid-for verification service to Saudi Arabia and 5 other territories last week, as it looks for ways to boost revenues

LONDON: Twitter has been saved from bankruptcy and the business is on track to break even, according to CEO Elon Musk.

In a message posted on the social media platform on Sunday, he said recent months had been difficult but the company is now in a stronger financial position, though there are further hurdles to overcome.

“Last three months were extremely tough, as had to save Twitter from bankruptcy, while fulfilling essential Tesla (and) SpaceX duties,” he wrote.

“Wouldn’t wish that pain on anyone. Twitter still has challenges, but is now trending to break even if we keep at it. Public support is much appreciated!

“To be extra clear, Twitter is definitely not financially healthy yet but is trending to be so. Lots of work still needed to get there.”

Musk posted his comment in response to a news report in The Wall Street Journal that examined his personal struggles while running several companies simultaneously, and questioned his physical well-being.

Following Musk’s takeover of Twitter in October, the company reported a massive drop in revenues from advertisers. This prompted the South African-born billionaire to say Twitter was like a “plane that is headed towards the ground at high speed with the engines on fire, and the controls don’t work,” and was at risk of going bust. He blamed the revenue decline on activists putting pressure on advertisers not to do business with the company after his takeover.

In his efforts to tackle the financial challenges Twitter faces, Musk has implemented a number of changes to the business and the platform. Shortly after completing his acquisition, he restructured the company and laid off about half of its 7,500 staff.

In an effort to enhance monetization of the platform, in December he revamped its Twitter Blue verification service in some territories and introduced a subscription-based tier that allows any user to obtain a “blue check” badge next to their name for $12 a month. The service expanded to six additional countries last week, including Saudi Arabia, increasing to 12 the total number in which it is available.

Also last week, Twitter announced it would end free access to its application programming interface, or API, which is used by third-party developers, and offer a basic paid tier instead. To further expand its revenue pool, the company was also reportedly considering offering popular usernames for sale at auction. In January, Twitter auctioned memorabilia from the company’s San Francisco headquarters.

Though the business appears to still be in a precarious financial state, the platform announced on Friday it will start sharing advertising revenue with some content creators.


Pakistan's PM orders restoration of Wikipedia 'with immediate effect'

Updated 49 min 57 sec ago

Pakistan's PM orders restoration of Wikipedia 'with immediate effect'

  • Pakistan blocked Wikipedia last week on grounds it failed to remove "blasphemous content" from its platform
  • "Unintended consequences" of blanket ban on Wikipedia outweigh its benefits, says committee formed by PM Sharif

ISLAMABAD: Prime Minister Shehbaz Sharif on Monday ordered the restoration of online encyclopedia Wikipedia "with immediate effect", a couple of days after it was banned for uploading "blasphemous" content on its platform. 

Pakistan last week banned Wikipedia across the country, accusing the platform of deliberately not removing blasphemous content. Pakistan's telecommunication regulator said it provided the platform multiple chances to present its stance in a hearing but it failed to do so. 

Blasphemy is a sensitive issue in Muslim-majority Pakistan, and social media giants Facebook and YouTube have previously been banned for publishing content deemed sacrilegious.

The move drew flak from digital rights activists and proponents of free speech, who pointed out how the move would deprive millions across the country of free knowledge and research material. 

According to a statement by the Prime Minister's House (PMO), the premier constituted a three-member ministerial committee comprising the ministers of law, information and economic affairs to deliberate on the matter. 

The committee said Wikipedia is a "useful" website that supports the dissemination of knowledge and information for the general public. "Blocking the site in its entirety was not a suitable measure to restrict access to some objectionable contents / sacrilegious matter on it," the committee said. 

The committee said further that the "unintended consequences" of the blanket ban outweigh its benefits.

"Based on the above recommendation, the Prime Minister is pleased to direct that the website (Wikipedia) may be restored with immediate effect," the PMO stated.

The statement said that the prime minister had constituted a separate cabinet committee comprising the ministers of IT, law, information, commerce and communications that may "co-opt any expert members or seek opinion from expert individuals/organizations to reach its findings."

The committee would review the suitability of the PTA's action of blocking Wikipedia to restrict access to blasphemous content. It would also explore and recommend alternative measures to remove or block blasphemous material on Wikipedia and other online sites and provide any other recommendations to control unlawful online content "in a balanced manner."

In September 2020, Pakistan blocked Tinder, Grindr and three other dating apps for not adhering to local laws, with the Pakistan Telecommunication Authority (PTA) saying it had taken the decision to curb the “negative effects of immoral/indecent content streaming.”


Tesla’s Elon Musk found not liable in trial over 2018 ‘funding secured’ tweets

Updated 05 February 2023

Tesla’s Elon Musk found not liable in trial over 2018 ‘funding secured’ tweets

  • Tesla shareholders claimed Musk misled them when he tweeted on Aug. 7, 2018, that he was considering taking the company private at $420 per share
  • Shares of Tesla rose 1.6 percent in after-hours trading following the verdict and Musk tweeted that "he wisdom of the people has prevailed"

SAN FRANCISCO: A US jury on Friday found Tesla Inc. CEO Elon Musk and his company were not liable for misleading investors when Musk tweeted in 2018 that he had “funding secured” to take the electric car company private.
Plaintiffs had claimed billions in damages and the decision also had been seen as important for Musk himself, who often takes to Twitter to air his views.
The jury came back with a unanimous verdict roughly two hours after beginning deliberations.
Musk was not present in court when the verdict was read but soon tweeted that he was “deeply appreciative” of the jury’s decision.
“Thank goodness, the wisdom of the people has prevailed,” he said.
Nicholas Porritt, a lawyer for the investors, said in a statement, “We are disappointed with the verdict and are considering next steps.”
Shares of Tesla rose 1.6 percent in after-hours trading following the verdict.
“A dark chapter is now closed for Musk and Tesla,” Wedbush analyst Dan Ives said. Ives added that some Tesla investors feared Musk might have to sell more Tesla stock if he lost.
The world’s second-richest person has previously created legal and regulatory headaches through his sometimes impulsive use of Twitter, the social media company he bought for $44 billion in October.
Minor Myers, who teaches corporate law at the University of Connecticut and who had previously called the investors’ case strong, called the outcome “astounding.”
The US anti-securities fraud law “has always been thought to be this great bulwark against misstatements and falsehoods,” he said. “This outcome makes you wonder if it is up to the job in modern markets,” he said, adding that Musk himself was likely to “double down” on his communication tactics after the verdict.
Musk’s attention has been divided in recent months between Tesla, his rocket company SpaceX and now Twitter. Tesla investors have expressed concerns that running the social media company has taken up too much of his focus.
’Bad word choice’
Tesla shareholders claimed Musk misled them when he tweeted on Aug. 7, 2018, that he was considering taking the company private at $420 per share, a premium of about 23 percent to the prior day’s close, and had “funding secured.”
They say Musk lied when he tweeted later that day that “investor support is confirmed.”
The stock price soared after the tweets and then fell again after Aug. 17, 2018, as it became clear the buyout would not happen.
Porritt during closing arguments said the billionaire CEO is not above the law, and should be held liable for the tweets.
“This case ultimately is about whether rules that apply to everyone else should also apply to Elon Musk,” he said.
Musk’s lawyer Alex Spiro countered that Musk’s “funding secured” tweet was “technically inaccurate” but that investors only cared that Musk was considering a buyout.
“The whole case is built on bad word choice,” he said. “Who cares about bad word choice?“
“Just because it’s a bad tweet doesn’t make it fraud,” Spiro said during closing arguments.
An economist hired by the shareholders had calculated investor losses as high as $12 billion.
During the three-week trial, Musk spent nearly nine hours on the witness stand, telling jurors he believed the tweets were truthful. 
Musk later testified that he believed he could have sold enough shares of his rocket company SpaceX to fund a buyout, and “felt funding was secured” with SpaceX stock alone.
Musk testified that he made the tweets in order to put small shareholders on the same footing as large investors who knew about the deal. But he acknowledged he lacked formal commitments from potential backers.
The verdict is another victory for Musk and his lawyer Spiro after they won a defamation lawsuit against the billionaire in 2019 over his tweet calling a cave explorer a “pedo guy.”