Telsa CEO Elon Musk might soon own Twitter, but must still comply with a court order that prohibits him from spontaneously tweeting about his car company, a federal judge ruled Wednesday.
U.S. District Court Judge Lewis Liman in New York said in a written decision that even though the restriction on tweeting affects Musk's First Amendment right to free speech, he waived that right in order to resolve allegations regarding federal securities laws.
The restrictions on Musk's use of Twitter grew out of charges by the Securities and Exchange Commission that he misled investors by tweeting in 2018 that he intended to take Telsa private.
Musk resolved the allegations that same year by entering into a settlement that requires him to obtain clearance from others at Tesla before tweeting about the company. The deal also forced him to step down as chairman of the company's board and pay a $20 million fine.
The agency has investigated Musk over his tweets at least twice since he settled the charges.
The most recent probe involved tweets posted on November 6, 2021, when Musk floated the possibility of selling 10% of his Tesla stock, and asked his followers whether they would support that move.
The Securities and Exchange Commission subpoenaed Musk for more information about those tweets, including whether he asked Tesla officials to approve them in advance.
Musk then petitioned Liman to quash the subpoena, and also to lift the restriction on his tweets.
Among other arguments, Musk said the pre-approval mandate violated the First Amendment.
Liman rejected that argument, noting that Musk initially agreed to the restriction.
“Musk, by entering into the consent decree in 2018, agreed to the provision requiring the pre-approval of any such written communications that contain, or reasonably could contain, information material to Tesla or its shareholders,” Liman wrote. “He cannot now complain that this provision violates his First Amendment rights.”