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Can a judge order Elon Musk to delete his Twitter account?

Can a judge order Elon Musk to delete his Twitter account?

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Is the Tesla tycoon’s Twitter threatened?

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Illustration by Alex Castro / The Verge | Photo by Joshua Lott / Getty Images

Elon Musk’s tweets have riled up enforcement officials again, and the real question now is what the legal system is going to do about them. Last week, the Securities and Exchange Commission filed paperwork to consider Musk in contempt of court. That’s because the SEC says the Tesla CEO broke his settlement agreement — by sending out a tweet that disclosed material information about the electric carmaker without running it by a lawyer first. And so I found myself up late at night wondering if it’s possible that a judge might order Musk to delete his account.

Now remember: The entire reason the settlement exists in the first place is because Musk was tweeting wildly. Specifically, in August, Musk tweeted that he was planning to take Tesla private, using the now-infamous phrase “funding secured.” This was something of a shock to everyone — the financial markets, Tesla employees, and me, personally. The tweet that has the SEC riled now was posted on February 19th, when Musk said Tesla would make 500,000 cars this year. Tesla had officially guided investors during its first quarter earnings a few weeks earlier to expect only 360,000 to 400,000 cars to be delivered in 2019. When Tesla lawyers got wind of this, Musk did try to issue a quick fix: “Meant to say annualized production rate at end of 2019 probably around 500k, ie 10k cars/week. Deliveries for year still estimated to be about 400k,” he tweeted, four hours later.

The entire reason the settlement exists in the first place is because Musk was tweeting wildly

The problem isn’t just that the tweet was inaccurate. According to the SEC’s filing, Tesla admitted that no one had reviewed Musk’s misleading tweet before it went live, even though the settlement agreement specifically calls for a lawyer to review Musk’s Tesla-related tweets.

Musk now has to file his own new paperwork, telling the court why he shouldn’t be held in contempt by March 11th. A possible next step is that a judge will hear arguments from the SEC and Musk about whether Musk’s tweet violated the settlement.

I don’t know if the February tweet is actually a violation of the settlement because — full disclosure! — I am not a lawyer. But as someone who’s been fascinated with Musk’s use of Twitter to disseminate information, I found myself wondering how a judge might be able to meaningfully punish Musk if he does decide that Tesla’s CEO violated the settlement. After all, the initial SEC agreement already fined him $20 million, got him to step down as chair of the board, and required new independent directors to join Tesla’s board, to boot. Plus “Delete your account” is a way more devastating burn coming from a real-life judge than a Twitter rando.

Enforcement of the settlement agreement is tough, said Evelyn Cruz Sroufe, a partner at Perkins Coie, whose law practice focuses on corporate governance. The court can assess fines if the judge finds Musk isn’t compliant, but removing him as CEO “would likely be more harmful than helpful to the company’s shareholders,” she said in an email. She also suspects telling Musk to stop tweeting or delete his account would raise First Amendment issues — and besides, it’s not the only way he can communicate directly with the public. Banning him from one medium wouldn’t necessarily stop him from writing an op-ed or uploading a YouTube video — or, for that matter, saying something on a TV show like 60 Minutes.

Musk seems to genuinely enjoy Twitter, so barring him is a fairly effective punishment

The nuclear option is to bar Musk from serving as an officer or director of a publicly traded company, but Peter Haveles, a partner at Pepper Hamilton in New York whose practice deals with commercial and regulatory disputes, told me that seems unlikely. A fine is likelier. But since Musk is a billionaire, a fine might be something he shrugs off. Which is how I began wondering if a judge can force Musk to delete his Twitter account, since it seems to be where the contentious information is coming from. Also, Musk seems to genuinely enjoy Twitter, so barring him is a fairly effective punishment.

“I’m doubtful the court can — or would — order Mr. Musk to stop tweeting and/or delete his Twitter account,” says former SEC commissioner Harvey Pitt, now the CEO of Kalorama Partners, in an email. “That type of order would smack of First Amendment infringement, I suspect.” Pitt says the court could order Musk to stop tweeting on behalf of Tesla, but because Musk is so closely associated with Tesla in the public’s mind, I’m not sure how that would work. This is the dude who immediately launched conspiracy theories just by changing his Twitter display name to “Elon Tusk” as a goof.

But while some lawyers indicated asking Musk to curtail his tweeting might raise First Amendment issues, it’s not entirely clear the First Amendment would protect Musk’s Twitter presence. A judge may have control over some of Musk’s speech because he’s an officer of a publicly traded company, said Ken White, a former US attorney and attorney at Brown White & Osborn LLP. “The SEC can put fairly strict limits on a publicly traded company’s communications to prohibit and punish fraud and comply with securities rules,” he said in an email. These communications are “commercial speech,” which has less First Amendment protection than whatever Musk might say in his capacity as, you know, a human. “The exact contours of the SEC’s power in the face of a First Amendment challenge aren’t completely clear,” White wrote.

That might mean that a judge could make Musk delete his Twitter account or at least threaten to remove him from the CEO role unless he stops tweeting, on the grounds that the previous measure in the settlement didn’t work. But, says White, if Musk steps down from Tesla, the judge can’t stop him from tweeting.

Alternatively, a judge could find that Musk’s February tweet violated the original settlement agreement to the point that it’s now entirely void, said John Reed Stark, who spent 15 years as an SEC enforcement attorney and 11 as the chief of the SEC’s internet enforcement branch. Stark told me he’s not entirely sure what would happen after that — in his 18 years at the SEC, he’d never once filed a contempt order. “I am honestly not sure what it means for the settlement. It is all up to the judge, who seems to have wide discretion.” His best guess is that the judge will find Musk in contempt — but issue a stern warning rather than imposing a heavier penalty, he told me. But it’s hard to know exactly what the SEC will do, because contempt motions are so rare. “When you get a celebrity defendant, all bets are off,” Stark said.

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