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In this Twitter world, news travels faster than the average general counsel can handle.
And for some reason, the bad news seems to travel faster. Like when Elon Musk tweeted about Tesla's car production for 2019, what should have been good news quickly turned into bad before the Securities and Exchange Commission.
The SEC is deciding whether to sanction Musk for tweeting without appropriate "controls and procedures." So inquiring GCs want to know, how do you stop the company's chief executive officer from posting stupid tweets?
Forrest Gump said "stupid is as stupid does." Technically, his mother always said that but you get the point.
Musk's lawyers are arguing he has a First Amendment right to tweet, and the SEC has no right to put a gag order on him. But every attorney knows free speech isn't really free; it just says that in the Constitution.
The Tesla CEO gave up that right when he signed a settlement agreement with the SEC over an ill-advised tweet last year. He tweeted then that he might take the company public, resulting in $40 million in fines and penalties for securities fraud.
He also agreed to "controls and procedures to oversee" his communications. That, of course, is the problem.
General counsel have had trouble with Musk since the company started. The last GC quit after two months, apparently right after the most recent ill-conceived tweet.
Perhaps that is the GC's solution: quit and let the tweet police handle it. Or hire a security team to control the CEO's tweets? Or bookmark this page and send it to the board?
In the meantime, the SEC could bar Musk from serving as an officer or director again. That would be another solution.
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.