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Tesla CEO Elon Musk has his sights on the U.S. Supreme Court days after Twitter accepted his offer to purchase the social media company.
The New York Times reports that Musk signed onto an amicus brief that could prevent the U.S. Securities and Exchange Commission from issuing gag orders, which prevent people who settle with the SEC without admitting fault from discussing their cases.
“He signed a supporting petition filed by Barry Romeril, a former chief financial officer for Xerox, asking the Supreme Court to negate a 2003 deal in which he agreed to always stay silent about the fraud case against him,” the Daily Mail reported.
“Romeril had been one of six executives at Xerox who settled allegations of inflating the company’s earnings by $1.4 million in the late 1990s. As part of his deal with the federal regulators, Romeril had agreed not to deny the allegations against him and was permanently barred from serving as an officer of a public company,” the report continued.
“He has since argued to the US Court of Appeals for the Second Circuit that the requirement he stays silent about the case violates his First Amendment right and no act of Congress authorizes such a sweeping restriction on freedom of speech. The appeals court, however, disagreed, with Judge Denny Chin writing last year that Romeril waived his right to deny the allegations when he agreed to the settlement,” the Daily Mail added.
“Now, Romeril is once again appealing the case – this time to the Supreme Court with the help of other business executives like Musk, who has also found himself in the SEC’s crosshairs following a 2018 agreement that censored what he could tweet,” the report said.
This comes as Twitter agreed to accept Musk’s offer to acquire the social media company.
Musk’s deal to purchase Twitter is not done yet.
Although Twitter agreed on Monday to accept Musk’s offer to acquire the company, there’s still a possibility that the deal doesn’t happen.
A Securities and Exchange Commission filing related to the purchase shows Musk is on the hook to pay a $1 billion termination fee should the deal fall through.
In one instance, the filing states that if the deal is not finalized on or before October 24, 2022, the SEC filing stipulates that Twitter “may terminate the Merger Agreement.”
Additionally, it could also fail if Twitter stockholders “fail to adopt the Merger Agreement.”
This could only happen under “limited circumstances,” including if a third party other than Musk decides to offer “a competing acquisition proposal that constitutes a Superior Proposal.”
“The board has to act as fiduciary, so if a higher price comes, they need to consider it,” an unnamed former investment banker told The Epoch Times regarding the deal.
“But if a higher price does come, Musk can always up his offer. Practically speaking though, there are no other potential buyers right now,” it states.
There are also some stipulations that are in Musk’s favor, such as Twitter is prevented from soliciting any additional offers.
A recent tweet from Musk suggests he’s willing to toe this line to get the deal finalized.
“By ‘free speech’, I simply mean that which matches the law. I am against censorship that goes far beyond the law,” Musk wrote.
By “free speech”, I simply mean that which matches the law.
I am against censorship that goes far beyond the law.
If people want less free speech, they will ask government to pass laws to that effect.
Therefore, going beyond the law is contrary to the will of the people.
— Elon Musk (@elonmusk) April 26, 2022
The sale is expected to close this year at $54.20 per share pending the approval of shareholders and regulatory approvals.
“Under the terms of the agreement, Twitter stockholders will receive $54.20 in cash for each share of Twitter common stock that they own upon closing of the proposed transaction,” the company said. “The purchase price represents a 38% premium to Twitter’s closing stock price on April 1, 2022, which was the last trading day before Mr. Musk disclosed his approximately 9% stake in Twitter.”
“Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated,” Musk said. “I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spambots, and authenticating all humans. Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it.”
