"Funding Secured": the SEC Case, and the Consent Decree

On August 7, 2018, at 16:48 UTC, Mr. Musk posted:

Am considering taking Tesla private at $420. Funding secured.

The Securities and Exchange Commission charged that sentence as fraud. He settled. A San Francisco jury later found him not liable in a shareholder class action about the same tweets. The settlement’s speech rules stayed in place. Those are three outcomes, and they are not interchangeable.

This page is the receipt. It sits on the lawsuits desk. The company is Tesla. The Delaware pay case is a different lawsuit: Tornetta.

The complaint

On September 27, 2018, the SEC issued press release 2018-219. It charged Mr. Musk, then CEO and chairman of Tesla, with securities fraud “for a series of false and misleading tweets about a potential transaction to take Tesla private.”

The release says that on August 7, 2018, he tweeted to his 22 million Twitter followers that he could take Tesla private at $420 per share, a substantial premium to the trading price, that funding had been secured, and that the only remaining uncertainty was a shareholder vote. It says the complaint alleges he had not discussed specific deal terms with any potential financing partners, and that he knew the transaction was uncertain and subject to numerous contingencies. It says the tweets caused Tesla’s stock to jump by over six percent on August 7 and led to significant market disruption.

The complaint was filed in the Southern District of New York. The release says it alleged violations of the antifraud provisions and sought an injunction, disgorgement, civil penalties, and a bar on serving as an officer or director of a public company. The case caption on the later docket is SEC v. Musk, No. 1:18-cv-08865.

Label: The SEC’s allegations, as its press release states them. A complaint is not a finding. He did not admit the allegations in the settlement that followed.

The settlement

Two days later, press release 2018-226 (September 29, 2018) announced a settlement. The SEC also charged Tesla with failing to have required disclosure controls and procedures for his tweets, and Tesla agreed to settle that charge. The release says the settlements were subject to court approval.

It says he and Tesla agreed to settle without admitting or denying the allegations. The relief in the release:

• He will step down as Tesla’s chairman, be replaced by an independent chairman, and be ineligible to be re-elected chairman for three years.
• Tesla will appoint a total of two new independent directors.
• Tesla will establish a new committee of independent directors and put in place additional controls and procedures to oversee his communications.
• He and Tesla will each pay a separate $20 million penalty. The $40 million will be distributed to harmed investors under a court-approved process.

The release also says Tesla had told the market in 2013 that his Twitter account would be a channel for material information, and that Tesla lacked controls to check whether those tweets were accurate or required to be filed.

Judge Lewis J. Liman’s April 27, 2022 opinion says a final judgment was entered on October 16, 2018. That is the court entry. September 29 is the announcement, and the release itself said court approval was still required. The opinion says the judgment permanently enjoined him from violating Section 10(b) and Rule 10b-5, ordered the $20 million penalty, required him to resign as chairman and not seek the job for three years, and required him to follow Tesla’s procedures for oversight and pre-approval of written communications that contain, or reasonably could contain, information material to Tesla or its shareholders.

Label: The press release for the deal as announced. The 2022 opinion for what the October 16 judgment contained. “Without admitting or denying” is the SEC’s description of the settlement. It is not a verdict that the tweet was true, and it is not a verdict that it was false.

The 2019 contempt motion, and the pre-approval list

Litigation Release No. 24413 (February 27, 2019) says that on February 25, 2019 the SEC asked the court to order Mr. Musk to show cause why he should not be held in contempt. The release says the motion concerned the October 16, 2018 final judgment’s requirement that he obtain pre-approval of written communications that contain, or reasonably could contain, information material to Tesla or its shareholders. The caption on that release is SEC v. Elon Musk, No. 1:18-cv-8865 (AJN).

CNBC (Christine Wang, April 26, 2019) reported that the SEC said he broke the settlement in February with a tweet about Tesla’s 2019 production numbers, and that the SEC said he had not sought clearance. The same article says that on April 26 the parties reached an agreement, still needing a judge, that replaced the open-ended materiality trigger with a list. CNBC says pre-approval would be required for written communications on:

• the company’s financial condition, statements, or results, including earnings or guidance
• potential or proposed mergers, acquisitions, dispositions, tender offers, or joint ventures
• production, sales, or delivery numbers, actual or projected, that have not already been published as official guidance or that deviate from it
• new business lines unrelated to vehicles, transportation, and sustainable energy products
• projections or estimates that have not been published as official guidance or that deviate from it
• events regarding the company’s securities, including his own trades, and credit or financing arrangements
• nonpublic legal or regulatory findings
• any event requiring a Form 8-K, including a change in control or in directors or principal officers
• any further topic the company, or a majority of the independent directors, asks to have pre-cleared

The SEC’s brief in the later Second Circuit appeal, No. 22-1291, recounts that the district court entered the amended consent judgment on April 30, 2019, and that covered communications had to be pre-approved by an experienced securities lawyer employed by Tesla. The brief says the other provisions of the 2018 consent remained in effect.

Label: The litigation release for the February 25 motion. CNBC for the subject of the February tweet and for the list, as that article says the filing laid it out. The SEC’s appellate brief for the April 30 entry. This desk did not retrieve the signed order as its own PDF. A show-cause motion is not a contempt finding. The brief’s history is that the parties amended the judgment instead.

The bid to end the decree

On April 27, 2022, Judge Liman denied Mr. Musk’s motion to terminate the consent decree and to quash parts of an SEC subpoena. Label: That order is the district court’s denial. It is not the court of appeals.

The appeal was Second Circuit No. 22-1291. The Supreme Court docket in No. 23-626 lists the Second Circuit decision date as May 15, 2023, and a rehearing denial on July 24, 2023. The Second Circuit opinion says the court saw no evidence that the SEC had used the decree for bad-faith, harassing investigations of protected speech, says the record showed three inquiries into his tweets since 2018, and concludes that the district court was within its discretion to deny the motion to modify the decree.

He petitioned for certiorari on December 7, 2023. On April 29, 2024, the Supreme Court docket records: Petition DENIED.

Label: Three dates, three courts. The district court denied termination in 2022. The Second Circuit affirmed in 2023, not in 2022. The Supreme Court denied review in 2024. The consent decree was still the settlement. Denying review does not rewrite it.

The San Francisco jury

The shareholder case is not the SEC case. Chancellor Kathaleen McCormick’s December 2, 2024 fee opinion in the Delaware pay suit cites it as In re Tesla, Inc. Securities Litigation, No. 3:18-cv-04865 (N.D. Cal.). That citation is the Delaware opinion’s, used here for the case number.

CNBC (Lora Kolodny and Rohan Goswami, February 3, 2023) reported that a jury in San Francisco federal court found Mr. Musk and Tesla not liable in the class action over the 2018 tweets. CNBC says jurors deliberated for less than two hours, that the verdict was unanimous, and that he posted: “I am deeply appreciative of the jury’s unanimous finding.” Plaintiffs’ lawyer Nicholas Porritt told CNBC the investors were disappointed and considering next steps. CNBC also reports his account at trial: a verbal commitment from Saudi Arabia’s sovereign wealth fund, and that he thought funding would come through at $420 on a handshake. The deal, CNBC says, never materialized.

Label: CNBC’s account of the verdict. “Not liable” is the jury’s result as that article reports it. It is not a finding that the SEC’s allegations were withdrawn, and it did not, by itself, end the consent decree. The Saudi handshake is his account as CNBC reported it.

On the map

Tesla as a company is Tesla. The 2018 pay package, the Chancery rescission, the June 13, 2024 vote, and the Delaware Supreme Court’s December 19, 2025 reinstatement are Tornetta. The lawsuits hub is the section.

Sources

Checked October 19, 2026.

A direct fetch of x.com returned 403. The August 7, 2018 post was read through fxtwitter on October 19, 2026. The link above is the x.com URL.