By Jonathan Stempel

NEW YORK (Reuters) -A federal appeals court docket on Monday rejected Elon Musk’s bid to change or finish his 2018 securities fraud settlement with the U.S. Securities and Change Fee that required a Tesla (NASDAQ:) Inc lawyer to approve a few of his tweets prematurely.

The 2nd U.S. Circuit Court docket of Appeals in Manhattan rejected Musk’s declare that the SEC exploited his consent decree to conduct bad-faith, harassing investigations that violated his First Modification free speech rights underneath the U.S. Structure.

Musk’s decree resolved an SEC lawsuit accusing him of defrauding traders with an Aug. 7, 2018, tweet that he had “funding secured” to take his electrical automobile firm personal.

It required advance evaluation of tweets that may comprise materials details about Tesla. Musk and Tesla every additionally paid $20 million in civil fines, and Musk gave up his function as chairman.

Within the enchantment, Musk’s attorneys referred to as the pre-approval mandate a “government-imposed muzzle” that amounted to an unlawful prior restraint on his speech.

However the three-judge appeals court docket panel mentioned the SEC had opened simply two subsequent inquiries into Musk’s tweets, and people tweets “plausibly violated” the decree’s phrases.

The panel mentioned the SEC’s “restricted, applicable inquiries on this case haven’t made compliance with the consent decree ‘considerably extra onerous'” for Musk, as he had argued.

It additionally mentioned Musk selected to permit screening of his tweets, and had no proper to revisit the matter “as a result of he has now modified his thoughts.”

Alex Spiro, a lawyer for Musk, mentioned in an electronic mail: “We are going to search additional evaluation and proceed to carry consideration to the necessary challenge of the federal government constraint on speech.”

The SEC declined to remark.

Monday’s determination upheld an April 2022 ruling by U.S. District Decide Lewis Liman in Manhattan.

Liman referred to as Musk’s arguments a “bemoaning” of necessities he now not wished to stick to now that Tesla had “change into, in his estimation, all however invincible.”

Musk purchased Twitter for $44 billion in October, and runs rocket and spacecraft producer SpaceX. He’s the world’s second-richest individual, in keeping with Forbes journal.

In February, a San Francisco jury discovered Musk not answerable for investor losses over his “funding secured” tweet.

The case is SEC v Musk, 2nd U.S. Circuit Court docket of Appeals, No. 22-1291.