Noah Feldman, Columnist

The SEC Can Justify Its ‘Gag Rule’ But Won’t Enforce It

The courts have backed the agency’s right to keep people from acting in bad faith. But as Elon Musk has shown, the rule can be blatantly flouted.

April 19, 2022 at 1:30 PM UTC

By Noah Feldman

Noah Feldman is a Bloomberg Opinion columnist. A professor of law at Harvard University, he is author, most recently, of “To Be a Jew Today: A New Guide to God, Israel, and the Jewish People."

Above the rules.
Photographer: Patrick Pleul/AFP/Getty Images

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Among the weird things in Elon Musk’s recent TED interview was how blatantly he appeared to violate the terms of a settlement agreement he reached with the Securities and Exchange Commission in 2018. At issue was his claim that he had the financing to take Tesla private. “Funding was actually secured,” he assured TED chief Chris Anderson.

The SEC investigated, concluded otherwise and charged Musk with civil securities fraud. His deal with the agency, following its standard policy, committed him not to “[deny] directly or indirectly, any allegation in the complaint or [create] the impression that the complaint is without factual basis.”