Published: Tue, February 26, 2019
Markets | By Otis Pena

SEC Says Tesla Chief Elon Musk's Tweets Violated Court Settlement

SEC Says Tesla Chief Elon Musk's Tweets Violated Court Settlement

The US financial regulator has asked a NY judge to hold Tesla boss Elon Musk in contempt for violating a settlement over social media comments. The SEC and Tesla settled the lawsuit a month later in an agreement that left Tesla free from charges of fraud but which required Musk to step aside as the company's chairman and for him and Tesla to each pay a a $20 million fine. The provision was viewed as a way to prevent him from repeating the same mistakes that may have led to share price swings amid the go-private debacle. The SEC is claiming that Musk violated the settlement when he made an "inaccurate" statement on February 19, tweeting "Tesla made 0 cars in 2011, but will make around 500k in 2019".

The case against Musk seems strong since he backed up the February 19th tweet with the second more specific tweet that seems like it came from someone in the company's legal department. "In total, we are expecting to deliver 360,000 to 400,000 vehicles in 2019", the letter read.

In court papers filed in NY on Monday, the SEC said the tweet was inaccurate and in breach of Mr Musk's agreement. Musk's tweet occurred weeks after the January earnings release, so the SEC argues that pre-approval would have been needed even if Musk had simply repeated information taken verbatim from an earlier Tesla publication.

Tesla CEO Elon Musk's Twitter habit has sparked gyrations in the stock market.

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They were offered dates and milk with orange blossom upon their arrival; a tradition often witnessed at Moroccan weddings. The couple will then travel to Rabat airport where they will catch their flight back to London later this afternoon.

The regulator's request - demanding that Musk answer to a judge for his latest tweet - sent Tesla's stock down 4.6 percent in after-hours trading to $285 a share.

The agreement, which was drafted in the aftermath of Musk's "Funding secured" debacle in 2018, forbade Musk from using his Twitter account or other social media platforms to disperse information that would be considered material to investors or Tesla without having gotten prior approval.

We reached out to the SEC for more information.

The SEC also pointed out that during the same interview, Musk declared: 'I want to be clear. The company told the agency that the first tweet had not been pre-approved. Stahl asked "how do they know if it's gong to move the market if they're not reading all of them?"

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