SEC wants Elon Musk held in contempt for tweeting about Tesla
- Stock market regulators ask judge to hold Musk in contempt for violating a settlement that required him to get Tesla approval for social media posts
- He breached that deal with a February 19 tweet that said Tesla would make about half a million cars in 2019, the agency claims
The US Securities and Exchange Commission (SEC) is pursuing a contempt order against Tesla Inc CEO Elon Musk, saying he violated a fraud settlement by tweeting material information without pre-approval, sending the firm’s shares down 5 per cent.
The SEC’s request potentially could reopen a turbulent chapter for the electric vehicle maker in which regulators last year accused Musk of fraud for making misleading tweets about plans to take the company private, and demanded that he be stripped of his CEO title.
Musk, Tesla and the SEC settled the lawsuit, and part of the settlement called for any material statements made by Musk on social media to be vetted in advance by the company.
In a court filing on Monday, the regulator pointed to a Musk February 19 tweet: “Tesla made 0 cars in 2011, but will make around 500k in 2019,” noting that Musk did not seek or receive pre-approval before publishing this tweet, which was inaccurate and disseminated to over 24 million people.
“Musk has thus violated the court’s final judgment by engaging in the very conduct that the pre-approval provision of the final judgment was designed to prevent,” the SEC wrote in its motion filed on Monday in federal court in Manhattan.