Elon Musk tweet about Tesla violates settlement agreement, US regulator tells court

A tweet about Tesla production targets by Elon Musk was “a blatant violation” of a court order to get his written communications pre-approved, US securities regulators told a judge on Monday, doubling down on the government’s demand to find the electric carmaker’s chief executive in contempt of a previous fraud settlement.

The Securities and Exchange Commission wrote in a filing in federal court in Manhattan that Musk’s February 19 tweet to his more than 24 million Twitter followers claiming that Tesla would build around 500,000 cars in 2019 contained, or could have contained information material to the company or its shareholders.

The ongoing public battle between Tesla’s chief executive and the top US securities regulator adds pressure on Musk, who is struggling to make the company profitable after cutting the price of its Model 3 sedan to US$35,000.

The regulator last month alleged that Musk had violated a September settlement of fraud charges by tweeting material information about Tesla without pre-approval from the company.

In response, Musk had argued that his “single, immaterial” tweet was in compliance with the settlement, and that the SEC’s push to find him in contempt infringed on his free speech.

The fraud settlement between Musk, Tesla and the SEC resolved a lawsuit brought by the regulator over claims Musk made on Twitter in August that he had “funding secured” to take the firm private at US$420 per share. The SEC called those tweets “false and misleading” and a go-private deal never materialised.