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U.S. SEC asks judge to hold Musk responsible in contempt for violating settlement

In a stern and decisive move, the U.S. Securities and Exchange Commission (US SEC) has asked a judge to hold Elon Musk in contempt for violating its October 16 settlement with the regulatory authority, according to a report by TechCrunch.

As per the report, Musk tweeted last Tuesday that Tesla would produce nearly 500,000 cars this year and then he went on to clarify later that he meant the company would be producing at an annualized rate of 500,000 vehicles by year-end.

Then in a sudden turn of events, Musk tweeted that general counsel, Dane Butswinkas, will be leaving after just months on the job. Butswinkas had battled on Musk’s behalf with the SEC last year after Musk infamously tweeted in August that he had “funding secured” to take the company private when he had not.

Butwinkas had battled hard on Musk’s behalf after Musk had infamously tweeted that he had ‘funding secured’ to take the company to the next level when the truth was far removed from his statement.

In the end, a settlement was reached and Tesla agreed to pay a fine of $20 million. Musk agreed to step down from the post of the CEO of the company for a period of at least 3 years and the company had to appoint two new directors on the board. Tesla was also asked by the SEC to put a structure in place to monitor Musk’s statement to the public.

In the month of November last year, it was announced that Chairman of Tesla’s audit committee Robyn Denholm would take the reins over from Elon Musk as chairman of the company. In the month of December, the company also complied with the other directive of the regulatory body by appointing two independent directors to its board.

Regarding his tweet last week, Elon Musk agreed that he had not taken the approval for his tweet last week that the SEC considers “clear and convincing evidence that he violated the court’s final judgment,” with the SEC adding in its filing that he has “not diligently attempted to comply” with that specific ruling.

Musk’s relationship with the SEC has been a turbulent one and this latest development is in no way going to ease the growing tension between the two and if he is found guilty of contempt, there is a possibility that he might have to spend time in jail or face some other penalty.

Source: TechCrunch

Image: Shutterstock

U.S. SEC asks judge to hold Musk responsible in contempt for violating settlement
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