Tesla CEO, Elon Musk, has until Monday to explain to the court why shouldn’t he be held in contempt for his recent tweets that violated a settlement with the U.S. SEC [Securities and Exchanges Commission].
Musk entered into a settlement with the SEC last year pledging that he wouldn’t divulge any material information relating to Tesla, the electric car maker without prior approval from the board. He had tweeted: “considering taking Tesla private at $420. Funding secured.” Musk agreed to pay $20 million and to step down as the Chairman of the company to settle the charges.
However, Musk took to Twitter last week to say that “Tesla made 0 cars in 2011, but will make around 500k in 2019.” The SEC said that this violated the agreement and he should be held in contempt for the Twitter post.
He corrected the tweet later to say that the annualized production rate at the end of 2019 would be about 500,000, with deliveries of 400,000.
A lawyer for the automaker and Musk said that information in the tweet was pre-approved and was already known to the public when it released the Q4 earnings call.
Following the SEC’s decision, Musk tweeted on Tuesday, “Something is broken with the SEC oversight.” Musk clearly holds a grudge against the SEC. In an interview, last year Musk said: “I want to be clear. I do not respect the SEC.”
If the court finds Musk guilty he might lose the position of CEO at Tesla plus a big chunk of his money.
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