In an interesting twist to the ongoing saga between Elon Musk and the US Securities and Exchange Commission (U.S. SEC), Musk argued on Friday that his tweets didn’t in any way violate the settlement deal with the U.S. SEC and the regulator’s request to hold him in contempt of court is based on a ‘radical interpretation’ of the order, as reported by TechCrunch.
The whole issue erupted on February 20, when Musk tweeted that Tesla would produce 500,000 cars this year. Musk later tweeted to clarify that Tesla’s total production capacity for 2019 would be around 500,000, or 10,000 cars a week, but deliveries were estimated to be about 400,000. The SEC requested the Judge to hold Musk in contempt for violating the settlement reached between the regulator and Tesla.
According to the settlement guidelines, Elon Musk is supposed to get approval from Tesla’s board before communicating potentially material information to investors.
Musk notes that it is wrong interpretation on part of the SEC that has led to this situation and in his defense, he describes it as “virtually wrong at every level.”
The filing also reveals new details about the settlement negotiations, notably that the SEC sent Musk a draft agreement that would have required him to obtain pre-approval for all public statements related to Tesla, in any format.
According to the filing supported in the Manhattan federal court, the SEC sent Musk a draft agreement that would have required Musk to obtain pre-approval for all public statements.
But the twist in the tale is that Musk and Tesla never agreed to those terms. On the contrary, Elon Musk says that the agreement requires him to him to comply with Tesla own policy, which requires pre-approval for “written communications that contain, or reasonably could contain, information material to the company or its shareholders.”
This ongoing fight between the SEC and the billionaire entrepreneur seems to be escalating with each passing day. It all started in August last year when Elon Musk had tweeted that he had “funding secured” for a private takeover of the company at $420 per share. Since then it has been an ongoing saga between the two and it seems that it will continue to simmer for some more time before the two parties reach to an agreement.