Elon Musk’s tweet on Tesla violates settlement agreement; US governor tells the court

63

A tweet about Tesla production goals by Elon Musk was “a clear violation” of a court order to receive his written communications pre-approved.

The Securities and Exchange Commission recorded in a filing in federal court in Manhattan. According to the filing, Musk’s February 19 tweet to his more than 24 million Twitter followers stated that Tesla would create around 500,000 cars in 2019.

This tweet had or could have had information details to the company or even its shareholders.

Why Musk Could Be In Great Trouble

The continuous public dispute between Tesla’s chief executive and the top US securities regulator adds pressure on Musk.

This comes at a time while he is already striving to make the company profitable after decreasing the price of its Model 3 sedan to US$35,000.

The regulator last month claimed that Musk had violated a September settlement of fraud charges by tweeting supply information about Tesla without it being pre-approved from the company.

In reply, Musk had explained that his “single, immaterial” tweet was in agreement with the settlement and that the SEC’s pressure to find him in contempt violated on his free speech.

The fraud settlement between Tesla, Musk and the SEC settled a lawsuit led by the regulator over claims Musk had made on Twitter in August.

This is what he had “funding secured” to take the private firm at US$420 per share. 

The SEC declared that those tweets are “false and misleading” and a go-private deal never materialised.

Repercussions Musk Has Faced 

As being a part of that settlement, Musk moved down as the company’s chairman and he and Tesla accepted to pay US$20 million each in fines.

He also accepted to offer written communications that could materially affect Tesla for pre-approval to the company before issuing them.

Tesla has issued a new communications policy in December for senior executives as a portion of the settlement. 

It asked for Tesla’s general counsel and a newly appointed in-house securities law attorney to pre-approve every written statement about Tesla that could be material.

A disclosure controls committee, formed by board members Brad Buss, Antonio Gracias and James Murdoch, was appointed with managing compliance with the new policy.

SEE ALSO: A Fight Brews Between WeWork and SoftBank, As Adam Neumann Faces Pressure to Step Down

For more updates and the latest tech news, keep reading iTMunch.