Risk Management

SEC letters claim Tesla failed to oversee Musk’s tweets

June 02, 2021 Reprints

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(Reuters) — A U.S. securities watchdog told Tesla Inc. last year that CEO Elon Musk’s use of Twitter had twice violated a settlement requiring his tweets to be preapproved by company lawyers, the Wall Street Journal reported on Tuesday.

The U.S. Securities and Exchange Commission had ordered the electric car maker to vet any material public communications Mr. Musk made regarding Tesla, following Mr. Musk’s August 2018 tweet that he had “funding secured” to possibly take Tesla private in a $72 billion transaction.

In correspondence sent to Tesla in 2019 and 2020, the SEC said tweets Mr. Musk wrote about Tesla’s solar roof production volumes and its stock price were not preapproved by Tesla’s lawyers, the Journal reported, citing records of communication that have not been previously reported.

“Tesla has abdicated the duties required of it by the court’s order,” the WSJ reported, citing a letter signed by a senior SEC official.

The SEC and Tesla were not immediately available for comment.