BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

Tesla's Musk nears deadline to respond to SEC contempt bid

Tesla Musk

(Reuters) — Tesla Inc. Chief Executive Elon Musk has until the end of the day on Monday to explain why he should not be held in contempt for recent tweets that U.S. securities regulators say violated a September fraud settlement.

The U.S. Securities and Exchange Commission asked a federal court in Manhattan to hold Mr. Musk in contempt after he tweeted about Tesla's production volume, saying he breached the agreement requiring him to get company approval before sharing any material information on social media.

The renewed public battle between Tesla's CEO and the SEC adds pressure on Mr. Musk, the public face of the electric vehicle-maker who is struggling to make it profitable after cutting the price of its Model 3 sedan to $35,000.

Mr. Musk on Feb. 19 tweeted to his more than 24 million Twitter followers that Tesla would make about  500,000 cars in 2019.

He corrected the tweet four hours later to say the annualized production rate at year-end 2019 would probably be about 500,000, with deliveries of about 400,000.

A lawyer for Tesla and Mr. Musk told the SEC that the CEO believed the substance of the tweet had been pre-approved and disseminated when the company released fourth-quarter earnings in January.

The September settlement among Mr. Musk, Tesla and the SEC resolved an SEC lawsuit over claims Mr. Musk made on Twitter in August that he had "funding secured" to take Tesla private at $420 per share. The SEC called those tweets "false and misleading" and a go-private deal never materialized.

As part of that settlement, Mr. Musk stepped down as the company's chairman and he and Tesla agreed to pay $20 million each in fines.

Mr. Musk had called the regulator the "Shortseller Enrichment Commission" after the settlement, and tweeted that "something is broken with SEC oversight" just one day after the SEC started pursuing the contempt order. Hours later, U.S. District Judge Alison Nathan set a March 11 deadline for Mr. Musk to respond.

Legal experts have said the SEC could now pursue multiple avenues, including a higher fine, imposing further restrictions on Mr. Musk's activities or removing him from Tesla's board or helm.

Tesla published a new communications policy in December for executives as part of the settlement. It called for Tesla's general counsel and a newly designated in-house securities law attorney to pre-approve any written statements about Tesla that could be material.

A disclosure controls committee, made up of board members Brad Buss, Antonio Gracias and James Murdoch, was tasked with overseeing compliance with the new policy.




Read Next

  • Tesla shares fall after Musk mocks SEC on Twitter

    (Reuters) — Shares of Tesla Inc. fell as much as 5% on Friday after Chief Executive Elon Musk stirred nerves about the settlement of his securities fraud lawsuit by mocking the U.S. Securities and Exchange Commission on Twitter.