Tesla CEO Elon Musk argued Friday that his Twitter use didn’t violate a settlement settlement with the U.S. Securities and Exchange Commission and that the company’s request to have him held in contempt relies on a “radical interpretation” of the order, in response to court docket papers filed in Manhattan federal court docket.
The SEC has requested a choose to carry Musk in contempt for violating a settlement settlement reached final yr over Musk’s now notorious “funding secured” tweet. Under that settlement, Musk is meant to get approval from Tesla’s board earlier than speaking doubtlessly materials data to traders.
Musk contends he didn’t violate the settlement and that the issue lies within the SEC’s interpretation, which he describes as “virtually wrong at every level.” The submitting additionally reveals new particulars in regards to the settlement negotiations, notably that the SEC despatched Musk a draft settlement that might have required him to acquire pre-approval for all public statements associated to Tesla, in any format.
Musk and Tesla by no means agreed to these phrases. Instead, Musk says the settlement requires him to adjust to Tesla personal coverage, which might require pre-approval for “written communications that contain, or reasonably could contain, information material to the company or its shareholders.”
The barbs traded by way of court docket filings are the most recent in an escalating battle between the billionaire entrepreneur and SEC that started final August when Musk tweeted that he had “funding secured” for a non-public takeover of the corporate at $420 per share. The SEC filed a criticism in federal district court docket in September alleging that Musk lied.
Musk and Tesla settled with the SEC final yr with out admitting wrongdoing. Tesla agreed to pay a $20 million high quality; Musk needed to conform to step down as Tesla chairman for a interval of at the very least three years; the corporate needed to appoint two impartial administrators to the board; and Tesla was additionally advised to place in place a strategy to monitor Musk’s statements to the general public in regards to the firm, together with by way of Twitter.
But the battle was re-ignited final month after Musk despatched a tweet on February 19 that Tesla would produce “around” 500,000 automobiles this yr, correcting himself hours later to make clear that he meant the corporate can be producing at an annualized price of 500,000 autos by yr finish.
The SEC argued that the tweet despatched by Musk violated their settlement. Musk has mentioned the tweet was “immaterial” and complied with the settlement.
