Stocks

SEC asks judge to hold Tesla's Musk in contempt of violating deal

Reuters

SAN FRANCISCO, Feb 25 () - The U.S. Securities and Exchange Commission on Monday said a federal court should hold Tesla Inc Chief Executive Officer Elon Musk in contempt for violating last year's settlement with the federal agency due to new statements made on Twitter, sending shares of the electric carmaker down 5 percent in extended trade.

Musk, Tesla, and the SEC last year settled a lawsuit filed by the federal agency over the CEO's tweets in August that he planned to take the company private. As part of that settlement, any material statements made by Musk on social media was to be vetted by the company.

The regulator pointed to Musk's Feb. 19 tweet: "Tesla made 0 cars in 2011, but will make around 500k in 2019," noting that Musk did not seek or receive preapproval before publishing this tweet, which was inaccurate and disseminated to over 24 million people.

Musk subsequently clarified his tweet to say that the "annualized production rate" at end-2019 would probably be about 500,000, with deliveries expected to be about 400,000.

The motion asks the judge to issue an order that would put the onus on Musk to show why he should not be held in contempt for violating the settlement.

A U.S. judge in October approved the settlement between the federal regulator, Tesla and Musk, over his tweets promising to take the company private.

Tesla did not immediately respond to a request for comment.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

TSLA

Other Topics

Politics

Reuters

Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

Learn More