Shares of Tesla (NASDAQ: TLSA ) were down by 2.4% in pre-market trading this morning following media reports that the Securities and Exchange Commission (SEC) is seeking a contempt of court order against CEO Elon Musk, alleging he violated a fraud settlement by tweeting material information without preapproval from his board of directors.
In a court filing on Monday, the agency highlighted a Feb. 19 tweet by Musk: "Tesla made 0 cars in 2011, but will make around 500k in 2019." The SEC said that Musk did not seek or receive preapproval before publishing the inaccurate tweet to more than 24 million people. Regulators last year accused Musk of fraud for making misleading tweets about plans to take the company private, and called for stripping him of his CEO title. Musk, Tesla and the enforcement agency settled the lawsuit, and part of the settlement called for any material statements made by Musk on social media to be vetted in advance by the company.
Musk corrected his tweet four hours later to say that the "annualized production rate" at year-end 2019 would probably be about 500,000, with deliveries expected to be about 400,000, according to Reuters . Tesla did not immediately respond to a request for comment, but Musk shot back on Twitter on Monday night, tweeting: "SEC forgot to read Tesla earnings transcript, which clearly states 350k to 500k. How embarrassing …", according to the news agency.
InvestorPlace contributor Rohit Chhatwal last month noted that "already, 2019 is shaping up to be Elon Musk's most important year, with TSLA stock swinging violently on any bit of good or bad news."
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