The Securities and Exchange Commission wants a federal judge to hold Tesla chief executive Elon Musk in contempt for violating a settlement deal reached last year.
On February 19, Musk tweeted that “Tesla made 0 cars in 2011, but will make around 500k in 2019.” He went on to correct that tweet later in the day, stating “Meant to say annualized production rate at end of 2019 probably around 500k, ie 10k cars/week. Deliveries for year still estimated to be about 400k.”
Musk’s tweets landed him in hot water because he reached an agreement with the SEC in October 2018 that any of his tweets with information that’s “material” to shareholders must be pre-approved by the company before they’re published. Tesla even agreed to establish a board committee to oversee Musk’s posts. The settlement also states that any edits to pre-approved language needs to be approved again by Tesla’s committee.
Meant to say annualized production rate at end of 2019 probably around 500k, ie 10k cars/week. Deliveries for year still estimated to be about 400k.
— Elon Musk (@elonmusk) February 20, 2019
CNN Business reports that in a court filing, Tesla admitted that Musk didn’t receive pre-approval for these posts but states he didn’t need to as the language he used was based on information Tesla made public during a January 30 earnings call. “SEC forgot to read Tesla earnings transcript, which clearly states 350k to 500k. How embarrassing…” Musk tweeted today.
While Tesla said it would produce an annualized rate of 500,000 cars, Musk’s tweet implied that it would build 500,000 vehicles total this year.
The SEC claims in court papers that Musk has not “made a diligent or good faith effort” to comply with the settlement.
According to professor at Georgetown University Law Center Urska Velikonja, Musk could face fines of up to $1000 a day if a court finds that he did violate the settlement.
SEC forgot to read Tesla earnings transcript, which clearly states 350k to 500k. How embarrassing … 🤗
— Elon Musk (@elonmusk) February 26, 2019