Tesla CEO Elon Musk Slammed With Contempt Claim for Breaching SEC Agreement
The SEC alleges that Musk never had his Tesla-related tweets policed prior to publishing.
The United States Securities and Exchange Commission has asked a judge to hold Tesla CEO Elon Musk in contempt after claiming he violated a prior SEC settlement penned in 2018 over allegations of fraud.
The SEC referenced an "inaccurate" tweet (below) by Musk made on Feb. 19 which publicly projected Tesla's production numbers for 2019. In the tweet, Musk stated that Tesla would build "around" 500,000 cars before the year's end.
Nearly four and a half hours later, Musk clarified the tweet, saying that he meant that Tesla would actually be at a sustained production rate that meets its long-promised 10,000 vehicles per week goal. He goes on to state that actual deliveries for 2019 remain predicted at 400,000 units.
"Musk did not seek or receive pre-approval prior to publishing this tweet, which was inaccurate and disseminated to over 24 million people," wrote the SEC in its court filing.
In October 2018, a federal judge approved a settlement between Musk and the SEC; Musk would resign as board chairman and pay a fine of $20 million. Tesla, in a separate settlement, also paid a $20 million fine and agreed to supervise Musk's tweets moving forward.
The regulatory body later continues its allegations, stating that Musk never adhered to the agreement that his tweets containing Tesla-related content would be reviewed prior to publishing. "Musk's tweets have been reviewed after their publication, but there is no suggestion that Musk has sought or obtained pre-approval of any tweet prior to publishing it."
Musk has previously expressed his disdain for the SEC, stating that he does not "respect" the regulatory body and jested that its name was better fit as the "Shortseller Enrichment Commission"
Tesla shares fell 5 percent during after-hours trading.
Musk later tweeted a meme after the news became public.