Elon Musk Settles With SEC, Agrees To Limit Disclosures (Again)
Tesla’s Twitter-happy CEO will have to stick to tweeting memes, as he agrees to avoid company-related disclosures… for real this time.
Tesla CEO Elon Musk has reached an agreement with the Securities and Exchange Commission, ending months of controversy over his tweets about the electric car maker's business. In the latest consent order [PDF via Plainsite.org, entire docket here] with the market regulator, Musk agrees to obtain pre-approval by an "experienced securities lawyer employed by the company" of any written communication about a laundry list of Tesla-related topics.
The new, more specific list of topics Musk is now required to receive oversight of include
- the Company’s financial condition, statements, or results, including earnings or guidance; • potential or proposed mergers, acquisitions, dispositions, tender offers, or joint ventures
- production numbers or sales or delivery numbers (whether actual, forecasted, or projected) that have not been previously published via pre-approved written communications issued by the Company (“Official Company Guidance”) or deviate from previously published Official Company Guidance;
- new or proposed business lines that are unrelated to then-existing business lines (presently includes vehicles, transportation, and sustainable energy products); • projection, forecast, or estimate numbers regarding the Company’s business that have not been previously published in Official Company Guidance or deviate from previously published Official Company Guidance;
- events regarding the Company’s securities (including Musk’s acquisition or disposition of the Company’s securities), credit facilities, or financing or lending arrangements; • nonpublic legal or regulatory findings or decisions;
- any event requiring the filing of a Form 8-K by the Company with the Securities and Exchange Commission, including:
- a change in control; or • a change in the Company’s directors; any principal executive officer, president, principal financial officer, principal accounting officer, principal operating officer, or any person performing similar functions, or any named executive officer; or
- such other topics as the Company or the majority of the independent members of its Board of Directors may request, if it or they believe pre-approval of communications regarding such additional topics would protect the interests of the Company’s shareholders;
Musk's original September 2018 consent order, stemming from fraud charges brought due to his tweets claiming to have secured funding for a company buyout at $420 per share, had been far more vague about communications requiring oversight, simply stating that Musk required "oversight of communications relating to the company." The SEC filed to hold Musk in contempt of the original order earlier this year, alleging that Musk had made repeated forecasts and disclosures about Tesla's business without ever seeking oversight.