Tesla Chief Executive Elon Musk shot back against US securities regulators on Monday, Asserting at a filing that his Latest tweet Concerning the electric vehicle maker’s production volume did not violate his fraud settlement and he Cannot Be held in contempt.
Musk’s”single, insignificant” tweet for his more than 24 million Twitter followers asserting the electrical vehicle-maker would produce around 500,000 automobiles in 2019 also complied with firm’s communication policy for senior executives, a state of the settlement, lawyers for the Tesla leader wrote in a filing in federal court in Manhattan.
The US Securities and Exchange Commission had asked the court to hold Musk in contempt, stating his Feb. 19 tweet violated a September fraud settlement barring him from sharing substance information about Tesla on social media without the organization’s pre-approval.
“This contempt action, following Musk’s sincerely-held complaint of the SEC on 60 Minutes, also reflects about and unprecedented overreach on the part of the SEC,” the filing said.
In December, Musk stated in a”60 Minutes” interview :”I do not have regard for the SEC.”
The settlement between Musk, Tesla and the SEC solved an SEC lawsuit over claims Musk created on Twitter in August that he had”funding secured” to take Tesla personal at $420 per share. The SEC known as those tweets”false and misleading” and a go-private deal never materialised.
As part of the settlement, Musk stepped down as the organization’s chairman and he and Tesla agreed to pay $20 million each in fines.
The renewed public struggle between Tesla’s chief executive and the top US securities regulator adds stress on Musk, the public face of Tesla, who is struggling to make the business profitable after cutting the purchase price of its Model 3 sedan to $35,000.
Tesla has backed a plan to close all of its US stores and stated it will instead raise costs of its higher-end vehicles by about 3% on average.
From the filing, Musk’s lawyers said his conversation was a”proud and optimistic restatement of publicly disclosed information.”
Musk fixed his conversation four hours later to say that the”annualised production rate” at year-end 2019 would probably be roughly 500,000, with deliveries expected to be approximately 400,000.
Moreover, Musk has exhibited self-censorship in radically reducing the quantity of tweets since the payoff, they wrote, adding that the SEC’s petition, if allowed, would increase free speech issues.
Musk known as the ruler that the”Shortseller Enrichment Commission” on Twitter following the settlement, and tweeted that”something is broken with SEC oversight” only one day after the bureau began pursuing the contempt order.
Legal experts have said the SEC could now pursue multiple avenues, including a higher fine, imposing further constraints on Musk’s activities or removing him from Tesla’s board or helm.
Tesla published a new communications policy in December for senior executives as part of the settlement. It called for Tesla’s general counsel and a newly designated in-house securities law attorney to pre-approve any written statements about Tesla that could be material.