Elon Musk’s Tesla tweets violated SEC settlement: report

US regulators alerted electric car-maker Tesla final yr that its CEO Elon Musk’s use of Twitter had twice violated a court-ordered coverage that required firm legal professionals to pre-approve a few of his tweets.

In correspondence despatched to Tesla in 2019 and 2020 and obtained by the Wall Street Journal, the Securities and Exchange Commission stated that Musk’s tweets about Tesla’s photo voltaic roof manufacturing and its inventory worth had violated the required coverage. 

Tesla and the SEC settled a case in 2018 that alleged Musk had committed fraud by tweeting that he had “funding secured” to take the corporate non-public at $420 a share. The SEC fined him and Tesla $20 million every, pressured him to step down as Tesla’s chairman, and Tesla agreed to have Musk’s public statements on social media overseen by legal professionals.

The SEC has since monitored Musk’s use of Twitter, even alerting the corporate that they’ve violated the settlement and asking a Manhattan federal courtroom to contemplate holding Musk in contempt, in line with the paperwork obtained by the Journal by way of a Freedom of Information Act request. 

Two of Musk’s tweets, particularly, caught the eye of SEC officers, in line with the Journal. One was posted in July 2019, when Musk tweeted, “Spooling up production line rapidly. Hoping to manufacture ~1000 solar roofs/week by end of this year.”

The SEC wrote in a letter to Tesla that the tweet wanted to be vetted by legal professionals as a result of it addressed “production numbers or sales or delivery numbers,” the Journal reported. Tesla responded that the tweet had not been pre-approved, however {that a} committee later decided it didn’t should be approved as a result of it was “wholly aspirational,” the report stated.

The second violating tweet got here lower than a yr later, when Tesla’s shares tumbled after Musk tweeted, “Tesla’s stock price is too high imo.”

That tweet infamously wiped about $13 billion off of Tesla’s market capitalization.

When the SEC wrote to Tesla on the subject of that tweet, the corporate responded that the tweet didn’t should be pre-approved as a result of it was simply “personal opinion,” in line with the Journal. 

“In the face of Mr. Musk’s repeated refusals to submit his covered written communications on Twitter to Tesla for pre-approval, we are very concerned by Tesla’s repeated determinations that there have been no policy violations because of purported carve-outs,” the SEC reportedly wrote in a letter to the corporate.

In a letter individually obtained by the Journal, Tesla’s legal professionals accused the SEC of making an attempt to “harass Tesla and silence Mr. Musk” with investigations that “overlapped endlessly.”

“The serial nature of these investigations leaves us gravely concerned that the SEC is targeting Mr. Musk for an improper purpose,” lawyer Alex Spiro reportedly wrote.

Representatives for the SEC didn’t return The Post’s request for remark.

The episode underscores the combative nature of Musk and his corporations with regards to regulatory businesses. 

After the 2018 settlement with the SEC, Musk struck a defiant stance towards the company in a December 2018 “60 Minutes” interview, saying, “I do not respect the SEC.” He additionally tweeted a suggestive jab on the fee final yr: “SEC, three letter acronym, middle word is Elon’s.”

Musk’s ongoing tweets about cryptocurrencies and numerous corporations have continued to drive market actions, spurring rumors of another potential SEC investigation

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