And the SEC isn’t playing around.
Elon Musk’s itchy Twitter finger has failed him again.
Musk’s Twitter use is supposed to be sharply observed after the Tesla CEO reached a settlement with the US Securities and Exchange Commission (SEC) for a different tweet-first, justify-later controversy: when he claimed he had sufficient funding to take Tesla private.
But last Tuesday, Musk made a careless error: He told his 25 million followers that Tesla would “make around 500k” cars in 2019. Four hours later, he clarified: Tesla was merely on pace to make 500,000 cars a year given its current production rate. It would probably only end up delivering 400,000 cars this year, he said.
That’s an easy error to make on Twitter, but it’s close to an unforgivable error to make when you’ve already agreed to have all business-related social media posts reviewed prior to pressing “send.”
So on Monday, the SEC reportedly asked a federal judge to hold Musk in contempt for violating last year’s agreement. That could jeopardize the deal struck last September, which notably required Musk to step down as chair of the electric car company and pay a fine of $20 million.
The SEC alleged that Tesla informed the agency that Musk’s tweet had not been preapproved, as the deal required.
“While Musk claims to ‘respect the justice system,’ his deliberate indifference to compliance with this Court’s final judgment indicates otherwise,” the SEC argues.
Even in the immediate aftermath of Musk’s settlement with regulators, he has displayed a cavalier at best approach toward the deal and the impositions. About a week after reaching it, he called the SEC the “Shortseller Enrichment Commission.”
Musk has claimed that his tweets would only require oversight if they could affect Tesla stock performance. (For what it’s worth, Tesla shares are down about 5 percent after the SEC news broke in after-hours trading.)
“The only tweets that would have to be, say, ‘reviewed’ would be if a tweet had a probability of causing a movement in the stock [price],” Musk told Lesley Stahl late last year. “Otherwise, it’s, ‘hello, first amendment.’ Like, freedom of speech is fundamental.”
Musk has spent the past year-plus careening from crisis to crisis. Despite enviable sales numbers of the midpriced Model 3 (a car on which he has staked the company’s future), in recent weeks, both Tesla’s general counsel and its chief financial officer have said they plan to step down.
Read the SEC filing here:
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