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Elon Musk may be held in contempt of court over this tweet

By Greg S · 6 replies
Feb 26, 2019
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  1. Members of the Securities and Exchange Commission are calling for Elon Musk to be held in contempt of court for violating a settlement made in regard to tweets about taking Tesla private for $420 a share. This time around, Musk has taken to social media stating that Tesla is expected to produce around 500,000 vehicles in 2019.

    Under the agreement reached last year with the SEC, Musk promised not to make statements on Tesla's financial performance without receiving prior approval and verification from other company officials.

    The SEC has asked a New York judge to step in and hold Musk accountable for breaching settlement terms. As a result, Tesla shares tumbled by five percent during after-hours trading.

    After the original tweet, Musk quickly followed up to clarify that he was referring to the annualized production rate, not that Tesla will actually deliver 500,000 vehicles. Instead, Tesla is shooting for closer to 400,000 deliveries.

    Musk may believe that he is not in violation of settlement terms because production numbers had already been publicly shared during a call detailing fourth quarter earnings. The SEC considers the statements made to be inaccurate and made without the required preapproval dictated under prior legal proceedings.

    A New York judge has received a filing from the SEC and will be hearing the case. Given the circumstances surrounding Musk's tweets, it is unlikely that any consequences with lasting effects will be doled out. Additional fines and agreement to even further oversight are possible options, but daily life would hardly be affected by such actions.

    Permalink to story.

  2. If the numbers were already made public in a filing, then why is this such a problem?

    It's almost like the SEC really has some vendetta against Tesla or Elon himself.
    Clamyboy74 and Plutoisaplanet like this.
  3. xxLCxx

    xxLCxx TS Addict Posts: 231   +153

    May? Should.
  4. mbrowne5061

    mbrowne5061 TS Evangelist Posts: 1,259   +702

    Because the numbers say "produce" and Elon implied "sell". One is cost, the other is revenue - and Musk was conflating the two.
    xxLCxx, Clamyboy74 and wiyosaya like this.
  5. wiyosaya

    wiyosaya TS Evangelist Posts: 4,223   +2,490

    Personally, I see it as Musk having a vendetta against the SEC because he thinks he can do anything he wants even if it is illegal.

    IMO, it is about time something like this challenges Musk's god complex.
    xxLCxx and captaincranky like this.
  6. Plutoisaplanet

    Plutoisaplanet TS Booster Posts: 110   +85

    It sounds like you're projecting. To me it looks he's doing nothing other than business as usual. The settlement says he only needs to seek approval for information that's material to stockholders. Since this is not new information, it's not material.
    The earnings call transcript is referencing projected Model 3 sales (of 350k-500k this year).

  7. wiyosaya

    wiyosaya TS Evangelist Posts: 4,223   +2,490

    You have a right to your opinion.

    IMO, I don't think the SEC takes things lightly. They would not bother with Musk if they did not think there is good reason to do so. We'll see where it goes.
    xxLCxx likes this.

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