Why it matters: Freedom of speech is well protected, but not when it comes to potentially misleading investors. The SEC is effectively seeking to regulate Musk's tweets because they have been called inaccurate and in violation of prior settlement terms.

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.