Elon Musk's Tweet Lands Him in SEC Crosshairs Again

[Drew Dowdell]

Last Tuesday, Tesla CEO Elon Musk tweeted that the company would produce "around 500,00" cars in 2019, a large increase over the goal of 400k vehicles the company previously forecast in January. Musk later corrected himself and said that is meant "annualized production rate at the end of 2019 probably around 500k". 

The problem with this tweet is that back in October, Tesla and Musk had entered into a settlement with the SEC that Musk's public statements regarding Tesla production, finances, and other such matters would be reviewed by the company's board of directors before they were posted. The settlement stems from a fraud case where Musk tweeted that "funding has been secured" to take Tesla private, a tweet that later turned out not to be true.  Tesla's lawyers acknowledged to the SEC on Friday that the posts in question had not been reviewed.

Yesterday, the SEC filed a motion with the Federal District Court in Manhattan that claims Musk had "violated the court’s final judgment by engaging in the very conduct that the preapproval provision of the final judgment was designed to prevent.". Further, the tweet had gone out to 24 million followers. 

Musk argues that the substance of his tweets had already been vetted, approved, and publicly disseminated.  The defense comes from Telsa's earning report which had a forecast production of between 350,000 to 500,000 cars. 

The federal judge has a range of options from imposing a fine, impose restrictions on Musk's use of Twitter, or even set up for a later removal of Musk as CEO.

Tesla stock dropped about 3% in the hour directly after the motion was filed.

Related:

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Tesla Laying Off 7% of Workforce

Tesla Dials Backs Production Hours on Model S and X

 

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[David]

IDIOT!, The board needs to remove his accounts. I would even say they need to consider removing him from the role of CEO. He clearly is a smart man but has no self control over what and how he affects others.

Musk really makes me have no desire for any Tesla product. I really do wonder how long reservation holders will wait or if they will before they move onto other products as other OEMs start to deliver their EVs. 🤔

Musk is screwing the company rather than focusing on growing and building it as a profitable long range company.

[balthazar]

Musk needs to be on Ritalin.

[riviera74]

Elon Musk needs to stop tweeting NOW.  Somebody might actually fire him just for being a bad CEO.

[Potluck]

smart people are sometimes really dumb

[riviera74]

19 hours ago, Potluck said:

smart people are sometimes really dumb

sad but true.

[Drew Dowdell]

They have CNBC on the tvs at work and it looks like Musk is going to try and fight the SEC on this one.   He may have a point if the information he tweeted was already in the January annual report.  There is supposed to be Tesla news at 5pm today.