Tesla Chief Executive Elon Musk shot back against US securities regulators on Monday, Asserting at a filing that his Latest tweet Concerning the electric vehicle maker’s production volume did N’t violate his fraud settlement and he Cannot Be held in contempt.
Musk’s”single, insignificant” tweet to his over 24 million Twitter followers claiming the electrical vehicle-maker would produce around 500,000 automobiles in 2019 also complied with company’s communication policy for senior executives, a state of the settlement, attorneys for the Tesla leader wrote in a filing in federal court in Manhattan.
The US Securities and Exchange Commission had asked the court to maintain Musk in contempt, stating his Feb. 19 tweet violated a September fraud settlement barring him from sharing substance information about Tesla on social websites without the company’s pre-approval.
Back in December, Musk said in a”60 Minutes” interview :”I do not have regard to the SEC.”
The settlement involving Musk, Tesla and the SEC solved an SEC litigation over claims Musk made on Twitter in August that he had”funds procured” to take Tesla personal at $420 per share.
As part of the settlement, Musk resigned as the company’s chairman and he and Tesla consented to pay $20 million every year in fines.
The renewed public battle between Tesla’s chief executive and the top US securities regulator adds stress to Musk, the public face of Tesla, who’s struggling to make the company profitable after cutting the price of its Model 3 sedan to $35,000.
Tesla has backed off a plan to close all its US stores and stated it will rather raise costs of its own high-value vehicles by about 3 percent on average.
In the filing, Musk’s lawyers said his conversation was a”proud and optimistic restatement of publicly disclosed information.”
Musk fixed his conversation four hours afterwards to state that the”annualised production rate” at year-end 2019 would probably be roughly 500,000, with deliveries expected to be about 400,000.
Additionally, Musk has shown self-censorship in dramatically reducing the volume of tweets because the payoff, they wrote, adding that the SEC’s petition, if granted, would raise free speech problems.
Musk known as the regulator the”Shortseller Enrichment Commission” on Twitter after the settlement, and tweeted that”something is broken with SEC oversight” only one day after the agency started following the contempt order.
Legal experts have said the SEC could pursue a number of avenues, including a higher fine, imposing further restrictions on Musk’s actions or eliminating him from Tesla’s board or helm.
Tesla released a new communications policy in December for senior executives as part of the settlement. It involves Tesla’s general counsel and a recently designated in-house securities law attorney to pre-approve any official statements about Tesla that may be material.