X

Elon Musk in Hot Water Yet Again Over a Tweet

SEC wants Tesla CEO held in contempt
By Newser Editors and Wire Services
Posted Feb 26, 2019 1:33 AM CST
In this June 14, 2018, file photo, Tesla CEO Elon Musk speaks at a news conference in Chicago.   (AP Photo/Kiichiro Sato, File)

(Newser) – Tesla CEO Elon Musk's tweeting habits have triggered another legal challenge from stock market regulators worried about him using his Twitter account to mislead investors, the AP reports. The latest dust-up emerged late Monday when the Securities and Exchange Commission asked a federal court in New York to hold Musk in contempt for violating a $40 million settlement he begrudgingly reached with the US stock market's chief regulatory agency five months ago, which requires any of Musk's tweets that could affect Tesla's stock to be pre-approved by the company. At issue is a Feb. 19 tweet projecting that Tesla would make about 500,000 cars this year. About 4 1/2 hours after that tweet, Musk corrected his statement, saying he meant that Tesla had started to manufacture cars at a weekly clip that would translate into 500,000 cars during yearlong period, but not necessarily for calendar 2019.

Musk acknowledged he didn't get company approval for the initial Feb. 19 tweet, according to the SEC, even though car manufacturing statistics can affect stock prices of automakers. In his defense, Musk said he didn't think his tweet needed clearance because he was basing it on information that had been disclosed in late January. Both Feb. 19 tweets occurred while the US stock market was closed. Tesla's stock rose by just $1.10, or less than 1%, the next day. But those factors evidently didn't sway the SEC, which illustrated Musk's allegedly contemptuous behavior with some of the comments he made during a television interview with 60 Minutes that aired Dec. 9. In that interview, Musk revealed that no one at Tesla was screening his tweets, and also declared: "I want to be clear. I do not respect the SEC. I do not respect them." On Monday, he appeared unfazed by the SEC's 17-page motion; as news of it broke, Mashable notes he was tweeting a "dumb meme" about himself. (Musk also mocked the SEC on Twitter days after the settlement.)

My Take on This Story
Show results without voting  |  
30%
9%
3%
9%
1%
48%