- A judge will hear oral arguments on whether Tesla CEO Elon Musk is in contempt of a Securities and Exchange Commission ruling on April 4.
- Musk’s contempt charge is related to a tweet he sent falsely claiming that Tesla would make 500,000 cars in 2019. The company has estimated it would make about 400,000 in public filings.
- Musk got in trouble for making false statements on Twitter last year, when he said he had “funding secured” to take Tesla private for $420 per share. He, in reality, did not have funding secured.
On April 4, Elon Musk’s lawyers (and perhaps Musk himself) will appear for oral arguments in New York City to counter the Securities and Exchange Commission’s (SEC) claim that Musk is in contempt of a ruling meant to prevent him from making false statements on Twitter.
This latest salvo between the Tesla CEO and the SEC started in February, when Musk tweeted that Tesla would make 500,000 cars in 2019. The company has said in public filings that it would make about 400,000.
To the SEC, this incorrect tweet was a violation of a ruling it made against Musk last year, in which it accused Musk of falsely claiming he had “funding secured” to take Tesla private at $420 per share in August. That tweet to his powerful 20 million-person Twitter following that allegedly spread false material information forced Musk to step down as Chairman of Tesla’s board.
Musk and Tesla were each fined $20 million.
On top of that, Musk had to appoint a Twitter czar to review tweets containing information material to Tesla’s future.
Adults don’t need a Twitter sitter
A day after Musk tweeted that Tesla would make 500,000 cars in 2019, his chief legal counsel (who had been at Tesla for two months) quit.
A few days later, the SEC demanded that Musk prove that he was not in contempt of court. To bolster the charge that he was, the SEC not only went back to the tweet but also to an interview Musk did with “60 Minutes,” during which he said there was no Twitter czar at Tesla and some “mistakes” may be made.
Musk responded to the SEC by saying that it was attempting to expand on the terms of its settlement by limiting his speech on Twitter and that, in doing so, it was seeking to violate his First Amendment rights.
Musk also said that he has “diligently attempted to comply” with the SEC and that the SEC’s use of Musk’s comments made during a CBS “60 Minutes” interview as proof of his violation reflected a “concerning and unprecedented overreach on the part of the SEC.”
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