CALIFORNIA – The Securities and Exchange Commission (SEC) asked a judge Monday to hold Tesla CEO Elon Musk in contempt for violating the terms of an agreement requiring the company to pre-approve his tweets.
The SEC claimed Musk violated the agreement when he tweeted Tesla would make around 500,000 cars in 2019. Musk tweeted again later that he “meant to say” weekly production would equal to half-a-million cars annually while total car deliveries would be roughly 400,000. The company told the agency that the first tweet had not been pre-approved.
Tesla’s attorney saw the tweet after it was published and asked Musk to correct the error, the SEC said. “As a result of his failure to comply with the [settlement, Musk] once again published inaccurate and material information about Tesla to his over 24 million Twitter followers,” the SEC said in a press statement.
Musk and Tesla agreed to resolve an SEC probe in October 2018 without admitting or denying wrongdoing. The plan called for their combined $40 million in penalties to be distributed to affected shareholders, the SEC has said.
Musk told his Twitter followers in August of that year that he secured “funding” to take the company private at $420 per share, far more than the company was worth at the time of the tweet. His tweet followed a report suggesting Saudi Arabia became a major Tesla shareholder earlier in 2018.
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