WASHINGTON – The Securities and Exchange Commission on Monday asked a federal judge to hold Tesla CEO Elon Musk in contempt for violating the terms of a recent settlement agreement that required pre-approval of any potentially market-moving tweets about the car company.
On Feb. 19, Musk tweeted that the company would make about 500,000 cars this year. Four hours later, he tweeted again that he “meant to say” the cars’ weekly production rate would equal up to about 500,000 on an annual basis, but that the total car deliveries this year would be closer to 400,000.
The next day, the SEC asked the company whether the tweets had been reviewed before being published. The first tweet had not been pre-approved, the company said. Instead, Tesla’s attorney’s saw the tweet after it was published and then reached out Musk to draft a second, corrective tweet, 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.
A Tesla spokesperson could not be immediately reached for comment.
Last September, Musk reached a $20 million settlement with the SEC, which had accused him of lying to investors when he tweeted that he had “funding secured” to take Tesla private. As part of the settlement, Tesla agreed to review Musk’s market-moving tweets and public statements before he published them.
But, according to the SEC, that didn’t happen. “The provision of the Court’s Final Judgment requiring Musk to obtain pre-approval before publishing written statements containing material information about Tesla is clear and unambiguous,” the SEC said in its court filing.