The Securities and Exchange Commission believes Elon Musk has twice violated his 2018 settlement agreement, according to correspondence obtained by: The Wall Street Journal between the SEC and Tesla. The agreement requires a lawyer to approve his tweets about the company.
Tesla lawyers did not review Musk’s May 2020 tweet about how Tesla’s stock price was “imo too high” before publishing it. The company’s lawyers also disapproved of a July 2019 tweet about Musk’s goal of making 1,000 of Tesla’s solar roofs a week by the end of that year. The SEC sent the letters to Tesla shortly after each tweet in 2019 and 2020, but has not taken any clear enforcement action against Musk or the company.
Musk initially found himself in hot water with the SEC in August 2018 after he infamously tweeted that he “[f]und secured” to take Tesla private at a price of $420 a share. (He didn’t, having only had preliminary talks with Saudi Arabia to fund such a move.) The agency accused him in September of securities fraud and the two parties quickly reached a settlement. Musk agreed to step down as chairman of Tesla and also agreed to have his public communications (known as his tweets) vetted by the company.
However, in early 2019, the SEC asked a judge to contempt Musk in court for violating the original settlement. Musk tweeted an estimate of the number of cars Tesla would make that year that exceeded the company’s official guidelines. The SEC found that Tesla’s lawyers had not approved the tweet and took Musk and his company to court. The two sides eventually agreed to vet Musk’s tweets about Tesla more specifically, especially about production, sales or delivery numbers.
The SEC wrote to Tesla about the solar roof tweet in August 2019, arguing that it was a clear violation of the amended settlement terms. But Tesla said in response that Musk’s estimate was “completely ambitious.”
“Tesla has relinquished the duties it requires under the court order,” Steven Buchholz, one of the SEC’s enforcement officers, wrote to Tesla in May 2020 in letters sent to the company. WSJ obtained. It was in response to the stock quote’s tweet. Tesla replied that the tweet was simply Musk’s opinion.
Musk continued 60 minutes late 2018 to say no one approved his tweets despite the settlement. His public attitude towards the agency hasn’t changed much since Musk’s open disdain 60 minutes. last July, he tweeted, “SEC, three-letter acronym, middle word is Elon’s.”