Elis Musk, CEO of Tesla, really wants to continue talking without any other adult looking over his shoulder, despite a settlement with the Securities and Exchange Commission last year. and did not order him to send out tweets that could affect Tesla's stock without obtaining prior approval from company officials.
In doubt, a February 19 tweet where Musk tweeted, and then corrected, inaccurate numbers on Tesla's car production rates without considering it in advance. The SEC recently filed to hold Musk contempt for the post, which it said violated a settlement imposed in 2018 after he declined claiming he had "funding secured" to take Tesla privately to a "420" course. The deal required Musk to resign as head of Tesla's board, paying tens of millions in fines and pre-declaring potentially "material" posts about the company with employees. According to the SEC, Musk has never done so lately.
The secretary recently issued a blistering court filing claiming that Musk continued to tweet inaccurate information about the company as opposed to the settlement, calling his reading of the agreement a "tortured analysis" that "adjoins the ridiculous." Musket's legal team responded Friday, according to Guardian, and in legal archives stated his case.
Lawyers for Musk, who have tried to portray the SEC as an out-of-control office out to destroy him, wrote in the documents that the specific wording of the settlement allows him to decide whether a tweet is material before it is sent out. They also claimed that the settlement only requires Musk to comply with the Tesla policy, which Tesla says he is:
The main question is whether Musk meets Tesla's policy, not whether the SEC is satisfied with Tesla's policy. Tesla's policy does not provide any Tesla-related tweet per se material. Instead, it incorporates the fixed legal definition of "materiality", which is context-specific and factual, and it shows subjects that "can" be material "dependent on the meaning. The policy necessarily involves a commitment to executive to make an initial, good creed about whether a particular tweet requires prior approval under the guidelines. "The Musket's opinion that the tweet did not require prior approval was correct," Musk's lawyers added. "All hallmarks of insecurity are present: Tweet – reworking previously advertised information, used general conditions, was ambitious and optimistic, and caused no reaction in post-trade. The SEC argues that this is a "post-hoc" rationalization. "
They also pointed to other tweets that the SEC says should have been cleared with a lawyer and claimed they are not material:" It is because he has complied with the Order, not defying it, that these tweets have not required prior approval. "
This does not move the ball forward much, so basically this exact argument was the SEC mocked earlier this week.
Not only did Musk have a" demonstrated inability to distinguish potential materiality "in his communication, the agency wrote. The order requires that he seek pre-declaration before tweeting something that "reasonably" could be interpreted as material. The agency also portrayed Musk's arguments that this whole mess is somehow a free question as obscene, and notes that his signature of the settlement waives these The rights, and the power to enforce the agreement lies with the court, not a powerful SEC. It also wrote that addressing was not a stand-alone problem, since it only requires him to clarify any relevant posts with his legal department before they tweeting them
SEC also called bullshit on Musk's argument that he somehow has the power to declare conformity d settlement without supervision by Tesla:
The court's order clearly assumes that Musk receives prior approval of written communications that contain or may reasonably contain material information and do not state that this claim is subject to his discretion. Musk voluntarily departed from the constitutional arguments he now expects.
Finally, as the Wall Street Journal noted, the SEC asked if Musk really was in accordance with the Tesla policy, and wrote that "Many of these tweets were about the issues specifically identified by Tesla in its own policy as potential material to shareholders. . "
As the guardian noted, more interesting is that Musk's Friday card contains documents from an earlier version of the settlement that he never signed. This agreement would have been subject to all Musk's public statements about Tesla, material or not, for pre-declaration by the company's employees. Musk's legal team wrote in the archives that this was a "puncture during the negotiations", which led to Musk signing the current agreement with stricter terms, but closer language around what he is allowed to say.
This seems like many efforts to go through to continue publishing statements on Tesla on Twitter, but Musk is apparently very determined to post. According to the guardian, the judge who oversees the case said that both sides have until March 26 to request a hearing if Musk is to be disdained; The SEC has not, apparently sure, that the court will agree. Musk's lawyers spit gibberish.